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Canada Watching EPA Vehicle Rule Changes Closely

By James Munson – Bloomberg
April 3, 2018

Canada’s climate change plan could be undermined U.S. vehicle fuel efficiency standards, Canadian officials said.

Canada’s vehicle standards, which are aligned with U.S. regulations, are central to the federal government’s plan to help bring the country within distance of its national greenhouse gas emission goals for 2030.

Canada is paying close attention while awaiting the U.S. Environmental Protection Agency’s final decision on the 2022-2025 light-duty vehicle standards, said Caroline Theriault, spokeswoman for Environment Minister Catherine McKenna.

“When we first adopted these fuel efficiency regulations aligned with the U.S., we committed to a public consultation in Canada after the U.S. midterm review concludes,” Theriault told Bloomberg Environment in an email. “Our review of the 2022 to 2025 standards will be comprehensive and thorough.”

Transportation Central to Climate Goal
The current U.S. standards for light-duty vehicles for the model years 2022-2025 are based on outdated information and might be too stringent, EPA Administrator Scott Pruitt said in the midterm final determination released April 2.

The U.S. is beginning a process to create new greenhouse gas and fuel efficiency standards.

Canada has long aligned its vehicle standards with the U.S. because of the countries’ integrated vehicle manufacturing sectors. Former President Barack Obama and Prime Minister Justin Trudeau said in March 2016 that both countries would work closely in the midterm review of the 2022-2025 standards.

Tougher tailpipe standards are among the policies Canada points to when defending its 2030 goal to bring greenhouse gases 30 percent below 2007 levels.

“Reducing pollution from transportation is an important part of Canada’s clean growth and climate plan to meet or beat our Paris commitments,” Theriault wrote.

The last amendments to the Canadian vehicle standards were expected to bring a cumulative decrease of 174 million metric tons in greenhouse gas emissions between 2017 and 2025, according to Environment Canada.

The 2022-2025 regulations require vehicle manufacturers to lower emission targets for models on average by five percent each year.

Automakers: Canada Should Follow U.S.
If the EPA rule-making process ends up with new standards, Canada should follow suit, said Mark Nantais, president of the Canadian Vehicle Manufacturers Association.

“If we were to break out on our own, and we were there at one point in time, that is a more costly way to go about it,” Nantais said.

Consumers will also hold on to older, higher-polluting vehicles if they can’t afford new ones, which would be bad for the environment, Nantais said.

“When we talk about greenhouse gas emissions, what we talk about in Canada doesn’t really matter,” he said. “What we do in North America does matter because GHG emissions cross borders and there are no boundaries.”

But making the rules less stringent will hurt the finances of car part manufacturers who have been preparing for the tougher standards, said Flavio Volpe, president of the Automotive Parts Manufacturers’ Association.

Two sets of standards will cause a “headache” for parts makers who will have to choose between focusing on the bigger market or the higher standard, Volpe said.

“We have been investing hundreds of billions of dollars in lightweighting and also alternative propulsion,” Volpe said. “If that standard is lowered, at this late stage, in some cases, it threatens to strand some of that advanced research and development spending.”

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