The car manufacturers that signed the agreement welcomed the increased safety it provides. The uncertainty associated with legal challenges to the SAFE rule and the possibility of having to comply with two different U.S. GHG regulatory regimes — the stricter California and Section 177 standards and the less stringent SAFE Part II standards in the rest of the U.S. — prompted these five major automakers to voluntarily enter into these agreements with CARB. According to automakers, this will lead to: “(i) making long-term product planning decisions and investments with confidence; (ii) to meet market demand and production realities; and (iii) meet regulatory requirements during this period. Settlement Agreement ¶ 25. The agreements also aim to provide automakers with “compliance flexibility” and “greater planning certainty” for their domestic fleets. Id. Whether these agreements achieve these objectives, how California and the Section 177 states exercise their scope, and the final fate of Parts I and II of the SAFE Rule warrant close prosecution.
The agreement is not a regulation, but a voluntary treaty. It applies to vehicles up to 2026 model year, starting with 2021 model year cars and light commercial vehicles, which are expected to arrive at dealerships this fall. “This agreement creates a significantly increased incentive for manufacturers to sell electric vehicles. “We are proud to help California introduce new, progressive greenhouse gas regulations, and we remain committed to leading the industry in the fight against climate change. That`s why we support the government`s goal of securing a future for electric vehicles and applaud President Biden`s leadership in reducing emissions and investing in critical infrastructure to achieve those reductions. As California companies move towards 40-50% of our electric vehicle sales over the next nine years, bold action by our federal government partners is essential to increase consumer demand for electric vehicles and put us on track to meet global commitments under the Paris Climate Agreement. These include a strong national standard for greenhouse gas emissions, continued investment in charging infrastructure, and broad consumption incentives for all electric vehicles. Five major automakers – BMW of North America, Ford, Honda, Volkswagen Group of America and Volvo – and the California Air Resources Board (CARB) recently signed voluntary framework agreements to reduce annual greenhouse gas emissions from vehicles through the 2026 model year. This follows the landmark agreement that CARB and automakers reached in July 2019 in anticipation of the Trump administration`s plans to enact less restrictive emissions standards for light-duty vehicles. In addition, the automakers agreed not to challenge or undermine these framework agreements or california standards for the 2021-2026 model year, and CARB agreed to apply the terms of the agreement only in accordance with the implementing provisions and remedies of the respective agreements (i.e., contractual remedies) rather than using all available enforcement mechanisms. Section 177 states (the 13 states that follow California`s emission standards) have also agreed to exercise their enforcement discretion.
The respective framework agreements between the automakers and carb provide for an annual reduction in greenhouse gas emissions from passenger cars and light commercial vehicles of about 4 percent, closer to the level initially envisaged under the Obama administration. Among other things, the 2025 model year standard has been extended to 2026 and upstream GHG emissions do not have to be considered in the calculation of GHG emissions for a car manufacturer`s fleet compliance. The agreements also provide incentives to accelerate the development and production of ZEVs, as well as flexibility by expanding and increasing the vehicle multiplier for hybrid and electric vehicles. Automakers have also made a confidential commitment to electrification, the promotion and advancement of electrification technology, including the expansion of charging infrastructure. The California Air Resources Board has agreements with BMW of North America, Ford, Honda, Volkswagen Group of America and Volvo. (The BMW of North America deal includes Rolls Royce, and Volkswagen`s deal also includes Audi, according to the Air Board`s announcement.) Seeing this change, countries are sprinting to take the lead. For example, China, with its rapidly growing electric vehicle market, is increasingly driving the global supply chain for electric vehicles and batteries. By setting clear targets for the sale of electric vehicles, these countries become magnets for private investment in their manufacturing sectors – from parts and materials to final assembly. President Biden is determined to change that and act for the American people. For this reason, it will sign a decree setting a new target for electric vehicles, which will account for half of the new vehicles sold in 2030. This builds on announcements made today by automakers that represent nearly the entire U.S. auto market and have positioned themselves around the goal of reaching a 40-50 percent share of electric vehicle sales by 2030.
It`s more than a mission goal, it`s a goal to use one-time generational investment and a whole-of-government effort to elevate the American autoworker and strengthen American leadership in clean cars and trucks. The 2030 goal is calibrated to give existing manufacturing facilities time to modernize without failing assets, upgrades catalyzed by the Build Back Better program and embark on a path that expands U.S. domestic production with unionized workers. In accordance with the first-day Executive Order, the Environmental Protection Agency (EPA) and the U.S. Department of Transportation`s National Highway Traffic Safety Administration (NHTSA) will announce how they are dealing with the previous administration`s harmful withdrawals of energy efficiency and emissions standards in the short term. The two agencies` standards will be consistent until the 2026 model year, with the NHTSA`s proposed rule starting at the 2024 model year and the EPA`s proposed rule coming into effect one year earlier with the 2023 model year. The standards build on the momentum of the California Framework Agreement – an agreement between the State of California and five automakers: Ford, Honda, Volkswagen Group, BMW and Volvo.Through these coordinated communications on the development of proposed rules, the two agencies are adopting smart fuel efficiency and emissions standards that would provide a net benefit of approximately $140 billion over the life of the standards. Including asthma attacks that are prevented and lives saved, they save about 200 billion gallons of gasoline and reduce about two billion tons of carbon pollution. For the average consumer, this means net savings of up to $900 over the life of the vehicle through fuel savings. Building on these short-term measures, the decree, which the president will sign, initiates the development of long-term energy efficiency and emissions standards to save money for consumers, reduce pollution, strengthen public health, promote environmental justice and address the climate crisis. .