Hey Congress—Don’t Let Automakers Undercut Fuel Standards with Phony Credits!

, senior vehicles analyst | November 10, 2015, 3:38 pm EDT
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Whether it’s the Volkswagen debacle (which continues to get worse), the massive Takata airbag recall involving just about every car company on the planet, or the GM ignition switch scandal, automakers have been in the news recently for all the wrong reasons. So it was no surprise when the Energy and Commerce Committee of the U.S. House of Representatives recently held a hearing on draft legislation regarding vehicles and roadway safety. After all, Congress should hold deceitful automakers accountable for their actions, and they should help ensure access to safe, clean vehicles.

It was a surprise, though, to see hidden provisions that would award fuel economy credits for safety technologies. If you are asking yourself, “What in the world does safety have to do with fuel economy?” you are not alone …

Connected vehicles are already being promoted to improve safety—why are automakers trying to use them to undo fuel economy regulations?

Connected vehicles are already being promoted to improve safety—why are automakers trying to use them to undo fuel economy regulations?

What automakers are asking for now

The provisions in question would allow automakers to receive credit for cutting fuel use just by making cars safer (which clearly has no direct impact on a vehicle’s fuel economy).  Instead of having to invest in ways to reduce fuel consumption of their vehicles, manufacturers would be able to comply with efficiency standards simply by putting specific safety technologies on cars, including lane departure warning systems and automatic emergency braking. While this would no doubt improve vehicle safety, there is little evidence to support the tremendous fuel consumption reductions being credited to automakers.

Just how bad is it?

The draft legislation would credit manufacturers 3 grams per mile for the use of three or more technologies like lane departure warning or adaptive cruise control on a vehicle; it would credit the vehicle another 6 grams per mile if it used any connected vehicle (or vehicle-to-vehicle) technology, where a vehicle transmits its presence to other vehicles. To put the magnitude of this giveaway into perspective, the light-duty standards aim to reduce the average new vehicle’s global warming emissions from about 320 grams per mile in 2011 to 163 grams per mile in 2025.

As written, the credit would not be available until after the 2018 model year. Even so, our analysis indicates that this legislation could still result in an additional 330 million metric tons of global warming emissions and the consumption of 730 millions of barrels of oil over the lifetimes of those vehicles, based on the agencies’ projections for the 2017-2025 new vehicle fleet—that’s equivalent to wiping out 14 percent of the total fuel savings from the 2017-2025 standards!

But haven’t I heard this before?

This request is not new, of course—manufacturers frequently ask for additional credits and exceptions in regulation, and in the rulemaking process for the 2017-2025 light-duty vehicle standards, automakers already asked for these credits and were denied by the federal agencies, definitively: “In the case of crash avoidance technologies, we are prohibiting off-cycle credits for these technologies under any circumstances.” [emphasis added]

Now, automakers are trying to pull an end-around on the regulators, begging Congress for a new credit windfall—and some members of Congress appear all too willing to oblige. With must-pass legislation like the transportation bill now heading to conference, where conferees from either party can shape the bill with sufficient latitude such that provisions like these could end up in the final version, there is every reason to be concerned that a bill with these ludicrous credits could wind up on the President’s desk.

Why this wouldn’t do much for safety or the environment

There are reasons to think that some safety technologies could have ancillary benefits—for example, adaptive cruise control could accelerate and decelerate more smoothly than the average driver, helping to reduce fuel use. However, at their core these are safety technologies—while a recent peer-reviewed consensus study by the National Research Council noted that adaptive cruise control will likely “increase safety for other drivers on the road and therefore reduce risk,” the authors also noted that “the reduction in fuel consumption would be highly dependent on the driver’s behavior and it is difficult to quantify.” In fact, the report goes on to highlight that more connected vehicles could even lead to higher levels of fuel consumption in some cases.

The group in the best position to judge this request is the National Highway Traffic Safety Administration (NHTSA), who oversees not just the safety requirements for new vehicles but also the CAFE fuel economy regulations. And they have already weighed in on the matter: “the agencies believe the advancement of crash avoidance systems specifically is best left to NHTSA’s exercise of its vehicle safety authority.”

Under that authority, these technologies are already being incentivized and brought to market. The so-called “advanced” technologies being promoted under this draft bill are already available on at least 60 percent of models being sold today, and more than 44 percent of vehicles offer at least three and would be eligible for credit.  Ten automakers have even promised NHTSA to put at least two of these technologies (front collision warning and automatic emergency braking) in every single one of their vehicles sold in the United States.  And NHTSA is already working on a rule that could mandate connected vehicle technology. These credits therefore aren’t an incentive—they’re a windfall. And that could eliminate a huge fraction of the real world benefits of these standards.

The cost of a Congressional handout

These credits are so large that they actually exceed manufacturers’ own estimates for the benefits of eliminating all crashes. While improved traffic flow could reduce idling for the fleet as a whole, technologies like start-stop mild hybrids are already being deployed and would address this source of fuel use, and connected autonomous vehicles even have the potential to substantially increase vehicle miles traveled and thus traffic and emissions. The secondary benefits from safety technologies are, at best, tenuous and indirect. One of the takeaways of the recent VW scandal is that any regulatory credits must be based on verifiable emissions reductions.

Credits like this would reduce the amount of fuel economy improvements needed to meet vehicle standards, standards that are working. Trading provable real-word reductions in fuel consumption for ambiguous reductions is never a good thing. What is even worse, however, is creating a handout to automakers, using credit incentives to reward technology application that they were already doing.

If enacted as-is, this legislation would result in environmental costs with no benefits for vehicle safety by promoting technologies that are already being deployed in an effort to keep the roads safer for the driving public. It’s time for the Auto Alliance and its members to quit trying to pressure Congress into providing regulatory loopholes and start focusing on how to provide real world value for their customers and the environment.

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  • Richard Solomon

    Thanks for sharing this important info. Does UCS intend to contact Congress members to try to convince them not to vote in favor of these credits being proposed by the industry?

    • David Cooke

      We have definitely raised our concerns with folks on the Hill, but I wanted to make sure that the people heard about it as well, since many are represented by those with a voice on the issue.

      Currently the transportation bill is in conference, where the House and Senate have passed different versions of a bill and will now negotiate a final version to send to the President. Generally they look at the House and Senate versions and pull pieces from those, and luckily this provision did not make it into either version, but there is significant latitude to what the conferees can incorporate so we are keeping a close eye on the issue.

      If you want to know whether your Representative or Senator is involved in the conference process for the transportation bill, which involves funding our transportation infrastructure and issues like vehicle safety, the names have been released, and the process is underway:

      House: http://thehill.com/policy/transportation/259276-house-appoints-negotiators-for-highway-bill-talks-with-senate

      Senate: http://thehill.com/policy/transportation/259731-senate-appoints-negotiators-for-highway-bill-talks