Climate Wire | The EPA’s proposed emissions rule on Wednesday is Congress’ stick to carrots, giving lawmakers the clearest view yet on how to make the most of the hundreds of billions of dollars spent on clean energy and infrastructure. offers.
In addition to generous incentives in last year’s Inflation Reduction Act (IRA) and the 2021 Bipartisan Infrastructure Act, the EPA has created two rules that will transform the market. As a result, the agency has proposed the most aggressive regulation of carbon, smog, and soot emissions from compact cars to long-haul trucks in U.S. history.
It’s a pattern that the EPA is likely to repeat when it releases its power plant carbon rule later this month.
On Wednesday, EPA Administrator Michael Regan said the EPA is “very strategically aligned” with climate and infrastructure legislation on its light and medium-duty vehicle rules. The small-car proposal, which targets two-thirds of his new cars electrified by the 2032 model year, is feasible because the EPA is “tying regulations and historic incentives,” he said. rice field.
The rule builds on newly enacted measures such as the IRA’s $7,500 tax credit for EVs, Infrastructure Act investment in charging stations, and last year’s CHIPS and Science Act for Domestic Semiconductor Manufacturing. increase.
“We’re rowing in the same direction,” Reagan told the audience in the hot April sunshine in front of EPA headquarters.
The Climate, Infrastructure, and Science Act has reshaped the future of the automotive industry and changed the baseline the EPA uses to determine the costs and benefits of vehicular emissions regulations. The law has likewise changed how economic models predict the future of the power sector (climate wireApril 4).
This is important because the Clean Air Act requires the EPA to consider costs and other factors when issuing rules. Now, thanks to a new law, the U.S. Treasury Department will cut some of the costs of “manufacturing, selling, and using zero-emission vehicles by addressing the essential elements of advancing clean transportation and clean power generation.” EPA says it will pay. Preface to the light car proposal.
In other words, federal incentives will drive more automakers and consumers to EVs. In its rules on cars and SUVs, the EPA says that by his 2032 model year, before new emissions rules come into force, electric vehicles will account for 56-67% of new car sales. Citing the Council’s analysis.
The preamble to the regulation includes a 3.5-page section on climate and infrastructure legislation and, to a lesser extent, CHIPS legislation. But the statute is also the backbone of the EPA’s rule justification, with references sprinkled throughout its 758 pages.
Due to the Climate Change Act’s $7,500 tax credit, some EVs are “now more affordable to buy and operate than comparable EVs. [internal combustion engine] Therefore, the EPA argues that tougher rules pushing manufacturers toward EVs won’t hurt consumers.
The agency also cites climate law tax credits for battery cell and module manufacturers, which it says will help reduce production costs. Both credits will be phased out between He 2030 and He 2032 when the rules end.
The rule also envisions that the $7.5 billion infrastructure law investment in the country’s charging network will help EVs eat more market share from gasoline vehicles and reduce emissions.
Market changes already in the pipeline cannot be attributed to new regulations. Thus, climate and infrastructure legislation has made the EPA’s car and truck rule (which Reagan called the strongest ever) look like part of the policy landscape, not an outlier. .
“The EPA has not set these standards in vain,” Chet France, a former EPA official who is now a consultant with the Environmental Defense Fund, said at a briefing on Tuesday. “It’s in the context of where the industry is going, not only in the world, but especially in this country.”
Right policy at the right time?
This week’s tailpipe rule — and upcoming rules to limit carbon emissions from power plants — will be affected more by Congress’ recent climate-related spending than most other EPA rules. This is because the transport and power sectors are the largest emitters of greenhouse gases and are subject to both climate laws and government agency regulations.
“These are the first rules where both what you do and how much it costs are affected by these incentives,” said David Doniger, senior strategic director for climate change at the Natural Resources Defense Council. What will happen to the emission limits that the EPA imposes on vehicles and power plants, and the cost of those emission limits, will be heavily influenced by the IRA in the direction of lowering these costs to enable EPA air pollution. To justify regulation under the Prevention Act.”
Doniger said the IRA has confirmed that the EPA has the authority to regulate six greenhouse gases under the Clean Air Act, demonstrating Congress’ intentions to decarbonize the power and transportation sectors, thereby reducing emissions. Doniger said it is tightening up its regulations. Both elements could help the administration defend the rule in court, he said.
However, the auto industry has expressed reservations about a draft rule that would require automakers to reduce their vehicles’ average emissions by at least 50% over the 2026-2032 model year.
John Bozzella, president and CEO of the Alliance for Automotive Innovation, said in a blog post Wednesday that the goal of the rules is “very high.”
The Biden administration’s previous EV goal of making 50% of car sales electric by 2030 is already a “stretch goal and subject to a number of conditions” and will require the full power of the IRA to reach it. he said it was
Bozera, who heads a group representing the major U.S. auto companies, said the feasibility of the rule will impact the industry, including “charging infrastructure, supply chains, grid resilience, availability of low-carbon fuels and critical minerals.” said that it depends on factors beyond their control.
He acknowledged that baseline assumptions had changed because of the new law.
“However, the Inflation Reduction Act, the Bipartisan Infrastructure Act, and the CHIPS and Science Act fueling infrastructure incentives and supply-side provisions are sufficient to support electrification at the levels envisaged by the proposed standards. I don’t know yet whether it will be many years,” Bozella wrote.
He also pointed to guidance recently released by the Treasury Department on which vehicles qualify for the $7,500 EV tax credit. The guidance requires vehicles to be manufactured and sourced in the United States or its closest trading partner, which Bozzella said is because “far fewer EV models” are expected by the EPA’s lightweight vehicle rules. It states that it means you are eligible for purchase incentives.
But while major automakers are cautious, the EV industry is eager to uphold EPA rules and even calls for stronger rules.
“This is the right policy at the right time, thanks to the industrial policies that have been put in place over the past two years,” said Albert Gore, executive director of the Zero Emission Transportation Association.
According to Gore, the Infrastructure Act has resulted in billions of dollars being spent on building public charging stations for electric vehicles. Although most of his EV charging takes place at home, the network of chargers is expected to help ease drivers’ anxiety about long-distance driving. The law also has provisions for dealing with other common complaints, such as slow charging speeds and frequent power outages (energy wireMarch 29).
The IRA has also expanded tax incentives for car and truck buyers, as well as created financial incentives to strengthen the battery and car manufacturing industries. Even before the law passed last year, new multi-billion dollar battery and vehicle factories were announced in the Midwest and Southeast.
“The IRA really accelerated that,” Gore said.
Contributed by reporter Mike Lee.
This story also appeared energy wire.
Reprinted from E&E News with permission of POLITICO, LLC. Copyright 2023. E&E News provides essential news for energy and environmental professionals.
