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GM Proposes New Path to California Emissions Targets

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GM Proposes New Path to California Emissions Targets

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WASHINGTON – General Motors on Wednesday supported blanket emissions reductions in California’s 2019 agreement with other major automakers, but called on the Biden administration to give automakers more flexibility to meet the reduction target of carbon between now and 2026.

GM’s position, outlined in a letter from CEO Mary Barra to Environmental Protection Agency Director Michael Regan, represented the latest change in vehicle emissions policy by the No. 1 US automaker.

Until November, GM supported the Trump administration’s effort to prevent California from setting stricter emissions standards than the federal government. Wednesday’s letter followed a call between Barra and Regan on Tuesday.

All of America’s major automakers face the challenge of protecting the profits of oil-fueled trucks and SUVs without clashing with an administration committed to a stronger climate policy, or with investors demanding that companies do more to reduce costs. emissions.

Ford Motor Co, Honda Motor Co, Volkswagen AG and BMW in July 2019 reached a voluntary agreement with California to reduce emissions from vehicles during the 2026 model years that would allow them to meet a single national standard.

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Under the California standard, GM and other automakers would be out of compliance for the current model year 2021 and 2022. The industry vehicle lineups blocked for production were aimed at meeting the Trump administration’s less demanding targets.

GM proposes that automakers adopt California’s greenhouse gas standards by 2023 and then go beyond the proposed California emissions targets for 2024-2026 to reduce overall emissions for 2020-2026 in the same amount.

The companies could “meet high-level performance standards in the latter part of the program through increased sales of pure electric vehicles,” Barra wrote in his letter.

The industry would then be set up for regulations for the 2027-2035 period that “should focus on the deployment of full battery electric vehicles,” Barra wrote.

President Joe Biden has proposed $ 174 billion to power electric vehicles and charging infrastructure, including $ 100 billion in rebates. A Senate panel voted May 26 to lift the cap on electric vehicle tax credits and raise it to $ 12,5,000 per vehicle for vehicles built by the union in U.S. factories. Republicans have opposed grant subsidies to electric vehicles.

Environmental Defense Fund Chairman Fred Krupp praised GM’s announcement saying it “is a sign that progress toward a cleaner future is becoming unstoppable.”

“A FUTURE OF ZERO EMISSIONS”

GM has outlined ambitious plans to expand its electric vehicle offering, investing $ 27 billion to place 30 new electric vehicles worldwide by 2025 and has said it aims to end the sale of gasoline-powered passenger vehicles by 2035.

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“We believe that an electric vehicle compliance pathway is a key component in putting the industry on an irreversible path to a zero-emission future, which can only be achieved with a light-duty fleet without tailpipes,” Barra wrote.

In the short term, GM, like its rivals Ford Motor Co and Stellantis NV, will make most of its profits selling large pickup trucks and SUVs in the United States.

GM announced plans last week to expand production of its largest pickup trucks by 1,000 vehicles a month to meet demand.

Average greenhouse gas emissions from new vehicles sold in the United States increased in 2019 due to consumers shifting to larger trucks and SUVs https://www.reuters.com/business/autos-transportation/us -vehicle-fleet-fuel-efficiency-fell-2019-249-mpg-epa-2021-01-06.

The Trump administration in 2020 finalized a rollback of corporate U.S. average fuel economy standards to require 1.5% annual increases in efficiency through 2026, well below the 5% annual increase in fuel economy rules. Obama administration that it ruled out.

The Center for Biological Diversity estimates that the California agreement will improve fuel economy by 3.7% year-on-year between 2022 and 2026.

The Biden administration plans to announce proposed revisions to US vehicle fuel economy and greenhouse gas emissions requirements by July Some Democrats want Biden to reinstate the strict Obama-era rules.

EPA Administrator Regan also spoke with top executives at Stellantis and Toyota on Monday.

“These talks have been constructive as the agency moves forward with action to address emissions from cars and light trucks,” EPA spokesman Nick Conger said Wednesday. (Reporting by David Shepardson; Editing by Howard Goller and Aurora Ellis)

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In-depth reports on the economics of innovation from The Logic, presented in association with the Financial Post.

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