International Automakers Association Supports Plan for Single National Greenhouse Gas Emissions and Fuel Economy Program

AIAM expresses support for harmonized effort by EPA and NHTSA

ARLINGTON, Va., Oct. 27, 2009; Michael J. Stanton, President and CEO of the Association of International Automobile Manufacturers, Inc. (AIAM) testified at a hearing today in support of a comprehensive and harmonized national approach to reducing greenhouse gas (GHG) emissions while improving fuel economy standards for cars and light trucks.

"The overriding issue that must be addressed now is how the necessary emission reductions and fuel economy improvements can most efficiently and effectively be achieved," said Stanton. "We strongly believe that a single national program to regulate greenhouse gas emissions from, and improve the fuel economy of, motor vehicles is the only sensible approach, with EPA, NHTSA, California and other states and localities playing important complementary roles."

The third in a series of joint hearings is being held today in Los Angeles, Calif., by the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) on proposed harmonized rulemaking for GHG emissions and Corporate Average Fuel Economy (CAFE) for 2012 through 2016 model year vehicles.

Stanton applauded the compliance flexibility in the proposal. "Such flexibility is of critical importance for manufacturers that must make the necessary design changes while continuing to meet consumer preferences and market demand. Implementing these comprehensive changes is a difficult undertaking under any circumstances but is particularly difficult in the current economic environment."

Stanton also stressed the critical role adequate lead time plays as part of this program due to the complexity of designing and integrating next-generation technologies into new vehicles. Building adequate lead times into the rulemaking is also consistent with President Obama's commitment for the federal government to work with all stakeholders to extend the national program beyond the time frame of the current proposal.

About AIAM - The Association of International Automobile Manufacturers, Inc. (AIAM) is a trade association representing 13 international motor vehicle manufacturers who account for 40 percent of all passenger cars and light trucks sold annually in the United States. AIAM provides members with information, analysis and advocacy on a wide variety of legislative and regulatory issues impacting the auto sector. The Association is dedicated to the promotion of free trade and to policies that enhance motor vehicle safety and the protection of the environment. Member companies include Aston Martin, Ferrari, Maserati, Honda, Hyundai, Isuzu, Kia, Mitsubishi, Nissan, Peugeot, Subaru, Suzuki and Toyota. For more information, visit our website at www.aiam.org.

COMPLETE TESTIMONY OF:

MICHAEL J. STANTON
PRESIDENT AND CEO
ASSOCIATION OF INTERNATIONAL AUTOMOBILE MANUFACTURERS (AIAM)

ON JOINT EPA AND NHTSA PROPOSAL FOR
NATIONAL GREENHOUSE GAS AND FUEL ECONOMY STANDARDS
FOR LIGHT VEHICLES

Good morning, I am Mike Stanton, President and CEO of AIAM , a trade association representing 13 international motor vehicle manufacturers and several Tier 1 suppliers. We welcome the opportunity to testify today. We see this rulemaking as an important step in developing an integrated national approach to reducing greenhouse gas emissions and improving the fuel economy of motor vehicles, the kind of comprehensive approach AIAM has long supported.

These standards, in conjunction with similar measures undertaken in other segments of our economy will advance our efforts to address the related concerns of global climate change and energy security. While our written comments will address many of the legal and regulatory details raised in the proposal, today I would like to focus on some of the key policy considerations that frame this important debate.

In our view, the overriding issue that must be addressed now is how the necessary emission reductions and fuel economy improvements can most efficiently and effectively be achieved. We strongly believe that a single national program to regulate greenhouse gas emissions from, and improve the fuel economy of, motor vehicles is the only sensible approach with EPA, NHTSA, California, and other states and localities playing important complementary roles.

While the enabling statutes for the EPA greenhouse gas emissions standards and the NHTSA fuel economy requirements have significant structural differences, we are grateful that the two agencies are working together to seek to harmonize the two programs. We are reviewing the proposal carefully and may recommend in our written comments further steps to harmonize the two programs. We remain concerned about possible inefficiencies created by differing Federal and State programs. As long as the Federal government is taking unified, aggressive action, varying State requirements would impose significant costs and administrative burdens while providing little or no environmental benefit.

In the proposed rule the agencies solicited comments on the question of whether the Clean Air Act, the Energy Policy and Conservation Act, or the Energy Independence and Security Act may need to be amended to better harmonize the programs. We are considering this important question and will make some suggestion in our written comments.

We will continue to support efforts to establish Federal greenhouse gas and fuel economy standards at levels that are feasible and that will allow the nation to meet both its environmental and energy security needs. Since these needs will remain with us for many years to come, we encourage the agencies to work with industry and other stakeholders, as soon as this rulemaking is completed, to establish the framework for determining the next steps for the 2017 model year and beyond. Lead time is a critical element of this program and this is consistent with President Obama’s commitment for the federal government to work with all stakeholders to extend the national program beyond the time frame of the current proposal.

We appreciate the compliance flexibility in the proposal, including the fleet averaging and the substantial opportunities for earning and trading credits. Compliance flexibility is of critical importance in enabling manufacturers to make the necessary design changes to their entire fleets while continuing to meet consumer preferences and market demand. Implementing these comprehensive changes is a difficult undertaking under any circumstances but is particularly difficult in the current economic environment.

Based on our initial review of the agencies’ proposal, we have identified certain areas of concern where we plan to offer written comment. We are concerned that the temporary lead-time standards that provide a more gradual compliance approach for manufacturers selling 400,000 or fewer vehicles in the United States, are designed primarily to assist intermediate size manufacturers in making the transition to the new EPA regulatory program, and will not provide sufficient flexibility for the much smaller, independent companies that produce specialty vehicles for the U.S. market at very low volume levels. We are also concerned about the emissions certification and in-use testing provisions under the new EPA program that would impose additional burdens on manufacturers but do not offer significant environmental benefits. In our written comments, we will identify options and recommendations for EPA to consider in addressing these issues.

I appreciate the opportunity to present AIAM’s thoughts regarding this important rulemaking, and I would be happy to answer any questions that you have.