Regulating Automotive Emissions: Part I – What to Expect Under the Second Trump Administration

12/12/2024|4 minute read

Key Takeaways

• The second Trump Administration is likely to take steps to lessen the pressure for traditional manufacturers to introduce electric vehicles into the market.
• The second Trump Administration is likely to revoke California's existing waivers allowing it to issue standards for mobile source emissions standards and to deny California's eight pending waiver requests.
• While the second Trump Administration is likely to continue efforts to curb certain criteria pollutants in mobile sources; it will not be inclined to continue efforts to reduce greenhouse gas emissions which could result in the delay, replacement, or revocation of rulemakings, regulations and programs targeting greenhouse gas emissions reductions.

On the day of his inauguration, President Joe Biden issued a historic number of executive orders, several of which focused on overturning actions taken by the Trump Administration's Environmental Protection Agency (EPA). We are likely to see a similar event, in reverse, on January 20, 2025, when President-elect Donald Trump begins his second term. This flip-flopping on environmental regulations over the past eight years has resulted in an automotive industry in search of regulatory stability.

Over the coming weeks, we will discuss the future of automotive emission regulation during President-elect Trump's second administration. We will discuss overarching plans with respect to the EPA, challenges facing the electric vehicle industry, ongoing litigation concerning emissions and fuel economy standards, challenges to California's waiver and anticipated changes to EPA's enforcement policy.

Second Trump Administration

On November 11, 2024, President-elect Trump selected former New York Representative Lee Zeldin to serve as EPA Administrator. One of Zeldin's key promises is to revitalize America's auto industry, a promise that President-elect Trump repeated on the campaign trail. While no specific details have been made public as to which specific Biden Administration regulations will be rolled back, there are a number that could be targeted in January. This is likely to include a freezing of recently finalized rules, pending risk assessments, and guidance documents.

Electric Vehicles

Specific to the automotive industry, there will be a resistance to the Biden Administration's full embrace of electric vehicles. Potential actions could reduce the reliance on electric vehicles under both EPA tailpipe emissions standards and the National Highway Traffic Safety Administration's (NHTSA) Corporate Average Fuel Economy (CAFE) standards. We would anticipate that the Trump EPA will work to replace EPA's MY 2027-MY 2032 light- and medium-duty vehicle emissions standards. Any Trump EPA replacement standards would slow the rate at which greenhouse gas emission reductions occur. The result will be a lessening of pressure for traditional automotive manufacturers to place electric vehicles on the market.

One uncertainty is the role that Tesla CEO Elon Musk might play in how the second Trump Administration handles the large investments made under the CHIPS and Science Act and the Inflation Reduction Act to support the growth of the electric vehicle industry.

California's Waiver

The second Trump Administration will almost certainly target California's waiver to set emissions standards, granted by Title II of the Clean Air Act. This is an effort that the First Trump Administration undertook in 2019 when the Trump EPA determined that global greenhouse gas emissions and their effects were outside the scope of local or regional air pollution and therefore did not present "compelling and extraordinary conditions" specific to California.[1] Thus, California was not entitled to receive a waiver. The withdrawal of California's waiver went into effect November 2019. However, in March 2022, EPA reissued that waiver under the Biden Administration, explaining that EPA had limited ability to rescind previously granted waivers and that the decision to withdraw the waiver was based on a flawed interpretation of the Clean Air Act.[2]

Increased Role for NHTSA

Additional changes to the regulation of automotive emissions include the potential for greenhouse gas emissions to be regulated by the Department of Transportation rather than EPA. This move would be in line with actions taken by the First Trump Administration, when the Trump NHTSA asserted its statutory authority under the Energy Policy and Conservation Act of 1975 to set nationally applicable fuel economy standards and interpreted that Act as preempting state and local greenhouse gas standards because such standards are related to fuel economy standards.[3]

Despite the outcome of revoking California's waiver, such an interpretation would prevent California from attempting to regulate greenhouse gas emissions. Further, the regulation of greenhouse gas emissions by NHTSA (under the Department of Transportation) rather than the EPA would allow for additional factors to be considered when standards are set, including costs associated with adopting such standards. Relatedly, it is possible that NHTSA will roll back its fuel economy standards and return them to the minimum average fuel economy standards specified by Congress for MY 2020 vehicles, which included levels aimed at achieving a fleetwide average of 35 mpg.

Other potential actions taken by the second Trump Administration could include the political appointment of a member of the Office of Transportation and Air Quality at EPA's offices in Ann Arbor, Michigan, a review of the "ramp rule," and advancing autonomous vehicles through the Automated Vehicles Comprehensive Plan.

Conclusion

President-elect Trump is likely to take an agency-wide position against the elimination of internal combustion engines in passenger and light-duty vehicles. This is likely to result in actions by the second Trump Administration to revoke and replace regulations related to tailpipe emissions and fuel economy that contemplate increased vehicle electrification for fleets to meet mandated requirements. To further this effort, President-elect Trump is likely to challenge California's waiver to regulate mobile source emissions, with a particular focus on limiting California's regulation of greenhouse gas emissions.

[1] EPA and NHTSA, "The Safer, Affordable Fuel-Efficient (SAFE) Vehicles Rule Part One: One National Program," 84 Fed. Reg. 51310 (Sep. 27, 2019).

[2] See EPA, "California State Motor Vehicle Pollution Control Standards: Advanced Clean Car Program; Reconsideration of a Previous Withdrawal of a Waiver of Preemption; Notice of Decision," 87 Fed. Reg. 14332 (Mar. 14, 2022).

[3] See Safe Vehicles Rule, supra note 1.

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