Oil and gas trade groups have filed a lawsuit against the Biden administration, challenging new emissions standards that they claim will effectively ban most new gas cars and traditional hybrids from the U.S. market within a decade. The American Petroleum Institute (API), the largest oil trade group in the country, argues that the Environmental Protection Agency (EPA) exceeded its authority in adopting these rules on emissions for light- and medium-duty vehicles. The API alleges that the restrictions are arbitrary, capricious, and not in accordance with the law.
The API filed the petition in the D.C. Circuit Court of Appeals on June 13, requesting the court to declare the EPA rule unlawful and vacate it. Ryan Meyers, API’s senior vice president and general counsel, stated that the regulation would eliminate most new gas cars and traditional hybrids from the U.S. market in less than ten years. He emphasized the need to protect American consumers, manufacturing workers, and the nation’s energy security from this intrusive government mandate.
Another legal challenge to the same EPA rule was announced by around a dozen organizations led by the American Fuel & Petrochemical Manufacturers (AFPM). In total, 36 petitioners are represented across three separate legal filings challenging the rule. The EPA issued the final rules for light- and medium-duty vehicles for model years 2023 through 2027 on April 18, with an updated version published on June 13.
These rules, set to go into effect on June 17, will impose the toughest-ever limits on tailpipe emissions. They are part of the Biden administration’s efforts to accelerate the production and adoption of electric vehicles (EVs). According to the EPA, the regulations will reduce carbon emissions by 7.2 billion tons through 2055, resulting in an estimated $99 billion of annual net benefits to society. These benefits include improved air quality leading to $13 billion in annual public health benefits, reduced annual fuel costs of $46 billion, and lower annual maintenance and repair costs for drivers amounting to $16 billion.
The plaintiffs argue that the new rules effectively ban most new gas cars and traditional hybrids. The EPA claims that the industry can meet the emissions standards if 56% of new vehicle sales are electric by 2032, along with at least 13% being plug-in hybrids or other partially electric cars, in addition to gasoline-powered vehicles with higher fuel efficiency. The standards for light-duty vehicles aim for an industry-wide average target of 85 grams per mile of carbon dioxide by 2032.
However, Chet Thompson, president and CEO of AFPM, argues that these fleetwide average standards are meant to force the adoption of EVs. He criticizes the EPA’s averaging scheme, which he believes is intended to push EV adoption since no gas, diesel, or traditional hybrid vehicles currently meet the 85 grams/mile standard. Thompson also highlights the arbitrary disadvantage placed on internal combustion engine vehicles by ignoring other vehicle lifecycle emissions.
AFPM states in a blog post that automakers historically improve fuel efficiency by around 2% per year, but meeting the 85 grams per mile standard would require an unprecedented and unrealistic rate of improvement. While the EPA and the White House deny that the rule amounts to a ban on gasoline cars, AFPM argues that not every consumer who wants to buy a gas car will be able to do so, and many more won’t be able to afford them.
The trade group asserts that under the new EPA regulations, automakers’ ability to sell new gas cars depends on their ability to sell more EVs. If they cannot sell enough EVs or there is a lack of credits to purchase from other automakers, then manufacturers will be forced to reduce gas car production. These emission rules are part of the Biden administration’s climate change agenda, which has been a top priority since President Biden took office.
