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White House presses automakers to back fuel-efficiency rollback

As the Trump administration races to roll back Obama’s most ambitious climate rule, it lobbies to get industry on board

A technician inserts a probe into a tailpipe of a vehicle during a routine smog check in San Francisco in September. (David Paul Morris/Bloomberg News)

Trump officials thought they were doing the auto industry a favor when they decided to freeze gas mileage standards. But automakers aren’t so sure.

To persuade them, White House officials have launched an intense lobbying campaign as they seek to line up support for a proposal they hope to finalize this summer. The rule, which would undercut the most ambitious climate policy enacted during Barack Obama’s time in office, is sure to set up a legal clash with California and 13 other states that plan to press ahead with stricter tailpipe standards.

In two separate discussions in less than three weeks, according to several participants, the White House has urged major auto companies to endorse the administration’s plan to freeze fuel standards for cars and smaller pickup trucks between model years 2020 and 2026. But domestic and foreign automakers have continued to raise concerns about the proposal, dubbed the Safer Affordable Fuel Efficient (SAFE) Vehicles rule, because California and other states plan to require vehicles in their states to meet tighter emissions limits.

The flurry of activity came after the White House broke off discussions with California on Feb. 21: State officials said the administration never actually offered a compromise proposal that could serve as the basis of a real negotiation. California received an exemption under the Clean Air Act to set its own emissions standards a half-century ago, but the Trump administration is poised to challenge its exemption as part of the package the Environmental Protection Agency and National Highway Traffic Safety Administration are racing to complete.

Bloomberg News and Reuters reported some details about the administration’s lobbying campaign this week.

A White House official, who refused to speak on the record, said the administration expects to get broad support for its rule once it is finalized. Administration officials say that the nation needs to readjust the emissions targets because consumers prefer bigger and less fuel-efficient vehicles than regulators initially envisioned and that keeping them in place will spur Americans to drive older, less safe vehicles.

Both the administration and its critics agree the rollback will lead to higher greenhouse gas emissions linked to climate change. In a draft environmental assessment of the proposal, NHTSA projected that it and other policies would keep the world on an emissions trajectory that could raise global temperatures by 7 degrees Fahrenheit by the end of the century. A new analysis by the State Energy and Environmental Impact Center at New York University School of Law projects that, if finalized, the administration’s proposal would yield between 16 million and 37 million metric tons of carbon dioxide by 2025, equivalent to the annual emissions of more than 9 million vehicles.

Auto companies asked Trump to reassess federal fuel efficiency standards within days of him taking office, a point administration officials raised during a Feb. 21 conference call and a meeting at the White House on Friday with representatives from Fiat Chrysler, Ford and General Motors.

“We’re doing it for you, we’re deregulating the sector for you,” is the way one senior administration official, who spoke on the condition of anonymity to discuss private conversations, put it. “We hope you get behind us.”

Fiat Chrysler expressed support for the administration’s proposal at the Friday meeting, according to two individuals who spoke on the condition of anonymity because they were not authorized to talk on the record. GM and Ford officials were less committal.

Asked about the ongoing discussions, Ford’s president of global operations, Joe Hinrichs, said in a statement that the company is “disappointed” that California and federal regulators have not been able to find a compromise on future fuel efficiency standards.

“A coordinated program with every stakeholder is in the best interest of Ford’s customers, and is the best path forward to achieve reductions in carbon dioxide emissions and support critical investments in new technologies,” the statement said. “The auto industry needs regulatory certainty, not protracted litigation.”

In a statement, a Fiat spokesman said the company supports mileage targets “based on market realities,” noting that gas prices are low and bigger vehicles remain popular with consumers.

A GM spokeswoman confirmed a representative attended the Friday meeting and said the company appreciated that White House contacted it.

Fiat Chrysler settles major emissions cheating case with federal officials

The Auto Alliance, whose members produce more than 70 percent of cars and light-duty trucks in the United States, has continued to voice concerns about the administration’s approach. Auto Alliance spokeswoman Gloria Bergquist said in an interview Thursday that the group supports “year-over-year increases in fuel economy” and a nationwide standard that includes California and its affiliated states. Any regulation that fails to achieve that, she said, would lead to litigation and force firms to sell a different mix of vehicles in parts of the country.

“Years of litigation is not helpful. It’s going to be difficult for the industry, and it’s ultimately going to be bad for customers because it could increase the price of cars,” Bergquist said. “It’s still a negotiation going on, and it’s not done till it’s done.”

American Honda Motor — which, along with Ford, has publicly questioned the proposed rule issued in August — echoed those concerns.

“Our position has not changed and we are still urging the parties to negotiate,” Robert Bienenfeld, an assistant vice president at Honda, said in an email.

The administration is exploring the idea of increasing fuel efficiency standards between 0.5 percent and 1 percent a year to address the industry’s call for annual increases, according to several people briefed on the plan. That would still fall short, however, of existing federal standards. The Obama rule would have boosted the fleetwide average to nearly 51 miles per gallon by 2025; it would reach 37 mpg by 2025 under the Trump proposal.

Mary D. Nichols, chairwoman of the California Air Resources Board, showed little sympathy for automakers in an interview Thursday. She said California regulators had been clear all along that they intended to stick with the steadily increasing fuel efficiency standards that the federal government and the auto industry agreed to during the Obama administration.

“They clearly intended to get some flexibilities built into the enforcement of the existing regulations, and maybe a little more time and ability to use some of the credits that they had built up over time,” she said of the automakers. “And now, at this point, they are facing years of litigation. It’s an unfortunate situation, but as I said, it’s not our problem.”

Sen. Thomas R. Carper of Delaware, the top Democrat on the Senate Environmental and Public Works Committee, said in a statement that auto companies should publicly disavow the administration’s proposal.

“The automobile industry should think twice — and then for a third or fourth time — before tying its future to a proposal that is so legally flawed that it will surely be overturned by the courts immediately,” Carper said. “Costly litigation and regulatory uncertainty are entirely avoidable. There is a clear deal to be had between the administration and the state of California, and the automobile industry should be up in arms until that deal is struck.”

Josh Dawsey contributed to this report.