Volvo XC40 grille

With the ink barely dry on federal fuel economy rules, Volvo said Wednesday that it intends to comply with stricter mpg rules it has been negotiating with the state of California—showing that global pressure to improve technology and combat climate change could push the auto industry to go beyond federal requirements.

On Tuesday, the Trump administration announced final regulations to set fuel efficiency for model years 2021-26. The revised federal rules call for the combined averages of a company’s models to improve by about 1.5 percent a year, down from 5 percent a year under rules adopted by the Obama administration in 2012. 

The California program calls for year-over-year improvements of about 3.7 percent from 2022 to 2026. The California targets better align with Volvo's broader goals, the company said in an email to Consumer Reports. That includes making every model it sells either a hybrid or all-electric as it tries to reduce carbon emissions.

Volvo says it is still negotiating a final agreement with the California Air Resources Board. 

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“A nationwide agreement that is consistent with Volvo Cars global electrification strategy and our goal to be climate neutral by 2040 has not happened,” Volvo said in its statement. “We believe this is the best path forward for U.S. regulatory certainty.”

Volvo would become the fifth automaker to join California’s voluntary agreement on fuel economy and carbon emissions from motor vehicles. The automaker joins BMW, Ford, Honda, and Volkswagen, which announced a deal with California in July. The state is allowed to set its own stricter emissions requirements under the Clean Air Act, and its rules have been adopted by 14 other states. But that authority is being challenged in court by the Trump administration.

“All of the European countries and most of the Asian countries are moving forward with higher technology, while the Trump administration is stuck in reverse,” said Dan Becker, executive director of the Safe Climate Campaign, a Washington watchdog group. “It’s good news that Volvo is joining other companies in shunning the Trump rollback.”

Correction: This version has been changed to reflect that Volvo and California are still negotiating a final agreement on fuel economy rules. An earlier version incorrectly stated that Volvo and California had finalized an agreement and that Volvo had "announced" a deal.