US car industry to fight Obama’s green proposal

Manufacturers claim the state-by-state emission regulations proposed could add up to US$3000 to the cost of each new vehicle which would be fatal to the already ailing US car manufacturing industry and that the government should instead adhere to a strong national emissions standard of 35 miles to the gallon by 2020 that has already been agreed to.

"There will be continuing controversy over this. This is not going to go away," said Bill Kovacs, vice-president for environment and regulatory affairs. "We will argue that this is a dangerous course of action."

Industry groups will endeavour to find a compromise with the new administration before taking the legal action but in the depressed market are struggling to make ends meet and see Monday's action as somewhat of a death blow to vehicle manufacturing.

"We are concerned that if states take off on their own then the economy will be Balkanized into regulatory fiefdoms," said Hank Cox, vice president of communications at the National Association of Manufacturers. "The car industry is on the ropes right now. This would be economic folly of the first order."

In an unusual loophole, California's draft rules could so far favour some manufacturers and end up letting more high-fuel consumption vehicles on the road as in its present form exempts manufacturers that deliver for sale fewer than 60,000 vehicles per annum (this currently includes Volkswagen, Jaguar, Land Rover, Hyundai and Kia).

California produces roughly 1.4 per cent of the world's and 6.2 per cent of the total US greenhouse gases and has often pioneered environmental standards.