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Here’s what we know so far, including what’s changed since last year.
The Biden administration announced final new emissions standards for cars on Wednesday, significantly curtailing both the carbon dioxide and the toxic soot and chemicals that spew from the tailpipes of the nation’s light- and medium-duty vehicles.
With that, Biden is checking off one of the two most important pieces of unfinished climate business he has left on his first term to-do list. The rules tighten pollution limits gradually over six years, beginning in 2027. In concert with other Biden policies including consumer tax credits for electric vehicles purchases, initiatives to build out charging infrastructure, and support for domestic manufacturing, the standards will help accelerate the transition to electric vehicles that is already well underway.
Transportation is responsible for more planet-warming emissions than any other part of the U.S. economy. To get the country on the path of reaching net zero emissions by 2050, as Biden has set out to do, curbing car emissions is unavoidable.
When the rules were originally proposed last year, we wrote that they would “roughly halve carbon pollution from America’s massive car and truck fleet, the world’s third largest, within a decade.” That’s still broadly the case, even though the final version features one big change: Automakers will now have more time to cut emissions from their fleets. They will still have to achieve the same standard in 2032 as what was originally proposed, but they can transition to it more slowly.
Ahead of the official release, senior administration officials downplayed the significance of the slower rollout. They argued that giving automakers, dealers, and labor unions more time in the near-term would make for a sturdier rule, and that the cumulative emissions benefits of the final standard converge with the original proposal. At a White House event on Wednesday, members of the president’s climate team built on that message, framing the new rules not as a government mandate but rather as a tool to give consumers more of what they already want. “We are witnessing a technological revolution driven by the markets,” Environmental Protection Agency administrator Michael Regan proclaimed.
Also speaking at the event was John Bozzella, head of the Alliance for Automotive Innovation, which represents most U.S. automakers, including the Big Three. Bozzella praised the administration for heeding the industry’s concerns over the original proposal’s rapid phase-in and said the new rules were “much improved” from what had initially been proposed. “Pace matters to automakers,” he said. “It certainly matters to consumers.”
The full rule was released mid-day Wednesday, and we’re digging through it to find out exactly what else has changed. But here’s what we know so far.
The rules strengthen greenhouse gas emission limits, in terms of grams of CO2 per mile, that automakers will have to adhere to, on average, across their product lines. They also tighten limits on dangerous pollutants, including particulate matter — the tiny bits that make up soot — and nitrogen oxides.
This chart shows how the cuts in the final rule compare to those proposed in the draft rule. The version released last April required automakers to make steeper reductions to carbon emissions in the first three years, while the final rule allows for a more gradual reduction.
No. They are what’s called technology-neutral standards, meaning that automakers have options for how to comply with them. Since automakers have to meet the emissions targets on average across their fleets, rather than for each vehicle, it’s likely they’ll produce a range of options in 2032, including plug-in hybrids, regular hybrids, and even some gas cars with improved efficiency — though their fleets will probably have a much higher proportion of EVs than they do now.
While that generally hasn’t changed from the preliminary rule, the Biden administration’s messaging around it has.
When it released the initial proposal, the EPA emphasized that the least-cost path to achieving the standards would be for about two-thirds of new vehicles sold in 2032 to be electric. Although this was just one potential scenario, it was widely interpreted as a target or even a mandate — particularly by Biden’s political opponents.
On Tuesday, administration officials said that the two-thirds finding had been based on limited data. The EPA now estimates that EVs may make up anywhere between 30% and 56% of new light-duty sales from model years 2030 to 2032.
By 2032, the light-duty fleet on offer from automakers will emit half as much carbon as vehicles on the market in 2026.
The EPA estimates that these rules will avoid 7.2 billion metric tons of carbon from 2027 to 2055, which accounts for the vehicles’ full lifetime on the road. That’s slightly less than the 7.3 billion metric tons the initial proposal would have avoided.
The rules will change the mix of vehicles sold by automakers, encouraging dealers to sell more hybrid, plug-in hybrid, and battery electric vehicles. They’re also expected to save Americans roughly $62 billion in fuel costs and avoided maintenance costs, since the EPA assumes that EVs are still cheaper to operate and maintain. On average, a consumer will save about $6,000 over the lifetime of a 2032 vehicle compared to one sold in 2026, according to the agency.
The tailpipe rule will likely increase the cost of building each vehicle, which could translate into higher prices for consumers. However, state and federal tax incentives — as well as the cheaper cost of operating and fueling EVs — will offset that increase.
The rules are projected to deliver major health and environmental benefits to the public. The EPA estimates they will produce $37 billion in benefits from improved public health and climate mitigation, including avoided hospitalizations and premature deaths.
This is what the EPA was created to do — use the best available science to protect human health and the environment. But even after decades of improvements in air quality, there is still a lot of room for improvement. More than one third of the population still live in places with unhealthy levels of ozone or particulate pollution, according to The American Lung Association’s most recent “ state of the air” report. The risks are deeply unequal, with people of color making up half of those exposed. The report also noted that climate change is making it harder to protect people, as heat, drought, and wildfires increasingly lead to spikes in these pollutants. Altogether, ozone and particulate matter are responsible for more than 60,000 premature deaths annually, according to the Health Effects Institute, a nonprofit, independent research organization funded by the EPA and automakers.
Officials stressed that EV sales are already shattering analyst predictions, prices are dropping, and product availability is growing. They see this rule as part of a larger ecosystem of policies — including those in the Inflation Reduction Act, the Bipartisan Infrastructure Law, and the CHIPS and Science Act — that are revitalizing American manufacturing and creating jobs while also contributing to the global fight against climate change. The EPA’s press release notes that companies have announced more than $160 billion in domestic clean vehicle manufacturing, and that the auto manufacturing sector as a whole has added more than 100,000 jobs since Biden took office.
The administration is also, perhaps less loudly, selling the pollution standards as a path to freedom from fossil fuels. During the press call Tuesday, a senior administration official said the rules would enable consumers to break loose from the oil industry’s grip on how we get around and how much it costs us.
The new rules kick in for cars in model year 2027, which will go on sale in 2026 and are being designed right now. Although the Biden administration has suggested that the new rules have won the support of the car industry — including automakers, labor unions, and dealerships — it could still face a court challenge from attorneys general in Republican-controlled states. Republican officials have repeatedly sued to block the Biden administration’s climate policies.
It’s unclear how the Supreme Court would respond to such a challenge. Although the Court has long backed the EPA’s ability to limit climate pollution from cars and trucks, its hard-right majority has recently rolled back what were once thought to be bedrock environmental laws. In this term alone, the Court seems likely to restrict the EPA’s ability to regulate toxic air pollution while sweeping away a central legal doctrine of environmental regulation.
Editor’s note: This story has been updated to reflect the White House event announcing the new rules.
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Current conditions: In the Atlantic, the tropical storm that could, as it develops, take the name Jerry is making its way westward toward the U.S. • In the Pacific, Hurricane Priscilla strengthened into a Category 2 storm en route to Arizona and the Southwest • China broke an October temperature record with thermometers surging near 104 degrees Fahrenheit in the southeastern province of Fujian.
The Department of Energy appears poised to revoke awards to two major Direct Air Capture Hubs funded by the Infrastructure Investment and Jobs Act in Louisiana and Texas, Heatmap’s Emily Pontecorvo reported Tuesday. She got her hands on an internal agency project list that designated nearly $24 billion worth of grants as “terminated,” including Occidental Petroleum’s South Texas DAC Hub and Louisiana's Project Cypress, a joint venture between the DAC startups Heirloom and Climeworks. An Energy Department spokesperson told Emily that he was “unable to verify” the list of canceled grants and said that “no further determinations have been made at this time other than those previously announced,”referring to the canceled grants the department announced last week. Christoph Gebald, the CEO of Climeworks, acknowledged “market rumors” in an email, but said that the company is “prepared for all scenarios.” Heirloom’s head of policy, Vikrum Aiyer, said the company wasn’t aware of any decision the Energy Department had yet made.
While the list floated last week showed the Trump administration’s plans to cancel the two regional hydrogen hubs on the West Coast, the new list indicated that the Energy Department planned to rescind grants for all seven hubs, Emily reported. “If the program is dismantled, it could undermine the development of the domestic hydrogen industry,” Rachel Starr, the senior U.S. policy manager for hydrogen and transportation at Clean Air Task Force told her. “The U.S. will risk its leadership position on the global stage, both in terms of exporting a variety of transportation fuels that rely on hydrogen as a feedstock and in terms of technological development as other countries continue to fund and make progress on a variety of hydrogen production pathways and end uses.”
Remember the Tesla announcement I teased in yesterday’s newsletter? The predictions proved half right: The electric automaker did, indeed, release a cheaper version of its midsize SUV, the Model Y, with a starting price just $10 shy of $40,000. Rather than a new Roadster or potential vacuum cleaner, as the cryptic videos the company posted on CEO Elon Musk’s social media site hinted, the second announcement was a cheaper version of the Model 3, already the lower-end sedan offering. Starting at $36,990, InsideEVs called it “one of the most affordable cars Tesla has ever sold, and the cheapest in 2025.” But it’s still a far cry from Musk’s erstwhile promise to roll out a Tesla for less than $30,000.
That may be part of why the company is losing market share. As Heatmap’s Matthew Zeitlin reported, Tesla’s slice of the U.S. electric vehicle sales sank to its lowest-ever level in August despite Americans’ record scramble to use the federal tax credits before the September 30 deadline President Donald Trump’s new tax law set. General Motors, which sold more electric vehicles in the third quarter of this year than in all of 2024, offers the cheapest battery-powered passenger vehicle on the market today, the Chevrolet Equinox, which starts at $35,100.
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Trump’s pledge to revive the United States’ declining coal industry was always a gamble — even though, as Matthew reported in July, global coal demand is rising. Three separate stories published Tuesday show just how stacked the odds are against a major resurgence:
As you may recall from two consecutive newsletters last month, Secretary of Energy Chris Wright said “permitting reform” was “the biggest remaining thing” in the administration’s agenda. Yet Republican leaders in Congress expressed skepticism about tacking energy policy into the next reconciliation bill. This week, however, Utah Senator Mike Lee, the chairman of the Senate Committee on Energy and Natural Resources, called for a legislative overhaul of the National Environmental Policy Act. On Monday, the pro-development social media account Yimbyland — short for Yes In My Back Yard — posted on X: “Reminder that we built the Golden Gate Bridge in 4.5 years. Today, we wouldn’t even be able to finish the environmental review in 4.5 years.” In response, Lee said: “It’s time for NEPA reform. And permitting reform more broadly.”
Last month, a bipartisan permitting reform bill got a hearing in the House of Representatives. But that was before the government shutdown. And sources familiar with Democrats’ thinking have in recent months suggested to me that the administration’s gutting of so many clean energy policies has left Republicans with little to bargain with ahead of next year’s midterm elections.
Soon-to-be Japanese prime minister Sanae Takaichi.Yuichi Yamazaki - Pool/Getty Images
On Saturday, Japan’s long-ruling Liberal Democratic Party elected its former economic minister, Sanae Takaichi, as its new leader, putting her one step away from becoming the country’s first woman prime minister. Under previous administrations, Japan was already on track to restart the reactors idled after the 2011 Fukushima disaster. But Takaichi, a hardline conservative and nationalist who also vowed to re-militarize the nation, has pushed to speed up deployment of new reactors and technologies such as fusion in hopes of making the country 100% self-sufficient on energy.
“She wants energy security over climate ambition, nuclear over renewables, and national industry over global corporations,” Mika Ohbayashi, director at the pro-clean-energy Renewable Energy Institute, told Bloomberg. Shares of nuclear reactor operators surged by nearly 7% on Monday on the Tokyo Stock Exchange, while renewable energy developers’ stock prices dropped by as much as 15%
Researchers at the United Arab Emirates’ University of Sharjah just outlined a new method to transform spent coffee grounds and a commonly used type of plastic used in packaging into a form of activated carbon that can be used for chemical engineering, food processing, and water and air treatments. By repurposing the waste, it avoids carbon emitting from landfills into the atmosphere and reduces the need for new sources of carbon for industrial processes. “What begins with a Starbucks coffee cup and a discarded plastic water bottle can become a powerful tool in the fight against climate change through the production of activated carbon,” Dr. Haif Aljomard, lead inventor of the newly patented technology, said in a press release.
Last week’s Energy Department grant cancellations included funding for a backup energy system at Valley Children’s Hospital in Madera, California
When the Department of Energy canceled more than 321 grants in an act of apparent retribution against Democrats over the government shutdown, Russ Vought, President Trump’s budget czar, declared that the money represented “Green New Scam funding to fuel the Left's climate agenda.”
At least one of the grants zeroed out last week, however, was supposed to help keep the lights on at a children’s hospital.
The $29 million grant was intended to build a 3.3-megawatt long-duration energy storage system at Valley Children’s Hospital, a large pediatric hospital in Madera, California. The system would “power critical hospital operations during outage events,” such as when the California grid shuts down to avoid starting wildfires, according to project documents.
“The U.S. Department of Energy’s cancellation of funding for [the] long-duration energy storage demonstration grant is disappointing,” Zara Arboleda, a spokesperson for the hospital, told me.
Valley Children’s Hospital is a 358-bed hospital that says it serves more than 1.3 million children across California’s Central Valley. It has 116 neonatal intensive care unit beds and nationally ranked specialties in pediatric neurology, orthopedics, and lung surgery, among others.
Energy Secretary Chris Wright has characterized the more than $7.5 billion in grants canceled last week as part of an ongoing review of financial awards made by the Biden administration. But the timing of the cancellations — and Vought’s gleeful tweets about them — suggests a more vindictive purpose. Republican lawmakers and President Trump himself threatened to unleash Vought as a kind of rogue budget cutter before the federal government shut down last week.
“We don’t control what he’s going to do,” Senator John Thune told Politico last week. “I have a meeting today with Russ Vought, he of PROJECT 2025 Fame, to determine which of the many Democrat Agencies, most of which are a political SCAM, he recommends to be cut,” Trump posted on the same day.
Up until this year, canceling funding that is already under contract with a private party would have been thought to be straightforwardly illegal under federal law. But the Supreme Court’s conservative majority has allowed the Trump administration to act with previously unimaginable freedom while it considers ruling on similar cases.
Faraday Microgrids, the contractor that was due to receive the funding, is already building a microgrid for the hospital. The proposed backup power system — which the grant stipulated should be “non-lithium-ion” — was supposed to be funded by the Energy Department’s Office of Clean Energy Demonstrations, with the goal of finding new ways of storing electricity without using lithium-ion batteries, and was meant to work in concert with that new microgrid and snap on in times of high stress.
That microgrid project is still moving forward, Arboleda, the hospital’s spokesperson, told me. “Valley Children’s Hospital continues to build and soon will operate its microgrid announced in 2023 to ensure our facilities have access to reliable and sustainable energy every minute of every day for our patients and our care providers,” she added. That grid will contain some storage, but not the long-term storage system discussed in the official plan.
Faraday Microgrids, formerly known as Charge Bliss, didn’t respond to a request for comment, but its website touts its ability to secure grants and other government funding for energy projects.
In a statement, a spokesman for the Energy Department said that the grant was canceled because the project wasn’t feasible. “Following an in-depth review of the financial award, it was determined, among other reasons, that the viability of the project was not adequate to warrant further disbursements,” Ben Dietderich, a spokesman for the Energy Department, told me.
The children’s hospital, at least, is in good company. On Tuesday, a Trump administration document obtained by Heatmap News suggested the Energy Department is moving to kill bipartisan-backed funding for two direct air capture hubs in Texas and Louisiana. And although California has lost the most grants of any state, the Energy Department has also sought to terminate funding for new factories and industrial facilities across Republican-governed states.
Editor’s note: This story initially misstated the number of neonatal intensive care unit beds at Valley Children’s Hospital. It has been corrected.
Rob and Jesse break down China’s electricity generation with UC San Diego’s Michael Davidson.
China announced a new climate commitment under the Paris Agreement at last month’s United Nations General Assembly meeting, pledging to cut its emissions by 7% to 10% by 2035. Many observers were disappointed by the promise, which may not go far enough to forestall 2 degrees Celsius of warming. But the pledge’s conservatism reveals the delicate and shifting politics of China’s grid — and how the country’s central government and its provinces fight over keeping the lights on.
On this week’s episode of Shift Key, Rob and Jesse talk to Michael Davidson, an expert on Chinese electricity and climate policy. He is a professor at the University of California, San Diego, where he holds a joint faculty appointment at the School of Global Policy and Strategy and the Jacobs School of Engineering. He is also a senior associate at the Center for Strategic and International Studies, and he was previously the U.S.-China policy coordinator for the Natural Resources Defense Council.
Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University.
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Here is an excerpt from our conversation:
Robinson Meyer: Your research and other people’s research has revealed that basically, when China started making capacity payments to coal plants, in some cases, it didn’t have the effect on the bottom line of these plants that was hoped for, and also we didn’t really see coal generation go down or change in the year that it happened. It wasn’t like they were paying these plants to stick around and not run. They were basically paying these plants, it seems like, to do the exact same thing they did the year before, but now they also got paid. And maybe that was needed for their economics, we can talk about it.
Why did coal get those payments and not, say, batteries or other sources of spare capacity, like pumped hydro storage, like nuclear? Why did coal, specifically, get payments for capacity? And does it have to do with spinning reserve? Or does it have to do with the political economy of coal in China?
Michael Davidson: When it came out, we said exactly the same thing. We said, okay, this should be a technology neutral payment scheme, and it should be a market, not a payment, right? But China’s building these things up little by little. Over time we’ve seen, historically, actually, a number of systems internationally started with payments before they move to markets because they realize that you could get a lot more competitive pressure with markets.
The capacity payment scheme for coal is extremely simple, right? It says, okay, for each province, we’re going to say what percentage of our benchmark coal investment costs are we going to subsidize. It’s extremely simple. It does not account for how much you’re using it at a plant by plant level. It does not account for other factors, renewables, etc. It’s a very coarse metric. But I wouldn’t say that it had had some, you know, perverse negative effect on the outcome of what coal generation is. Probably more likely is that these payments were seen, for some, as extra support. But then for some that are really hurting, they’re saying, okay, well then we will maybe put up less obstacles to market reforms.
But then on top of that, you have to put in the hourly energy demand growth story and say, okay, well you have all these renewables, but you don’t have enough storage to shift to evening peaks. You are going to rely on coal to meet that given the current rigid dispatch system. And so you’re dispatching them kind of regardless of whether or not you have the payment schemes.
I will say that I was a skeptic, right? Because when people told me that China should put in place a capacity market, I said, China has overcapacity. So if you have an overcapacity situation, you put in place a market, the prices should be zero. So what’s the point? But actually, when you’re looking out ahead with all of this surplus coal capacity that you’re trying to push down, you’re trying to push those capacity factors of those coal plans from 50%, 60%, down to 20% or even lower, they need to have other revenue schemes if you’re not going to dramatically open up your spot markets, which China is very hesitant to do — very risk averse when it comes to the openness of spot markets, in terms of price gaps. So that’s a necessary part of this transition. But it can be done more efficiently, and it should done technology neutral.
And by the way that is happening in certain places. That’s a national scheme, but we actually see that the implementation — for example, Shaanxi province, we have a technology neutral scheme that would include other resources, not just coal.
Mentioned:
China’s new pledge to cut its emissions by 2035
What an ‘ambitious’ 2035 electricity target looks like for China
China’s Clean Energy Pledge is Clouded by Coal, The Wire China
Jesse’s upshift; Rob’s upshift.
This episode of Shift Key is sponsored by …
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A warmer world is here. Now what? Listen to Shocked, from the University of Chicago’s Institute for Climate and Sustainable Growth, and hear journalist Amy Harder and economist Michael Greenstone share new ways of thinking about climate change and cutting-edge solutions. Find it here.
Music for Shift Key is by Adam Kromelow.