California agency rejects Stellantis bid to void rivals' emissions deal

FILE PHOTO: Stellantis' Sevel van-making plant in Atessa, Italy,

WASHINGTON (Reuters) -A California agency has rejected Chrysler-parent Stellantis's bid to void a 2019 state emissions deal with rival automakers, according to a letter seen on Tuesday by Reuters.

California's Office of Administrative Law declined to accept the automaker's petition filed in December to overturn the California Air Resources Board (CARB) agreement and said the automaker could file suit or pursue the issue with the air resources board.

The automaker, which did not immediately comment on Tuesday, said in December it was seeking to address "the competitive disadvantages arising from our continuing exclusion and to preserve our ability to best serve our customers by fairly allocating our products to all states."

Ford, Honda, Volkswagen and BMW struck a voluntary agreement with California on reducing vehicle emissions and Volvo Cars, owned by China's Geely, joined soon afterward. Stellantis has since sought to join the voluntary agreement but been rebuffed.

In December, Stellantis said it would temporarily cut one shift at its Detroit assembly plant that builds Jeep sport utility vehicles and its Toledo, Ohio, assembly plant that builds the Jeep Wrangler, would move from an alternative work schedule to a traditional two-shift operation, citing California emissions regulations.

Stellantis said CARB intends to pursue retroactive enforcement of greenhouse gas emissions standards against automakers including Stellantis but "is not retroactively enforcing these same regulations against" automakers in the voluntarily agreement.

The agreement allows participating automakers to comply based on national sales, while Stellantis and other automakers are measured by sales in the 14 states following the California rules, which hinders them from selling electric models in the other states.

CARB did not immediately comment.

Stellantis has been limiting shipments of gasoline-powered vehicles to dealers in states adopting California's emissions rules and sales of plug-in EVs to states adopting California rules.

In January, the Environmental Protection Agency held a hearing on CARB's request to approve its rules adopted in August 2022 to ban the sale of gasoline-only powered vehicles by 2035 and require at least 80% electric-only models by then.

In June, Reuters reported Stellantis paid a record $235.5 million for not meeting U.S. fuel economy requirements.

(Reporting by David ShepardsonEditing by Marguerita Choy)