California Finalizes Deal With Five Automakers to Reduce Emissions

The interior of the Ford Mustang Mach-E SUV, an all-electric vehicle, pictured in 2019. (AP Photo/Carlos Osorio)

SACRAMENTO, Calif. (CN) — Marking substantial progress in California’s fight against the Trump administration’s bid to weaken emissions standards, the state announced Monday it had finalized commitments with five major automakers to continue producing cleaner and more electric cars.

The California Air Resources Board says the individual deals reached with Ford, Honda, Volkswagen Group of America, Volvo and BMW of North America will help enshrine the state’s stringent clean air goals regardless of whether the courts uphold President Donald Trump’s contentious rollback of the Obama-era rules. According to the board, the voluntary deals apply to model years 2021-2026 and will prevent hundreds of millions of tons of greenhouse gas emissions.

“We consider the automakers who have joined these agreements as forward-looking and committed to cleaner cars and cleaner air,” said Stanley Young, the board’s communications director. 

The Trump administration stunned state officials and environmentalists in August 2018 when it proposed rolling back Obama-era vehicle emissions and fuel economy standards that were intended to nearly double passenger vehicle’s fuel economy and halve their carbon emissions by 2025.

The Environmental Protection Agency defended its decision and cast California’s standards as regulatory burdens that were preventing automakers from producing cheap cars, calling for one uniform standard. Meanwhile, Trump claimed the move would lead to a rush of “less expensive cars” and be a boon for consumers and workers.

More importantly for California, the move meant its long-standing ability to force automakers to produce cleaner, more efficient cars was on the ropes.

California’s emissions laws, which have been adopted by a dozen other states, have forced automakers to help clear California’s infamously smoggy skies in order to remain in its lucrative market. The clean air laws are also a critical component of the state’s ambitious climate change goals, as tailpipe emissions are the major contributor of greenhouse gas emissions in the state.

After the rollback was finalized, California predictably responded with a pair of federal lawsuits that are pending in the District of Columbia, joined by 22 other states. The state argues the EPA lacks the authority to revoke a waiver intended to improve air pollution in the first place.

Looking to hedge its legal battles, California began talks with automakers and announced the proposed deals in July 2019.

The agreements angered Trump, who lashed out on Twitter and called the automakers “foolish” for agreeing to work with California regulators. The Department of Justice then opened an antitrust probe into the automakers but quickly dropped it in February 2020.

“These trumped up charges were always a sham — a blatant attempt by the Trump administration to prevent more automakers from joining California and agreeing to stronger emissions standards,” California’s Democratic Governor Gavin Newsom said of the fruitless inquiry.

Under the finalized agreements announced Monday, the automakers will abide by California’s existing standard regardless of how the courts rule. For their cooperation, the air resources board will give the companies more time to meet the regulations, which require gradual reductions in tailpipe emissions, along with credits for producing electric vehicles.  

The board says the automakers proved their commitment by sharing detailed business plans for future electric vehicles and that the deals are on solid ground. 

“These agreements, designed to further advance innovation and investment, are memorialized in a separate appendix for each company, and are designated as Confidential Business Information because they relate to specific model production plans and similar matters. Generally they promote enhanced distribution of zero emission vehicles,” the board said in its announcement.

While the state’s workaround does include industry titans like Ford and Honda, others including General Motors and Toyota are backing Trump’s rollback.

A total of 15 automakers and the National Automobile Dealers Association have intervened on behalf of the federal government in the lawsuit, claiming one national standard would save money and spur further emissions innovation.

“With our industry facing the possibility of multiple, overlapping and inconsistent standards that drive up costs and penalize consumers, we had an obligation to intervene,” the coalition said in defense of its decision to join with the Trump administration.

As the fight over fuel mileage plays out in Washington, D.C., Young said in a phone interview that there is still time for the other automakers to come to the bargaining table: “We are very open to further discussions.”

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