EPA Warns Automakers of Even Steeper U.S. Fuel-Economy Goals

The auto industry will need to step up introduction of fuel-saving technology to help the U.S. meet aggressive goals to combat climate change despite manufacturers’ requests for relief from existing rules, the Environmental Protection Agency’s top transportation official said.

The U.S. will have to accelerate carbon reductions beyond current regulations calling for average vehicle gas mileage of 50 miles per gallon by 2025 to meet targets called for in the global climate agreement reached in Paris last year, Christopher Grundler, director of EPA’s Office of Transportation and Air Quality, said in an interview.

“What we know is, just from the math, if we’re going to achieve what science tells us we need to achieve by 2050, we’re going to need to see a lot of zero and near-zero emissions technology coming into the fleet,” Grundler said. “Facts are facts.”

Automakers say they’re already straining to meet U.S. fuel economy targets, and a couple of years of low gas prices are driving consumers toward trucks and SUVs and away from hybrids and electric cars. On Monday, the Alliance for Automobile Manufacturers petitioned the Obama administration for more time to evaluate a key technical report that lays the groundwork for a "midterm evaluation" regulators will complete next year. The industry is asking for some relief from regulations starting in 2022.

Self-Driving Cars

Grundler publicly announced the need for more aggressive carbon-reduction from the auto industry Tuesday at the Center for Automotive Research in Traverse City, Michigan. In an earlier interview with Bloomberg News, Grundler said other trends in society could help meet the future targets, too -- such as the arrival of self-driving cars and the migration of millennials to walkable cities.

Right now, the U.S. is relying on technology to reduce greenhouse gas emissions but that may change given other societal trends. Grundler said the EPA doesn’t know yet what regulations will be required after 2025.

“There must be a way for public policy to be as innovative as some of these things we’re seeing,” Grundler said. “I don’t know what that looks like yet, but I know for sure we need to think differently post-2025.”

Technological Progress

A technical report published July 18 by the EPA, National Highway Transportation Safety Administration and the California Air Resources Board buttressed the case for keeping the regulations as written. Based on current trends, the average car would get between 50 and 52.6 miles per gallon by 2025, the report said. Real-world mileage for consumers would be closer to 40 miles per gallon.

Furthermore, conventional gasoline-powered engines are seeing better technological progress than expected, and automakers aren’t likely to have to rely on large sales of electric cars or hybrids to meet the standards over the next nine years, the agency said.

“The automakers are beating these standards,” Grundler said. “It’s demonstrable that innovation is happening faster than we expected.”

For the auto industry, the challenge is more than just creating new technology to make cars more efficient, said Mitch Bainwol, president of the Alliance of Automobile Manufacturers, the trade group whose members include General Motors Co. and Toyota Motor Corp. Consumers need to buy the new cars if they’re going to make a difference, he said.

The regulations threaten to make new cars too expensive for consumers to afford, even if they’ll later save money through lower gasoline costs, Bainwol said at the conference.

“If people buy fewer cars, there’s a job consequence,” Bainwol said. “It’s very important to save the planet. It is also very important that we continue employing people in the production of vehicles.”