Recently, the Administration announced its intentions to revise these standards. While Honda supports revising the regulations, we do not support their rollback. Instead, we are promoting what we believe to be a sensible path forward – maintaining the stringency of the current standards through 2025, but doing so in a way that provides added flexibility for manufacturers to achieve compliance and promote advanced technologies. This approach, we believe, will help maintain consistency between federal standards and those adopted by California and 12 other "Section 177" states – an approach known as the "one national program."
As background, in 2012, Honda helped lead the way in support of new GHG emissions and fuel economy (CAFE) standards for U.S. light-duty vehicles through the year 2025. These standards set challenging but, we believed, achievable targets that align with long-term societal goals to reduce emissions that cause climate change. Likewise, the standards aligned with Honda's own goals to significantly reduce GHGs from our operations and the use of our products.
Since the standards were enacted, automotive technology and the marketplace have continued to evolve. Gasoline prices have been lower than predicted, resulting in lower consumer demand for fuel-efficient vehicles. At the same time, there has been rapid growth in the popularity of larger, less fuel-efficient trucks and SUVs, as well as surging raw materials costs associated with some of the newest technologies, such as cobalt, used in advanced batteries.
On January 12, 2017, in the midst of these changes and in its closing days, the previous Administration moved quickly to lock-in the standards, precluding further public comment and analysis through the agreed upon mid-term evaluation (MTE) process. The new Administration re-opened the MTE with support from the auto industry, including Honda, in a process that was concluded in recent days. The EPA determined that the standards set more than five years ago were no longer appropriate given current technology and market conditions. The next phase is for EPA to propose new standards for 2022-2025. The public, environmental groups, the auto industry and other stakeholders will be provided an opportunity to comment and a final decision will follow.
Honda continues to support one national program that aligns the regulations of EPA, NHTSA and California. To do so, we advocate maintaining the current standards that would raise the average fuel economy of the U.S. light-duty vehicle fleet to a projected 50.8 mpg by 2025 based on the current U.S. light-duty vehicle fleet mix. Importantly, we also seek the reinstatement of flexibilities that exist in the regulation today but that are mostly phased-out by 2021. These flexibilities were designed to incentivize advanced, electrified technologies, and we believe these technologies still need support for a few more years. In addition, Honda believes the EPA should eliminate automakers' responsibility for the impact of upstream emissions from the electric grid (which currently phases in by 2025), and advocates for the accommodation of more off-cycle technologies, such as start-stop systems, that contribute to reduced fuel consumption but that are not fully accounted for in current EPA test procedures.
These and other flexibilities can significantly incentivize automakers to electrify more vehicles and adopt advanced, efficient technologies while maintaining current goals to reduce GHGs. If a fine-tuned policy can deliver long-term societal goals while reducing the cost of vehicles, everyone wins.
Based on our commitment to a future of low-carbon mobility and dramatically reduced greenhouse gases emissions, Honda will continue to work with other stakeholders to seek a path forward that preserves one strong national standard for our industry, and to help protect the environment through significant and ongoing reductions in GHG emissions.
Robert J. Bienenfeld
Assistant Vice President, Regulatory Policy
American Honda Motor Co., Inc.