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Largest US oil trade group sues to block Biden's EV push

Published 06/13/2024, 05:08 AM
Updated 06/13/2024, 10:45 AM
© Reuters. FILE PHOTO: A 3D printed natural gas pipeline is placed in front of displayed ExxonMobil logo in this illustration taken February 8, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

By Jarrett Renshaw

(Reuters) - The nation's largest oil trade group, which includes Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX), filed a federal lawsuit on Thursday seeking to block the Biden administration's efforts to reduce planet-warming emissions from cars and light trucks and encourage electric vehicle manufacturing.

The U.S. Environmental Protection Agency issued new tailpipe emission rules in March that will force automakers to produce and sell more electric vehicles to meet the new standards. Under the rule, the administration projects up to 56% of all car sales will be electric between 2030 and 2032.

The American Petroleum Institute (API) says the EPA has exceeded its congressional authority with a regulation that will eliminate most new gas cars and traditional hybrids from the U.S. market in less than a decade.

“Today, we are taking action to protect American consumers, U.S. manufacturing workers and our nation’s hard-won energy security from this intrusive government mandate,” API Senior Vice President and General Counsel Ryan Meyers said.

The lawsuit was filed on Thursday in the D.C. Circuit Court of Appeals.

The EPA declined to comment, citing a policy against talking publicly about pending litigation.

The National Corn Growers Association and the American Farm Bureau Federation will join API as co-petitioners, along with six auto dealers representing 16 brands and collectively operating dozens of dealerships across the country.

The two farm groups rely on gas-powered cars to support the corn-ethanol industry.

“By approving tailpipe standards that focus exclusively on electric vehicles, EPA has ignored the proven benefits corn ethanol plays in reducing greenhouse gas emissions and combating climate change,” Minnesota farmer and National Corn Growers Association President Harold Wolle said.

In April, Republican attorneys general from 25 states sued the EPA to block the same rules.

The regulations are among the most significant environmental rules implemented under President Joe Biden, who has made tackling climate change a key pillar of his presidency. It has also complicated his relationship with a key ally, the United Auto Workers, who have been slow to embrace the transition to electric vehicles.

The U.S. auto industry has largely endorsed the new tailpipe standards.

In the final rule, Biden slashed its target for electric vehicle adoption amid auto worker backlash, but the watering down of the measure did little to pacify an oil industry that needs gas-powered cars to survive.

© Reuters. FILE PHOTO: A 3D printed natural gas pipeline is placed in front of displayed ExxonMobil logo in this illustration taken February 8, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

For both Biden and his Republican rival, Donald Trump, the road to the White House in November's presidential election goes through industrial states Michigan, Wisconsin and Pennsylvania where workers fear that the EV transition threatens jobs.

Trump has repeatedly excoriated electric vehicles and promised to roll back the new tailpipe standards.

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