U.S. may revise 2021 fuel efficiency standards, freeze targets

WASHINGTON (Reuters) - The U.S. Transportation Department said on Tuesday it may revise auto fuel efficiency requirements starting with the 2021 model year, a year earlier than previously disclosed, and could adopt lower standards through 2025.

FILE PHOTO: A vehicle has its emissions tested at a smog testing facility in Oceanside, California, U.S. on September 29, 2015. REUTERS/Mike Blake/File Photo

In March, President Donald Trump ordered a review of U.S. vehicle fuel-efficiency standards from model year 2022 through 2025 established under the Obama administration. U.S. regulators said in a notice published Tuesday they are preparing a new environmental impact statement and could decide to freeze 2021 standards through 2025, rather than raising them every year.

The Alliance of Automobile Manufacturers, a trade group representing General Motors Co GM.N, Volkswagen AG VOWG_p.DE, Toyota Motor Corp 7203.T and others, said in a statement the environmental review "must happen regardless of what future standards are."

The group argues “facts need to drive public policy, including data on consumer sales, gas prices and costs of technology” in determining the final standards.

The Obama administration’s rules, negotiated with automakers in 2011, were aimed at doubling average fleet-wide fuel efficiency to about 50 miles per gallon by 2025.

The Obama administration said the rules would save motorists $1.7 trillion in fuel costs over the life of the vehicles but cost the auto industry about $200 billion over 13 years.

Under the 2011 deal, the 2022-2025 model year rules must be finalized by April 2018. Trump reopened a review of those rules after automakers said the Obama administration did not conduct a proper review to ensure the rules are feasible.

Under federal law, the National Highway Traffic Safety Administration must set “maximum feasible” Corporate Average Fuel Economy requirements, while considering “technological feasibility, economic practicability... and the need of the United States to conserve energy.”

The White House recently invited automakers to attend meetings with officials to talk about the review, officials briefed on the matter said.

Sierra Club’s Andrew Linhardt said freezing the fuel efficiency standards could “hurt the American people just to pad the pockets of big oil and auto executives.”

NHTSA said in its notice Tuesday it will consider a number of options - including continuing the 2021 requirements through 2025, rather than requiring yearly increases.

Under current rules, fleetwide average fuel economy is expected to be around 41 miles per gallon in 2021, compared to an average of nearly 50 miles per gallon in 2025.

The agency also said it is considering giving automakers additional flexibility for prior model years to meet requirements.

Reporting by David Shepardson; editing by Andrea Ricci and Cynthia Osterman