Trump to propose sharp rollback in US vehicle fuel economy rules

By David Shepardson

WASHINGTON, Dec 3 (Reuters) - The Trump administration on Wednesday will propose a significant rollback of fuel economy standards that former President Joe Biden had finalized last year, in its latest push to make it easier ​for automakers to sell gasoline-powered cars, automakers and sources told Reuters.

The National Highway Traffic Safety Administration is set to ‌propose significantly reducing the fuel economy requirements from model years 2022 to 2031. It will also make drastic changes to the program including eliminating credit trading among ‌automakers and will end some credits for fuel-saving features, the sources said.

President Donald Trump will be joined by the CEOs of Chrysler parent Stellantis and Ford Motor to unveil the proposal at 2:30 p.m. EST (1930 GMT).

White House press secretary Karoline Leavitt confirmed the plan, saying on social media that the administration will propose a "reset of federal fuel standards."

Earlier this year, Trump signed legislation that ended fuel economy penalties for automakers, ⁠and NHTSA said they faced no fines ‌dating back to the 2022 model year.

Ending credit trading could hurt automakers like EV manufacturers Tesla and Rivian, which have sold credits to rivals making gas-powered models.

Ford CEO Jim Farley praised Trump, in a statement ‍ahead of the event, for "aligning fuel economy standards with market realities. We can make real progress on carbon emissions and energy efficiency while still giving customers choice and affordability."

GM CEO Mary Barra noted on Tuesday at an event that before Congress blocked California's zero-emission vehicle rules in June, the ​auto sector was facing requirements in some states that 35% of new vehicles sold in 2026 must be EVs.

"We were going ‌to have to start shutting down plants because we weren't going to be able to build and sell those vehicles," Barra said.

In June 2024, during the Biden administration, NHTSA hiked Corporate Average Fuel Economy requirements to about 50.4 miles per gallon (21.4 km per liter) by 2031, from the 39.1 mpg for light-duty vehicles last year. That rule did not increase requirements for light trucks for 2027 and 2028 and required 2% increases from 2029 to 2031.

In 2022 under Biden, NHTSA increased fuel efficiency by 8% annually for model years ⁠2024-2025 and 10% for 2026.

The agency last year said passenger cars and ​truck rule would reduce gasoline consumption by 64 billion gallons and cut emissions ​by 659 million metric tons, reducing fuel costs with net benefits estimated at $35.2 billion for drivers.

The 2022 rule was estimated to reduce fuel use by more than 200 billion gallons through 2050.

Kathy Harris, director of clean ‍vehicles at environmental nonprofit the Natural ⁠Resources Defense Council, said, "the Trump administration is sticking drivers with higher costs at the pump, all to benefit the oil industry ... Drivers will be paying hundreds of dollars more at the pump every year if these rules are put in ⁠place."

Trump has taken a series of steps to make it easier to sell gas-powered vehicles and disincentivize EV production, including rescinding EV tax credits and barring ‌California from banning the sale of traditional gas-powered vehicles after 2035.

(Reporting by David Shepardson in Washington; Additional reporting by ‌Kalea Hall in Detroit; Editing by Franklin Paul and Matthew Lewis)