The Environmental Protection Agency (EPA) recently re-evaluated its January 2017 mid-term evaluation final determination of greenhouse gas emission standards for model year 2022-2025 light-duty vehicles, initially set in 2012. This re-evaluation culminated in an agency decision – in a notice to be published in the Federal Register – that it would revise those greenhouse gas emission standards. The EPA concluded that the standards "are based on outdated information" and that "more recent information suggests that the… standards may be too stringent". For example, the EPA now believes that the initial standards were based on an overly optimistic view of consumer adoption of electrified light-duty vehicles and on estimates of higher gasoline prices.

In the notice, the EPA states that it will separately begin a joint rulemaking with the National Highway Traffic Safety Administration to consider replacement standards. According to the initial mid-term evaluation, the existing 2022-2025 standards were expected to achieve a projected fleet average fuel economy of 51.4 miles per gallon equivalent, which would translate to a real world average fuel economy of approximately 36 miles per gallon. The EPA's reversal could lead to a legal battle with California over its Clean Air Act waiver, which granted the state the right to impose stricter-than-federal standards for certain vehicular emissions.

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For further information on this topic please contact Samuel B Boxerman or Jim Wedeking at Sidley Austin LLP by telephone (+1 202 736 8000) or email (sboxerman@sidley.com or jwedeking@sidley.com). The Sidley Austin LLP website can be accessed at www.sidley.com.