Fuel Regulation Compliance Costs Could Be 40% Lower Than EPA Estimate

An economic assessment conducted by the International Council on Clean Transportation found that, due to recent improvements in technology, the Environmental Protection Agency’s rationale for its 2025 fuel efficiency standards may have overestimated the cost for automakers to comply. The ICCT’s study shows average per-car investments 34 to 40 percent lower than the previous EPA appraisal.

While this information, had it come out sooner, may not have kept automotive executives from bending the president’s ear to reevaluate EPA guidelines, it certainly reframes their reasons for doing so. The ICCT, famous for turning researchers loose on Volkswagen diesels, makes a good case that manufacturers have the tools to meet current standards without spending a lot of money.

The ICCT white paper builds on the modeling and peer-reviewed data used in the EPA and National Highway Traffic Safety Administration’s Technical Assessment Report of US passenger vehicle emission regulations. It includes newer industry research and the usage of advanced vehicle technologies. The paper asserts that technology costs continue to decrease, proving that previous estimates, including those made by the federal regulatory agencies, have been far too conservative.

“All of those evolutionary changes, just getting a few percent here and a few percent there from those allow more cost-effective implementation of the regulations,” said the report’s principal author Nic Lutsey.

Features like cylinder deactivation, higher-compression Atkinson-cycle engines, composite materials, and hybridization will all become more affordable and prevalent in the coming years. So, instead of the EPA-estimated $875 per vehicle needed to meet the standards, the ICCT’s analysis places the average per-unit-fee at $551.

Regulatory matters are usually pretty dry, but that’s a mic drop moment.

Automakers, through their lobbying groups, have said the Obama era rules were far too expensive to meet, and could even eliminate American jobs — leading to Donald Trump’s recent decision to have review those standards. However, protesting on the grounds of excessive cost becomes a little less potent when the necessary investment is the same price as a remote starter and some floor mats. Consumers aren’t likely to take up arms against an automaker or stop buying its product, especially when they are saving at the pump.