EPA: Automakers Too Reliant on Credits for Emissions Compliance

Matt Posky
by Matt Posky
epa automakers too reliant on credits for emissions compliance

The Environmental Protection Agency released its annual assessment of new vehicles yesterday, and it was filled with good news. On average, fuel economy continues to improve. Cars are not getting heavier, horsepower keeps going up, and every major manufacturer managed was in compliance with greenhouse gas standards through the 2017 model year. However, the EPA also said it’s concerned that manufacturers frequently tap into stored-up regulatory credits to make this possible.

“Most large manufacturers used banked credits, along with technology improvements, to maintain compliance in model year 2017. Three large manufacturers achieved compliance based on the emission performance of their vehicles, without utilizing additional banked credits,” the agency explained.

The ability to bank credits by over-complying in a given year is seen by some environmental groups as a way for corporations to shirk their responsibility to the planet. But EPA Administrator Andrew Wheeler’s concerns regarding the system rest elsewhere.

“Today’s report shows that while the auto industry continues to increase fuel economy, there are legitimate concerns about the ability to cost-effectively achieve the Obama administration’s standards in the near future,” Wheeler said.

Officially, the industry used fewer credits in 2017 than it did in 2016 and only exhausted about 7 percent of the total balance. But most of those are set to expire at the end of the 2021 model year. That’s significant because the EPA and National Highway Traffic Safety Administration are in the process of delivering less-stringent efficiency standards that would take effect that same year.

Over the summer, the agencies proposed capping mileage requirements around 37 mpg after 2020 — instead of setting them at roughly 47 mpg by 2025, which was the path chosen under President Obama’s administration. According to Bloomberg, the EPA’s opinion on the matter has upset several environmental groups.

“While the Trump administration is moving to gut the clean car standards, its own data shows the current standards are working,” said Luke Tonachel, director for clean vehicles and fuels at the Natural Resources Defense Council. “Automakers are innovating and improving the performance of their fleets, and tailpipe emissions continue to plummet.”

It’s true that manufacturers are investing heavily in alternative powertrains that pass the pollution buck to regional energy providers, but suggesting that they’re prepared to comply with the next decade’s efficiency requirements is little more than a guess. The University of Michigan has repeatedly reported that, while fleet-wide efficiencies continue to improve, practical sales-weighted fuel economy averages haven’t truly changed in the United States since MY 2014 — due primarily to increased consumer interest in larger vehicles, like crossovers and SUVs.

Dan Becker, director of the Center for Auto Safety’s Safe Climate Campaign, said overwhelming evidence exists that the Trump administration should be working harder to support emissions reductions and avoid a rollback at all costs. Last year, he said the automotive industry projected a 1 mpg improvement for the 2017 model year. In reality, they only managed to achieve around 0.2 mpg.

“Today’s EPA report demonstrates the chasm between what the rules were supposed to produce and what automakers delivered,” Becker told Bloomberg.

Obviously, the White House sees things as the same… but also very differently. Rather than a signal to double down on environmental legislation, it believes industry failures and consumer habits are at odds with the existing efficiency standards. The Trump administration imagines this as a pathway toward deregulation. The possibility of an industry-wide reliance on credits just creates more ammunition for their argument.

Presently, the world’s largest automakers bookend the range of corporate efficiency averages; Honda’s on top with 29.4 mpg while Fiat Chrysler sits in last place at 21.2 mpg. Both have a long way to climb before they’re complaint with 2020’s levels, though Honda could theoretically achieve the goal if it continues improving efficiency at its current pace. Still, it would be one of the only manufacturers to do so under that metric. The rest will likely become increasingly depending on credits (which will eventually end up being reset), while diving headlong into electrification.


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  • Art Vandelay Art Vandelay on Mar 08, 2019

    Honestly, the carmakers need to crap or get off the pot. They don't want to side with the President outright because politics, and they don't want to come out and say outright "we can't do it" because odds are some carmakers can and then they look like idiots. Fine then, meet the standards or pay the fines, but as has been mentioned, if your plan is just to pay the low fines you had better be giving to the right PACs this cycle because frankly, I think in 2020 you are going to find a much less receptive audience at 1600 Pennsylvania Ave and my sympathy ran out right around the first TARP bailout.

    • DenverMike DenverMike on Mar 08, 2019

      CAFE has simply been bastardized by political movements/agendas. Its original mission had absolutely nothing to do with forcing electric car adoption on a grand scale. If a decent percentage of consumers wanted EV, it'd be a different story, and obviously not much more can be done to ICE vehicles to drastically improve efficiency. No matter how good it feels, or who it gets happy, it makes zero sense dictating what automakers can build and offer, when consumers want something else entirely, or even a direct opposite. Even Honda would have to sell at least 15% EVs to comply. Forget about FCA, we're talking closer to 50% EVs, and likely 4 EVs for every Hellcat.

  • DenverMike DenverMike on Mar 09, 2019

    BAF0 didn't resurface to be anyone but "BAF0", full strength. For a true sociopath, what would be the point of that and not sticking to his well known, warped and deranged agenda and mission? Yeah he was instantly recognized, no doubt about it and I've only spotted him, "Charles James" bringing up the Chicken tax once, but it's gotta be killing him. I guess the moderators don't care, as it adds a couple clicks a day or hour. But as longs as he's not using profanity nor insulting other commenters, the infamous and totally banned BAF0 (Big Al from 0Z), probably using a new IP, found a loophole in the system.

  • Aidian Holder I'm not interested in buying anything from a company that deliberately targets all their production in crappy union-busting states. Ford decided to build their EV manufaturing in Tennessee. The company built it there because of an anti-union legal environment. I won't buy another Ford because of that. I've owned four Fords to date -- three of them pickups. I'm shopping for a new one. It won't be a Ford Lightning. If you care about your fellow workers, you won't buy one either.
  • Denis Jeep have other cars?!?
  • Darren Mertz In 2000, after reading the glowing reviews from c/d in 1998, I decided that was the car for me (yep, it took me 2 years to make up my mind). I found a 1999 with 24k on the clock at a local Volvo dealership. I think the salesman was more impressed with it than I was. It was everything I had hoped for. Comfortable, stylish, roomy, refined, efficient, flexible, ... I can't think of more superlatives right now but there are likely more. I had that car until just last year at this time. A red light runner t-boned me and my partner who was in the passenger seat. The cops estimate the other driver hit us at about 50 mph - on a city street. My partner wasn't visibly injured (when the seat air bag went off it shoved him out of the way of the intruding car) but his hip was rather tweaked. My car, though, was gone. I cried like a baby when they towed it away. I ruminated for months trying to decide how to replace it. Luckily, we had my 1998 SAAB 9000 as a spare car to use. I decided early on that there would be no new car considered. I loathe touch screens. I'm also not a fan of climate control. Months went by. I decided to keep looking for another B5 Passat. As the author wrote, the B5.5 just looked 'over done'. October this past year I found my Cinderella slipper - an early 2001. Same silver color. Same black leather interior. Same 1.8T engine. Same 5 speed manual transmission. I was happier than a pig in sh!t. But a little sad also. I had replaced my baby. But life goes on. I drive it every day to work which takes me over some rather twisty freeway ramps. I love the light snarel as I charge up some steep hills on my way home. So, I'm a dyed-in-the-wool Passat guy.
  • Paul Mezhir As awful as the styling was on these cars, they were beautifully assembled and extremely well finished for the day. The doors closed solidly, the ride was extremely quiet and the absence of squeaks and rattles was commendable. As for styling? Everything's beautiful in it's own way.....except for the VI coupe....it's proportions were just odd: the passenger compartment and wheelbase seemed to be way too short, especially compared to the VI sedan. Even the short-lived Town Coupe had much better proportions. None of the fox-body Lincolns could compare to the beautiful proportions of the Mark V.....it was the epitome of long, low, sleek and elegant. The proportions were just about perfect from every angle.
  • ToolGuy Silhouetting yourself on a ridge like that is an excellent way to get yourself shot ( Skylining)."Don't you know there's a special military operation on?"