Trump might ease fuel economy rules, but automakers won't be off the hook

Chevy Bolt powers through
Chevy Bolt powers through

President Donald Trump announced in Michigan Wednesday that he's reconsidering tougher mileage requirements placed on the auto industry by the Obama administration.

But that doesn't mean the automakers will be off the hook. Even if Trump's EPA does relax fuel economy rules, the fact remains that separate emissions regulations from California apply to about 35% of the nation. And those emissions rules effectively determine fuel economy regulations, since the fuel a car burns generates emissions.

While California does not set mileage requirements, it does have a federal waiver that allows it to set its own, tougher, emissions standards. And those emissions rules are in effect in 12 other states -- including New York, Pennsylvania, New Jersey and Washington.

In other words, about 35% of the country lives in the states that follow California's emissions rules, not the EPA's, and that has a direct bearing on fuel economy rules.

Related: What Trump's fuel economy plan means for you

Right now, California is cooperating and federal regulators are working together to coordinate emissions and fuel economy standards. But if the Trump administration rolls back the federal mileage rules, the California rules could effectively require a higher fuel economy standard in those states.

Automaker executives who attended the Wednesday event are certainly happy that Trump is reconsidering federal regulations.

The federal rule, as originally announced by the Obama administration in 2012, would have required automakers to achieve average fuel economy of 54.5 miles per gallon by the year 2025. (In reality, cars would average about 42 mpg because of the way real-world fuel economy is calculated.)

The Obama plan included a "midterm review" by April 2018, to ensure that these regulation targets were feasible. But just as that administration was winding down, the EPA announced that it had reviewed all the data and that it believed the automakers could meet the goals.

The review Trump announced Wednesday means that these regulations are back in flux.

But California's authority to set emissions rules for itself and other states has not been questioned by the Trump administration, at least not yet.

"California already has a waiver," a senior White House official told reporters Tuesday night, adding that if the EPA decides to role back fuel economy regulations, the administration will work together with the state.

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That means automakers will probably have to keep meeting the tougher California standards, because it simply isn't practical to make different versions of the same car for different parts of the nation.

Automakers are clear that they want a single standard -- and stressed the importance of that in their meeting with Trump during his first week in office.

"We weren't advocating for elimination of the standards," said Ford (F) CEO Mark Fields said on a call with investors soon after that meeting. "I made the point that, one of the reasons we were very supportive of the one national standard is because it was one national standard ... and that's what we emphasized that was important going forward."

Trump can't simply eliminate California's authority to set standards or force other states to align with the EPA.

"There's no precedent for revoking a waiver that has already been granted," said Dave Cooke, senior vehicle analyst Union of Concerned Scientist. "It's a fight they're unlikely to win. That doesn't mean they wouldn't try. But California has been clear they'll fight that."

-- CNNMoney's Peter Valdes-Dapena contributed to this report

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