South Korea’s finished carmakers may benefit from Donald Trump administration`s possible budget cut for the U.S. Environmental Protection Agency (EPA), a move that would ease the country’s tough emissions regulations that some of Korean sports utility vehicle (SUV) models have failed to meet.

White House last week proposed a 31 percent cut in budget of the EPA, raising concerns that the plan would eliminate nearly 20 percent of the agency’s workforce and trim initiatives aimed at protecting the environment. The EPA is an agency of the US Federal government, which is in charge of legislating and enforcing environment related laws. The agency has worked with the National Highway Traffic Safety Administration (NHTSA) to set vehicle’s fuel economy standards since 2010.

According to a report released by Eugene Investment & Securities on Monday, the budget cut plan is expected to ease some emissions regulations, which would provide some relief to Korean car makers that manufacture bulky gas guzzler models with low fuel efficiency. Among domestic automakers, Kia Motors Corp. whose SUVs account for about third of its sales in the U.S. market, is expected to be the biggest beneficiary of the proposed budget cut in the EPA, said Lee Jae-il, an analyst at Eugene Investment & Securities. SUVs that are generally heavier than sedans tend to emit more carbon dioxide.

Last year, Hyundai Motor Co., Korea’s largest automaker, sold 775,000 units of vehicles in the U.S., 28 percent of which were SUVs. Its smaller sibling Kia Motors sold 647,588 units over the same period and SUVs including the Sorento and Sportage made up 37.1 percent, or about 240,000 units.

Kia Motors failed to satisfy EPA’s greenhouse gas emissions standards in 2014 and 2015 with fast-increasing sales of its SUV models in the country where leisure vehicles have been growing popular. Companies that fail to meet the EPA standards have purchase extra emissions rights.

U.S. President Trump’s proposal for the EPA budget cut immediately met strong opposition from environmentalists across the world and some of politicians even in Trump’s Republican party. The plan must be agreed by the Congress.

Shares of Hyundai Motor closed Tuesday at 170,000 won ($151.79), up 8.63 percent or 13,500 won from the previous session while those of Kia Motors ended at 38,300 won, up 3.51 percent or 1,300 won.

By Lee Yong-gun

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