Posted on November 07, 2019
Three major automakers have sided with the federal state against California, in the battle that sets them against the greenhouse gas emission standards for vehicles. Toyota, General Motors and Fiat-Chrysler support the Donald Trump administration's decision to prevent the California state from issuing stricter standards. Other automakers like Ford, on the other hand, have made commitments to California to reduce their emissions.
Three major automakers have rallied Donald Trump's positions on greenhouse gas emissions. Toyota, General Motors and Fiat-Chrysler, united in the "Coalition for Sustainable Automotive Regulation", oppose California's decision to adopt more stringent auto emissions standards than those at the federal level. They defend the idea of one rule valid for the whole country, rather than disparate standards between states. And defend the least stringent rule in terms of emissions …
California had adopted regulations derogating from federal law, as authorized by the Clean Air Act, to counter the Donald Trump administration's decision to ease the constraints on the automotive industry. The state, led by Democratic governor Gavin Newsom, wants to force automakers to average 54.5 miles per gallon by 2025 (about 4.3 liters per 100 km), while the US Environmental Protection Agency (EPA) planned for next year, is expected to be around 40 miles per gallon (about 5.8 liters per 100).
Several power games are at work in this business. The one that is played at the level of the automotive industry in the first place. Toyota, GM and Fiat-Chrysler, the Italian-American group currently in talks for a merger with the Peugeot group, preach for their parish, hoping to ease the regulatory constraints on the engines of their vehicles. The profile of the US car fleet, consisting of two-thirds of SUV and pick-ups very fuel-intensive, does not facilitate them indeed the task. Reducing vehicle fuel consumption, and therefore their emissions, is nevertheless crucial to combat climate change.
The other power game lies between the administration of Donald Trump, who has just made his decision to leave the Paris Agreement, and some states and local governments that continue to act against global warming. In 2018, California, along with 17 other states and communities, filed a lawsuit against EPA's plan to relax vehicle standards. The administration of Donald Trump did not remain without reacting. Last September, the Environmental Protection Agency decided to suspend California's greenhouse gas emissions exemption for vehicles. Decision immediately challenged by California and 23 other jurisdictions, some states have aligned themselves with California standards.
A risk for builders
The builders had already been attacked. Four of them (Ford, Honda, BMW and Volkswagen) signed an agreement in July 2019 with the California authorities on reducing their emissions, achieving a compromise that will allow them to reach only 50 miles per gallon by 2026. Again, the federal government responded by launching an "antitrust" investigation by the Justice Department on this deal.
Finally, according to the New York Times, the decision of Toyota, GM and Chrysler to stand on the side of the federal administration in its lawsuit against California, would have intervened after pressure from the White House. This fierce battle may take a long time to resolve, as the proceedings can potentially go back to the Supreme Court.
It remains to be seen, by then, the impact it will have on the image of the builders. "General Motors, Toyota, Fiat-Chrysler and the manufacturers' association have chosen a path that will prevent us from achieving our climate goals and put them in regulatory, legal and competitiveness risk", says Carol Lee Rawn, transport specialist at Ceres.
Arnaud Dumas, @ ADumas5