U.S. states sue Trump administration over fuel efficiency rollback

WASHINGTON (Reuters) - A group of 23 U.S. states and the District of Columbia filed a lawsuit on Wednesday challenging a Trump administration decision to weaken Obama-era fuel efficiency standards.

In March, the administration issued final rules requiring 1.5% annual increases in vehicle fuel efficiency through 2026 - far weaker than the 5% increases set under former President Barack Obama. The Trump administration also abandoned its August 2018 proposal to freeze requirements at 2020 levels through 2026.

California Air Resources Board chair Mary Nichols said the administration “used questionable science, faulty logic and ludicrous assumptions to justify what they wanted from the start: to gut and rewrite the single most important air regulation of the past decade.”

Michigan Attorney General Dana Nessel called the rule a “gift to the fossil fuel industry” that would harm the state, home to Detroit’s Big Three automakers, because it would reduce automotive-related employment by 4%.

The Environmental Protection Agency declined comment on the suit but defended the rule as a “sensible, single national program that strikes the right regulatory balance, protects our environment, and sets reasonable targets for the auto industry.”

New York City, Denver, San Francisco and Los Angeles are joining the challenge by California, New York, Illinois, Massachusetts, Michigan, Nevada and 17 other states.

Separately, 12 environmental groups including the Environmental Defense Fund, Sierra Club and Union of Concerned Scientists also sued over the rules.

A trade group representing General Motors Co (GM.N), Fiat Chrysler Automobiles (FCAU.N), Toyota Motor Corp (7203.T) and others said it would review the lawsuit. Last week, the group sided with the Trump administration plan and opposed a legal challenge to further weaken the requirements, while other automakers including Ford did not.

The new rules require the U.S. vehicle fleet to average 40.4 miles per gallon rather than 46.7 under the Obama rules finalized in 2012.

In 2019, Ford Motor Co (F.N), Honda Motor Co (7267.T), BMW AG (BMWG.DE) and Volkswagen AG (VOWG_p.DE) reached an agreement with California over compromise fuel efficiency rules more stringent than Trump’s but weaker than Obama’s.

The Trump administration said the new rules would reduce future new car costs and save automakers billions in regulatory costs but boost average consumer fuel costs, while lifting oil consumption by about 2 billion barrels and hiking carbon dioxide emissions by 867 to 923 million metric tons.

Obama’s environmental policies sought to cut carbon emissions that drive climate change, while Trump has ditched numerous environmental regulations his administration deemed harmful to industry.