WASHINGTON -- President Donald Trump's administration on Tuesday completed a rollback of vehicle emissions standards adopted under his predecessor Barack Obama and will require 1.5 percent annual increases in efficiency through 2026 - far weaker than the 5 percent increases in the discarded rules.
The announcement - condemned by environmentalists and lauded by big business - sets up a legal battle, with California and 22 other states planning to challenge the rewrite of what had been one of most ambitious U.S. policies aimed at combating climate change.
The Trump administration called the move its largest single deregulatory action and said it would will save automakers upwards of $100 billion in compliance costs. The policy reversal marks the latest step by Trump, a Republican, to erase environmental policies pursued by Obama, a Democrat.
California Attorney General Xavier Becerra, a Democrat, said the Trump administration is weakening "standards that protect our health and environment from polluting contaminants emitted by cars and trucks." The coalition of states previously challenged the Trump administration's decision to revoke California's authority to set its own stiff vehicle tailpipe emissions rules.
Under the Obama rules, automakers were to have averaged about 5 percent per year increases in fuel efficiency through 2026, but the industry lobbied Trump to weaken them. The new requirements mean the U.S. vehicle fleet will average 40.4 miles per gallon rather than 46.7 mpg under the Obama rules.
The Trump administration said the new rules will result in about 2 billion additional barrels of oil being consumed and 867 to 923 additional million metric tons of carbon dioxide being emitted and boost average consumer fuel costs by more than $1,000 per vehicle over the life of their vehicles.
EPA Administrator Andrew Wheeler said the rule "strikes the right regulatory balance that protects our environment, and sets reasonable targets for the auto industry."
An automotive trade group that represents General Motors , Volkswagen Group, Toyota Motors Corp. and others, said that automakers need policies that support "a customer-friendly shift" toward electrified and other highly efficient technologies.
"We are carefully reviewing the full breadth of this final rule to determine the extent to which it supports these priorities," said the statement from John Bozzella, CEO of the Alliance for Automotive Innovation.
The Trump administration has battled with California over auto regulations. Last month, the U.S. Justice Department closed an antitrust investigation into a voluntary agreement that four automakers reached with California on emissions without taking any action.
Ford Motor Co, BMW, Honda Motor Co. and VW struck a voluntary deal with California last year on emissions standards, prompting the investigation. The deal with the California Air Resources Board bypassed a White House effort to strip the state of the right to fight climate change and drew Trump's ire.
Ford said on Tuesday it remains "committed to meeting emission reductions consistent with the California framework."
Volvo confirmed Tuesday it is also in talks with California to reach a voluntary emissions agreement with the state.
Obama's environmental policies were intended to cut carbon emissions that drive climate change, while Trump has ditched numerous environmental regulations that his administration deemed harmful to industry and has aimed to increase the use of fossil fuels. Trump also pulled the United States out of a global climate accord and moved to reverse clean water regulations and pollution standards for coal-burning power plants.
Michael Brune, executive director of the Sierra Club, criticized the administration "for exploiting the cover of a pandemic to roll back the clean car standards, which are crucial public health safeguards," referring to the coronavirus crisis.
The U.S. Chamber of Commerce, a business group, said the final rule provides a "workable path forward on a unified national program that provides regulatory certainty while strengthening fuel economy standards and continuing emissions reductions."
The administration said the revised rules will cut the future price of new vehicles by around $1,000 and reduce traffic deaths. Environmentalists dispute the analysis that the rule will reduce traffic deaths.
The final rule acknowledges that drivers will pay more in higher fuel costs than they will save in new vehicle prices but said they will save more in overall vehicle ownership costs.
It said it will reduce up to 1.8 million crashes and lower "the auto industry's costs to comply with the program, with a commensurate reduction in per-vehicle costs to consumers, the standards enhance the ability of the fleet to turn over to newer, cleaner and safer vehicles."