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A.G. Schneiderman Secures Court Order Blocking Trump Administration Delay Of Fuel Efficiency Standards Penalty Rule

AGs Sued in September to Block Delay of Rule that Incentivized Automakers to Achieve CAFE Standards – Which Would Reduce Carbon Emissions by 1.8 Billion Metric Tons and Save Each Consumer $1,650

New York Attorney General Eric T. Schneiderman recently announced a federal court order blocking the Trump administration’s delay of a rule that updates penalties assessed to automakers for noncompliance with federal fuel efficiency standards. The rule encourages automakers to produce vehicle fleets that meet or exceed federal fuel efficiency standards – which would reduce carbon emissions by 1.8 billion metric tons and save each consumer $1,650.

In September, Attorney General Schneiderman and California Attorney General Xavier Becerra led a coalition of five Attorneys General (New York, California, Vermont, Maryland, and Pennsylvania) that filed suit to block the Trump administration’s delay of the penalty rule. This morning, the Second Circuit issued an order vacating the Trump administration’s delay rule.

“The fuel efficiency standards penalty rule is a common sense measure that would protect consumers’ pocketbooks while reducing the carbon emissions that harm our health and drive climate change,” said Attorney General Schneiderman. “Today’s court order is a big win for New Yorkers’ and all Americans’ health and environment. As we’ve proven again and again, when the Trump administration puts special interests before public health and our environment, we’ll take them to court – and we will win.”

Originally set to take effect in July 2017, the rule would increase the penalty imposed on automakers whose vehicle fleets do not meet minimum fuel efficiency standards. All federal agencies were required to increase their civil penalty rates by an act of Congress, the 2015 Federal Civil Penalties Inflation Adjustment Act. In response, the U.S. Department of Transportation issued a new rule to increase the penalty by $8.50 per tenth of a mile per gallon. The Trump administration delayed it, reverting back to the lower penalty rate instead. If the penalty is not sufficiently high, automakers lack a vital incentive to manufacture fuel efficient vehicles.

The penalties provide increased incentive for auto manufacturers to achieve the Corporate Average Fuel Economy (CAFE) Standards for upcoming model years. The standards – for model years 2016 through 2025 – would save approximately 1.8 billion metric tons of carbon dioxide emissions over the lifetimes of the vehicles sold. The Augural Standards (model years 2022 through 2025) alone would reduce carbon dioxide emissions by 40 million tons a year in 2025, and by over 200 million tons a year in 2050, compared to indefinitely maintaining the 2021 standards. Relatedly, Attorney General Schneiderman has made clear that he would challenge in court any effort to rollback these important standards.

The Environmental Protection Agency (EPA) has previously estimated that the Augural Standards would also lead to an annual reduction of 13,000 tons of NOx emissions and of 2,000 tons of particulate matter emissions nationwide by 2030. A consumer would save a net $1,650 with a model year 2025 vehicle that adheres to the Augural Standards, compared to one that complies with the model year 2021 standards. These impacts are described in a National Highway Traffic Safety Administration (NHTSA) fact sheet.

As the lawsuit filed by the Attorneys General details, on December 28, 2016, the NHTSA announced a rule that increased the penalty rate for violating fuel efficiency standards by $8.50, from $5.50 per tenth of a mile per gallon to $14 per tenth of a mile per gallon. However, on July 12, 2017, NHTSA announced it was indefinitely delaying the effective date of its updated penalty. This is unlawful in two ways. First, NHTSA acted without notice and without taking comment, which violates the Administrative Procedure Act. Second, this arbitrary delay reinstates the outdated $5.50 penalty rate, which violates the 2015 Federal Civil Penalties Inflation Adjustment Act.

In a similar petition, the Natural Resources Defense Council, Sierra Club, and the Center for Biological Diversity also challenged the Trump administration’s illegal delay.