Trump administration halts car talks with California

US president Donald Trump's administration has put the brakes on talks with California over the future of fuel economy and CO2 standards for new cars, likely setting the stage for a legal fight over the state's ability to enforce its own regulations.

The White House today said administration officials decided to discontinue the negotiations with the California Air Resources Board (ARB), blaming the agency for failing to "put forward a productive alternative" to a proposal by the US Environmental Protection Agency and Department of Transportation that would freeze federal standards in 2020-26.

"Accordingly, the administration is moving forward to finalize a rule later this year with the goal of promoting safer, cleaner, and more affordable vehicles," the White House said.

California officials, who have previously questioned the administration's seriousness in holding the talks, for their part accused the White House of "abandoning ship" on efforts to address climate change and predicted the two will wind up in court. The state, along with 16 others, is already challenging EPA's decision to revisit the standards in the first place.

"California and states throughout America are prepared to defend our national clean car standards even if the Trump administration intends to go AWOL," California attorney general Xavier Becerra (D) said.

The end of the discussions comes the Trump administration works to complete changes to the standards by the end of March, to provide time for automakers to adjust cars and trucks they will sell in model year 2021. The ARB played a lead role in developing the existing vehicle efficiency and emissions standards, which were adopted by the Environmental Protection Agency (EPA) under former president Barack Obama and would require new cars and trucks to achieve a projected fuel-economy of 46.7 miles/USG by 2025.

The Trump administration last year proposed to freeze fuel-economy standards starting next year at 37 miles/USG through 2026, which it expects will increase fuel consumption by 500,000 b/d. But some lawmakers say EPA and the Department of Transportation may wind up with a regulation that leads to a 0.5pc/yr increase in the standards.

EPA is also proposing to withdraw a Clean Air Act wavier for California. The law allows California to set its own vehicle emissions standards, subject to such a waiver, which other states can then use. To date, 13 states have adopted the California standards.

Automakers, fearful of having to produce cars and trucks that meet two separate standards, had supported the federal-state talks as a way to keep costs down.

"We encourage everyone to keep focusing on how we get there, because this is in the best interests of all parties, including consumers," the Alliance of Automobile Manufacturers said.

ARB has said the federal proposal would severely undermine the state's ability to meet its mandate to cut GHG emissions 40pc from 1990 levels by 2030. The transportation sector accounts for 41pc of the state's emissions, with most of that coming from passenger vehicles.