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GM supports US-wide rollout of California’s vehicle emissions framework

11 June 2021 Stephanie Brinley

General Motors (GM) has informed the US Environmental Protection Agency (EPA) that it now supports national adoption of the clean vehicle standards proposed in California's vehicle emissions framework.

Ford, Honda, VW, and BMW are among the automakers which agreed to that framework with the California Air Resources Board (CARB) in 2019. This framework was negotiated between CARB and these automakers in 2019; it does not include prior California rules, or a direct mandate for a percentage of zero-emissions vehicle sales.

Following a discussion between GM CEO Mary Barra and EPA Administrator Michael Regan, Barra sent an official letter from GM to EPA, which the automaker shared with IHS Markit and several media outlets.

The GM statement represents a reversal of position from its decision in 2019 not to enter into the California agreement, although it is consistent with the company's support of the introduction of one set of national standards and with the automaker's electric vehicle (EV) objectives.

Under President Joe Biden, the US has rejoined a global effort to reduce GHG emissions and achieve carbon neutrality under the Paris Climate Agreement, and is placing much more emphasis on EVs than the previous administration of President Donald Trump

According to a statement emailed to IHS Markit 8 June, in the letter, GM says it now supports "a federal path to achieve the same CO2 reductions endorsed by California through the acceleration of electric vehicle adoption. With this letter, GM is not only communicating our endorsement of California's CO2 reductions, but we are also calling for federal reductions at the same levels, achieved through stronger acceleration of EVs."

GM's letter said the company "supports the [vehicle] emission reduction goals of California through [model year (MY) 2026] and believes that the same environmental benefits can and should be achieved through a high-volume electric vehicle pathway that will set the industry on a stronger trajectory to greater GHG reductions in MY 2027 and later."

The California framework included targets for reducing GHG emissions in the 2020 through 2026 model years based on a carbon-related exhaust emissions (CREE) value calculated for each automaker based on its fleet; the framework also saw the automakers agreeing to maintain reductions in GHG emissions in their national fleet, not only what is sold in California, and lays out processes for calculating credits for sales of zero-emissions vehicles and off-cycle credits.

GM is suggesting that the US federal authorities adopt these targets essentially for MY 2023 through MY 2026, before moving to a stricter set of regulations to cover the period after MY 2026. The reason for this is that EPA is required to issue vehicle fuel-economy and emissions rules at least 18 months prior to the model year; this means EPA cannot adopt the Californian framework for MY 2020 and 2021, which are essentially over, or for MY 2022, which has begun.

For a national program, the earliest EPA could adopt different standards would be for MY 2023, based on EPA procedural rules.

A federal program would accelerate the state-by-state approach that is now underway. Individual states can adopt the California program, and Colorado, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, and Washington have announced plans to do so.

According to a GM spokesperson who spoke to IHS Markit, the automaker has no intention of signing up to the California framework directly.

"While some automakers are choosing to make new investments in intermediary technologies like hybrids and plug-in hybrids, others, such as GM, have chosen to invest early in our business transformation and are already committed to a pure battery-electric, zero emissions vehicle line-up. In order to accelerate electrification, we believe establishing an EV compliance pathway, in addition to the hybrid reliant path of some, would catapult our nation forward to achieve the targets established in the Paris Agreement," GM's letter stated.

In addition to supporting the Californian framework targets, beginning in MY 2023, GM encouraged EPA to instill more-stringent regulations from MY 2027. Currently, there are no regulations set beyond MY 2026, but EPA under President Joe Biden could create the next set of regulations.

"Establishing a compliance pathway for companies that have invested in an EV future early and can comply with higher-level performance standards in the later part of the program through increased sales of pure EV vehicles will encourage mass adoption and help the US claim a leadership position in electrification," GM's letter stated. "We believe an electric vehicle compliance pathway is a key component to setting the industry on an irreversible path towards a zero-emissions future, which can only be achieved with a tailpipe-free light duty fleet. This pathway would also provide the needed time for critical investment in charging infrastructure. It would provide a strong foundation for the industry to meet the needed reductions to meet Paris Climate objectives and provide a model for the next set of regulations targeting 2027-2035 which will need to focus on full battery electric vehicle deployment."

Outlook and implications

The shift in presidential objectives from the Trump administration to the Biden administration has not fundamentally changed GM's strategy, but the letter indicates that the company does sense an opportunity to move forward on the agenda, as well as a more open environment for the discussion.

GM is investing massively in a transition to an EV future, including increasing EV investment through 2025 to $27 billion, which was first announced in November 2020, and a commitment to an all-EV light-duty lineup by 2035, announced in January 2021.

Overall, US automakers are under pressure to reduce emissions, as the transportation sector accounts for approximately 28% of US GHGs, according to EPA.

Supporting the California agreement and encouraging the US to be more aggressive on vehicle emission and fuel-economy standards is in line with GM's internal business targets. If the federal standards did change to be in line with the Californian framework, it could free up federal support for the EV transition, which should benefit GM's business, as well as its carbon neutrality targets by encouraging and supporting US consumer adoption of EV technology and the infrastructure necessary to support it.

CARB announced the framework in July 2019. The agreement sets out requirements for light-vehicle fuel-economy and GHG targets up to the 2026 model. The automakers who voluntarily signed up agreed to only sell vehicles in the US which met the standards included in the framework. However, the July 2019 framework does not address mandating a percentage of sales be zero-emissions vehicles.

At the time, GM did not sign onto agreement, but said "our focus remains on working with all parties on a solution that would involve a 50-state solution and a national electric vehicle program."

President Trump opposed the California program, and his Department of Justice sued to strip the state of its authority under Section 177 of the Clean Air Act, with the support of some automakers and auto trade groups (not GM).

Under Trump, EPA issued the Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule, which, among other things, ended California's waiver authority. But Biden ordered EPA to review the SAFE rule, to look for a way to revise the standards it set, and to reinstate the California waiver.

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