For comparison, the standards EPA finalized in December 2021 put the fleet average backstop at 161 g/m for model year 2026.

By the end of the new proposed rule’s scope, the limit is nearly half of that. A fleet’s MY 2027 cars and trucks would be required to, on average, emit no more than 152 grams of CO2 per mile, a standard that rises each year to reach 82 g/m in 2032 (notably, the year when the Inflation Reduction Act’s clean vehicle tax credits sunset).

In plain English: A 161 g/m standard has a 55 MPG equivalent. We couldn’t find similar calculations in the proposed rule, but some quick math suggests an automaker’s fleet in 2032 would have to cut emissions to an MPG-equivalent average of over 100, a fuel economy that is pretty hard to imagine without a major disruption to the status quo.

Critical differences vs. California: California’s Advanced Clean Cars II regulations were finalized in August and require automakers to sell increasing shares of zero-emission vehicles through 2035, when all new sales must be ZEVs.

More on the mechanics: The proposed standards by contrast are formally tech-neutral. EPA gave a nod to the various alternatives manufacturers may use to comply, including deploying the use of filters to reduce gasoline particulate matter emissions.

Automakers could also in theory dive headlong into engineering carbon-neutral synthetic fuels (what the Germans are banking on) or other less-emitting fuels, and combustion engine technologies to run on them.

But the Biden administration has made no bones about its motivations with the proposed standards or which technology it favors.

“There’s multiple pathways to compliance with the regulations. I suspect that most automakers, just given their public statements, the way they’re investing their research and development dollars and capital, that they’re eyeing battery electric,” Thomas Boylan, regulatory director for the Zero Emission Transportation Association, told Jeremy.

Automakers had been making the move. As of November, those with planned phase-outs of combustion engines accounted for 30% of the global auto market, according to BloombergNEF.

The critical eye: Republicans in Congress and free-market interest groups slammed EPA’s proposed regulations this morning, saying their effect would limit consumers’ options to more expensive electric models while serving China, which still dominates the global EV supply chain.

The IRA, as Sen. Joe Manchin intended, is meant to address both of those issues.

TBD.

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Jeremy Beaman (@jeremywbeaman) and Breanne Deppisch (@breanne_dep). Email [email protected] or [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.

GRID STRAIN AND RELIABILITY FEARS VERSUS BIDEN ELECTRIC VEHICLE PUSH: The Biden administration’s ambitious EV targets also threaten to place significant strain power grids––and without proper planning and the rapid addition of renewable energy sources could increase the risk of transformer blowouts, electricity shortages, and rolling blackouts during hours of peak demand.

Grids are already strained: California and Texas both experienced widespread outages in 2020 and 2021, respectively, forcing both states to take drastic new steps to increase reliability and avoid collapse.

The U.S. EV fleet had already been projected to grow to roughly 22 million vehicles by 2030––an amount that could increase further, pending implementation of today’s new proposed rule on tailpipe emissions––and require billions of dollars in investments in transmission and storage to ensure grids can meet the additional demand.

Researchers from MIT and Stanford found that, in the West alone, EV ownership could cause power demand to increase by up to 25% by 2035 if the dominant trend of evening, in-home charging continues.

Both reports stressed the urgency of encouraging public charger use––including building out public charging networks downtown and at workplaces to incentivize daytime charging and utilize solar resources, which are abundant during the day.

Other recommendations include adopting a strategy of “delayed home charging” overnight, which can eliminate peak demand from EVs by more than 50%, and help avoid a spike in overall power costs that could actually make EVs less affordable for consumers.

Decarbonizing the grid: The U.S. must also rapidly add renewable energy resources to the grid in order to meet the rising demand by EVs while also halving carbon emissions by 2030 under the Paris climate accord.

Decarbonizing U.S. grids while also ensuring they can withstand EV demand is likely to prove a daunting, if not altogether impossible task––and the director of the Electric Power Research Institute, Ronald Schoff, likened the challenge to “rebuilding an airplane that is in mid-flight.”

“We are trying to switch the fuel, and we’re trying to change out the wings, the wheels, the engine, all as we go,” he added. “Which is possible — but it’s complicated.” Read more from Breanne here. 

FUSION STARTUP PUBLISHES FIRST RENDERINGS OF PILOT PLANT: Tokamak Energy, a nuclear fusion startup based in Oxford, England, released digital renderings today of the commercial fusion pilot plant design it hopes to demonstrate in the early 2030s.

The 500-megawatt plant design, which the company says could generate enough electricity to power 50,000 homes, would be powered using magnetic confinement to recreate fusion conditions inside a spherical tokamak.

Tokamak Energy, and fusion startups more broadly, trust fusion technologies will take the industrial and power sectors by storm by providing a reliable source of electricity and heat without producing emissions — or radioactive waste, as is generated by fission.

This is CEO Chris Kelsall’s elevator pitch: “The endgame is a globally deployable, industrially scalable, low-cost, safe, secure solution that is available to a broad cross section of humanity, not just a few G-7 nations that can afford an expensive, VIP form of energy creation.”

A recent GAO report said fusion technologies will have to make immense strides over the next decade to achieve commercial viability on the timelines many in the sector have laid out. GAO identified regulatory uncertainty as a leading challenge. The Nuclear Regulatory Commission has yet to finalize a regulatory framework for fusion energy plants.

See the images of Tokamak Energy’s pilot plant here.

GREEN GROUPS HOLD BIDEN’S FEET TO THE FIRE ON LNG: Dozens of environmental groups are warning the Biden administration to stay away from any G-7 endorsement of expanding liquefied natural gas supplies or else violate Biden’s commitments on climate change and environmental justice.

The team of groups, which includes Natural Resources Defense Council, Sierra Club, Friends of the Earth, and more than 100 others argued in a letter to the White House that the long-term contracts required to underpin new LNG ventures are incompatible with the Paris agreement’s temperature target.

It’s something G-7 members are actively working out. The latest is that an earlier proposal pushed by the Japanese to endorse new upstream investment in LNG and gas has been nixed from the draft communique.

G-7 conclusions last year did not call for new investment in LNG but said increased deliveries of it were extremely important to replace pipeline imports into Europe from Russia. They also declined to write off new public support for gas as something categorically contrary to the Paris agreement’s targets.

War changes things: The LNG surge to Europe in particular is a source of pride for the Biden administration. The Department of Energy has increased export authorizations for planned export facilities, and the White House recently issued a progress report reaffirming its commitment to ensure at least 50 billion cubic meters of U.S. LNG make it to Europe again this year.

RUSSIAN SEABORNE OIL EXPORTS SURGED 17% IN MARCH: Russia’s seaborne oil exports jumped by more than 17% last month, rising from 9.53 million barrels per day (bpd) in February to 12.37 million bpd last month despite the country’s vowed production cuts and new EU exports and G-7 price cap restrictions on Russian refined oil products that also took effect beginning Feb. 5.

Russia’s oil product exports surged most notably in the Black Sea and the Azov Sea, according to data shared with Reuters, rising from 3.23 million tons in February to 5.09 million tons last month––or an increase of 42.4%.

The strong volumes appear to contradict Russia’s pledge to curtail its oil production by 500,000 bpd in retaliation for Western sanctions on its energy exports. Those cuts were originally slated to begin March 1 and last through the end of June, but Russian Deputy Prime Minister Alexander Novak said earlier this month that Moscow would extend the 500,000 bpd production cut through the end of 2023.

Russia’s production cuts are in addition to reductions from OPEC+, which also committed to further reducing its production during its April meeting.

The Rundown

Bloomberg Proxy season may see more Wall Street rejection of climate proposals

Reuters LNG imports test EU resolve to quit Russian fossil fuel