What Happened: The U.S. Environmental Protection Agency (EPA) recently proposed to delay Biden-era Tier 4 emissions standards for light- and medium-duty vehicles by two years, extending Tier 3 standards through model years (MYs) 2027 and 2028.
Who is Impacted: Manufacturers of light- and medium-duty vehicles in the U.S.
What Companies Should Consider Doing: Regulated entities should carefully review the proposed rule, evaluate its potential impact on production plans, and consider submitting comments to inform EPA’s decision by July 6, 2026.
Background
Section 202(a) of the Clean Air Act (CAA) authorizes EPA to promulgate air pollutant emission standards for new motor vehicles. Using this authority, EPA enacted “Tier 3” vehicle criteria pollutant emissions standards in 2014, which took effect in MY 2017. In 2024, EPA promulgated a final rule establishing the phase-in of more stringent “Tier 4” emissions standards, effective MY 2027 and continuing through MY 2032. The final rule encouraged manufacturers to invest in electric vehicle (EV) technologies, such as hybrid EVs and battery EVs (BEVs), to meet Tier 4 standards.
EPA announced on May 14, 2026, its proposal to delay the Tier 4 standards for two years until MY 2029.
Proposed Rule
The proposed rule is the first part of a two-part rulemaking EPA is considering for Tier 4 standards. The first part proposes delaying the Tier 4 program by two MYs and therefore extending Tier 3 standards until MY 2029. The delay would provide industry with additional time to adjust its production plans to navigate the lack of demand for BEVs and the high costs associated with bringing gasoline vehicles into Tier 4 compliance. The proposal also incorporates changes to the test protocols for emissions performance and certification. EPA has stated that the second part will be addressed at a later date and will reconsider the Tier 4 program, which may incorporate potential amendments to the Tier 4 standards, implementation schedule, and test procedures.
As justification for the proposed rule, EPA explains that the 2024 rule assumed that EV adoption in the vehicle market would be more widespread. If this assumption were true, Tier 4 standards would have been more feasible to attain by MY2027 because higher BEV sales would have allowed manufacturers to implement additional controls on fewer gasoline vehicles to comply with the Tier 4 phase-in requirements. However, EPA claims that these assumptions ultimately proved incorrect. Instead, manufacturers have faced lower BEV market share due to low demand and federal regulations that have deemphasized EVs. Manufacturers, therefore, had to modify their original production plans to bring more non-BEVs into compliance with Tier 4 standards than anticipated, creating feasibility issues and time constraints to meet the original Tier 4 implementation deadlines.
Next Steps
If finalized, the proposal may affect compliance strategies for manufacturers that have already planned for MY 2027 and 2028 Tier 4 requirements. Manufacturers and suppliers that have already invested in MY 2027 or 2028 Tier 4 compliance strategies should evaluate whether the proposal would alter near-term compliance obligations or create opportunities to adjust production plans. Manufacturers and suppliers may also need to reassess certification timelines, emissions-control technology investments, BEV and hybrid product planning, and contractual commitments tied to MY 2027 and 2028 production.
The proposed rule is subject to a 45-day public comment period. Additionally, EPA plans to hold a public hearing for the proposal on June 3 and 4, 2026. Vehicle manufacturers and other affected entities should carefully consider the proposed rule’s potential impacts and whether it is in their interests to submit comments that address, for example, the feasibility, costs, compliance planning strategies, certification timelines, and other related impacts from the proposed rule.
