What if the EPA dialed back emissions rules, but only on trucks?

August 15, 2017

Back in March, Donald Trump authorized a review of current U.S. emissions regulations. Those regulations cover vehicles through the 2025 model year and were hastily finalized by the Environmental Protection Agency in the days leading up to Trump's inauguration. 

The review alarmed environmental activists, not to mention California's Air Resources Board. (Thanks to a waiver from the EPA, CARB sets its own emissions standards, which are followed by more than a dozen states across the country and affect roughly 30 percent of the vehicles sold in America.) Given Trump's pick of climate science skeptic Scott Pruitt to head the EPA, many assumed that the review would eventually lead to a rollback of emissions standards. 

And in fact, that may come to pass. But what if the rollback were limited in scope? Is there a way that Trump and Pruitt might spin the change so that it looks like a win-win-win for environmentalists, automakers, and consumers?

Maybe so, if the rollback were only applied to trucks

What are the current regulations?

In the fall of 2011, the EPA and the Department of Transportation announced new fuel economy and emissions regulations affecting vehicles through 2025. By that model year, automakers will need to achieve a fleet-wide fuel economy of 54.5 miles per gallon or face penalties.

(Just as a reminder, the EPA sets emissions standards, and the DOT sets matching fuel economy standards. However, because most people think of efficiency in terms of miles per gallon rather than, say, grams of CO2 per mile driven, it's easier to speak of the standards using mpgs. It's also important to remember that the federal fuel economy guidelines are corporate average fuel economy, or CAFE, which is higher than drivers would achieve on actual roads. Here's a handy explainer.)

The EPA and the DOT set different targets for different classes of vehicles. Under current regulations, passenger cars manufactured in the 2025 model year will need to meet a corporate average fuel economy of 62 mpg, while light trucks will be held to a lower standard of 44 mpg. The next major uptick along the way will come in 2021, when trucks will need to hit 33 mpg.

Why would lowering truck targets be a "win"?

On the surface, it might seem like a reasonable compromise for the EPA to freeze or walk back efficiency rules for light trucks rather than cars. Why?

1. It seems to affect less than half the vehicles on the road. You might think that there are more cars than trucks in America, which would imply that most vehicles would still be subject to existing EPA rules. However, truck sales figures are nearly double those of cars. As of July 31, automakers had sold 3,748,570 cars in the U.S. and 6,118,706 light trucks. 

If that sounds absurd, it may be because you're thinking of "trucks" as pickups and vans. Of the light trucks sold this year, just 2,128,121 were classified as trucks and vans. 

But in fact, the category of light trucks includes SUVs, too, which have accounted for 1,022,331 sales so far this year. And the EPA doesn't have a set classification for crossovers, which have accounted for 2,968,254 sales in 2017. As a result, automakers themselves can determine how crossovers are classified. Since light trucks are held to lower efficiency standards, many car companies choose to categorize them that way. 

In other words, while environmentalists might accept a compromise of continuing the EPA's rules for cars but freezing the rules for light trucks, that freeze would affect roughly 62 percent of the current U.S. auto market. 

2. Light trucks are crucial to businesses. Construction crews, courier services, and caterers all depend on trucks to get the job done. Easing the rules on light trucks could be seen as a way to make those vehicles more affordable for companies large and small. That would be hugely important to business owners and an administration that's heavily focused on creating a business-friendly environment. 

3. Light trucks are hugely popular with consumers. With gas prices at or near historic lows, it's no wonder that trucks, vans, SUVs, and crossovers are so popular with shoppers today. Freezing efficiency rules could help continue that trend by making those vehicles less expensive to develop and produce. 

4. Light trucks are huge profit centers, particularly for Detroit automakers. Light trucks account for roughly 75 percent of sales at Fiat Chrysler, Ford, and General Motors, making a freeze/rollback a big win for domestic companies. Foreign automakers that sell pickups and crossovers like Toyota and Nissan could fare well under a freeze of regulations, too. Companies like Volkswagen, however, would likely be infuriated, since they make few vehicles that qualify as light trucks and their diesel efficiency strategy has gone up in smog

In other words, a rollback of emissions regulations for light trucks could be palatable to environmental advocates, consumers, business owners, and American car companies--if it's properly messaged, that is. 

Would a freeze or rollback affect actual emissions?

Ironically, freezing or rolling back emissions regulations would probably have little effect on the efficiency of U.S. vehicles. Given the long lead times required to develop new cars and trucks, many, if not all of the increasingly efficient vehicles planned for the coming decade are already in the works. 

There are also big changes a-coming in terms of powertrains, primarily in terms of electrification. U.S. automakers aren't going to stop shifting to hybrids and fully electric vehicles--not if they want to remain competitive in other countries. That should lead to increasingly low emissions and increasingly high fuel economy.

To be sure, a change in regulations could mean that automakers would be able to decide how far above and beyond federal efficiency targets they'd want to go. That, in turn, could have some negative effects on efficiency improvements. However, the bigger effect could be a bump in approval ratings for the Trump administration.

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