Supplier alliance seeks to minimize changes to fuel economy rules
WASHINGTON -- Auto suppliers, emission-control companies and advanced-material manufacturers are forming a coalition to thwart any large-scale attempt by the Trump administration to reverse current auto emissions and fuel economy standards.
The political campaign puts suppliers at odds with their ultimate customers: automakers.
Car companies petitioned the Trump administration last year to reopen a review of stricter standards established by joint agreement with industry for model years 2022 to 2025. They argued the EPA under President Obama rushed to lock in the standards, designed to curb greenhouse gases, 15 months ahead of schedule and that the review failed to include the most current data on consumer preferences, sales trends, technology costs and other factors.
Environmentalists are worried administration officials, working under instructions to reduce regulations on business, will scrap the EPA's final determination and propose new rules that lower the standards or extend the deadline for compliance.
Suppliers are banding together to oppose such a move, too, basing their case on economics. They argue the mandate has contributed to job growth in the emission-control technology field and that they need predictable rules to justify investments. Significant loosening of the standards would also erode U.S. leadership in development of advanced vehicle technologies.
"To continue growing jobs in this sector, and making forward progress on reducing pollution as we have for the last 40 years, our companies need a steady path," said Chris Miller, executive director of the Advanced Engine Systems Institute, in a statement. "We want all the regulators to work together and with the stakeholders again so we have clear and stable long-term policy direction that creates market opportunities for our companies to develop and deploy advanced-vehicle technologies that will help achieve the nation's energy and environmental goals."
On Thursday, AESI, along with the Motor & Equipment Manufacturers Association, the Manufacturers of Emission Controls Association, and the Aluminum Association, announced they are joining forces as the Automotive Technology Leadership Group to advocate for continued progress on reducing emissions and oil consumption.
But in a joint statement of principles, the groups appeared to accept that some changes giving automakers compliance flexibility are forthcoming. Any revisions, however, should be made in close coordination with NHTSA, the state of California, other states that follow California's high emissions standards and industry stakeholders, the document said. It also urged regulators to considering issuing coordinated fuel economy standards for model years 2026 to 2030.
"MEMA is aware that minor tweaks and adjustments are expected. However, major changes to the program would cause significant ramifications to the industry's investments and jobs," Laurie Holmes, the trade association's senior director of environmental policy, said in a statement provided to Automotive News.
"Motor vehicle parts suppliers have made -- and continue to make -- extensive investments in research and development to bring emissions-reducing technologies to the market. Suppliers are on the front line taking on the initial investments and the associated risks to develop technologies for their OEM customers," she said.
"Delaying a product deployment or shortening a product's anticipated lifespan will jeopardize these carefully planned technology investments put in place several years in advance, resulting in significant ramifications to the supplier industry. It is for these reasons that regulatory certainty is so important to suppliers. Suppliers face significant risks in the technology development."
Holmes insisted that administration has conducted an "open and transparent" process so far, and has carefully listened to MEMA's views.
"Our membership in this alliance is in no way an indication that we are unhappy with the Trump administration," she added.
The EPA, in January 2017, set the 2022-2025 fleet-wide requirements for CO2 reductions at an equivalent of 51.4 mpg.
NHTSA, which operates under different statutory authority, is responsible for fuel-economy standards and did not issue a rulemaking by the time President Trump took office. Agency officials say they plan to issue their proposal by the end of March, which is also when the EPA is scheduled to announce whether it will keep the greenhouse gas standards or begin work to modify them.
Suppliers voiced their concerns about a rollback in written comments and public testimony to the EPA last summer. They said lowering emissions standards would reduce demand for fuel-saving devices and raise the per-unit price as economies-of-scale were lost. Suppliers would bear the brunt of the financial hardship because they, not automakers, are taking most of the investment risk on emissions technology.
According to a report last year by the BlueGreen Alliance, a coalition of labor and environmental groups, there are more than 1,200 operations in 48 states and 288,000 workers making components and materials that go directly into improving vehicle fuel economy.