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September 11, 2019

Volume 2 Issue 37

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Feds Probe California Emissions Deal

The United States federal government notified California last week that it had begun an antitrust probe of the state’s recent agreement with four automakers on vehicular emission standards.

In July Ford, Honda, BMW and Volkswagen agreed not to challenge California’s ability to set its own emission standards in exchange for a moderate slowdown in the state’s schedule for ratcheting carbon dioxide caps. President Donald Trump’s administration has stated its opposition to California’s ability to set its own emissions rules.

The investigation, which was undertaken by the Department of Justice and the Environmental Protection Agency, marks the administration’s latest effort to roll back fuel economy regulations, which have been the main driver behind a trend toward lighter-viscosity engine oils.

EPA sets national vehicular emissions regulations for the United States, but California has been granted unique permission to adopt its own stricter mandates. The same rules allow other states to follow EPA or California rules, and at least 13 states now follow California.

Before automakers reached their agreement with California, the administration had indicated its opposition to the state’s ability to set its own emissions standards, and it advised automakers not to sign the agreement.

According to The Wall Street Journal, Justice Department attorneys are investigating whether the automakers “violated federal competiton law by agreeing with each other to follow tailpipe-emission standards beyond those proposed by the Trump administration.” A call from Lubes Report Americas to the DOJ went unreturned Tuesday afternoon.

Separately, the federal Transportation Department and Environmental Protection Agency sent a two-page letter to the California Air Resources Board’s Chairman Mary Nicholas Friday stating the agreement between the state and carmakers “appears to be inconsistent with federal law.”

“Congress has squarely vested the authority to set fuel economy standards for new motor vehicles and nationwide standards for [greenhouse gas] vehicle emissions, with the Federal government, not with California or any other State,” the letter reads.

It states that the Energy Policy and Conservation Act preempts states from setting fuel economy standards. Under EPCA and the Clean Air Act, authority to set fuel economy belongs to the EPA and DOT, the letter states, buttressing the administration theory that only the federal government can set fuel economy and greenhouse admissions standards for vehicles.

The car companies told media outlets they would cooperate with the investigation. California slammed the action as efforts by the administration to “bully car companies.” Meanwhile, Gov. Gavin Nesom, told The Los Angeles Times, California “remains undeterred. California stands up to bullies and will keep fighting for stronger clean-car protections that protect the health and safety of our children and families.”

Trump’s administration, through the EPA, has also proposed to slow down plans to tighten Corporate Average Fuel Economy and greenhouse gas emissions standards for passenger vehicles and light trucks and establish new standards, covering model years 2021 through 2026. The agencies’ preferred alternative would retain model year 2020 standards for both programs through 2026.

However, opponents contend that would essentially roll back federal vehicle emission standards, effectively freezing them at the 2020 level through the 2026 model year.

For the past couple decades, fuel economy mandates and CO2 emissions caps adopted by the U.S. and other countries have forced automakers to look for savings wherever they can – by employing lighter materials, reducing engine sizes and designing more efficient drivetrains. They’ve also demanded contributions from lubricants, and that has pushed viscosity grades from 10W-XX to 5W- and now 0W- multigrades.

The car companies told media outlets they would cooperate with the investigation. California slammed the action as efforts by the administration to “bully car companies.” Meanwhile, Gov. Gavin Nesom, told The Los Angeles Times, California “remains undeterred. California stands up to bullies and will keep fighting for stronger clean-car protections that protect the health and safety of our children and families.”