EPA sticks to its guns, keeps 2025 emissions goals

December 1, 2016

No doubt about it: 2016 has been the Year of WTF. The latest proof comes in the form of an announcement from the Environmental Protection Agency that it plans to maintain its current auto emissions goals for 2025.

That wasn't what most observers expected. Then again, there may be more to this than meets the eye.

In the beginning

The EPA and the National Highway Traffic Safety Administration debuted their 2025 roadmap way back in November 2011. (For reference, the EPA sets emissions standards, while NHTSA sets fuel economy standards.) Eco-advocates praised the plan, which, among other things, requires automakers to achieve average fleet-wide fuel economies of 54.5 miles per gallon of gas. 

Most automakers liked the new regulations, too, because they set different guidelines for different types of vehicles. For example, per NHTSA's proposal, passenger cars are required to have a combined rating of 62 mpg by 2025, while trucks and SUVs are held to a lower standard of 44 mpg.

Dealers were less comfortable with the rules, fearing that they'll drive up the prices of new vehicles. And a couple of foreign car companies were downright mad, insisting that by distinguishing between cars and trucks, the regulations make it easier for U.S. automakers to meet the benchmarks because Detroit automakers have more truck-heavy lineups.

Volkswagen was perhaps most vocal, issuing a statement that said, in part:

"Volkswagen Group clean diesel products are among the most fuel efficient vehicles on the road today. Our new mid-size Passat TDI, built here in the US in Chattanooga, TN, achieves 43 mpg highway and can travel almost 800 miles on a single tank of fuel. If one-third of the vehicles on the road today were clean diesel, the US would save 1.4 million barrels of oil a day. Yet there is no consideration in the current proposal for the positive impact clean diesels can have on fuel consumption here in the US."

Which is thoroughly ironic, given what we now know about Volkswagen's not-so-clean-diesels--namely, that the company designed software to allow those vehicles to cheat on emissions tests because engineers couldn't find any other way to meet strict U.S. regulations.

More recently

Nearly five years down the road, automakers are feeling a little less optimistic about the rules than they were in 2011. The EPA recently launched a review of the regulations to determine whether car companies were likely to meet the benchmarks on schedule. As part of that process, many in the industry hoped that the agency would soften the rules.

That's not because automakers lack technology to reach the EPA's targets. It's because of strong consumer demand for less-efficient vehicles.

When the EPA first issued its guidelines, the price of oil hovered above $100 a barrel. That kept gas prices high and boosted consumer interest in smaller cars and hybrids. 

In the summer of 2014, though, the price of oil began to tumble, falling from more than $107 a barrel in June to $55 a barrel in December. In January 2016, it dropped to nearly $29 a barrel--a low not seen since 2002.

That's helped keep gas prices low, which, in turn, has caused American consumers to worry less about the cost of filling up their tanks. They've shelled out for larger, less-efficient vehicles like trucks and SUVs, which has kept automakers' fleet-wide emissions higher--and fuel economy lower--than they might've expected in 2011.

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