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EPA justifies CAFE roll-back: standards were 'not appropriate'

EPA's public notice outlines reasoning behind rolling back Obama-era standards.

The U.S. Environmental Protection Agency published a notice to the Federal Registry Friday outlining the administration's justifications for reviewing Obama-era greenhouse gas emissions standards, saying the previous agreement reached with automakers should be revised.

The notice specifically refers to the standards established (with input from OEMs) for Corporate Average Fuel Economy (CAFE) and greenhouse gas emissions for vehicles model year 2022-2025--standards which the EPA now says were based on what it describes as "outdated information."

It outlines several issues which have been raised by automakers (who have been lobbying the administration to review future CAFE regulations since shortly after President Trump took office last year), including availability of technology, feasibility of implementation, and diminishing returns.

Ultimately, it boils down to cost. Automakers have been burned by an economy which has kept gas prices relatively affordable (if not "cheap" in the traditional/historical sense) and consumer demand for larger, less-efficient light trucks and crossovers.

In addition, the cost of developing fuel-saving technology continues to increase, and some have argued that it is outpacing the demand for those same technologies. A report from lobbying group Global Automakers included data showing that take rates for electrified vehicles continue to decline from their peak in 2013.

Slowing adoption rates for technologies such as plug-in hybrid systems make them less effective as compliance tools; automakers need to sell a critical mass of these highly efficient vehicles to meet CAFE quotas, and if demand is low, that drives up automakers' financial losses on each unit sold.

The lobbying group also "...asserted that EPA's modeling has consistently underestimated the costs associated with technologies and the amount of technology needed, commenting that a quality check at every step of the process needs to be done with real-world data that has been supplied by manufacturers," the report continues.

"EPA, in partnership with the National Highway Traffic Safety Administration, will initiate a notice and comment rulemaking in a forthcoming Federal Register notice to further consider appropriate standards for model year 2022-2025 light-duty vehicles, as appropriate," the notice said.