Everything You Need to Know about EPA’s New Clean Car Emissions Standards

   

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Last week, the Biden Administration finalized the newest, and strongest, set of vehicle emissions standards for new passenger cars and trucks. These new rules apply to all auto manufacturers and only affect new vehicle sales. They will go into effect in model year 2027 and steadily increase in stringency through model year 2032. Here’s what you need to know:

Transportation is the largest source of climate emissions in the US (29 percent) and passenger cars and trucks account for the majority of this pollution. These new rules represent the largest climate regulatory action ever adopted by EPA and are expected to reduce more than seven billion tons of climate emissions. That’s the equivalent of four years’ worth of climate pollution from today’s entire US transportation sector. 

The new standards apply to both light duty passenger cars and trucks as well as medium-duty vehicles (which include larger pick-ups like the Ford F-250 and vans between 8,501 to 14,000 pounds gross vehicle weight). By 2032, new light-duty vehicle climate emissions would decrease by nearly 50 percent (to 85 grams/mile) compared to existing standards that go through 2026. Medium-duty vehicle climate emissions would drop about 44 percent (to 274 grams/mile).

But climate pollution isn’t the only thing coming out of tailpipes that’s harming us, and the impact of these tailpipe emissions isn’t equally shared. These new standards take another leap forward in reducing the toxic pollution from burning gasoline in our vehicles. For example, by 2031, new gasoline passenger vehicles will be required to cut particulate matter (PM)emissions by more than 80 percent most likely resulting in the use of gasoline particulate filters which can remove even the smallest ultrafine particles that are most harmful to breathe. This is a common sense step that relies on affordable, proven technology already in use in millions of gasoline vehicles outside the US.

The overall combination of reductions in particulate matter, nitrogen oxides and other air pollutants are expected to deliver $13 billion in annual health benefits.

EPA has set standards before, so what’s different this time? This is arguably the first time that the availability of plug-in electric vehicles has factored so significantly into the setting of US vehicle standards. Even so, the new rules encourage EV deployment but are technology neutral and don’t actually require automakers to sell them. EPA stuck to their tradition of setting performance-based standards—essentially setting an emissions target, or limit, on how much pollution on average is allowed from the new vehicles manufacturers sell (set as grams of pollution/mile). The lower the average, the more changes manufacturers need to make–either by improving their gasoline and diesel vehicles, or by increasing sales of lower emission technology like plug-in hybrid or battery electric vehicles.  

The flexibility in the standards means that we don’t know for certain how many EVs manufacturers will make. If manufacturers comply with the standards as EPA estimates they might, we could see battery electric EVs make up as much as 30 to 56 percent of light-duty sales between 2030 and 2032. That’s good, but there’s no guarantee and it also leaves us quite a ways to go to get on track to 100 percent sales by 2035 which UCS estimates is needed to be on track to zeroing out climate emissions by mid-century. 

Figure 1 More Work To Do: If automakers comply with the standards as EPA estimates they might [EPA (lowest -cost scenario)], plug-in hybrid and battery electric vehicles (included in zero-tailpipe emission vehicles) could make up more than 50 percent of new vehicle sales by 2032. UCS analysis [UCS (zero-CO2 2050 scenario]  illustrates the importance of exceeding this target and continuing quickly toward 100 percent market share of zero-emission vehicles by 2035 to be on track to zeroing out climate emissions by 2050. Note: EPA modeling showing an increase in gasoline sales after 2032 coincides with the phase out of the Inflation Reduction Act EV incentives

One thing to keep in mind. These standards do not rely on rocket science. Far from it. They rely on using technology already that is already in use today—just using it on more vehicle models.  

From a consumer perspective, the vehicles at the dealership in 2027 and beyond will in many ways be “more of the same.” The “more” being: more fuel efficient gasoline options, more hybrids, more plug-in hybrids and more EVs. In other words, more options to choose from that are also cleaner and that have lower operating costs. EPA estimates that on average, consumers will save an average of $6,000 over the life of a model 2032 vehicle even after accounting for the higher technology costs.

There’s been a lot of attention (and misinformation) about EVs and what these rules will and won’t do. It’s important to remember that even without these rules, the market for EVs is expected to grow substantially with estimates ranging around 30 percent to more than 50 percent sales by 2030. The global trend toward electric transportation is accelerating and it’s happening in the US too—with EV sales reaching record highs again last year and progress happening in every state (See our state-specific EV factsheets). US automakers—which are also global automakers—risk being left behind if they don’t continue their investment in and deployment of EVs.

While the industry momentum is already toward electrification, these standards are important to help create more certainty for automakers, charging providers, and utilities and ensures a robust and growing domestic EV manufacturing industry—which in turn supports a strong future for US autoworkers. 

But as UCS pointed out, the rules could and should have gone farther given the technology available today to improve gasoline vehicles and the massive private, public and global investment in an electric transportation future that is well underway.

The new EPA rules, in addition to setting a fleet average standard, also included additional flexibilities that mean significant uncertainty about the level of EV deployment we will actually see and the overall emissions benefits of the program.

UCS strongly advocated for a final rule that leveraged the availability of EVs and cleaner gasoline technology to get earlier overall reductions AND end up with more certainty in getting on track to 100 percent by 2035. The final rule ultimately relaxed the emissions targets in the earlier years of the program and lowered expectations for EV deployment while discounting the improvements available to gasoline vehicles. As a result, the emissions benefits are significantly smaller than they could have been under a more ambitious final rule.

On paper, EPA finalized a rule similar to Alternative 3, which my colleague Dave Cooke examined in a previous blog post. However, the agency extended a number of loopholes which they had proposed to eliminate, without adjusting the stringency of the rule, leading to even further reductions in the benefits of the rule. These loopholes are nothing new, and many we have argued against in not just this but prior rulemakings. For example, EPA continued the off-cycle credit program through at least 2032, something which we have long known over credits certain technologies well beyond their real-world reductions. Additionally, despite a wealth of data showing that plug-in hybrids drive on gasoline rather than electricity far more frequently than currently credited (particularly today’s plug-in hybrids), EPA has chosen not to take any corrective action until 2031.

The largest source of credits is for the use of alternative air-conditioning refrigerants with a lower greenhouse gas potential. This technology has been deployed by automakers in nearly the entire vehicle fleet over the past decade. However, because EPA did not adjust its final standard to reflect this technology, these credits serve as a massive windfall for manufacturers, particularly in the earliest years of the final rule.

Not only do these loopholes mean fewer emissions benefits than anticipated (our initial assessment is they could add up to a 15 percent reduction in emissions benefits), but because they are all weighted towards the earliest years of the program, they reduce the nearer term push towards an electric future which is especially important in states that have not adopted their own zero emission vehicle requirements.

These federal standards are important—they set the direction for the nation’s auto industry,  ensure we are making progress in reducing pollution, and hold automakers accountable for their products and the impact they have.  

But as a country and a planet, we are at a critical point in the climate crisis and need to accelerate our ambition. UCS demonstrated to regulators that the technology is available to go farther and faster to reduce climate emissions from new vehicles and we need to do everything we can to make that a reality.  States will continue to have an important role to play in supporting vehicle electrification as well as investing in transit and transportation infrastructure to support cleaner mobility choices, including walking and biking.    

The good news is that momentum is building around the globe for cleaner vehicles and in the US the investments and tax credits from the Inflation Reduction Act and Bipartisan Infrastructure Law will continue to support the robust roll out of EVs, domestic manufacturing, and charging infrastructure in the coming years. There’s no guarantee that EV deployment will exceed expectations. But on-going investments and continued momentum should help ensure that EVs are a compelling compliance strategy for automakers. And EVs will become increasingly attractive to more and more drivers because they are cleaner, can be charged at home, and are cheaper to fuel and maintain than the gasoline vehicles of the past. 

Federal vehicle standards are one piece of the puzzle, and it’s good news that Biden administration has taken definitive step towards a cleaner transportation future. But of course there is much more to do.  We need to use every policy tool available to reduce the dangers of climate change and build the transportation system of the future—which yes, means more EVs, but also means a more balanced system that is safer, healthier, and connects communities with cleaner, more accessible ways to move around.