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The Auto Alliance, whose members include Ford, GM, FCA, Mazda, Toyota, and Volvo, among others, applauded Pruitt's announcement and said "This was the right decision, and we support the administration for pursuing a data-driven effort and a single national program as it works to finalize future standards".

"The Obama EPA's determination was wrong", he said, calling the former president's signature greenhouse-gas emissions standards "too high". The Auto Alliance, a trade group that represents US automakers, praised the decision to revisit the standards in a statement but urged the Trump administration to strike a deal with California.

The announcement will affect vehicles for model years 2022 through 2025.

The agency cited a recent drop in oil prices and the subsequent decline in the sale of smaller vehicles in favor of crossovers such as SUVs as some of the main reasons it believes the current standards are unreasonable. However, the EPA under the previous Administration didn't hang around, and completed the MTE by January 12, 2017. Their argument has been that the demands made are simply too great, and unfeasible even given the ongoing transition to greater electrification.

The Obama-era evaluation process, according to Pruitt, was "short-circuited" and "politically charged".

The rules were put into place in 2012 and would set the CAFE requirement at 54.5 miles per gallon, which is closer to 36 mpg in real-world driving. That would be based on all vehicles in the cars and light trucks categories across an automaker's line-up. A senior Honda official, talking on background, took the same position, not only pointing to what is happening globally but also noting that the Japanese automaker would be reluctant to shift direction only to see a new, Democratic administration come in three years from now and again toughen CAFE, forcing a costly reversal.

The agency is also examining the waiver that allows California, the most popular U.S. state, to impose tougher requirements than called for under the Clean Air Act. Automakers had hoped for a slight loosening which might prove palatable to California, but the reality may well be that the EPA's new goals and those of the green-minded state are wildly different.

In 2011, the State of California locked in its own pollution and gas mileage standards and managed to reach an agreement to enforce the rules with a host of major vehicle manufacturers.

Currently, 13 states follow California's emissions requirements.

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For instance, automakers had chafed at being held responsible for how green the production of electricity charging EVs was, arguing that it was a factor beyond its control.

"We support increasing clean vehicle standards through 2025 and are not asking for a rollback", Ford Executive Chairman Bill Ford and President and CEO Jim Hackett wrote in a blog post on Medium.

The decision on Monday sets up a potential legal battle with the state of California, which has vowed to stick by its stringent targets to slash planet-warming carbon emissions from tailpipes.

It is in the nation's best interest to have a national standard, according to Pruitt.

"Cooperative federalism doesn't mean that one state can dictate standards for the rest of the country", he said, in a statement.

While he may be talking about cooperation with California, it's clear Pruitt's EPA isn't happy with the state's independence under the CAA.

Another unknown is what the administration will do about California, which has a waiver from Obama's EPA to set its own strict standards.

The current greenhouse gas regulations, codified just before Trump took office, will be replaced by a standard developed in conjunction with the National Highway Traffic Safety Administration. That includes the California waiver which "is still being" the agency said. "Americans voted for an economy built for the future, but this administration continues to ignore experts and the auto industry's own progress to push a vision that will damage United States competitiveness for years to come".

"The illegal rollback of achievable, common sense fuel efficiency and pollution standards for cars will result in higher fuel costs and more risky air pollution, including the carbon dioxide that drives climate change", he said in a statement.