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The Insider

President Joe Biden has directed EPA to quickly work to tighten vehicle emissions standards that the Trump administration loosened, but the agency’s options could be constrained by a new Supreme Court appeal on states’ authority to set their own emissions mandates, and the deal that several automakers forged with California to achieve voluntary greenhouse gas targets.

Former regulators and a broad array of automakers are supporting a high court petition by Volkswagen where the firm hopes to overturn an appellate decision that allows states to regulate updates to vehicle emission systems, which they argue would interfere with the Clean Air Act regulatory regime for the sector.

VW Wins Broad Support For Supreme Court Petition On Air Act Preemption
Former EPA and California air regulators are joining automotive groups in backing Volkswagen’s effort to have the Supreme Court overturn a ruling that the Clean Air Act does not preempt state and local governments from enforcing against post-sale updates to vehicle emissions systems, saying such enforcement is a federal responsibility.

Supporters of the automaker VW’s position outlined their arguments in four amicus briefs filed Feb. 16 in Volkswagen Group of America, Inc., et al., v. the Environmental Protection Commission of Hillsborough County, Florida, et al.

The court had been scheduled to meet Feb. 19 to decide whether to take the case but that may be delayed because the justices Feb. 16 also asked the counties to file a response to VW’s petition by March 18.

The groups are all supporting VW’s Jan. 21 filing asking the Supreme Court to grant its petition for a writ of certiorari and overturn a decision by the U.S. Court of Appeals for the 9th Circuit allowing local governments to sue the automaker for installing defeat devices in millions of vehicles, even after VW paid billions in a landmark settlement with EPA over the air act violations.

Even as they join with regulators on the Volkswagen case, automakers are bracing for a clash with the Biden administration over their push for new regulatory flexibility on federal emissions limits to reduce vehicles’ GHG emissions.

However, sources say the odds are poor that industry will secure any mandate that would be more favorable than their Trump-era deal with California.

Prospects For Easing California Vehicle GHG Deal Unlikely, Observers Say
Automakers are unlikely to win significant new regulatory flexibility from the Biden administration beyond California’s greenhouse gas deal with five companies that is already weaker than Obama-era rules, according to early appraisals from observers, amid signs of an ongoing auto sector split over the scope and stringency of future vehicle GHG rules.

“How do they maintain credibility if they go weaker?” asks one industry source, citing the balancing act the administration faces between its pledge to pursue ambitious reversals of Trump administration’s deregulatory efforts, and its pledge to consult with industry on future requirements for reducing vehicles’ GHGs.

But the observers also note that the real-world stringency of future rules could be affected by several details that provide potential negotiating room, including top line stringency, which technologies are credited toward requirements, and possible tradeoffs between near term flexibility and future mandates.

Biden in a Jan. 20 executive order (EO) floated a preliminary July 2021 deadline for a possible new proposal on federal vehicle climate regulations, along with an April 2021 deadline for at least initial steps to revisit the Trump administrations attack on state vehicle GHG programs.

The dual timelines in the EO suggest that Biden administration might pursue a two-track approach focused on near term vehicle standards for the next several model years, combined with a longer-term push combining both rules and incentives in a bid to spur electrification and which could require congressional help.

Meanwhile, several states are pressing EPA to scrap a 1986 enforcement policy for its auto rules governing catalytic converter modifications, in favor of revisions to its new anti-tampering guidance.

EPA Urged To Withdraw 1986 Catalyst Policy, Add To Anti-Tampering Plan
States are urging EPA to withdraw what they say is an outdated policy issued in 1986 for how the agency will pursue Clean Air Act enforcement actions against illegal aftermarket catalytic converters, and instead incorporate catalysts into its newly revised anti-tampering policy finalized late last year.

EPA’s Office of Enforcement & Compliance Assurance (OECA) last November completed a major update to its decades-old guidance documents for how it will enforce the Clean Air Act ban on engine tampering and installation of aftermarket parts. The guide reinforces EPA’s view that it will only enforce against aftermarket devices that increase emissions, rather than “unduly [restrain] commerce in the aftermarket sales and service industry.”

The agency simultaneously floated a separate document seeking input on its standalone 1986 tampering guidance on catalytic converters, which have since undergone vast technological improvements.

EPA sought information on whether it had accomplished the goals of the original policy, whether it should establish a consistent enforcement approach for all types of replacement catalysts, and whether it should withdraw the catalyst policy and use the overarching tampering policy for catalysts, among other information requests. The agency published the catalyst document in the Dec. 14 Federal Register and opened at 60-day comment period, which ended Feb. 12.