EPA Tees Up Response To California’s Fuel Economy Deal With Four Carmakers

The Environmental Protection Agency is questioning whether California has the legal authority to strike a deal with four automakers on fuel economy standards stronger than what the Trump administration will set.

The Environmental Protection Agency sent a letter to California air regulators earlier this month asking the state to outline a legal justification for altering its vehicle greenhouse gas limits, pursuant to a deal the state struck with four automakers, EPA Administrator Andrew Wheeler said during remarks Thursday at agency headquarters.

Those automakers — Ford, Honda, Volkswagen, and BMW — went around the Trump administration in July, agreeing with California regulators to follow standards weaker than the Obama-era rules but much more stringent than what the Trump administration proposed.

That deal infuriated the White House, and the letter from the EPA appears to be the latest in a series of threats from the Trump administration against the Golden State and the four automakers teaming up with it.

Earlier this month, in retaliation, the Justice Department launched an antitrust investigation into those four automakers to explore whether they violated federal competition laws by teaming up with California.

Wheeler’s remarks came during an event at which he and Transportation Secretary Elaine Chao formally announced the agencies’ move to eliminate California’s authority to set its own greenhouse gas limits for passenger cars stricter than federal limits.

California has had the special ability under the Clean Air Act to set its own tailpipe pollution limits since the law was written in the 1970s, so long as the EPA grants the state a waiver.

But if it wants to change its state-level rules, to accommodate the deal made with automakers, California needs to apply for a new waiver from the agency, EPA general counsel Matt Leopold told reporters Thursday.

“California knows this full well,” Leopold said. “We haven’t been contacted by California to seek any waiver, so we question the legality of that.”

It’s unlikely the EPA would grant California another waiver to alter its greenhouse gas limits to match the deal the state struck with the four automakers.

Leopold said he wouldn’t speculate on whether the agency could bring an enforcement action against California.

“But I will say that the law is clear that absent a waiver from the EPA, they can’t adopt or attempt to enforce — that’s the language of the statute — standards,” he added.

As the EPA explores whether California’s actions are unlawful, Democrats and environmentalists are urging more automakers to sign onto the deal.

Sen. Tom Carper of Delaware, the top Democrat on the Senate environment committee, told reporters Wednesday he and his staff called nearly a dozen automakers individually to urge them to join California.

“You don’t have to stay stuck in neutral,” Carper said he told automakers. “It’s time for all companies to really take a stand.”

The action from the two agencies to withdraw California’s existing waiver follows a tweet Wednesday from President Trump announcing the administration would eliminate California’s vehicle greenhouse gas authority.

Trump tweeted the move while traveling in the state, timing he told reporters late Wednesday was “really a coincidence.”

Without a waiver, the Golden State won’t be able to set or enforce stricter greenhouse gas standards for cars in the future, which could be a critical blow to California’s ability to meet its long-term climate goals.

“The one national program will ensure there is one, and only one, set of national fuel economy standards as Congress mandated and intended,” Chao said in remarks Thursday at EPA headquarters in Washington.

“No state has the authority to opt-out of the nation’s rule, and no state has the right to impose its policies on everybody else and our whole country,” Chao added.

California regulators, though, have already promised to challenge the administration’s move in court.

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