Could Zero-Emission Mandates Be on the Bubble?

What would a repeal of the Clean Air Act’s exemption for California mean for zero-emission mandates?

Last week, Colorado’s Air Quality Control Commission approved a compromise to adopt California’s zero-emission vehicle requirements after a hearing that lasted from Tuesday to Friday. The decision came as Congress is poised to repeal Section 177 of the Clean Air Act, which has allowed California to adopt its separate fuel economy standards independent of federal policy, which otherwise preempts states from creating their own standards. States have been allowed to adopt the rules California created, and Colorado is the 10th state to adopt California’s zero-emission policy. Aside from Oregon, most of the states are in the Eastern U.S., such as New York, Maryland and Maine.

The zero-emission vehicle set of standards requires manufacturers to make electric vehicles comprise a percentage of their vehicles sold in Colorado. Starting in 2023, 4.9% of a manufacturer’s vehicles for sale in the state have to produce zero emissions. Higher target setting would continue through 2030. Auto manufacturers can also earn credits for selling electric vehicles in the two model years prior to 2023.

In July, California came to a compromise with a handful of auto manufacturers for stricter emission rules in order to get around the presidential administration’s efforts to take away California’s authority to make its own rules.

Air Quality Control Commission members had split opinions on adopting the zero-emission vehicle deal. Some members said market demand rather than mandates should drive the availability of electric vehicles. Others expressed understanding for that position, but said the need to address climate change is immediate, and also pointed to public comments and testimony supporting the new regulations. 

University of Denver Sturm College of Law professor KK DuVivier said she has no doubt Section 177’s repeal will get challenged in court. One potential question lingers: If the repeal of Section 177 passes, can states still have their own zero-emission vehicle mandates? Or does that also fall exclusively in the purview of the federal government?

“The federal government has preempted the manufacturing part, but as far as different state programs to encourage zero-emission vehicles, I think states still can do that.” She said she believes states could regulate those mandates without having to touch fuel economy manufacturing standards. 

Regulating greenhouse gas emissions is separate from regulating fuel economy standards, which is what the Environmental Protection Agency and by extension the Clean Air Act govern. The difference could be the source of debate over whether states could have the authority to regulate zero-emission vehicles should Section 177 go away.

But Matthew Groves, vice president of legal, regulatory and compliance for the Colorado Automobile Dealers Association, believes a repeal of Section 177 would render state zero-emission vehicle policies obsolete. He said he believes the federal Energy Policy and Conservation Act prevents states from creating their own regulations. 

According to a fact sheet published by the EPA and Department of Transportation, Section 177 of the Clean Air Act doesn’t affect the Energy Policy and Conservation Act’s preemption over state vehicle emission standards. The guidance says state limits on carbon dioxide emissions and its zero-emission vehicle mandate are tied to fuel economy standards because “carbon dioxide is the primary byproduct of gasoline fuel combustion, and compliance with the California rules and the Federal CAFE standards is assessed on the same basis: by measuring carbon emissions.”

DuVivier said she believes the guidance is consistent with the federal government only having the ability to regulate emission standards. Congress “can’t keep states from trying other incentives like encouraging EVs,” she said.

But the fact sheet does note that no federal appellate court has addressed the preemption question. The 2nd and 9th Circuit Courts of Appeals were poised to look at the issue in two cases from 2007, Green Mountain Chrysler Plymouth Dodge v. Crombie in Vermont and Central Valley Chrysler-Jeep, Inc. v. Goldstene in the Eastern District of California. The district courts had ruled the ECPA wouldn’t preempt California’s rules if the state received a waiver from the Clean Air Act. 

Before the appellate courts decided the cases, the Obama administration, the California Air Resources Board and the automakers agreemd on a joint set of standards. As one condition, the automakers dropped their appeals.

Groves said states regulate around the edges of federal vehicle policy. Colorado’s legislature has attempted a bill to give electric vehicles HOV lane access. They’ve also subsidized charging stations and authorized ticketing for regular vehicles parked in electric vehicle parking spaces.  “They can do those sorts of things, but you’re not seeing any other states going out and trying to do something other than what California did.” He added he believes Colorado’s adoption of a compromise with vehicle manufacturers for policies such as early-action credits shows the state understands the risk of federal preemption of a zero-emission vehicle policy. The compromise also included an agreement from manufacturers not to join any litigation against the state if the repeal of Section 177 passes.

“I think the state understands that there’s some risk here, and they’re trying to deal with that ahead of time so that when the preemption comes, they can look to the automakers and say hey, we had a deal” that the automakers still have an obligation to to honor under the agreement. 

—Julia Cardi

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