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Welcome to the inaugural issue of Mobility Matters Quarterly. This publication is designed to provide those in the automotive and other mobility industries with updates on the latest trends and developments related to environmental mobile source and transportation safety laws and regulations.

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Executive Order Sets 2030 Goal to Limit Vehicle Emissions

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On August 5, President Biden issued an&nbsp;<a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2021/08/05/executive-order-on-strengthening-american-leadership-in-clean-cars-and-trucks/" target="_blank" rel="noopener">“Executive Order on Strengthening American Leadership in Clean Cars and Trucks”</a> (Order). Signed and announced in Detroit alongside representatives from Ford, General Motors, Stellantis and the United Auto Workers, the Order sets a goal for 50% of all new passenger cars and light trucks sold in 2030 to be zero-emission vehicles (ZEV), which for purposes of the Order includes battery electric, plug-in hybrid electric or fuel cell electric vehicles. According to EPA, transportation is the single largest source of greenhouse gas emissions – 29% – with passenger cars and trucks accounting for 58% of all transportation sources.

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The Order also called on EPA and the U.S. Department of Transportation to consider promulgating new emissions and fuel economy standards. As discussed below, both agencies released proposed rules in August that, if promulgated, would reverse the Trump administration’s standards and set federal GHG emissions standards for passenger cars and light trucks to achieve greater pollution reductions through model year 2026.

EPA and NHTSA Propose Regulations for Passenger Cars and Light-Duty Trucks

On August 10, EPA issued its proposed GHG emissions rule,&nbsp;<a href="https://www.federalregister.gov/documents/2021/08/10/2021-16582/revised-2023-and-later-model-year-light-duty-vehicle-greenhouse-gas-emissions-standards" target="_blank" rel="noopener">“Revised 2023 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emissions Standards,”</a> 86 Fed. Reg. 43276, which would set an industry-wide target of 171 grams of carbon dioxide (CO2) per mile by model year 2026, a 17% decrease from the Trump administration’s goal of 205 grams of CO2 per mile.

EPA’s proposed GHG standards for light-duty vehicles are 10% more stringent than the Trump-era rules for 2023 model year vehicles. The GHG standards would become 5% more stringent each year through 2026 model year vehicles, but EPA accepted comments on even tighter standards for model year 2026. If these standards are promulgated, light-duty vehicles would average 38.2 mpg (compared to 32.2. mpg under the 2020 Trump administration rule), which EPA estimates would avoid 2.2 billion tons of CO2 emissions through 2050. To date, EPA has received approximately 28,000 written comments on its proposed rule.

Separately, but in coordination with EPA, the National Highway Transportation Safety Administration (NHTSA) also proposed a rule on August 10,&nbsp;<a href="https://www.federalregister.gov/documents/2021/09/03/2021-17496/corporate-average-fuel-economy-standards-for-model-years-2024-2026-passenger-cars-and-light-trucks" target="_blank" rel="noopener">“Corporate Average Fuel Economy Standards for Model Years 2024-2026 Passenger Cars and Light Trucks.”</a>&nbsp;NHTSA’s proposed rule, formally published in the federal register on September 3, 2021, would increase fuel efficiency by 8% annually for model years 2024-2026 rather than 1.5%, as previously set. It would also increase the estimated model year 2026 fleetwide average by 12 mpg compared with model year 2021. NHTSA states that its proposed standards would achieve a fleet average almost 9 mpg higher than those set during the Trump administration. Public hearings on the proposed NHTSA rule will be held on October 13 and 14.

On September 7, the California Air Resources Board (CARB) proposed that all new medium- and heavy-duty trucks sold in the state must have zero emissions beginning in 2040. This is an entirely new provision in a draft truck fleet climate regulation that in effect would amend the state’s landmark 2020 truck manufacturer zero-emission sales mandate rule. This rule is intended to complement CARB’s Advanced Clean Trucks regulation adopted in June 2020, which requires medium- and heavy-duty truck makers to begin selling a certain percentage of zero-emission models in the state beginning in model year 2024.

On September 8, New York Governor Kathy Hochul signed a bill banning the sale of gas-powered cars, light-duty trucks and off-road vehicles by 2035. New medium- and heavy-duty vehicles will have until 2045 to meet the same goal. The law puts New York in the company of California, which became the first U.S. state to advance a ban that will effectively end the leasing and sale of traditional internal combustion engine vehicles by 2035. Massachusetts is considering a similar goal, and other states may follow. These state developments further signal the growth of the U.S. electric vehicle market.

California continues to work toward development of the Advanced Clean Car II (ACC II) regulations, which may further reduce GHG and criteria pollutant emissions from new light- and medium-duty vehicles starting with model year 2026 and promote increased ZEV production and sales. The next ACC II public workshop is scheduled for October 13.

California’s Lithium-ion Car Battery Recycling Advisory Group continues to meet quarterly as the state moves toward proposing the first regulations in the country regarding the recovery and recycling of electric vehicle batteries. At its September 28 meeting, the Board publicly endorsed research and survey results conducted by UC Davis, which will be publicly available on December 15, after the Advisory Group reviews the rough draft, which it expects to receive by November 1. By April 2022, California law requires the Advisory Group to issue policy recommendations based on these results that will then be used to draft future regulations on lithium-ion battery recycling. This may ultimately spur EPA and other states to follow suit.

Finally, EPA continues to reconsider its 2019 withdrawal of the waiver of preemption to the state of California, which effectively revoked California’s authority to administer its ZEV and GHG emission standards within its Advanced Clean Car (ACC) program. EPA issued its notice for reconsideration on April 28, 2021 and accepted public comment through July 6, 2021. These developments follow EPA and NHTSA’s September 27, 2019 rule,&nbsp;<a href="https://www.federalregister.gov/documents/2019/09/27/2019-20672/the-safer-affordable-fuel-efficient-safe-vehicles-rule-part-one-one-national-program" target="_blank" rel="noopener">“The Safer Affordable Fuel-Efficient Vehicles Rule Part One: One National Program,”</a> (SAFE 1), which had determined that EPA could reconsider the waiver to California and that portions of the ACC program should be withdrawn due to NHTSA’s action under the Energy Policy &amp; Conservation Act as well as the Clean Air Act’s preemption provisions.

Joel D. Eagle 216.566.5938 <a href="mailto:Joel.Eagle@ThompsonHine.com">Joel.Eagle@ThompsonHine.com</a>

Tim Goodman 202.263.4117 <a href="mailto:Tim.Goodman@ThompsonHine.com">Tim.Goodman@ThompsonHine.com</a>

Will Godfrey* 202.263.4119 <a href="mailto:Will.Godfrey@ThompsonHine.com">Will.Godfrey@ThompsonHine.com</a><a href="mailto:Will.Godfrey@ThompsonHine.com"> </a>*Director, Mobility, Automation and Safety; not licensed to practice law

Jake M. Levin** 216.566.5628 <a href="mailto:Jake.Levin@ThompsonHine.com">Jake.Levin@ThompsonHine.com</a><a href="mailto:Jake.Levin@ThompsonHine.com"> </a>**2021 graduate of Chicago-Kent College of Law; not yet licensed to practice

or any member of our&nbsp;<a href="https://www.thompsonhine.com/services/automotive-industry" target="_blank" rel="noopener">Automotive Industry</a> or&nbsp;<a href="https://www.thompsonhine.com/services/environmental" target="_blank" rel="noopener">Environmental</a> practices.

This publication may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgment of its source and copyright. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel.

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Mobility Matters Quarterly – October 2021

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