NRDC Sues DOT for Relaxing Fuel Economy Violation Fines

In yet another attack on fuel economy standards supported by the majority of the public, the Trump Administration unlawfully delayed implementation of rules  meant to ensure auto companies invest in fuel-saving technologies. This delay sets up a perverse incentive making it cheaper for auto companies to simply pay a fine rather than meet fuel economy standards. The result is that consumers will have less fuel-efficient vehicle choices on the market, will pay more at the gas pump, and will suffer from increased pollution. Today, we took the Administration to court to make sure the rule stays in place, auto companies aren’t given a license to pollute, and consumers continue to be provided with cars delivering the fuel efficiency we expect and need.

The importance of these standards to the public is tremendous. Consumers can expect to save between $3,200-$4,800 over the lifetime of a new vehicle meeting the standards, even at low gas prices. If gas prices rise, the savings will be up to $8,200 per vehicle. A recent Consumers Union survey found 9 out of 10 consumers support continued fuel economy improvements. As my colleague Luke Tonachel has written, the 2012-2025 standards are expected to cut imports by one-third in 2030 because the program avoids consumption of 3.1 million barrels of oil per day. Annual carbon pollution in 2030 will be reduced by about 570 million metric tons of CO2, which is equivalent to the pollution from 85 million of today’s cars or 140 coal-fired power plants.

The National Highway Traffic Safety Administration (NHTSA), which sets fuel economy standards for passenger vehicles, enforces the standards by fining auto companies that violate the rules. The problem is that NHTSA’s fine has not been adjusted for inflation in 20 years. It was first set in 1975 at $5 for each tenth of a mile per gallon (mpg) a manufacturer falls short of its compliance obligation, and bumped up to $5.50 per tenth of an mpg in 1997. NHTSA finally updated the fine level in 2016, to $14 per tenth of an mpg, using the legally-required formula for inflation adjustment. This summer, with complete disregard for the procedures required by law, the Trump Administration reversed the adjustment, meaning today’s fine level is effectively only 40% of the 1975 level in real dollars. 

NHTSA, together with the U.S. Environmental Protection Agency, reported last year that the standards could be met on time at or below the costs originally expected. Now, the Administration’s delay means it will be remain cheaper for automakers to simply pay a penalty rather than comply with the law.

We won’t stand for the Administration giving auto companies a license to pollute. Automakers should be held to their obligations to meet fuel economy standards. In partnership with the Center for Biological Diversity and Sierra Club, we sued the Administration today to keep the current penalty level in place.

Stay tuned for ongoing developments in our case, and click here to raise your voice about the continued assault on these critical standards.