The Environmental Protection Agency (EPA), a federal agency responsible for maintaining and enforcing national standards under a variety of environmental laws, ensures Americans have clean air to breathe and clean water to drink. The agency has this power through the Constitution’s commerce clause, giving the federal government authority to regulate commerce between the states and international. Recently the EPA issued new rules which essentially mandate the trucking industry to transition to electric vehicles.
Electric vehicles, in theory, are emission free and the EPA argues reducing fossil fuel filled vehicles will reduce air pollution and help the ongoing fight against climate change. According to the EPA the average passenger vehicle emits 400 grams of carbon dioxide (CO2) per mile. The new rules mandate drastic reductions of this amount. The new rule creates a scale, starting with 2027 model vehicles, requiring manufacturers to decrease the amount of CO2 produced with each successive model year. The scale for passenger vehicles starts with a maximum grams per mile of 145.2 and by 2032 it must be 75.6. For light trucks the standards are, respectively, 239.9 and 110.1.
The EPA predicts the monetary benefit of restricting the amount of carbon dioxide to be $99 billion. This monetary benefit is derived from the expected health benefits from the reduced air pollution. This amount, however, is speculative. Critics of the rule also plan on arguing the cost to implement the new rule will drastically lower the expected benefit.
The rule, though, does not mandate where these vehicles’ electricity comes from. Electric vehicles are only emission free if the electricity which powers them came from an emission free “clean” source. This new rule does not require providers of electric power to obtain their power from clean sources. So, your electric charging station could be obtaining its power from a diesel generator, or other fossil fuels.
The trucking industry plans to challenge the new ruling, arguing that the type of electric trucks the rule mandates do not exist or do not exist in the amount necessary to implement the rule, and the cost of transitioning to an electric fleet is considerable, prohibitive in some cases. A majority of trucking companies are considered small operations - according to registrations with the Federal Motor Carrier Safety Administration, the number of companies registered is over 500,000. According to industry statistics, only 2.6% of those companies have fleets which exceed 20 vehicles, and 91% have less than six vehicles. In addition, many drivers operate as an owner-operator of their 1 truck business. Like any rule which affects big and small businesses, this rule will have an oversized impact on the small businesses.
Congress can overrule the EPA, however, as long as control of Congress is divided that does not appear likely to happen. The other way to challenge administrative rules is through the courts. Prior to passing an administrative rule, which this is rather than a statute, federal agencies are required to go through a detailed process taking various elements into consideration. Essentially, agencies are not supposed to rule by fiat. As well-heeled groups oppose this rule it is likely multiple suits will be filed, giving the courts, and potentially the Supreme Court, the last say on its enforceability.
If this rule is eventually enforced, be prepared for consolidation across the industry to absorb these costs, and for the smaller operators to go out of business. What will this mean for you? Higher transportation costs, which will translate to higher prices.
If you have questions about this article, contact Todd Knode (tknode@setlifflaw.com) at (804) 377-1277 or Steve Setliff (ssetliff@setlifflaw.com) at (804) 377-1261.
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