Trump administration to end fuel economy talks with California: official
Traffic jam cars (Shutterstock)

Federal officials have decided to end negotiations with California over the Trump administration’s plans to roll back fuel economy rules designed to reduce greenhouse gas emissions, a government official said on Wednesday.

California and 19 other states have demanded the Trump administration abandon a proposal made in August to freeze fuel efficiency standards after 2020 and strip California of the ability to impose stricter rules.

Detroit automakers have the most at stake. General Motors, Ford Motor Co and Fiat Chrysler Automobiles generate most of their global profits from sales of fuel-thirsty large pickup trucks and sport utility vehicles in the United States. All three have discontinued or planned to drop small and medium-sized sedans from their lineups to focus on trucks and SUVs.

The California Air Resources Board, which did not have an immediate comment, has been meeting with officials from the White House, U.S. Environmental Protection Agency and Transportation Department over Trump administration efforts to stop California from tightening vehicle emissions rules in the state.

The government official, asked about a report by the Daily Caller News Foundation, offered no further details on the end of the talks and it was not immediately clear when an announcement would be made.

California officials already have filed suit to block the Trump administration proposal to roll back federal fuel economy targets for 2022-2025. It is not clear how the industry would respond to the formal adoption of Trump’s proposed freeze, and likely litigation by California and other states.

California’s top clean air regulator, California Air Resources Board Chair Mary Nichols, last year said the state was willing to give automakers more flexibility to comply with vehicle greenhouse gas limits.

Fiat Chrysler declined comment. General Motors, Ford and the Alliance for Automobile Manufacturers did not immediately respond to a request for comment for this story.

Ford had floated a compromise proposal to other automakers with Executive Chairman Bill Ford Jr. telling Reuters the company was not asking for a rollback but wanted “one national standard.”

Trump’s proposed freeze would result in 500,000 barrels per day more oil consumption by the 2030s. The administration says it would reduce regulatory costs for automakers by more than $300 billion over the next decade.

The administration was supposed to finalize the new rules by the end of March in order for the softer requirements to take effect by the 2021 model year, but some automakers and officials have questioned if it will meet that deadline.

Most automakers oppose freezing the requirements but also want relief from standards approved during the Obama administration that called for a roughly 5 percent annual reduction in carbon emissions - targets that translate to fuel efficiency requirements for various classes of vehicles.

Reporting by Steve Holland, David Shepardson and Joe White; Writing by Diane Bartz; Editing by Tim Ahmann and Bill Trott