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Federal Court Tosses Trump Administration’s Rewrite of Fuel Economy Penalties

May 18, 2018

A federal appeals court in New York blocked a Department of Transportation decision to delay increased penalties for automobile manufacturers who fail to meet federal fuel economy standards.

A federal appeals court in New York blocked a policy enacted by President Donald Trump’s Department of Transportation (DOT) to delay higher penalties for automobile manufacturers who fail to meet federal fuel economy standards.

In Barack Obama’s waning days as President, DOT increased the penalty for exceeding federal corporate average fuel economy (CAFE) emission standards by approximately 150 percent, in order to encourage car and truck makers to improve the fuel economy of the passenger fleet on an expedited schedule as part of his administration’s efforts to fight climate change.

Lawsuit Challenges DOT Decision

Saying the increased penalties were unjustified and would cost consumers millions of dollars and limit their freedom of choice in vehicles, under Trump DOT postponed the higher penalties in July 2017 just before they were set to kick in. At the time, DOT said automakers had already paid more than $890 million in CAFE penalties under existing rules.

The Natural Resources Defense Council, Sierra Club, Center for Biological Diversity, and Attorneys General for the states of California, Maryland, New York, Pennsylvania, and Vermont sued to overturn the Trump administration’s reversal and keep the expedited, enhanced penalties in place. They argued DOT had failed to provide adequate public notice, as required by law, for its change and had violated a federal law requiring civil penalties to rise with inflation.

On April 23, a three-judge panel of the United States Court of Appeals for the 2nd Circuit agreed with the plaintiffs, blocking DOT’s decision to postpone the CAFE.

The Court’s decision came just two weeks after the U.S. Environmental Protection Agency announced it was revising expedited increases in required fuel economy the Obama administration put in place just two days before leaving office. In a press release from EPA announcing it was revising the higher standards, the Agency said the Obama era standards “didn't comport with reality.”

EPA’s efforts to rewrite current CAFE standards are not affected by the ruling in this case.

H. Sterling Burnett, Ph.D. (hsburnett@heartland.org) is the managing editor of Environment & Climate News.

Author
H. Sterling Burnett, Ph.D. is a Heartland senior fellow on environmental policy and the managing editor of Environment & Climate News.
hsburnett@heartland.org