Trump Backs Down From Proposed Fuel Efficiency Freeze

(CN) – The Trump administration is backing off from its plan to freeze Obama-era fuel efficiency standards, according to media reports released late Thursday.

Officials are instead looking at requiring an 1.5% annual increase in fuel efficiency from automakers, far less than the 4.7% annual increase in current regulations. The Obama administration’s goal was to almost double the efficiency to 54 miles per gallon by 2025.

The change marks the latest move in a fight between the administration and California. The Golden State has led the country in improving fuel efficiency and reducing emissions under an exemption in the Clean Air Act that allows it to set its own standards. The Trump administration sued the state, claiming that fuel economy standards should be set by the federal government rather than states.

(AP Photo/John Raoux)

California struck a deal with Honda, Ford, Volkswagen and BMW in July to increase their vehicles’ average efficiency to roughly 50 miles per gallon by 2026 in defiance of the fuel efficiency freeze. Other automakers, including GM, Toyota and Fiat Chrysler sided with President Donald Trump in his rollbacks. In a statement, Toyota said its support of Trump’s stance is not a political stance.

“We do not believe that there should be different fuel economy standards in different states.  There should be one standard for all Americans and all auto companies. That is why we decided to be part of this legal matter.  Doing so does not diminish our commitment to the environment, nor does it lower our desire to manufacture vehicles that produce fewer emissions year-after-year,” the statement said.

National Economic Council Director Larry Kudlow’s office had encouraged automakers to support the White House’s rollbacks and President Trump himself met with GM chief executive Mary Barra in September, according to a report by The Washington Post.

Overseas companies were concerned about being targeted by tariffs if they didn’t support the Trump administration, according to four individuals familiar with the matter who told The Post.

The coalition of automakers siding with Trump have faced criticism over their commitment to reduce greenhouse gas emissions, including customers who have threatened to boycott.

The White House has not yet released a comment on the potential rule change.

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