US Policy Updates

There are several high-profile issues under discussion in Washington that will have a strong impact on our industry. First and foremost, federal vehicle standards are moving forward. The final truck rules for MY 2014-2018 were announced on August 9th. These rules call for significant improvements in the fuel efficiency and emissions performance of medium- and heavy-duty vehicles with a focus on combination tractors and pick-up trucks. Attention will now turn to the next round of medium- and heavy-duty vehicle standards, which are expected to be more ambitious in driving the use of advanced vehicle technologies in the nation’s trucking fleet.
 
EPA and NHTSA continue to work with the California Air Resources Board (CARB) to develop proposed light-duty vehicle emissions and efficiency standards for MY 2017-2025. The Obama Administration, relevant agencies and most of the OEMs have agreed to a fleet-wide average target of 54.5 MPG in 2025. However, the devil is in the details, and the details are still being worked out. A proposal is expected in late October (a month later than originally anticipated) and the rule will not be finalized until 2012. A recent article in Crain’s Detroit Business calls the program a “supplier bonanza” because of the incentive it provides for automakers to incorporate advanced technologies. Electrification in particular will receive a push from the standards, as plug-in and fuel cell vehicles will be counted as having zero emissions for the purpose of the regulation and will also have a multiplier, with full EVs counted as 2 zero emission vehicles, when the program starts in 2017. Due in part to these elements of the proposal, which are seen as “incentives” by industry, and “loopholes” by environmental groups, the 54.5 MPG target is likely to result in a real world fleet average closer to 37-40 MPG in 2025.
 
Beyond the fuel economy standards, Washington continues to be predictably unpredictable. The Federal Transportation Bill, which includes the 18.4 cent federal gas tax used to help fund our roads, is set to expire on September 30th. A short term fix appears likely and has already passed out of the House, but there is a long road ahead for any sort of long term approach to the gas tax and our lack of funds for transportation infrastructure. In other news, President Obama has pulled back new federal smog standards, which would have given increased urgency to state and local efforts to reduce transportation-related emissions.
 
Several advanced transportation technology bills remain in play, but the fate of spending and incentive bills is anything but clear.

 

Contact: Jamie Hall, Policy Director, jhall@calstart.org or 510-307-8774.

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