Advisories May 9, 2024

Environment, Land Use & Natural Resources Advisory: EPA’s New Rule Primes the Pump to Reduce Greenhouse Gas Vehicle Emissions by 2032

Executive Summary
Minute Read

Our Environment, Land Use & Natural Resources Group unpacks the Environmental Protection Agency’s strict new standards to reduce greenhouse gas emissions from light- and medium-duty vehicles by 2032.

  • Manufacturers must meet new emissions reduction benchmarks each year for model years 2027 through 2032
  • Businesses can select the emissions control technologies they deem best suited for their fleet
  • Compliance technology costs may increase by about $1,200 per vehicle for light-duty vehicles and $1,400 for medium-duty vehicles

On March 20, 2024, the Environmental Protection Agency (EPA) finalized a rule for performance-based standards aimed at reducing air pollutant emissions from light- and medium-duty vehicles starting with model year 2027. The EPA’s rule sets gradual emissions reduction benchmarks for greenhouse gases (GHGs), nonmethane organic gases, nitrogen oxides (NOx), and particulate matter (PM2.5) for model years through 2032.

What vehicle types are covered by these standards?

The EPA’s rule will apply to light- and medium-duty vehicles. The light-duty vehicle standards will apply to passenger cars, light trucks, and heavier vehicles for the transportation of people. The medium-duty vehicle standards will apply to heavy-duty class 2b and class 3 vehicles, which are primarily large work pickups and vans with a gross vehicle weight rating of between 8,501 and 14,000 pounds, typically with a higher towing and hauling capacity than light-duty vehicles.

What do the emissions standards require?

The new standards impose model year 2032 industry-wide average emissions targets of 85 grams of CO2 per mile for light-duty vehicles and 274 grams of CO2 per mile for medium-duty vehicles. Each of these standards represents a reduction of over 40% when compared with the standard applying to the 2026 model year under the EPA’s preexisting standards. The new standards also address non-GHG emissions by setting industry-wide average emissions targets of 15 milligrams of nonmethane organic gases and NOx per mile by the 2032 model year for light-duty vehicles and 75 milligrams of nonmethane organic gases and NOx per mile by the 2031 model year for medium-duty vehicles. For all light- and medium-duty vehicles, a final PM2.5 standard of 0.5 milligrams per mile will apply with varying test standards and phase-in dates.

As finalized, the new standards are generally consistent with a version of the rule proposed in April 2023 except that, in recognition of public comments received, certain benchmarks for earlier model years (2027–2031) have been softened in the final rule. In responding to comments on the proposed rule, the EPA rejected calls for more stringent standards to be established beyond 2032, citing uncertainty around available technologies and cost estimates for that further time horizon.

Vehicle manufacturers, independent commercial importers, alternative fuel converters, and converters of medium-duty vehicles may all be affected by this rule and should evaluate its potential implications. The standards are considered technology-neutral, meaning that affected businesses will be able to select the emissions control technologies they consider to be best suited for their fleet. According to EPA estimates, the rule is generally expected to lead to increases in per-vehicle technology costs by an average of about $1,200 for light-duty vehicles and $1,400 for medium-duty vehicles.

What are some other features of the new rule?

In addition to setting the emissions standards for the 2027–2032 model years, the rule finalized on March 20 revises the EPA’s air conditioning and off-cycle credit programs for light-duty vehicles, the treatment of upstream emissions related to zero-emission and plug-in hybrid electric vehicles, and certain vehicle certification and compliance standards. The EPA is also using the new rule to set standards for battery durability and warranties for electrified vehicles in the light- and medium-duty classes and to update emissions certification and testing provisions for manufacturers of light-duty vehicles, among other changes. Potentially affected parties are encouraged to review the rule to assess its full scope and understand its impacts on compliance requirements.

When is the rule set to take effect?

The final rule will take effect 60 days after publication in the Federal Register.

You can subscribe to future advisories and other Alston & Bird publications by completing our publications subscription form. If you have any questions, or would like additional information, please contact one of the attorneys on our Environment, Land Use & Natural Resources Team.

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