Coalition abandons U.S. legal battle with Calif. over emissions standards

The Coalition for Sustainable Automotive Regulation, a group representing automakers and dealers, is withdrawing from a lawsuit between California and the federal government over the state's authority to set its own emissions standards, the group said Tuesday.

"We are aligned with the Biden Administration's goals to achieve year-over-year improvements in fuel economy standards that provide meaningful climate and national energy security benefits, reduce [greenhouse gas] emissions and promote advanced technologies," the coalition said. "In a gesture of good faith and to find a constructive path forward, the CSAR has decided to withdraw from this lawsuit in order to unify the auto industry behind a single national program, with ambitious, achievable standards."

The action comes after President Joe Biden issued an executive order Jan. 20 directing the Department of Transportation and the EPA to reconsider the Trump administration's 2019 decision to revoke California's authority to restrict tailpipe emissions by April and review fuel-efficiency standards for light vehicles by July.

California and 22 other states and environmental groups challenged the Trump administration's rule that federal law prevents California from setting its own auto pollution standards and zero-emission vehicle mandates.

The coalition — a group that includes Stellantis (formerly Fiat Chrysler Automobiles), Hyundai, Kia, Mazda, Mitsubishi, Subaru, Toyota and the National Automobile Dealers Association — intervened in the 2019 lawsuit between California and the federal government, with the goal of supporting one national fuel economy and greenhouse gas program.

In November, General Motors withdrew its support of the Trump administration in the California lawsuit. Ford Motor Co., a week after GM's announcement, urged other automakers to consider backing a framework deal with the state on vehicle emissions and move forward on a single national standard.

Ford, BMW, Volkswagen, Volvo and Honda finalized binding agreements with California in August to meet stricter fuel economy and emissions standards through the 2026 model year than ones set by the Trump administration, which loosened standards put in place under predecessor President Barack Obama.

The Trump administration's rules, which took effect in June, require 1.5 percent annual increases in vehicle fuel efficiency through 2026. Under Obama, emissions standards would have tightened by 5 percent each year. The California framework meets automakers in the middle, requiring 3.7 percent annual increases.

The Alliance for Automotive Innovation — a group that represents most major automakers in the U.S. as well as some suppliers and tech companies — also has pledged to work with the Biden administration on establishing a revised national program that includes California as well as achieving net-zero carbon transportation and speeding the transition to electric vehicles.

"What unites our industry in pursuing a revised national program is a simple premise: A resolution that has the support of all stakeholders could set the industry on an accelerated path for reducing GHG emissions, build a robust market for electric vehicles and resolve ongoing litigation," John Bozzella, CEO of the association, said in a statement Tuesday. "Addressing such near-term issues will provide regulatory clarity, advance our shared environmental goals and lay the foundation for future efforts."

Political reactions

Asked to respond to the automakers' action, White House climate adviser Gina McCarthy said in a statement that "after four years of putting us in reverse, it is time to restart and build a sustainable future, grow domestic manufacturing, and deliver clean cars for America."

California Gov. Gavin Newsom praised the automakers on Twitter for "dropping your climate-denying, air-polluting, Trump-era lawsuit against CA" and urged them to join the voluntary framework.

“Automakers need to make good on their promises, government officials need to demonstrate true leadership, and advocates need to hold us all accountable,” Rep. Debbie Dingell, a Michigan Democrat, said in a statement. “Together, we will establish a new framework for a national program for automobile greenhouse gas emissions that unites California and every state, so we can protect our environment, create jobs and guarantee America’s place as a global leader in mobility.”

Reuters contributed to this report.