Trump Regime Opens Up Second Front on Its War Against Limits on Greenhouse Gas Emissions from Vehicles

It was a big deal: On Aug. 1, the U.S. Environmental Protection Agency (EPA) published a proposal to revoke its own 2009 Endangerment Finding.

Why is it a big deal? In the 2009 Endangerment Finding, EPA asserted (for the first time) that it had the authority to regulate new motor vehicles’ greenhouse gas emissions under the Clean Air Act because those emissions contribute to climate change, which creates effects that endanger the public health and welfare.  

The framework of 2009 Endangerment Finding has also served as the basis for EPA’s assertion of its authority to regulate greenhouse emissions from other sources, including all stationary sources (an assertion with which the Supreme Court disagreed), power plants (ditto), airplane engines, and oil and natural gas extraction (an assertion that EPA is now backing away from). 

If EPA ultimately revokes the 2009 Endangerment Finding, existing regulations of greenhouse gas emissions will no longer be enforceable and there will be no new EPA regulations to control them, for at least the time being.  

This will take some time, though. Here’s why:

The proposed revocation must go through the formal rulemaking process (that Aug. 1 proposal was just the first step), and will undoubtedly be subject to challenge in court, likely going all the way to the U.S. Supreme Court before it is ultimately decided.   

Bottom line? EPA’s proposed revocation of the 2009 Endangerment Finding was an entirely predictable result of the 2024 Presidential election, and the responses of environmental and industry groups that followed it have been just as entirely predictable.  

You can read examples typical of industry here and typical of environmentalists here. 

What has largely escaped the attention of those writing about the 2009 Endangerment Finding is another avenue of attack on emission standards for motor vehicles that the regime has also recently opened up.  

The so-called “One Big Beautiful Bill,” which was signed into law July 4, contains a provision (specifically, its section 40006) that eliminates the penalty that automakers would have to pay if they failed to comply with the Corporate Average Fuel Efficiency (or CAFE) standards promulgated by the National Highway Traffic Safety Administration, beginning with the most recent model year for which a manufacturer has not yet been issued a penalty for noncompliance.  

The financial impact on automakers of eliminating the penalty could be significant – had the penalty not been eliminated, any automaker that failed to comply with the standard for its model year 2024 fleet would have been fined $17 per tenth of a mile per gallon by which it failed to meet the standard, multiplied by the number of model year 2024 vehicles it sold.  

(Still with us? We know that’s a word problem and a half…)

Automakers collectively paid well more than a billion dollars in penalties for failing to comply with CAFE standards between 1985 and 2020 (a breakdown of who paid what, and when, is available here).

And while the proposed revocation of the 2009 Endangerment Finding will take some years to go into effect and may in the end be stymied by the courts, the One Big Beautiful Bill is already the law of the land.

However, the elimination of the penalty for violating the CAFE standards does not necessarily mean that roads will fill up with even more gas guzzlers beginning with the next model year. The standards themselves remain on the books and automakers are (at least nominally) obligated to follow them, as they are still the law.  

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Also, automakers plan for the cars they plan to sell years in advance, so it will be difficult, if not impossible, for them to retool quickly to manufacture vehicles that are not CAFE-compliant.

Rather, the biggest immediate impact of the elimination of the penalty is likely to be to the bottom line of electric vehicle manufacturers.  

“They were previously able to sell credits to other vehicle manufacturers to help them avoid or offset their penalties for failing to comply with the CAFE standards,” GASP senior attorney John Baillie said. “The income from these sales of emissions credits were a significant part of some manufacturers’ revenue streams.”

Baillie continued:

“The elimination of the penalty likely destroys the value of those credits. Only time will tell if electric vehicle manufacturers are forced to raise their prices to make up for this lost revenue stream.  If they cannot, expect to see fewer electric vehicles on the road.”

Editor’s Note: GASP continues to follow this issue closely and will keep you posted as new details become available.