WASHINGTON, July 19, 2017 - The National Highway Traffic Safety Administration (NHTSA) is reconsidering a rule that raised civil penalties for corporate emissions violations. Corporate Average Fuel Economy (CAFE), enacted in 1975 to reduce energy consumption, placed a civil penalty of $5.50 per each tenth of a mile per gallon that a fleet falls short of compliance. The amount has not changed in the 42 years since then, but a hike to $14 was decided upon Dec. 28, 2016.
Now NHTSA is not sure that amount is the appropriate inflationary-adjusted penalty.
The agency said it is delaying implementation without notice and comment. It said it is reconsidering the final rule “because it did not give adequate consideration to all of the relevant issues, including the potential economic consequences of increasing CAFE penalties by $1 billion per year,” as estimated in an industry petition. The NHTSA document states that “many manufacturers are falling behind the standards for model year 2016 and increasingly so for model year 2017.” While the administration rethinks the adjustment, the penalty rate will remain the same as it has been since 1975.
The order to raise CAFE rates was meant to improve energy security and save consumers money at the pump. Since these rules were created during the oil crisis, NHTSA noted that these objectives may no longer be of concern, given America’s newfound wealth of fuel.
NHTSA says its responsibility is to ensure that any increase in the penalty results in substantial energy conservation and, simultaneously, that it causes the nation no economic hardship. Since enacted by Congress, automakers have paid more than $890 million in penalties relating to the CAFE standards. NHTSA is seeking public comment on the appropriate inflationary adjustment. To comment, visit the NHTSA’s website.