May 31, 2018 / 4:03 PM / 3 months ago

U.S. agency backs halting tighter fuel economy standards after 2020

WASHINGTON, May 31 (Reuters) - Automakers would no longer have to boost fuel economy for their U.S. fleets after 2020, and California would not be able to set stricter standards than the federal government under a proposal submitted to the White House on Thursday by the Transportation Department, two sources said on Thursday.

Sources confirmed details of a document that was posted on a government website Thursday confirming that the department submitted the proposal to the Office of Management and Budget for review. Sources briefed on the matter said the proposal could be unveiled as early as next week.

The rules, negotiated with automakers by former President Barack Obama’s administration in 2011, aimed to double average fleet-wide fuel efficiency to about 50 miles (80 km) per gallon by 2025 and included significant annual increases in automaker requirements.

The sources said the proposed rule, to be made available for public comment, will include a series of alternatives but the preferred alternative will be to freeze requirements at 2020 levels through 2026.

Advocates of stricter standards, designed to limit emissions of greenhouse gases, were quick to criticize the Transportation Department proposal. U.S. Senator Tom Carper said a draft shows the administration’s preferred alternative would result in Americans using 206 billion more gallons of gasoline through 2050 versus the current standards.

The lengthy proposal will assert that a 1975 federal law preempts states from imposing emissions rules. Automakers have sought changes to the Obama-era standards to address lower gasoline prices and a shift in U.S. consumer preferences to larger vehicles.

Environmental Protection Agency spokesman Jahan Wilcox said the EPA and the National Highway Traffic Safety Administration have jointly developed the rule and sent it to OMB for review. He declined further comment ahead of the review’s completion.

The final proposal could still be changed during the inter-agency review process.

Reuters and other media outlets reported in April that the administration was likely to back freezing the standards, which would spark a fight with California and other states backing tougher rules. This month, California and 16 other states filed suit to challenge the Trump administration’s April decision to announce plans to revise the rules.

Automakers at a May 11 meeting with President Donald Trump urged him to try to reach agreement with California. The following week, California Air Resources Board chief Mary Nichols met with administration officials.

Also last week, General Motors chief executive Mary Barra held a new round of meetings with Transportation Secretary Elaine Chao and EPA Administrator Scott Pruitt.

A person briefed on the NHTSA proposal said it will address impacts of fuel efficiency increases on the economy, auto industry, environment and safety. (Reporting by David Shepardson; Editing by David Gregorio)

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