Canadian automakers agree with United States President Donald Trump’s decision to allow automakers another year to dispute fuel economy and emissions standards, saying that whatever the result in 2018, standards must remain harmonized for both countries.
“We’re going to work on the CAFE standards so you can make cars in America again. “There is no more beautiful sight than an American-made car,” Trump said while speaking at the American Center for Mobility, a planned US $80 million autonomous vehicle testing ground on the site of the former Willow Run bomber plant near Detroit.
The reopening of the midterm review does not mean the standards will be weakened, but it does give automakers the opportunity to push for relief by lobbying new EPA Administrator Scott Pruitt, who has downplayed the effect humans have on climate.
A review of requirements for the companies to boost the fuel economy of their fleets to an average of 54.5 miles per gallon — about 4.3 litres per 100 kilometres — by 2025 was scheduled to end in 2018. But the outgoing U.S. administration of Barrack Obama closed the review a week before his departure from the White House.
With Trump’s decision to re-open the process, the automakers now get to make their case to Pruitt. The agency will restore the original timeline set in agreement with carmakers, which was to determine by April 2018 whether the standards for 2022 through 2025 are still feasible.
The announcement was attended by a number of auto executives, including Ford CEO Mark Fields, GM CEO Mary Barra, Fiat Chrysler CEO Sergio Marchionne and Toyota Motor North America CEO Jim Lentz and others. Hundreds of auto workers, bused in by their companies, also attended.
Automakers agreed in 2011 to the “one national program” that coordinated fuel economy standards set by the U.S. Transportation Department, and greenhouse gas emissions standards set by the EPA and California’s Air Resources Board.
Debate cut short
Eighteen auto industry executives including Mary Barra of GM, Ford Motor Co.’s Mark Fields and Fiat Chrysler Automobiles boss Sergio Marchionne sent a letter to Trump in February, asking him to reinstate the review of fuel economy regulations.
The EPA’s decision to end the review prematurely ended a promised debate, they said.
“Moving back to the original timeline probably makes sense,” said David Adams, president of the Global Automakers of Canada, “and as far as Canada is concerned, generally, vehicles we have in this market are guided by the vehicles they have in the U.S. market. A common approach makes sense.”
Canada’s federal regulator, the Ministry of Environment Canada and Climate Change only looks at greenhouse gas and not fuel economy, Adams said. “One ultimately affects the other. If you reduce greenhouse gas, you improve fuel economy,” he said.
Mark Nantais, president of the Canadian Vehicle Manufacturers Association, said the Obama administration’s decision to close the review early “was premature.”
“The evaluation was not complete,” he said. “There are studies that are underway that need to be consulted before arriving at a decision to maintain these standards or relax them. All we want is to ensure the midterm evaluation is completed and there is a full and proper analysis of that work before any decision is made.”
Nantais said by closing the review early, it’s not yet known if there is demand for higher standards, if they are affordable or even achievable.
“The midterm evaluation is critical to answering those questions,” Nantais said. “It’s premature to surmise the standards will be rolled back.”
Nantais called the 2025 standards “unprecedented in their stringency” and that would cost US $200 billion to get there.
“Whatever the outcome is we want to maintain harmonization on a Canada-U.S. basis,” he said.
Nantais said that by harmonizing standards between Canada and the United States the auto industry can reduce its cost of bringing greener, more fuel-efficient technology to market more broadly and more quickly. He also said it means efficiencies in government, where there would be one standard test to meet.
“We are adamant about maintaining harmonization,” he said.
Michael Martinez and Bloomberg contributed to this report.