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California is said to ready retaliation if Trump lightens emission rules

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EPA Administrator Scott Pruitt speaks on June 2, 2017, during a briefing in the Brady Briefing Room at the White House. (Molly Riley/Sipa USA/TNS)

WASHINGTON — As the Trump administration begins to dismantle Barack Obama’s auto efficiency regulations, California is said to be prepared to retaliate by doing something that automakers have feared: decoupling the state’s rules from those set in Washington.

The U.S. Environmental Protection Agency has concluded that current rules to limit vehicle greenhouse-gas emissions are too aggressive and should be revised, according to people familiar with the determination. The agency is scheduled to make the decision public by Sunday.

California intends to counterpunch by revoking its so-called deemed to comply provision, two people familiar with the matter said. The obscure state rule says carmakers that satisfy the EPA’s tailpipe greenhouse gas standards automatically fulfill California’s rules too.

California officials started notifying the nine states that follow California’s air quality regulations of this prospect last week, the people said.

“What this shows is that California and the states are saying ‘We’re serious. We decided based on the midterm review that these standards are achievable and are what the states need to meet our goals, so you’re going to have to comply with them,’” said Dave Cooke, senior vehicles analyst at the Union of Concerned Scientists.

Eliminating the rule would expose automakers to a patchwork of efficiency regulations if Trump regulators, as expected, impose weaker standards than California’s in upcoming model years. The state has already locked in its rules through 2025 and is developing tougher standards through 2030. California and the several states that follow its tailpipe regulations together account for about a third of the U.S. auto market.

Caught in the middle are automakers, which, after lobbying the Trump administration to re-evaluate the rules, are calling for peace between Washington and California. They’re escalating a campaign to persuade Trump administration officials not to lower emissions and related fuel economy requirements so much that talks with California break down.

“Automakers are talking in earnest with each other about how to thread the needle” between the demands of the federal government and California, said Robert Bienenfeld, assistant vice president for environmental strategy at Honda Motor Co.

The EPA’s release of the final determination will begin a longer-term process to rewrite the current regulations, intended to reduce carbon emissions from cars and light trucks by boosting fuel economy to a fleet average of more than 50 miles mpg by 2025. The standard is equivalent to roughly 36 mpg in real-world driving.

How it will all play out is up in the air.

“The final determination is a shot across the bow to California and the clean-car states: They’re on notice that EPA and NHTSA are going to move forward with weakening the standards,” said Roland Hwang, director the transportation program at the Natural Resources Defense Council. “Now everybody has to take a deep breath and figure out what that means.”

The EPA could issue its own proposal for new tailpipe standards. It could also propose rules jointly with the National Highway Traffic Safety Administration, which regulates fuel economy and has been preparing its own proposal. NHTSA’s fuel economy rules are the third component of rules that carmakers, California and the Obama administration agreed upon. The joint plan was struck in 2009 as General Motors and Chrysler sought federal assistance during the recession.

Yet NHTSA too appears ready to propose major cuts to fuel economy requirements under the current ruled, based on a review agency documents obtained by Bloomberg.

NHTSA officials have said they plan to propose a range of fuel economy targets for 2022-2025 model years by the end of March, though the agency may miss that goal. NHTSA has yet to send a fuel economy proposal to the White House for review.

In an interview this month with Bloomberg News, EPA Administrator Scott Pruitt said “California is not the arbiter of these issues.” He said that California regulates greenhouse gas emissions at the state level, “but that shouldn’t and can’t dictate to the rest of the country what these levels are going to be.”

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