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Defying Trump, California locks in vehicle emission deals with major automakers

imageStock Markets3 hours ago (Aug 17, 2020 05:50PM ET)

(C) Reuters. FILE PHOTO: FILE PHOTO: Traffic moves slowly on the 405 freeway in Los Angeles

By David Shepardson

WASHINGTON (Reuters) – The California Air Resources Board (CARB) and major automakers on Monday confirmed they had finalized binding agreements to cut vehicle emissions in the state, defying the Trump administration’s push for weaker curbs on tailpipe pollution.

The agreements with carmakers, including Ford Motor (NYSE:F) Co, Volkswagen AG (DE:VOWG_p), Honda Motor Co and BMW AG, were first announced in July 2019 as voluntary measures, prompting anger from U.S. President Donald Trump.

A month later, the Justice Department opened an antitrust probe of the agreements, only to end it without action.

The administration in March finalized a rollback of U.S. vehicle emissions standards to require 1.5% annual increases in efficiency through 2026, well below the 5% annual increases in discarded rules under President Barack Obama.

The Center for Biological Diversity estimates the deal will improve fuel economy 3.7% year over year between 2022-2026.

Volvo Cars, owned by China’s Geely Holdings, also finalized its agreement on Monday.

CARB said the deal will cut vehicle greenhouse gas emissions through 2026 and “encourage innovation to accelerate the transition to electric vehicles, provide industry the certainty needed to make investments and create jobs, and save consumers money.”

The White House did not comment.

The 13 states that follow California’s standards, which represent about 40% of the U.S. auto market, have said they support the agreements.

In May, a group of 23 U.S. states led by California and some major cities challenged the Trump vehicle emissions rule.

Other major automakers like General Motors Co (NYSE:GM), Fiat Chrysler Automobiles NV and Toyota Motor (NYSE:TM) Corp did not join the California agreement.

Those companies also sided with the administration in a separate lawsuit over whether the federal government can strip California of the right to set zero emission vehicle requirements.

Ford said the deal will support “and incentivize the production of electrified products, and create regulatory certainty.” Honda said the agreement will allow it to sell “a single nationwide fleet… that achieves substantial annual emissions improvements.”

Defying Trump, California locks in vehicle emission deals with major automakers

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