(Adds more details, environmental reaction)
By David Shepardson
WASHINGTON, Sept 5 (Reuters) - Two U.S. agencies are preparing to submit for final White House regulatory review a plan to revoke California's authority to set its own vehicle greenhouse gas standards and declare that states are pre-empted from setting their own vehicle rules, two people briefed on the matter said on Thursday.
The Environmental Protection Agency in August 2018 proposed revoking a waiver granted to California in 2013 under the Clean Air Act as part of the Trump administration's plan to roll back Obama-era fuel economy standards through 2025.
The EPA and the National Highway Traffic Safety Administration (NHTSA) are expected to seek approval to finalize the first portion of the rule dealing with California and other states before completing action on setting yearly fuel efficiency requirements. The plan would not revoke California's ability to set low-emission vehicle standards that has been in place since 1990, the sources said.
The move comes as President Donald Trump has expressed anger with automakers over the issue. In July, four major automakers, including Ford Motor Co and Volkswagen AG, said they had reached a voluntary agreement with California on fuel efficiency rules.
California and other states had vowed to enforce stricter Obama-era emissions standards, after Trump proposed rolling back the federal rules. Automakers had worried that court battles between state and federal governments could create years of uncertainty for manufacturers.
The plan, also backed by BMW AG and Honda Motor Co Ltd, is more stringent than Trump's proposal but looser than the Obama-era rule. California, the most populous U.S. state, accounts for about 12% of American vehicle sales, and if the administration recognizes the deal, it would allow automakers to operate under one set of rules.
An administration official said it was close to submitting a rule internally dubbed the "One National Program rule" aimed at ensuring a single national level for fuel economy standards. It would also block California from setting zero emission vehicle requirements.
On Friday, a federal appeals court in Washington will hear arguments in a suit filed by California and other states challenging the Trump administration's decision to set aside a 2017 EPA determination under Obama that the 2022-2025 fuel rules were appropriate.
Other automakers, including General Motors Co and Toyota Motor Corp, have declined to back the deal with California. Mary Nichols, who chairs the California Air Resources Board, told Reuters in July that the four automakers had agreed not to legally challenge California's vehicle regulatory authority.
Under Trump, federal regulators backed freezing emissions requirements for new cars and trucks at 2020 levels through 2026. Administration officials say its final regulation will include a modest boost in annual efficiency requirements but far less than what the Obama administration had set in 2012.
The Obama-era rules called for a fleetwide fuel efficiency average of 46.7 mpg by 2025, with average annual increases of about 5%, compared with 37 mpg by 2026 under the Trump administration’s preferred option to freeze requirements.
The administration's proposal said that by the 2030 model year, the average price increase of a new vehicle would be reduced by $1,850 and consumers would pay $490 less for financing, insurance and taxes.
The Environmental Defense Fund said Thursday rolling back the rules would cost motorists at least $200 annually in average higher fuel costs.
Reporting by David Shepardson Editing by Jonathan Oatis and Steve Orlofsky