WASHINGTON – Fifteen states led by New York sued the National Highway Traffic Safety Administration Tuesday over the agency’s decision, under former President Donald Trump, to delay fee increases for automakers who fail to meet fuel economy standards.
The states petitioned the U.S. Court of Appeals for the Second Circuit to reverse the Trump-era rule, which was put into place just a week before President Joe Biden was sworn into office. Under the new rule, increased fines will not be applied through model year 2022.
Other states named in the lawsuit include California, Illinois, New Jersey, Massachusetts, Pennsylvania, Washington, Connecticut, Delaware, Maine, Maryland, Oregon, Minnesota and Rhode Island.
In 2015, Congress and the Obama administration passed a law that required federal agencies to raise penalties to catch up with inflation. The decision prompted a near-tripling of the non-compliance fine from $5.50 to $14 for each 0.1 mile per gallon consumed beyond the standards beginning with model year 2015.
Automakers opposed the increased fines, arguing it would cost the industry around $1 billion more annually to comply with the regulations. And the Trump administration’s decision to delay the fee hike was made in part at the urging of major U.S. automakers.
The Alliance for Automotive Innovation – which represents major automakers selling vehicles in the U.S., including the Detroit automakers – asked the Trump administration to do so, arguing that increased fines wouldn’t incentivize adherence because it’s too late to make changes to certain model years and would “effectively be punishing violators retroactively,” according to NHTSA.
Environmental and safety advocates criticized the decision, with the Union of Concerned Scientists’ Dave Cooke writing on Twitter that it resembled “industry handouts” and the Center for Auto Safety calling it a “ridiculous” last-minute regulation.
California Attorney General Xavier Becerra wrote on Twitter Tuesday that the rollback of fuel economy standards “cements the Trump (Administration’s) legacy of putting industry ahead of public health” and that “it will take time for the new Administration to undo the damage of the last.”
The industry has not met federal fuel economy standards since 2015, according to the Environmental Protection Agency. While Detroit automakers’ fuel economy has been increasing and greenhouse gas emissions have been decreasing in recent years, the three lag behind other major manufacturers in the measurements, according to NHTSA’s most recent Automotive Trends report.
In late October, Fiat Chrysler Automobiles NV said in a quarterly filing that it may have to pay nearly $583 million in fines after the Court of Appeals decision.
Biden has already made “green” auto industry policy a priority for the administration, including directing agencies to review fuel economy and emissions standards that were rolled back under the Trump administration.White House officials are preparing to discuss revisions to emissions standards with automakers and have spoken directly with several leaders in the industry, including United Auto Workers President Rory Gamble and General Motors Co. CEO Mary Barra.
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