Proposed Rulemaking To Establish Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards, 49454-49789 [E9-22516]
Download as PDF
<![CDATA[
49454
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Parts 86 and 600
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety
Administration
49 CFR Parts 531, 533, 537, and 538
[EPA–HQ–OAR–2009–0472; FRL–8959–4;
NHTSA–2009–0059]
RIN 2060–AP58; RIN 2127–AK90
Proposed Rulemaking To Establish
Light-Duty Vehicle Greenhouse Gas
Emission Standards and Corporate
Average Fuel Economy Standards
mstockstill on DSKH9S0YB1PROD with PROPOSALS
AGENCY: Environmental Protection
Agency (EPA) and National Highway
Traffic Safety Administration (NHTSA).
ACTION: Proposed rule.
SUMMARY: EPA and NHTSA are issuing
this joint proposal to establish a
National Program consisting of new
standards for light-duty vehicles that
will reduce greenhouse gas emissions
and improve fuel economy. This joint
proposed rulemaking is consistent with
the National Fuel Efficiency Policy
announced by President Obama on May
19, 2009, responding to the country’s
critical need to address global climate
change and to reduce oil consumption.
EPA is proposing greenhouse gas
emissions standards under the Clean Air
Act, and NHTSA is proposing Corporate
Average Fuel Economy standards under
the Energy Policy and Conservation Act,
as amended. These standards apply to
passenger cars, light-duty trucks, and
medium-duty passenger vehicles,
covering model years 2012 through
2016, and represent a harmonized and
consistent National Program. Under the
National Program, automobile
manufacturers would be able to build a
single light-duty national fleet that
satisfies all requirements under both
programs while ensuring that
consumers still have a full range of
vehicle choices.
FOR FURTHER INFORMATION CONTACT:
Comments: Comments must be received
on or before November 27, 2009. Under
the Paperwork Reduction Act,
comments on the information collection
provisions must be received by the
Office of Management and Budget
(OMB) on or before October 28, 2009.
See the SUPPLEMENTARY INFORMATION
section on ‘‘Public Participation’’ for
more information about written
comments.
Hearings: NHTSA and EPA will
jointly hold three public hearings on the
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
following dates: October 21, 2009 in
Detroit, Michigan; October 23, 2009 in
New York, New York; and October 27,
2009 in Los Angeles, California. EPA
and NHTSA will announce the
addresses for each hearing location in a
supplemental Federal Register Notice.
The hearings will start at 9 a.m. local
time and continue until everyone has
had a chance to speak. See the
SUPPLEMENTARY INFORMATION section on
‘‘Public Participation’’ for more
information about the public hearings.
ADDRESSES: Submit your comments,
identified by Docket ID No. EPA–HQ–
OAR–2009–0472 and/or NHTSA–2009–
0059, by one of the following methods:
• www.regulations.gov: Follow the
on-line instructions for submitting
comments.
• E-mail: a-and-r-Docket@epa.gov.
• Fax: EPA: (202) 566–1741; NHTSA:
(202) 493–2251.
• Mail:
Æ EPA: Environmental Protection
Agency, EPA Docket Center (EPA/DC),
Air and Radiation Docket, Mail Code
2822T, 1200 Pennsylvania Avenue,
NW., Washington, DC 20460, Attention
Docket ID No. EPA–HQ–OAR–2009–
0472. In addition, please mail a copy of
your comments on the information
collection provisions to the Office of
Information and Regulatory Affairs,
Office of Management and Budget
(OMB), Attn: Desk Officer for EPA, 725
17th St., NW., Washington, DC 20503.
Æ NHTSA: Docket Management
Facility, M–30, U.S. Department of
Transportation, West Building, Ground
Floor, Rm. W12–140, 1200 New Jersey
Avenue, SE., Washington, DC 20590.
• Hand Delivery:
Æ EPA: Docket Center, (EPA/DC) EPA
West, Room B102, 1301 Constitution
Ave., NW., Washington, DC, Attention
Docket ID No. EPA–HQ–OAR–2009–
0472. Such deliveries are only accepted
during the Docket’s normal hours of
operation, and special arrangements
should be made for deliveries of boxed
information.
Æ NHTSA: West Building, Ground
Floor, Rm. W12–140, 1200 New Jersey
Avenue, SE., Washington, DC 20590,
between 9 a.m. and 5 p.m. Eastern Time,
Monday through Friday, except Federal
Holidays.
Instructions: Direct your comments to
Docket ID No. EPA–HQ–OAR–2009–
0472 and/or NHTSA–2009–0059. See
the SUPPLEMENTARY INFORMATION section
on ‘‘Public Participation’’ for more
information about submitting written
comments.
Public Hearing: NHTSA and EPA will
jointly hold three public hearings on the
following dates: October 21, 2009 in
PO 00000
Frm 00002
Fmt 4701
Sfmt 4702
Detroit, Michigan; October 23, 2009 in
New York, New York; and October 27,
2009 in Los Angeles, California. EPA
and NHTSA will announce the
addresses for each hearing location in a
supplemental Federal Register Notice.
See the SUPPLEMENTARY INFORMATION
section on ‘‘Public Participation’’ for
more information about the public
hearings.
Docket: All documents in the dockets
are listed in the www.regulations.gov
index. Although listed in the index,
some information is not publicly
available, e.g., confidential business
information (CBI) or other information
whose disclosure is restricted by statute.
Certain other material, such as
copyrighted material, will be publicly
available only in hard copy. Publicly
available docket materials are available
either electronically in
www.regulations.gov or in hard copy at
the following locations: EPA: EPA
Docket Center, EPA/DC, EPA West,
Room 3334, 1301 Constitution Ave.,
NW., Washington, DC. The Public
Reading Room is open from 8:30 a.m. to
4:30 p.m., Monday through Friday,
excluding legal holidays. The telephone
number for the Public Reading Room is
(202) 566–1744. NHTSA: Docket
Management Facility, M–30, U.S.
Department of Transportation, West
Building, Ground Floor, Rm. W12–140,
1200 New Jersey Avenue, SE,
Washington, DC 20590. The Docket
Management Facility is open between 9
a.m. and 5 p.m. Eastern Time, Monday
through Friday, except Federal holidays.
FOR FURTHER INFORMATION CONTACT:
EPA: Tad Wysor, Office of
Transportation and Air Quality,
Assessment and Standards Division,
Environmental Protection Agency, 2000
Traverwood Drive, Ann Arbor MI
48105; telephone number: 734–214–
4332; fax number: 734–214–4816; e-mail
address: wysor.tad@epa.gov, or
Assessment and Standards Division
Hotline; telephone number (734) 214–
4636; e-mail address asdinfo@epa.gov.
NHTSA: Rebecca Yoon, Office of Chief
Counsel, National Highway Traffic
Safety Administration, 1200 New Jersey
Avenue, SE., Washington, DC 20590.
Telephone: (202) 366–2992.
SUPPLEMENTARY INFORMATION:
A. Does This Action Apply to Me?
This action affects companies that
manufacture or sell new light-duty
vehicles, light-duty trucks, and
medium-duty passenger vehicles, as
defined under EPA’s CAA regulations,1
1 ‘‘Light-duty vehicle,’’ ‘‘light-duty truck,’’ and
‘‘medium-duty passenger vehicle’’ are defined in 40
CFR 86.1803–01. Generally, the term ‘‘light-duty
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
and passenger automobiles (passenger
cars) and non-passenger automobiles
(light trucks) as defined under NHTSA’s
CAFE regulations.2 Regulated categories
and entities include:
NAICS
codes A
Category
Industry ......................................................................
Industry ......................................................................
A North
Examples of potentially regulated entities
336111
336112
811112
811198
541514
Motor vehicle manufacturers.
Commercial Importers of Vehicles and Vehicle Components.
American Industry Classification System (NAICS).
How Do I Prepare and Submit
Comments?
In this joint proposal, there are many
issues common to both EPA’s and
NHTSA’s proposals. For the
convenience of all parties, comments
submitted to the EPA docket will be
considered comments submitted to the
NHTSA docket, and vice versa. An
exception is that comments submitted to
the NHTSA docket on the Draft
Environmental Impact Statement will
not be considered submitted to the EPA
docket. Therefore, the public only needs
to submit comments to either one of the
two agency dockets. Comments that are
submitted for consideration by one
agency should be identified as such, and
comments that are submitted for
consideration by both agencies should
be identified as such. Absent such
identification, each agency will exercise
its best judgment to determine whether
a comment is submitted on its proposal.
Further instructions for submitting
comments to either the EPA or NHTSA
docket are described below.
EPA: Direct your comments to Docket
ID No EPA–HQ–OAR–2009–0472. EPA’s
policy is that all comments received
will be included in the public docket
without change and may be made
available online at www.regulations.gov,
including any personal information
provided, unless the comment includes
information claimed to be Confidential
Business Information (CBI) or other
information whose disclosure is
restricted by statute. Do not submit
information that you consider to be CBI
or otherwise protected through
www.regulations.gov or e-mail. The
www.regulations.gov Web site is an
‘‘anonymous access’’ system, which
means EPA will not know your identity
or contact information unless you
provide it in the body of your comment.
If you send an e-mail comment directly
to EPA without going through
www.regulations.gov your e-mail
address will be automatically captured
and included as part of the comment
that is placed in the public docket and
made available on the Internet. If you
submit an electronic comment, EPA
recommends that you include your
name and other contact information in
the body of your comment and with any
disk or CD–ROM you submit. If EPA
cannot read your comment due to
technical difficulties and cannot contact
you for clarification, EPA may not be
able to consider your comment.
Electronic files should avoid the use of
special characters, any form of
encryption, and be free of any defects or
viruses. For additional information
about EPA’s public docket visit the EPA
Docket Center homepage at https://
www.epa.gov/epahome/dockets.htm.
NHTSA: Your comments must be
written and in English. To ensure that
your comments are correctly filed in the
Docket, please include the Docket
number NHTSA–2009–0059 in your
comments. Your comments must not be
more than 15 pages long.3 NHTSA
established this limit to encourage you
to write your primary comments in a
concise fashion. However, you may
attach necessary additional documents
vehicle’’ means a passenger car, the term ‘‘lightduty truck’’ means a pick-up truck, sport-utility
vehicle, or minivan of up to 8,500 lbs gross vehicle
weight rating, and ‘‘medium-duty passenger
vehicle’’ means a sport-utility vehicle or passenger
van from 8,500 to 10,000 lbs gross vehicle weight
rating. Medium-duty passenger vehicles do not
include pick-up trucks.
2 ‘‘Passenger car’’ and ‘‘light truck’’ are defined in
49 CFR part 523.
This list is not intended to be
exhaustive, but rather provides a guide
regarding entities likely to be regulated
by this action. To determine whether
particular activities may be regulated by
this action, you should carefully
examine the regulations. You may direct
questions regarding the applicability of
this action to the person listed in FOR
FURTHER INFORMATION CONTACT.
B. Public Participation
NHTSA and EPA request comment on
all aspects of this joint proposed rule.
This section describes how you can
participate in this process.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49455
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00003
Fmt 4701
Sfmt 4702
to your comments. There is no limit on
the length of the attachments. If you are
submitting comments electronically as a
PDF (Adobe) file, we ask that the
documents submitted be scanned using
the Optical Character Recognition (OCR)
process, thus allowing the agencies to
search and copy certain portions of your
submissions.4 Please note that pursuant
to the Data Quality Act, in order for the
substantive data to be relied upon and
used by the agencies, it must meet the
information quality standards set forth
in the OMB and Department of
Transportation (DOT) Data Quality Act
guidelines. Accordingly, we encourage
you to consult the guidelines in
preparing your comments. OMB’s
guidelines may be accessed at https://
www.whitehouse.gov/omb/fedreg/
reproducible.html. DOT’s guidelines
may be accessed at https://www.dot.gov/
dataquality.htm.
Tips for Preparing Your Comments
When submitting comments,
remember to:
• Identify the rulemaking by docket
number and other identifying
information (subject heading, Federal
Register date and page number).
• Follow directions—The agency may
ask you to respond to specific questions
or organize comments by referencing a
Code of Federal Regulations (CFR) part
or section number.
• Explain why you agree or disagree,
suggest alternatives, and substitute
language for your requested changes.
• Describe any assumptions and
provide any technical information and/
or data that you used.
• If you estimate potential costs or
burdens, explain how you arrived at
your estimate in sufficient detail to
allow for it to be reproduced.
• Provide specific examples to
illustrate your concerns, and suggest
alternatives.
3 See
49 CFR 553.21.
character recognition (OCR) is the
process of converting an image of text, such as a
scanned paper document or electronic fax file, into
computer-editable text.
4 Optical
E:\FR\FM\28SEP2.SGM
28SEP2
49456
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
• Explain your views as clearly as
possible, avoiding the use of profanity
or personal threats.
Make sure to submit your comments
by the comment period deadline
identified in the DATES section above.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
How Can I Be Sure That My Comments
Were Received?
NHTSA: If you submit your comments
by mail and wish Docket Management
to notify you upon its receipt of your
comments, enclose a self-addressed,
stamped postcard in the envelope
containing your comments. Upon
receiving your comments, Docket
Management will return the postcard by
mail.
How Do I Submit Confidential Business
Information?
Any confidential business
information (CBI) submitted to one of
the agencies will also be available to the
other agency. However, as with all
public comments, any CBI information
only needs to be submitted to either one
of the agencies’ dockets and it will be
available to the other. Following are
specific instructions for submitting CBI
to either agency.
EPA: Do not submit CBI to EPA
through https://www.regulations.gov or
e-mail. Clearly mark the part or all of
the information that you claim to be
CBI. For CBI information in a disk or
CD–ROM that you mail to EPA, mark
the outside of the disk or CD–ROM as
CBI and then identify electronically
within the disk or CD–ROM the specific
information that is claimed as CBI. In
addition to one complete version of the
comment that includes information
claimed as CBI, a copy of the comment
that does not contain the information
claimed as CBI must be submitted for
inclusion in the public docket.
Information so marked will not be
disclosed except in accordance with
procedures set forth in 40 CFR part 2.
NHTSA: If you wish to submit any
information under a claim of
confidentiality, you should submit three
copies of your complete submission,
including the information you claim to
be confidential business information, to
the Chief Counsel, NHTSA, at the
address given above under FOR FURTHER
INFORMATION CONTACT. When you send a
comment containing confidential
business information, you should
include a cover letter setting forth the
information specified in our
confidential business information
regulation.5
In addition, you should submit a copy
from which you have deleted the
5 See
49 CFR part 512.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
claimed confidential business
information to the Docket by one of the
methods set forth above.
Will the Agencies Consider Late
Comments?
NHTSA and EPA will consider all
comments received before the close of
business on the comment closing date
indicated above under DATES. To the
extent practicable, we will also consider
comments received after that date. If
interested persons believe that any new
information the agency places in the
docket affects their comments, they may
submit comments after the closing date
concerning how the agency should
consider that information for the final
rule. However, the agencies’ ability to
consider any such late comments in this
rulemaking will be limited due to the
time frame for issuing a final rule.
If a comment is received too late for
us to practicably consider in developing
a final rule, we will consider that
comment as an informal suggestion for
future rulemaking action.
How Can I Read the Comments
Submitted by Other People?
You may read the materials placed in
the docket for this document (e.g., the
comments submitted in response to this
document by other interested persons)
at any time by going to https://
www.regulations.gov. Follow the online
instructions for accessing the dockets.
You may also read the materials at the
EPA Docket Center or NHTSA Docket
Management Facility by going to the
street addresses given above under
ADDRESSES.
How Do I Participate in the Public
Hearings?
NHTSA and EPA will jointly host
three public hearings on the dates and
locations described in the DATES and
ADDRESSES sections above.
If you would like to present testimony
at the public hearings, we ask that you
notify the EPA and NHTSA contact
persons listed under FOR FURTHER
INFORMATION CONTACT at least ten days
before the hearing. Once EPA and
NHTSA learn how many people have
registered to speak at the public hearing,
we will allocate an appropriate amount
of time to each participant, allowing
time for lunch and necessary breaks
throughout the day. For planning
purposes, each speaker should
anticipate speaking for approximately
ten minutes, although we may need to
adjust the time for each speaker if there
is a large turnout. We suggest that you
bring copies of your statement or other
material for the EPA and NHTSA panels
and the audience. It would also be
PO 00000
Frm 00004
Fmt 4701
Sfmt 4702
helpful if you send us a copy of your
statement or other materials before the
hearing. To accommodate as many
speakers as possible, we prefer that
speakers not use technological aids (e.g.,
audio-visuals, computer slideshows).
However, if you plan to do so, you must
notify the contact persons in the FOR
FURTHER INFORMATION CONTACT section
above. You also must make
arrangements to provide your
presentation or any other aids to
NHTSA and EPA in advance of the
hearing in order to facilitate set-up. In
addition, we will reserve a block of time
for anyone else in the audience who
wants to give testimony.
The hearing will be held at a site
accessible to individuals with
disabilities. Individuals who require
accommodations such as sign language
interpreters should contact the persons
listed under FOR FURTHER INFORMATION
CONTACT section above no later than ten
days before the date of the hearing.
NHTSA and EPA will conduct the
hearing informally, and technical rules
of evidence will not apply. We will
arrange for a written transcript of the
hearing and keep the official record of
the hearing open for 30 days to allow
you to submit supplementary
information. You may make
arrangements for copies of the transcript
directly with the court reporter.
Table of Contents
I. Overview of Joint EPA/NHTSA National
Program
A. Introduction
1. Building Blocks of the National Program
2. Joint Proposal for a National Program
B. Summary of the Joint Proposal
C. Background and Comparison of NHTSA
and EPA Statutory Authority
1. NHTSA Statutory Authority
2. EPA Statutory Authority
3. Comparing the Agencies’ Authority
D. Summary of the Proposed Standards for
the National Program
1. Joint Analytical Approach
2. Level of the Standards
3. Form of the Standards
E. Summary of Costs and Benefits for the
Joint Proposal
1. Summary of Costs and Benefits of
Proposed NHTSA CAFE Standards
2. Summary of Costs and Benefits of
Proposed EPA GHG Standards
F. Program Flexibilities for Achieving
Compliance
1. CO2/CAFE Credits Generated Based on
Fleet Average Performance
2. Air Conditioning Credits
3. Flex-Fuel and Alternative Fuel Vehicle
Credits
4. Temporary Lead-time Allowance
Alternative Standards
5. Additional Credit Opportunities Under
the CAA
G. Coordinated Compliance
H. Conclusion
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
II. Joint Technical Work Completed for This
Proposal
A. Introduction
B. How Did NHTSA and EPA Develop the
Baseline Market Forecast?
1. Why Do the Agencies Establish a
Baseline Vehicle Fleet?
2. How Do the Agencies Develop the
Baseline Vehicle Fleet?
3. How Is the Development of the Baseline
Fleet for this Proposal Different From
NHTSA’s Historical Approach, and Why
is This Approach Preferable?
4. How Does Manufacturer Product Plan
Data Factor Into the Baseline Used in
This Proposal?
C. Development of Attribute-Based Curve
Shapes
D. Relative Car-Truck Stringency
E. Joint Vehicle Technology Assumptions
1. What Technologies Do the Agencies
Consider?
2. How Did the Agencies Determine the
Costs and Effectiveness of Each of These
Technologies?
F. Joint Economic Assumptions
III. EPA Proposal for Greenhouse Gas
Vehicle Standards
A. Executive Overview of EPA Proposal
1. Introduction
2. Why Is EPA Proposing This Rule?
3. What Is EPA Proposing?
4. Basis for the Proposed GHG Standards
Under Section 202(a)
B. Proposed GHG Standards for Light-Duty
Vehicles, Light-Duty Trucks, and
Medium-Duty Passenger Vehicles
1. What Fleet-Wide Emissions Levels
Correspond to the CO2 Standards?
2. What Are the CO2 Attribute-Based
Standards?
3. Overview of How EPA’s Proposed CO2
Standards Would Be Implemented for
Individual Manufacturers
4. Averaging, Banking, and Trading
Provisions for CO2 Standards
5. CO2 Temporary Lead-Time Allowance
Alternative Standards
6. Proposed Nitrous Oxide and Methane
Standards
7. Small Entity Deferment
C. Additional Credit Opportunities for CO2
Fleet Average Program
1. Air Conditioning Related Credits
2. Flex Fuel and Alternative Fuel Vehicle
Credits
3. Advanced Technology Vehicle Credits
for Electric Vehicles, Plug-in Hybrids,
and Fuel Cells
4. Off-cycle Technology Credits
5. Early Credit Options
D. Feasibility of the Proposed CO2 Standards
1. How Did EPA Develop a Reference
Vehicle Fleet for Evaluating Further CO2
Reductions?
2. What Are the Effectiveness and Costs of
CO2-Reducing Technologies?
3. How Can Technologies Be Combined
into ‘‘Packages’’ and What Is the Cost
and Effectiveness of Packages?
4. Manufacturer’s Application of
Technology
5. How Is EPA Projecting That a
Manufacturer Would Decide Between
Options To Improve CO2 Performance To
Meet a Fleet Average Standard?
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
6. Why Are the Proposed CO2 Standards
Feasible?
7. What Other Fleet-Wide CO2 Levels Were
Considered?
E. Certification, Compliance, and
Enforcement
1. Compliance Program Overview
2. Compliance With Fleet-Average CO2
Standards
3. Vehicle Certification
4. Useful Life Compliance
5. Credit Program Implementation
6. Enforcement
7. Prohibited Acts in the CAA
8. Other Certification Issues
9. Miscellaneous Revisions to Existing
Regulations
10. Warranty, Defect Reporting, and Other
Emission-related Components Provisions
11. Light Vehicles and Fuel Economy
Labeling
F. How Would This Proposal Reduce GHG
Emissions and Their Associated Effects?
1. Impact on GHG Emissions
2. Overview of Climate Change Impacts
From GHG Emissions
3. Changes in Global Mean Temperature
and Sea-Level Rise Associated With the
Proposal’s GHG Emissions Reductions
4. Weight Reduction and Potential Safety
Impacts
G. How Would the Proposal Impact NonGHG Emissions and Their Associated
Effects?
1. Upstream Impacts of Program
2. Downstream Impacts of Program
3. Health Effects of Non-GHG Pollutants
4. Environmental Effects of Non-GHG
Pollutants
5. Air Quality Impacts of Non-GHG
Pollutants
H. What Are the Estimated Cost, Economic,
and Other Impacts of the Proposal?
1. Conceptual Framework for Evaluating
Consumer Impacts
2. Costs Associated With the Vehicle
Program
3. Cost per Ton of Emissions Reduced
4. Reduction in Fuel Consumption and Its
Impacts
5. Impacts on U.S. Vehicle Sales and
Payback Period
6. Benefits of Reducing GHG Emissions
7. Non-Greenhouse Gas Health and
Environmental Impacts
8. Energy Security Impacts
9. Other Impacts
10. Summary of Costs and Benefits
I. Statutory and Executive Order Reviews
1. Executive Order 12866: Regulatory
Planning and Review
2. Paperwork Reduction Act
3. Regulatory Flexibility Act
4. Unfunded Mandates Reform Act
5. Executive Order 13132 (Federalism)
6. Executive Order 13175 (Consultation
and Coordination With Indian Tribal
Governments)
7. Executive Order 13045: ‘‘Protection of
Children From Environmental Health
Risks and Safety Risks’’
8. Executive Order 13211 (Energy Effects)
9. National Technology Transfer
Advancement Act
10. Executive Order 12898: Federal Actions
to Address Environmental Justice in
PO 00000
Frm 00005
Fmt 4701
Sfmt 4702
49457
Minority Populations and Low-Income
Populations
J. Statutory Provisions and Legal Authority
IV. NHTSA Proposal for Passenger Car and
Light Truck CAFE Standards for MYs 2012–
2016
A. Executive Overview of NHTSA Proposal
1. Introduction
2. Role of Fuel Economy Improvements in
Promoting Energy Independence, Energy
Security, and a Low Carbon Economy
3. The National Program
4. Review of CAFE Standard Setting
Methodology Per the President’s January
26, 2009 Memorandum on CAFE
Standards for MYs 2011 and Beyond
5. Summary of the Proposed MY 2012–
2016 CAFE Standards
B. Background
1. Chronology of Events Since the National
Academy of Sciences Called for
Reforming and Increasing CAFE
Standards
2. NHTSA Issues Final Rule Establishing
Attribute-Based CAFE Standards for MY
2008–2011 Light Trucks (March 2006)
3. Ninth Circuit Issues Decision re Final
Rule for MY 2008–2011 Light Trucks
(November 2007)
4. Congress Enacts Energy Security and
Independence Act of 2007 (December
2007)
5. NHTSA Proposes CAFE Standards for
MYs 2011–2015 (April 2008)
6. Ninth Circuit Revises Its Decision re
Final Rule for MY 2008–2011 Light
Trucks (August 2008)
7. NHTSA Releases Final Environmental
Impact Statement (October 2008)
8. Department of Transportation Decides
not to Issue MY 2011–2015 final Rule
(January 2009)
9. The President Requests NHTSA to Issue
Final Rule for MY 2011 Only (January
2009)
10. NHTSA Issues Final Rule for MY 2011
(March 2009)
11. Energy Policy and Conservation Act, as
Amended by the Energy Independence
and Security Act
C. Development and Feasibility of the
Proposed Standards
1. How Was the Baseline Vehicle Fleet
Developed?
2. How were the Technology Inputs
Developed?
3. How Did NHTSA Develop the Economic
Assumption Inputs?
4. How Does NHTSA Use the Assumptions
in Its Modeling Analysis?
5. How Did NHTSA Develop the Shape of
the Target Curves for the Proposed
Standards?
D. Statutory Requirements
1. EPCA, as Amended by EISA
2. Administrative Procedure Act
3. National Environmental Policy Act
E. What Are the Proposed CAFE Standards?
1. Form of the Standards
2. Passenger Car Standards for MYs 2012–
2016
3. Minimum Domestic Passenger Car
Standards
4. Light Truck Standards
F. How Do the Proposed Standards Fulfill
NHTSA’s Statutory Obligations?
E:\FR\FM\28SEP2.SGM
28SEP2
49458
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
can achieve substantial reductions of
greenhouse gas (GHG) emissions and
improvements in fuel economy from the
light-duty vehicle part of the
transportation sector, based on
technology that is already being
commercially applied in most cases and
that can be incorporated at a reasonable
cost.
This joint notice is consistent with the
President’s announcement on May 19,
2009 of a National Fuel Efficiency
Policy of establishing consistent,
harmonized, and streamlined
requirements that would reduce
greenhouse gas emissions and improve
fuel economy for all new cars and lightduty trucks sold in the United States.6
The National Program holds out the
promise of delivering additional
environmental and energy benefits, cost
savings, and administrative efficiencies
on a nationwide basis that might not be
available under a less coordinated
approach. The proposed National
Program also offers the prospect of
regulatory convergence by making it
possible for the standards of two
different Federal agencies and the
standards of California and other States
to act in a unified fashion in providing
these benefits. This would allow
automakers to produce and sell a single
fleet nationally. Thus, it may also help
to mitigate the additional costs that
manufacturers would otherwise face in
having to comply with multiple sets of
Federal and State standards. This joint
notice is also consistent with the Notice
of Upcoming Joint Rulemaking issued
by DOT and EPA on May 19 7 and
responds to the President’s January 26,
2009 memorandum on CAFE standards
for model years 2011 and beyond,8 the
details of which can be found in Section
IV of this joint notice.
I. Overview of Joint EPA/NHTSA
National Program
mstockstill on DSKH9S0YB1PROD with PROPOSALS
G. Impacts of the Proposed CAFE Standards
1. How Would These Proposed Standards
Improve Fuel Economy and Reduce GHG
Emissions for MY 2012–2016 Vehicles?
2. How Would These Proposed Standards
Improve Fleet-Wide Fuel Economy and
Reduce GHG Emissions Beyond MY
2016?
3. How Would These Proposed Standards
Impact Non-GHG Emissions and Their
Associated Effects?
4. What Are the Estimated Costs and
Benefits of These Proposed Standards?
5. How Would These Proposed Standards
Impact Vehicle Sales?
6. What Are the Consumer Welfare Impacts
of These Proposed Standards?
7. What Are the Estimated Safety Impacts
of These Proposed Standards?
8. What Other Impacts (Quantitative and
Unquantifiable) Will These Proposed
Standards Have?
H. Vehicle Classification
I. Compliance and Enforcement
1. Overview
2. How Does NHTSA Determine
Compliance?
3. What Compliance Flexibilities Are
Available under the CAFE Program and
How Do Manufacturers Use Them?
4. Other CAFE Enforcement Issues—
Variations in Footprint
J. Other Near-Term Rulemakings Mandated
by EISA
1. Commercial Medium- and Heavy-Duty
On-Highway Vehicles and Work Trucks
2. Consumer Information
K. Regulatory Notices and Analyses
1. Executive Order 12866 and DOT
Regulatory Policies and Procedures
2. National Environmental Policy Act
3. Regulatory Flexibility Act
4. Executive Order 13132 (Federalism)
5. Executive Order 12988 (Civil Justice
Reform)
6. Unfunded Mandates Reform Act
7. Paperwork Reduction Act
8. Regulation Identifier Number
9. Executive Order 13045
10. National Technology Transfer and
Advancement Act
11. Executive Order 13211
12. Department of Energy Review
13. Plain Language
14. Privacy Act
The National Program is both needed
and possible because the relationship
between improving fuel economy and
reducing CO2 tailpipe emissions is a
very direct and close one. The amount
of those CO2 emissions is essentially
A. Introduction
The National Highway Traffic Safety
Administration (NHTSA) and the
Environmental Protection Agency (EPA)
are each announcing proposed rules
whose benefits would address the
urgent and closely intertwined
challenges of energy independence and
security and global warming. These
proposed rules call for a strong and
coordinated Federal greenhouse gas and
fuel economy program for passenger
cars, light-duty-trucks, and mediumduty passenger vehicles (hereafter lightduty vehicles), referred to as the
National Program. The proposed rules
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
1. Building Blocks of the National
Program
6 President Obama Announces National Fuel
Efficiency Policy, The White House, May 19, 2009.
Available at: https://www.whitehouse.gov/
the_press_office/President-Obama-AnnouncesNational-Fuel-Efficiency-Policy/ (last accessed
August 18, 2009). Remarks by the President on
National Fuel Efficiency Standards, The White
House, May 19, 2009. Available at: https://www.
whitehouse.gov/the_press_office/Remarks-by-thePresident-on-national-fuel-efficiency-standards/
(Last accessed August 18, 2009).
7 74 FR 24007 (May 22, 2009).
8 Available at: https://www.whitehouse.gov/
the_press_office/Presidential_Memorandum_
Fuel_Economy/ (last accessed on August 18, 2009).
PO 00000
Frm 00006
Fmt 4701
Sfmt 4702
constant per gallon combusted of a
given type of fuel. Thus, the more fuel
efficient a vehicle is, the less fuel it
burns to travel a given distance. The less
fuel it burns, the less CO2 it emits in
traveling that distance.9 While there are
emission control technologies that
reduce the pollutants (e.g., carbon
monoxide) produced by imperfect
combustion of fuel by capturing or
destroying them, there is no such
technology for CO2. Further, while some
of those pollutants can also be reduced
by achieving a more complete
combustion of fuel, doing so only
increases the tailpipe emissions of CO2.
Thus, there is a single pool of
technologies for addressing these twin
problems, i.e., those that reduce fuel
consumption and thereby reduce CO2
emissions as well.
a. DOT’s CAFE Program
In 1975, Congress enacted the Energy
Policy and Conservation Act (EPCA),
mandating that NHTSA establish and
implement a regulatory program for
motor vehicle fuel economy to meet the
various facets of the need to conserve
energy, including ones having energy
independence and security,
environmental and foreign policy
implications. Fuel economy gains since
1975, due both to the standards and
market factors, have resulted in saving
billions of barrels of oil and avoiding
billions of metric tons of CO2 emissions.
In December 2007, Congress enacted the
Energy Independence and Securities Act
(EISA), amending EPCA to require
substantial, continuing increases in fuel
economy standards.
The CAFE standards address most,
but not all, of the real world CO2
emissions because EPCA requires the
use of 1975 passenger car test
procedures under which vehicle air
conditioners are not turned on during
fuel economy testing.10 Fuel economy is
determined by measuring the amount of
CO2 and other carbon compounds
emitted from the tailpipe, not by
attempting to measure directly the
amount of fuel consumed during a
vehicle test, a difficult task to
accomplish with precision. The carbon
content of the test fuel 11 is then used to
calculate the amount of fuel that had to
be consumed per mile in order to
9 Panel on Policy Implications of Greenhouse
Warming, National Academy of Sciences, National
Academy of Engineering, Institute of Medicine,
‘‘Policy Implications of Greenhouse Warming:
Mitigation, Adaptation, and the Science Base,’’
National Academies Press, 1992. p. 287.
10 EPCA does not require the use of 1975 test
procedures for light trucks.
11 This is the method that EPA uses to determine
compliance with NHTSA’s CAFE standards.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
produce that amount of CO2. Finally,
that fuel consumption figure is
converted into a miles-per-gallon figure.
CAFE standards also do not address the
5–8 percent of GHG emissions that are
not CO2, i.e., nitrous oxide (N2O), and
methane (CH4) as well as emissions of
CO2 and hydrofluorocarbons (HFCs)
related to operation of the air
conditioning system.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
b. EPA’s Greenhouse Gas Standards for
Light-Duty Vehicles
Under the Clean Air Act EPA is
responsible for addressing air pollutants
from motor vehicles. On April 2, 2007,
the U.S. Supreme Court issued its
opinion in Massachusetts v. EPA,12 a
case involving a 2003 order of the
Environmental Protection Agency (EPA)
denying a petition for rulemaking to
regulate greenhouse gas emissions from
motor vehicles under section 202(a) of
the Clean Air Act (CAA).13 The Court
held that greenhouse gases were air
pollutants for purposes of the Clean Air
Act and further held that the
Administrator must determine whether
or not emissions from new motor
vehicles cause or contribute to air
pollution which may reasonably be
anticipated to endanger public health or
welfare, or whether the science is too
uncertain to make a reasoned decision.
The Court further ruled that, in making
these decisions, the EPA Administrator
is required to follow the language of
section 202(a) of the CAA. The Court
rejected the argument that EPA cannot
regulate CO2 from motor vehicles
because to do so would de facto tighten
fuel economy standards, authority over
which has been assigned by Congress to
DOT. The Court stated that ‘‘[b]ut that
DOT sets mileage standards in no way
licenses EPA to shirk its environmental
responsibilities. EPA has been charged
with protecting the public‘s ‘health’ and
‘welfare’, a statutory obligation wholly
independent of DOT’s mandate to
promote energy efficiency.’’ The Court
concluded that ‘‘[t]he two obligations
may overlap, but there is no reason to
think the two agencies cannot both
administer their obligations and yet
avoid inconsistency.’’ 14 The Court
remanded the case back to the Agency
for reconsideration in light of its
findings.15
12 549
U.S. 497 (2007).
FR 52922 (Sept. 8, 2003).
14 549 U.S. at 531–32.
15 For further information on Massachusetts v.
EPA see the July 30, 2008 Advance Notice of
Proposed Rulemaking, ‘‘Regulating Greenhouse Gas
Emissions under the Clean Air Act’’, 73 FR 44354
at 44397. There is a comprehensive discussion of
the litigation’s history, the Supreme Court’s
findings, and subsequent actions undertaken by the
13 68
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
EPA has since proposed to find that
emissions of GHGs from new motor
vehicles and motor vehicle engines
cause or contribute to air pollution that
may reasonably be anticipated to
endanger public health and welfare.16
This proposal represents the second
phase of EPA’s response to the Supreme
Court’s decision.
c. California Air Resources Board
Greenhouse Gas Program
In 2004, the California Air Resources
Board approved standards for new lightduty vehicles, which regulate the
emission of not only CO2, but also other
GHGs. Since then, thirteen States and
the District of Columbia, comprising
approximately 40 percent of the lightduty vehicle market, have adopted
California’s standards. These standards
apply to model years 2009 through 2016
and require CO2 emissions for passenger
cars and the smallest light trucks of 323
g/mi in 2009 and 205 g/mi in 2016, and
for the remaining light trucks of 439 g/
mi in 2009 and 332 g/mi in 2016. On
June 30, 2009, EPA granted California’s
request for a waiver of preemption
under the CAA.17 The granting of the
waiver permits California and the other
States to proceed with implementing the
California emission standards.
2. Joint Proposal for a National Program
On May 19, 2009, the Department of
Transportation and the Environmental
Protection Agency issued a Notice of
Upcoming Joint Rulemaking to propose
a strong and coordinated fuel economy
and greenhouse gas National Program
for Model Year (MY) 2012–2016 light
duty vehicles.
B. Summary of the Joint Proposal
In this joint rulemaking, EPA is
proposing GHG emissions standards
under the Clean Air Act (CAA), and
NHTSA is proposing Corporate Average
Fuel Economy (CAFE) standards under
the Energy Policy and Conservation
Action of 1975 (EPCA), as amended by
the Energy Independence and Security
Act of 2007 (EISA). The intention of this
joint rulemaking proposal is to set forth
a carefully coordinated and harmonized
approach to implementing these two
statutes, in accordance with all
substantive and procedural
requirements imposed by law.
Climate change is widely viewed as
the most significant long-term threat to
the global environment. According to
the Intergovernmental Panel on Climate
Bush Administration and the EPA from 2007–2008
in response to the Supreme Court remand.
16 74 FR 18886 (Apr. 24, 2009).
17 74 FR 32744 (July 8, 2009).
PO 00000
Frm 00007
Fmt 4701
Sfmt 4702
49459
Change, anthropogenic emissions of
greenhouse gases are very likely (90 to
99 percent probability) the cause of
most of the observed global warming
over the last 50 years. The primary
GHGs of concern are carbon dioxide
(CO2), methane, nitrous oxide,
hydrofluorocarbons, perfluorocarbons,
and sulfur hexafluoride. Mobile sources
emitted 31.5 percent of all U.S. GHG in
2006, and have been the fastest-growing
source of U.S. GHG since 1990. Lightduty vehicles emit four GHGs—CO2,
methane, nitrous oxide, and
hydrofluorocarbons—and are
responsible for nearly 60 percent of all
mobile source GHGs. For Light-duty
vehicles, CO2 emissions represent about
95 percent of all greenhouse emissions,
and the CO2 emissions measured over
the EPA tests used for fuel economy
compliance represent over 90 percent of
total light-duty vehicle greenhouse gas
emissions.
Improving energy security by
reducing our dependence on foreign oil
has been a national objective since the
first oil price shocks in the 1970s. Net
petroleum imports now account for
approximately 60 percent of U.S.
petroleum consumption. World crude
oil production is highly concentrated,
exacerbating the risks of supply
disruptions and price shocks. Tight
global oil markets led to prices over
$100 per barrel in 2008, with gasoline
reaching as high as $4 per gallon in
many parts of the U.S., causing financial
hardship for many families. The export
of U.S. assets for oil imports continues
to be an important component of the
U.S.’ historically unprecedented trade
deficits. Transportation accounts for
about two-thirds of U.S. petroleum
consumption. Light-duty vehicles
account for about 60 percent of
transportation oil use, which means that
they alone account for about 40 percent
of all U.S. oil consumption.
NHTSA and EPA have coordinated
closely and worked jointly in
developing their respective proposals.
This is reflected in many aspects of this
joint proposal. For example, the
agencies have developed a
comprehensive joint Technical Support
Document (TSD) that provides a solid
technical underpinning for each
agency’s modeling and analysis used to
support their proposed standards. Also,
to the extent allowed by law, the
agencies have harmonized many
elements of program design, such as the
form of the standard (the footprint-based
attribute curves), and the definitions
used for cars and trucks. They have
developed the same or similar
compliance flexibilities, to the extent
allowed and appropriate under their
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49460
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
respective statutes, such as averaging,
banking, and trading of credits, and
have harmonized the compliance testing
and test protocols used for purposes of
the fleet average standards each agency
is proposing. Finally, as discussed in
Section I.C., under their respective
statutes each agency is called upon to
exercise its judgment and determine
standards that are an appropriate
balance of various relevant statutory
factors. Given the common technical
issues before each agency, the similarity
of the factors each agency is to consider
and balance, and the authority of each
agency to take into consideration the
standards of the other agency, both EPA
and NHTSA are proposing standards
that result in a harmonized National
Program.
This joint proposal covers passenger
cars, light-duty-trucks, and mediumduty passenger vehicles built in model
years 2012 through 2016. These vehicle
categories are responsible for almost 60
percent of all U.S. transportation-related
GHG emissions. EPA and NHTSA
expect that automobile manufacturers
will meet these proposed standards by
utilizing technologies that will reduce
vehicle GHG emissions and improve
fuel economy. Although many of these
technologies are available today, the
emissions reductions and fuel economy
improvements proposed would involve
more widespread use of these
technologies across the light-duty
vehicle fleet. These include
improvements to engines,
transmissions, and tires, increased use
of start-stop technology, improvements
in air conditioning systems (to the
extent currently allowed by law),
increased use of hybrid and other
advanced technologies, and the initial
commercialization of electric vehicles
and plug-in hybrids.
The proposed National Program
would result in approximately 950
million metric tons of total carbon
dioxide equivalent emissions reductions
and approximately 1.8 billion barrels of
oil savings over the lifetime of vehicles
sold in model years 2012 through 2016.
In total, the combined EPA and NHTSA
2012–2016 standards would reduce
GHG emissions from the U.S. light-duty
fleet by approximately 21 percent by
2030 over the level that would occur in
the absence of the National Program.
These proposals also provide important
energy security benefits, as light-duty
vehicles are about 95 percent dependent
on oil-based fuels. The benefits of the
proposed National Program would total
about $250 billion at a 3% discount rate,
or $195 billion at a 7% discount rate. In
the discussion that follows in Sections
III and IV, each agency explains the
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
related benefits for their individual
standards.
Together, EPA and NHTSA estimate
that the average cost increase for a
model year 2016 vehicle due to the
proposed National Program is less than
$1,100. U.S. consumers who purchase
their vehicle outright would save
enough in lower fuel costs over the first
three years to offset these higher vehicle
costs. However, most U.S. consumers
purchase a new vehicle using credit
rather than paying cash and the typical
car loan today is a five year, 60 month
loan. These consumers would see
immediate savings due to their vehicle’s
lower fuel consumption in the form of
reduced monthly costs of $12–$14 per
month throughout the duration of the
loan (that is, the fuel savings outweigh
the increase in loan payments by $12–
$14 per month). Whether a consumer
takes out a loan or purchases a new
vehicle outright, over the lifetime of a
model year 2016 vehicle, consumers
would save more than $3,000 due to
fuel savings. The average 2016 MY
vehicle will emit 16 fewer metric tons
of CO2 emissions during its lifetime.
This joint proposal also offers the
prospect of important regulatory
convergence and certainty to automobile
companies. Absent this proposal, there
would be three separate Federal and
State regimes independently regulating
light-duty vehicles to reduce fuel
consumption and GHG emissions:
NHTSA’s CAFE standards, EPA’s GHG
standards, and the GHG standards
applicable in California and other States
adopting the California standards. This
joint proposal would allow automakers
to meet both the NHTSA and EPA
requirements with a single national
fleet, greatly simplifying the industry’s
technology, investment and compliance
strategies. In addition, in a letter dated
May 18, 2009, California stated that it
‘‘recognizes the benefit for the country
and California of a National Program to
address greenhouse gases and fuel
economy and the historic
announcement of United States
Environmental Protection Agency (EPA)
and National Highway Transportation
Safety Administration’s (NHTSA) intent
to jointly propose a rule to set standards
for both. California fully supports
proposal and adoption of such a
National Program.’’ To promote the
National Program, California announced
its commitment to take several actions,
including revising its program for MYs
2012–2016 such that compliance with
the Federal GHG standards would be
deemed to be compliance with
California’s GHG standards. This would
allow the single national fleet used by
automakers to meet the two Federal
PO 00000
Frm 00008
Fmt 4701
Sfmt 4702
requirements and to meet California
requirements as well. This commitment
was conditioned on several points,
including EPA GHG standards that are
substantially similar to those described
in the May 19, 2009 Notice of Upcoming
Joint Rulemaking. Many automakers and
trade associations also announced their
support for the National Program
announced that day.18 The
manufacturers conditioned their
support on EPA and NHTSA standards
substantially similar to those described
in that Notice. NHTSA and EPA met
with many vehicle manufacturers to
discuss the feasibility of the National
Program. EPA and NHTSA are confident
that these proposed GHG and CAFE
standards, if finalized, would
successfully harmonize both the Federal
and State programs for MYs 2012–2016
and would allow our country to achieve
the increased benefits of a single,
nationwide program to reduce lightduty vehicle GHG emissions and reduce
the country’s dependence on fossil fuels
by improving these vehicles’ fuel
economy.
A successful and sustainable
automotive industry depends upon,
among other things, continuous
technology innovation in general, and
low greenhouse gas emissions and high
fuel economy vehicles in particular. In
this respect, this proposal would help
spark the investment in technology
innovation necessary for automakers to
successfully compete in both domestic
and export markets, and thereby
continue to support a strong economy.
While this proposal covers MYs
2012–2016, EPA and NHTSA anticipate
the importance of seeking a strong,
coordinated national program for lightduty vehicles in model years beyond
2016 in a future rulemaking.
Key elements of the proposal for a
harmonized and coordinated program
are the level and form of the GHG and
CAFE standards, the available
compliance mechanisms, and general
implementation elements. These
elements are outlined in the following
sections.
C. Background and Comparison of
NHTSA and EPA Statutory Authority
This section provides the agencies’
respective statutory authorities under
which CAFE and GHG standards are
established.
1. NHTSA Statutory Authority
NHTSA establishes CAFE standards
for passenger cars and light trucks for
each model year under EPCA, as
18 These letters are available at https://
www.epa.gov/otaq/climate/regulations.htm.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
amended by EISA. EPCA mandates a
motor vehicle fuel economy regulatory
program to meet the various facets of the
need to conserve energy, including ones
having environmental and foreign
policy implications. EPCA allocates the
responsibility for implementing the
program between NHTSA and EPA as
follows: NHTSA sets CAFE standards
for passenger cars and light trucks; EPA
establishes the procedures for testing,
tests vehicles, collects and analyzes
manufacturers’ data, and calculates the
average fuel economy of each
manufacturer’s passenger cars and light
trucks; and NHTSA enforces the
standards based on EPA’s calculations.
a. Standard Setting
We have summarized below the most
important aspects of standard setting
under EPCA, as amended by EISA.
For each future model year, EPCA
requires that NHTSA establish
standards at ‘‘the maximum feasible
average fuel economy level that it
decides the manufacturers can achieve
in that model year,’’ based on the
agency’s consideration of four statutory
factors: technological feasibility,
economic practicability, the effect of
other standards of the Government on
fuel economy, and the need of the
nation to conserve energy. EPCA does
not define these terms or specify what
weight to give each concern in
balancing them; thus, NHTSA defines
them and determines the appropriate
weighting based on the circumstances in
each CAFE standard rulemaking.19
For MYs 2011–2020, EPCA further
requires that separate standards for
passenger cars and for light trucks be set
at levels high enough to ensure that the
CAFE of the industry-wide combined
fleet of new passenger cars and light
trucks reaches at least 35 mpg not later
than MY 2020.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
i. Factors That Must Be Considered in
Deciding the Appropriate Stringency of
CAFE Standards
(1) Technological Feasibility
‘‘Technological feasibility’’ refers to
whether a particular method of
improving fuel economy can be
available for commercial application in
the model year for which a standard is
being established. Thus, the agency is
not limited in determining the level of
new standards to technology that is
19 See Center for Biological Diversity v. NHTSA,
538 F.3d. 1172, 1195 (9th Cir. 2008) (‘‘The EPCA
clearly requires the agency to consider these four
factors, but it gives NHTSA discretion to decide
how to balance the statutory factors—as long as
NHTSA’s balancing does not undermine the
fundamental purpose of the EPCA: Energy
conservation.’’)
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
already being commercially applied at
the time of the rulemaking. NHTSA has
historically considered all types of
technologies that improve real-world
fuel economy, except those whose
effects are not reflected in fuel economy
testing. Principal among them are
technologies that improve air
conditioner efficiency because the air
conditioners are not turned on during
testing under existing test procedures.
(2) Economic Practicability
‘‘Economic practicability’’ refers to
whether a standard is one ‘‘within the
financial capability of the industry, but
not so stringent as to’’ lead to ‘‘adverse
economic consequences, such as a
significant loss of jobs or the
unreasonable elimination of consumer
choice.’’ 20 This factor is especially
important in the context of current
events, where the automobile industry
is facing significantly adverse economic
conditions, as well as significant loss of
jobs. In an attempt to ensure the
economic practicability of attributebased standards, NHTSA considers a
variety of factors, including the annual
rate at which manufacturers can
increase the percentage of its fleet that
employs a particular type of fuel-saving
technology, and cost to consumers.
Consumer acceptability is also an
element of economic practicability, one
which is particularly difficult to gauge
during times of frequently-changing fuel
prices. NHTSA believes this approach is
reasonable for the MY 2012–2016
standards in view of the facts before it
at this time. NHTSA is aware, however,
that facts relating to a variety of key
issues in CAFE rulemaking are steadily
evolving and seeks comments on the
balancing of these factors in light of the
facts available during the comment
period.
At the same time, the law does not
preclude a CAFE standard that poses
considerable challenges to any
individual manufacturer. The
Conference Report for EPCA, as enacted
in 1975, makes clear, and the case law
affirms, ‘‘a determination of maximum
feasible average fuel economy should
not be keyed to the single manufacturer
which might have the most difficulty
achieving a given level of average fuel
economy.’’ 21 Instead, NHTSA is
compelled ‘‘to weigh the benefits to the
nation of a higher fuel economy
standard against the difficulties of
individual automobile manufacturers.’’
Id. The law permits CAFE standards
exceeding the projected capability of
any particular manufacturer as long as
20 67
FR 77015, 77021 (Dec. 16, 2002).
793 F.2d 1322, 1352 (D.C. Cir. 1986).
21 CEI–I,
PO 00000
Frm 00009
Fmt 4701
Sfmt 4702
49461
the standard is economically practicable
for the industry as a whole. Thus, while
a particular CAFE standard may pose
difficulties for one manufacturer, it may
also present opportunities for another.
The CAFE program is not necessarily
intended to maintain the competitive
positioning of each particular company.
Rather, it is intended to enhance fuel
economy of the vehicle fleet on
American roads, while protecting motor
vehicle safety and being mindful of the
risk of harm to the overall United States
economy.
(3) The Effect of Other Motor Vehicle
Standards of the Government on Fuel
Economy
‘‘The effect of other motor vehicle
standards of the Government on fuel
economy,’’ involves an analysis of the
effects of compliance with emission,22
safety, noise, or damageability standards
on fuel economy capability and thus on
average fuel economy. In previous CAFE
rulemakings, the agency has said that
pursuant to this provision, it considers
the adverse effects of other motor
vehicle standards on fuel economy. It
said so because, from the CAFE
program’s earliest years 23 until present,
the effects of such compliance on fuel
economy capability over the history of
the CAFE program have been negative
ones. For example, safety standards that
have the effect of increasing vehicle
weight lower vehicle fuel economy
capability and thus decrease the level of
average fuel economy that the agency
can determine to be feasible.
In the wake of Massachusetts v. EPA
and of EPA’s proposed endangerment
finding, granting of a waiver to
California for its motor vehicle GHG
standards, and its own proposal of GHG
standards, NHTSA is confronted with
the issue of how to treat those standards
under the ‘‘other motor vehicle
standards’’ provision. To the extent the
GHG standards result in increases in
fuel economy, they would do so almost
exclusively as a result of inducing
manufacturers to install the same types
of technologies used by manufacturers
in complying with the CAFE standards.
The primary exception would involve
increases in the efficiency of air
conditioners.
Comment is requested on whether
and in what way the effects of the
California and EPA standards should be
22 In the case of emission standards, this includes
standards adopted by the Federal government and
can include standards adopted by the States as well,
since in certain circumstances the Clean Air Act
allows States to adopt and enforce State standards
different from the Federal ones.
23 42 FR 63184, 63188 (Dec. 15, 1977). See also
42 FR 33534, 33537 (Jun. 30, 1977).
E:\FR\FM\28SEP2.SGM
28SEP2
49462
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
considered under the ‘‘other motor
vehicle standards’’ provision or other
provisions of EPCA in 49 U.S.C. 32902,
consistent with NHTSA’s independent
obligation under EPCA/EISA to issue
CAFE standards. The agency has already
considered EPA’s proposal and the
harmonization benefits of the National
Program in developing its own proposal.
(4) The Need of the United States To
Conserve Energy
‘‘The need of the United States to
conserve energy’’ means ‘‘the consumer
cost, national balance of payments,
environmental, and foreign policy
implications of our need for large
quantities of petroleum, especially
imported petroleum.’’ 24 Environmental
implications principally include
reductions in emissions of criteria
pollutants and carbon dioxide. Prime
examples of foreign policy implications
are energy independence and security
concerns.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
(a) Fuel Prices and the Value of Saving
Fuel
Projected future fuel prices are a
critical input into the preliminary
economic analysis of alternative CAFE
standards, because they determine the
value of fuel savings both to new
vehicle buyers and to society. In this
rule, NHTSA relies on fuel price
projections from the U.S. Energy
Information Administration’s (EIA)
Annual Energy Outlook (AEO) for this
analysis. Federal government agencies
generally use EIA’s projections in their
assessments of future energy-related
policies.
(b) Petroleum Consumption and Import
Externalities
U.S. consumption and imports of
petroleum products impose costs on the
domestic economy that are not reflected
in the market price for crude petroleum,
or in the prices paid by consumers of
petroleum products such as gasoline.
These costs include (1) higher prices for
petroleum products resulting from the
effect of U.S. oil import demand on the
world oil price; (2) the risk of
disruptions to the U.S. economy caused
by sudden reductions in the supply of
imported oil to the U.S.; and (3)
expenses for maintaining a U.S. military
presence to secure imported oil supplies
from unstable regions, and for
maintaining the strategic petroleum
reserve (SPR) to provide a response
option should a disruption in
commercial oil supplies threaten the
U.S. economy, to allow the United
States to meet part of its International
24 42
FR 63184, 63188 (1977).
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
Energy Agency obligation to maintain
emergency oil stocks, and to provide a
national defense fuel reserve. Higher
U.S. imports of crude oil or refined
petroleum products increase the
magnitude of these external economic
costs, thus increasing the true economic
cost of supplying transportation fuels
above the resource costs of producing
them. Conversely, reducing U.S. imports
of crude petroleum or refined fuels or
reducing fuel consumption can reduce
these external costs.
(c) Air Pollutant Emissions
While reductions in domestic fuel
refining and distribution that result
from lower fuel consumption will
reduce U.S. emissions of various
pollutants, additional vehicle use
associated with the rebound effect 25
from higher fuel economy will increase
emissions of these pollutants. Thus, the
net effect of stricter CAFE standards on
emissions of each pollutant depends on
the relative magnitudes of its reduced
emissions in fuel refining and
distribution, and increases in its
emissions from vehicle use.
Fuel savings from stricter CAFE
standards also result in lower emissions
of CO2, the main greenhouse gas emitted
as a result of refining, distribution, and
use of transportation fuels. Lower fuel
consumption reduces carbon dioxide
emissions directly, because the primary
source of transportation-related CO2
emissions is fuel combustion in internal
combustion engines.
NHTSA has considered
environmental issues, both within the
context of EPCA and the National
Environmental Policy Act, in making
decisions about the setting of standards
from the earliest days of the CAFE
program. As courts of appeal have noted
in three decisions stretching over the
last 20 years,26 NHTSA defined the
‘‘need of the Nation to conserve energy’’
in the late 1970s as including ‘‘the
consumer cost, national balance of
payments, environmental, and foreign
policy implications of our need for large
quantities of petroleum, especially
imported petroleum.’’ 27 Pursuant to
that view, NHTSA declined in the past
25 The ‘‘rebound effect’’ refers to the tendency of
drivers to drive their vehicles more as the cost of
doing so goes down, as when fuel economy
improves.
26 Center for Auto Safety v. NHTSA, 793 F.2d
1322, 1325 n. 12 (D.C. Cir. 1986); Public Citizen v.
NHTSA, 848 F.2d 256, 262–3 n. 27 (D.C. Cir. 1988)
(noting that ‘‘NHTSA itself has interpreted the
factors it must consider in setting CAFE standards
as including environmental effects’’); and Center for
Biological Diversity v. NHTSA, 538 F.3d 1172 (9th
Cir. 2007).
27 42 FR 63184, 63188 (Dec. 15, 1977) (emphasis
added).
PO 00000
Frm 00010
Fmt 4701
Sfmt 4702
to include diesel engines in determining
the appropriate level of standards for
passenger cars and for light trucks
because particulate emissions from
diesels were then both a source of
concern and unregulated.28 In 1988,
NHTSA included climate change
concepts in its CAFE notices and
prepared its first environmental
assessment addressing that subject.29 It
cited concerns about climate change as
one of its reasons for limiting the extent
of its reduction of the CAFE standard for
MY 1989 passenger cars.30 Since then,
NHTSA has considered the benefits of
reducing tailpipe carbon dioxide
emissions in its fuel economy
rulemakings pursuant to the statutory
requirement to consider the nation’s
need to conserve energy by reducing
fuel consumption.
ii. Other Factors Considered by NHTSA
NHTSA considers the potential for
adverse safety consequences when in
establishing CAFE standards. This
practice is recognized approvingly in
case law.31 Under the universal or ‘‘flat’’
CAFE standards that NHTSA was
previously authorized to establish, the
primary risk to safety came from the
possibility that manufacturers would
respond to higher standards by building
smaller, less safe vehicles in order to
‘‘balance out’’ the larger, safer vehicles
that the public generally preferred to
buy. Under the attribute-based
standards being proposed in this action,
that risk is reduced because building
smaller vehicles tends to raise a
manufacturer’s overall CAFE obligation,
rather than only raising its fleet average
CAFE. However, even under attributebased standards, there is still risk that
manufacturers will rely on
downweighting to improve their fuel
economy (for a given vehicle at a given
28 For example, the final rules establishing CAFE
standards for MY 1981–84 passenger cars, 42 FR
33533, 33540–1 and 33551 (Jun. 30, 1977), and for
MY 1983–85 light trucks, 45 FR 81593, 81597 (Dec.
11, 1980).
29 53 FR 33080, 33096 (Aug. 29, 1988).
30 53 FR 39275, 39302 (Oct. 6, 1988).
31 See, e.g., Center for Auto Safety v. NHTSA
(CAS), 793 F.2d 1322 (D.C. Cir. 1986)
(Administrator’s consideration of market demand as
component of economic practicability found to be
reasonable); Public Citizen 848 F.2d 256 (Congress
established broad guidelines in the fuel economy
statute; agency’s decision to set lower standard was
a reasonable accommodation of conflicting
policies). As the United States Court of Appeals
pointed out in upholding NHTSA’s exercise of
judgment in setting the 1987–1989 passenger car
standards, ‘‘NHTSA has always examined the safety
consequences of the CAFE standards in its overall
consideration of relevant factors since its earliest
rulemaking under the CAFE program.’’ Competitive
Enterprise Institute v. NHTSA (CEI I), 901 F.2d 107,
120 at n.11 (D.C. Cir. 1990).
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
footprint target) in ways that may
reduce safety.
In addition, the agency considers
consumer demand in establishing new
standards and in assessing whether
already established standards remained
feasible. In the 1980’s, the agency relied
in part on the unexpected drop in fuel
prices and the resulting unexpected
failure of consumer demand for small
cars to develop in explaining the need
to reduce CAFE standards for a several
year period in order to give
manufacturers time to develop
alternative technology-based strategies
for improving fuel economy.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
iii. Factors That NHTSA Is Statutorily
Prohibited From Considering in Setting
Standards
EPCA provides that in determining
the level at which it should set CAFE
standards for a particular model year,
NHTSA may not consider the ability of
manufacturers to take advantage of
several EPCA provisions that facilitate
compliance with the CAFE standards
and thereby reduce the costs of
compliance.32 As noted below in
Section IV, manufacturers can earn
compliance credits by exceeding the
CAFE standards and then use those
credits to achieve compliance in years
in which their measured average fuel
economy falls below the standards.
Manufacturers can also increase their
CAFE levels through MY 2019 by
producing alternative fuel vehicles.
EPCA provides an incentive for
producing these vehicles by specifying
that their fuel economy is to be
determined using a special calculation
procedure that results in those vehicles
being assigned a high fuel economy
level.
iv. Weighing and Balancing of Factors
NHTSA has broad discretion in
balancing the above factors in
determining the average fuel economy
level that the manufacturers can
achieve. Congress ‘‘specifically
delegated the process of setting * * *
fuel economy standards with broad
guidelines concerning the factors that
the agency must consider.’’ The breadth
of those guidelines, the absence of any
statutorily prescribed formula for
balancing the factors, the fact that the
relative weight to be given to the various
factors may change from rulemaking to
rulemaking as the underlying facts
change, and the fact that the factors may
often be conflicting with respect to
whether they militate toward higher or
lower standards give NHTSA discretion
to decide what weight to give each of
32 49
U.S.C. 32902(h).
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
the competing policies and concerns
and then determine how to balance
them—as long as NHTSA’s balancing
does not undermine the fundamental
purpose of the EPCA: Energy
conservation, and as long as that
balancing reasonably accommodates
‘‘conflicting policies that were
committed to the agency’s care by the
statute.’’
Thus, EPCA does not mandate that
any particular number be adopted when
NHTSA determines the level of CAFE
standards. Rather, any number within a
zone of reasonableness may be, in
NHTSA’s assessment, the level of
stringency that manufacturers can
achieve. See, e.g., Hercules Inc. v. EPA,
598 F.2d 91, 106 (D.C. Cir. 1978) (‘‘In
reviewing a numerical standard we
must ask whether the agency’s numbers
are within a zone of reasonableness, not
whether its numbers are precisely
right’’).
v. Other Requirements Related to
Standard Setting
The standards for passenger cars and
those for light trucks must increase
ratably each year. This statutory
requirement is interpreted, in
combination with the requirement to set
the standards for each model year at the
level determined to be the maximum
feasible level that manufacturers can
achieve for that model year, to mean
that the annual increases should not be
disproportionately large or small in
relation to each other.
The standards for passenger cars and
light trucks must be based on one or
more vehicle attributes, like size or
weight, that correlate with fuel economy
and must be expressed in terms of a
mathematical function. Fuel economy
targets are set for individual vehicles
and increase as the attribute decreases
and vice versa. For example, size-based
(i.e., size-indexed) standards assign
higher fuel economy targets to smaller
(and generally, but not necessarily,
lighter) vehicles and lower ones to
larger (and generally, but not
necessarily, heavier) vehicles. The fleetwide average fuel economy that a
particular manufacturer is required to
achieve depends on the size mix of its
fleet, i.e., the proportion of the fleet that
is small-, medium- or large-sized.
This approach can be used to require
virtually all manufacturers to increase
significantly the fuel economy of a
broad range of both passenger cars and
light trucks, i.e., the manufacturer must
improve the fuel economy of all the
vehicles in its fleet. Further, this
approach can do so without creating an
incentive for manufacturers to make
small vehicles smaller or large vehicles
PO 00000
Frm 00011
Fmt 4701
Sfmt 4702
49463
larger, with attendant implications for
safety.
b. Test Procedures for Measuring Fuel
Economy
EPCA provides EPA with the
responsibility for establishing CAFE test
procedures. Current test procedures
measure the effects of nearly all fuel
saving technologies. The principal
exception is improvements in air
conditioning efficiency. By statutory
law in the case of passenger cars and by
administrative regulation in the case of
light trucks, air conditioners are not
turned on during fuel economy testing.
See Section I.C.2 for details.
The fuel economy test procedures for
light trucks could be amended through
rulemaking to provide for air
conditioner operation during testing and
to take other steps for improving the
accuracy and representativeness of fuel
economy measurements. Comment is
sought by the agencies regarding
implementing such amendments
beginning in MY 2017 and also on the
more immediate interim alternative step
of providing CAFE program credits
under the authority of 49 U.S.C.
32904(c) for light trucks equipped with
relatively efficient air conditioners for
MYs 2012–2016. These CAFE credits
would be earned by manufacturers on
the same terms and under the same
conditions as EPA is proposing to
provide them under the CAA, and
additional detail is on this request for
comment for early CAFE credits is
contained in Section IV of this
preamble. Modernizing the passenger
car test procedures, or even providing
similar credits, would not be possible
under EPCA as currently written.
c. Enforcement and Compliance
Flexibility
EPA is responsible for measuring
automobile manufacturers’ CAFE so that
NHTSA can determine compliance with
the CAFE standards. When NHTSA
finds that a manufacturer is not in
compliance, it notifies the
manufacturer. Surplus credits generated
from the five previous years can be used
to make up the deficit. The amount of
credit earned is determined by
multiplying the number of tenths of a
mpg by which a manufacturer exceeds
a standard for a particular category of
automobiles by the total volume of
automobiles of that category
manufactured by the manufacturer for a
given model year. If there are no (or not
enough) credits available, then the
manufacturer can either pay the fine, or
submit a carry back plan to NHTSA. A
carry back plan describes what the
manufacturer plans to do in the
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49464
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
following three model years to earn
enough credits to make up for the
deficit. NHTSA must examine and
determine whether to approve the plan.
In the event that a manufacturer does
not comply with a CAFE standard, even
after the consideration of credits, EPCA
provides for the assessing of civil
penalties, unless, as provided below, the
manufacturer has earned credits for
exceeding a standard in an earlier year
or expects to earn credits in a later
year.33 The Act specifies a precise
formula for determining the amount of
civil penalties for such a
noncompliance. The penalty, as
adjusted for inflation by law, is $5.50 for
each tenth of a mpg that a
manufacturer’s average fuel economy
falls short of the standard for a given
model year multiplied by the total
volume of those vehicles in the affected
fleet (i.e., import or domestic passenger
car, or light truck), manufactured for
that model year. The amount of the
penalty may not be reduced except
under the unusual or extreme
circumstances specified in the statute.
Unlike the National Traffic and Motor
Vehicle Safety Act, EPCA does not
provide for recall and remedy in the
event of a noncompliance. The presence
of recall and remedy provisions34 in the
Safety Act and their absence in EPCA is
believed to arise from the difference in
the application of the safety standards
and CAFE standards. A safety standard
applies to individual vehicles; that is,
each vehicle must possess the requisite
equipment or feature that must provide
the requisite type and level of
performance. If a vehicle does not, it is
noncompliant. Typically, a vehicle does
not entirely lack an item or equipment
or feature. Instead, the equipment or
features fails to perform adequately.
Recalling the vehicle to repair or replace
the noncompliant equipment or feature
can usually be readily accomplished.
In contrast, a CAFE standard applies
to a manufacturer’s entire fleet for a
model year. It does not require that a
particular individual vehicle be
equipped with any particular equipment
or feature or meet a particular level of
fuel economy. It does require that the
manufacturer’s fleet, as a whole,
comply. Further, although under the
attribute-based approach to setting
CAFE standards fuel economy targets
are established for individual vehicles
based on their footprints, the vehicles
are not required to comply with those
targets. However, as a practical matter,
33 EPCA does not provide authority for seeking to
enjoin violations of the CAFE standards.
34 49 U.S.C. 30120, Remedies for defects and
noncompliance.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
if a manufacturer chooses to design
some vehicles that fall below their target
levels of fuel economy, it will need to
design other vehicles that exceed their
targets if the manufacturer’s overall fleet
average is to meet the applicable
standard.
Thus, under EPCA, there is no such
thing as a noncompliant vehicle, only a
noncompliant fleet. No particular
vehicle in a noncompliant fleet is any
more, or less, noncompliant than any
other vehicle in the fleet.
2. EPA Statutory Authority
Title II of the Clean Air Act (CAA)
provides for comprehensive regulation
of mobile sources, authorizing EPA to
regulate emissions of air pollutants from
all mobile source categories. Pursuant to
these sweeping grants of authority, EPA
considers such issues as technology
effectiveness, its cost (both per vehicle,
per manufacturer, and per consumer),
the lead time necessary to implement
the technology, and based on this the
feasibility and practicability of potential
standards; the impacts of potential
standards on emissions reductions of
both GHGs and non-GHGs; the impacts
of standards on oil conservation and
energy security; the impacts of
standards on fuel savings by consumers;
the impacts of standards on the auto
industry; other energy impacts; as well
as other relevant factors such as impacts
on safety.
This proposal implements a specific
provision from Title II, section 202(a).35
Section 202(a)(1) of the Clean Air Act
(CAA) states that ‘‘the Administrator
shall by regulation prescribe (and from
time to time revise) * * * standards
applicable to the emission of any air
pollutant from any class or classes of
new motor vehicles * * *, which in his
judgment cause, or contribute to, air
pollution which may reasonably be
anticipated to endanger public health or
welfare.’’ If EPA makes the appropriate
endangerment and cause or contribute
findings, then section 202(a) authorizes
EPA to issue standards applicable to
emissions of those pollutants.
Any standards under CAA section
202(a)(1) ‘‘shall be applicable to such
vehicles * * * for their useful life.’’
Emission standards set by the EPA
under CAA section 202(a)(1) are
technology-based, as the levels chosen
must be premised on a finding of
technological feasibility. Thus,
standards promulgated under CAA
section 202(a) are to take effect only
‘‘after providing such period as the
Administrator finds necessary to permit
the development and application of the
35 42
PO 00000
U.S.C. 7521(a).
Frm 00012
Fmt 4701
Sfmt 4702
requisite technology, giving appropriate
consideration to the cost of compliance
within such period’’ (section 202(a)(2);
see also NRDC v. EPA, 655 F.2d 318,
322 (D.C. Cir. 1981)). EPA is afforded
considerable discretion under section
202(a) when assessing issues of
technical feasibility and availability of
lead time to implement new technology.
Such determinations are ‘‘subject to the
restraints of reasonableness’’, which
‘‘does not open the door to ‘crystal ball’
inquiry.’’ NRDC, 655 F.2d at 328,
quoting International Harvester Co. v.
Ruckelshaus, 478 F.2d 615, 629 (D.C.
Cir. 1973). However, ‘‘EPA is not
obliged to provide detailed solutions to
every engineering problem posed in the
perfection of the trap-oxidizer. In the
absence of theoretical objections to the
technology, the agency need only
identify the major steps necessary for
development of the device, and give
plausible reasons for its belief that the
industry will be able to solve those
problems in the time remaining. The
EPA is not required to rebut all
speculation that unspecified factors may
hinder ‘real world’ emission control.’’
NRDC, 655 F.2d at 333–34. In
developing such technology-based
standards, EPA has the discretion to
consider different standards for
appropriate groupings of vehicles
(‘‘class or classes of new motor
vehicles’’), or a single standard for a
larger grouping of motor vehicles
(NRDC, 655 F.2d at 338).
Although standards under CAA
section 202(a)(1) are technology-based,
they are not based exclusively on
technological capability. EPA has the
discretion to consider and weigh
various factors along with technological
feasibility, such as the cost of
compliance (see section 202(a)(2)), lead
time necessary for compliance (section
202(a)(2)), safety (see NRDC, 655 F.2d at
336 n. 31) and other impacts on
consumers, and energy impacts
associated with use of the technology.
See George E. Warren Corp. v. EPA, 159
F.3d 616, 623–624 (D.C. Cir. 1998)
(ordinarily permissible for EPA to
consider factors not specifically
enumerated in the Act). See also Entergy
Corp. v. Riverkeeper, Inc., 129 S.Ct.
1498, 1508–09 (2009) (congressional
silence did not bar EPA from employing
cost-benefit analysis under Clean Water
Act absent some other clear indication
that such analysis was prohibited;
rather, silence indicated discretion to
use or not use such an approach as the
agency deems appropriate).
In addition, EPA has clear authority to
set standards under CAA section 202(a)
that are technology forcing when EPA
considers that to be appropriate, but is
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
not required to do so (as compared to
standards set under provisions such as
section 202(a)(3) and section 213(a)(3)).
EPA has interpreted a similar statutory
provision, CAA section 231, as follows:
mstockstill on DSKH9S0YB1PROD with PROPOSALS
While the statutory language of section 231
is not identical to other provisions in title II
of the CAA that direct EPA to establish
technology-based standards for various types
of engines, EPA interprets its authority under
section 231 to be somewhat similar to those
provisions that require us to identify a
reasonable balance of specified emissions
reduction, cost, safety, noise, and other
factors. See, e.g., Husqvarna AB v. EPA, 254
F.3d 195 (DC Cir. 2001) (upholding EPA’s
promulgation of technology-based standards
for small non-road engines under section
213(a)(3) of the CAA). However, EPA is not
compelled under section 231 to obtain the
‘‘greatest degree of emission reduction
achievable’’ as per sections 213 and 202 of
the CAA, and so EPA does not interpret the
Act as requiring the agency to give
subordinate status to factors such as cost,
safety, and noise in determining what
standards are reasonable for aircraft engines.
Rather, EPA has greater flexibility under
section 231 in determining what standard is
most reasonable for aircraft engines, and is
not required to achieve a ‘‘technology
forcing’’ result.36
This interpretation was upheld as
reasonable in NACAA v. EPA, (489 F.3d
1221, 1230 (D.C. Cir. 2007)). CAA
section 202(a) does not specify the
degree of weight to apply to each factor,
and EPA accordingly has discretion in
choosing an appropriate balance among
factors. See Sierra Club v. EPA, 325 F.3d
374, 378 (D.C. Cir. 2003) (even where a
provision is technology-forcing, the
provision ‘‘does not resolve how the
Administrator should weigh all [the
statutory] factors in the process of
finding the ’greatest emission reduction
achievable’ ’’). Also see Husqvarna AB
v. EPA, 254 F. 3d 195, 200 (D.C. Cir.
2001) (great discretion to balance
statutory factors in considering level of
technology-based standard, and
statutory requirement ‘‘to [give
appropriate] consideration to the cost of
applying * * * technology’’ does not
mandate a specific method of cost
analysis); see also Hercules Inc. v. EPA,
598 F. 2d 91, 106 (D.C. Cir. 1978) (‘‘In
reviewing a numerical standard we
must ask whether the agency’s numbers
are within a zone of reasonableness, not
whether its numbers are precisely
right’’); Permian Basin Area Rate Cases,
390 U.S. 747, 797 (1968) (same); Federal
Power Commission v. Conway Corp.,
426 U.S. 271, 278 (1976) (same); Exxon
Mobil Gas Marketing Co. v. FERC, 297
F. 3d 1071, 1084 (D.C. Cir. 2002) (same).
36 70
FR 69664, 69676, November 17, 2005.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
a. EPA’s Testing Authority
Under section 203 of the CAA, sales
of vehicles are prohibited unless the
vehicle is covered by a certificate of
conformity. EPA issues certificates of
conformity pursuant to section 206 of
the Act, based on (necessarily) pre-sale
testing conducted either by EPA or by
the manufacturer. The Federal Test
Procedure (FTP or ‘‘city’’ test) and the
Highway Fuel Economy Test (HFET or
‘‘highway’’ test) are used for this
purpose. Compliance with standards is
required not only at certification but
throughout a vehicle’s useful life, so
that testing requirements may continue
post-certification. Useful life standards
may apply an adjustment factor to
account for vehicle emission control
deterioration or variability in use
(section 206(a)).
Pursuant to EPCA, EPA is required to
measure fuel economy for each model
and to calculate each manufacturer’s
average fuel economy.37 EPA uses the
same tests—the FTP and HFET—for fuel
economy testing. EPA established the
FTP for emissions measurement in the
early 1970s. In 1976, in response to the
Energy Policy and Conservation Act
(EPCA) statute, EPA extended the use of
the FTP to fuel economy measurement
and added the HFET.38 The provisions
in the 1976 regulation, effective with the
1977 model year, established
procedures to calculate fuel economy
values both for labeling and for CAFE
purposes. Under EPCA, EPA is required
to use these procedures (or procedures
which yield comparable results) for
measuring fuel economy for cars for
CAFE purposes, but not for labeling
purposes.39 EPCA does not pose this
restriction on CAFE test procedures for
light trucks, but EPA does use the FTP
and HFET for this purpose. EPA
determines fuel economy by measuring
the amount of CO2 and all other carbon
compounds (e.g. total hydrocarbons
(THC) and carbon monoxide (CO)), and
then, by mass balance, calculating the
amount of fuel consumed.
b. EPA Enforcement Authority
Section 207 of the CAA grants EPA
broad authority to require
manufacturers to remedy vehicles if
EPA determines there are a substantial
number of noncomplying vehicles. In
addition, section 205 of the CAA
authorizes EPA to assess penalties of up
to $37,500 per vehicle for violations of
various prohibited acts specified in the
CAA. In determining the appropriate
37 See
49 U.S.C. 32904(c).
41 FR 38674 (Sept. 10, 1976), which is
codified at 40 CFR part 600.
39 See 49 U.S.C. 32904(c).
38 See
PO 00000
Frm 00013
Fmt 4701
Sfmt 4702
49465
penalty, EPA must consider a variety of
factors such as the gravity of the
violation, the economic impact of the
violation, the violator’s history of
compliance, and ‘‘such other matters as
justice may require.’’ Unlike EPCA, the
CAA does not authorize vehicle
manufacturers to pay fines in lieu of
meeting emission standards.
3. Comparing the Agencies’ Authority
As the above discussion makes clear,
there are both important differences
between the statutes under which each
agency is acting as well as several
important areas of similarity. One
important difference is that EPA’s
authority addresses various GHGs,
while NHTSA’s authority addresses fuel
economy as measured under specified
test procedures. This difference is
reflected in this rulemaking in the scope
of the two standards: EPA’s proposal
takes into account air conditioning
related reductions, as well as proposed
standards for methane and N2O, but
NHTSA’s does not. A second important
difference is that EPA is proposing
certain compliance flexibilities, and
takes those flexibilities into account in
its technical analysis and modeling
supporting its proposal. EPCA places
certain limits on compliance flexibilities
for CAFE, and expressly prohibits
NHTSA from considering the impacts of
the compliance flexibilities in setting
the CAFE standard so that the
manufacturers’ election to avail
themselves of the permitted flexibilities
remains strictly voluntary.40 The Clean
Air Act, on the other hand, contains no
such prohibition. These considerations
result in some differences in the
technical analysis and modeling used to
support EPA’s and NHTSA’s proposed
standards.
These differences, however, do not
change the fact that in many critical
ways the two agencies are charged with
addressing the same basic issue of
reducing GHG emissions and improving
fuel economy. Given the direct
relationship between emissions of CO2
and fuel economy levels, both agencies
are looking at the same set of control
technologies (with the exception of the
air conditioning related technologies).
The standards set by each agency will
drive the kind and degree of penetration
of this set of technologies across the
vehicle fleet. As a result, each agency is
trying to answer the same basic
question—what kind and degree of
technology penetration is necessary to
achieve the agencies’ objectives in the
rulemaking time frame, given the
40 74
E:\FR\FM\28SEP2.SGM
FR 24009 (May 22, 2009).
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49466
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
agencies’ respective statutory
authorities?
In making the determination of what
standards are appropriate under the
CAA and EPCA, each agency is to
exercise its judgment and balance many
similar factors, such as the availability
of technologies, the appropriate lead
time for introduction of technology, and
based on this the feasibility and
practicability of their standards; the
impacts of their standards on emissions
reductions (of both GHGs and nonGHGs); the impacts of their standards on
oil conservation; the impacts of their
standards on fuel savings by consumers;
the impacts of their standards on the
auto industry; as well as other relevant
factors such as impacts on safety.
Conceptually, therefore, each agency is
considering and balancing many of the
same factors, and each agency is making
a decision that at its core is answering
the same basic question of what kind
and degree of technology penetration is
it appropriate to call for in light of all
of the relevant factors. Finally, each
agency has the authority to take into
consideration impacts of the standards
of the other agency. EPCA calls for
NHTSA to take into consideration the
effects of EPA’s emissions standards on
fuel economy capability (see 49 U.S.C.
32902 (f)), and EPA has the discretion
to take into consideration NHTSA’s
CAFE standards in determining
appropriate action under section 202(a).
This is consistent with the Supreme
Court’s statement that EPA’s mandate to
protect public health and welfare is
wholly independent from NHTSA’s
mandate to promote energy efficiency,
but there is no reason to think the two
agencies cannot both administer their
obligations and yet avoid inconsistency.
Massachusetts v. EPA, 549 U.S. 497, 532
(2007).
In this context, it is in the Nation’s
interest for the two agencies to work
together in developing their respective
proposed standards, and they have done
so. For example, the agencies have
committed considerable effort to
develop a joint Technical Support
Document that provides a technical
basis underlying each agency’s analyses.
The agencies also have worked closely
together in developing and reviewing
their respective modeling, to develop
the best analysis and to promote
technical consistency. The agencies
have developed a common set of
attribute-based curves that each agency
supports as appropriate both technically
and from a policy perspective. The
agencies have also worked closely to
ensure that their respective programs
will work in a coordinated fashion, and
will provide regulatory compatibility
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
that allows auto manufacturers to build
a single national light-duty fleet that
would comply with both the GHG and
the CAFE standards. The resulting
overall close coordination of the
proposed GHG and CAFE standards
should not be surprising, however, as
each agency is using a jointly developed
technical basis to address the closely
intertwined challenges of energy
security and climate change. As
discussed above, in determining the
standards to propose the agencies are
called upon to weigh and balance
various factors that are relevant under
their respective statutory provisions.
Each agency is to exercise its judgment
and balance many similar factors, such
as the availability of technologies, the
appropriate lead time for introduction of
technology, and based on this, the
feasibility and practicability of their
standards; and the impacts of their
standards on the following: Emissions
reductions (of both GHGs and nonGHGs); oil conservation; fuel savings by
consumers; the auto industry; as well as
other relevant factors such as safety.
Conceptually, each agency is
considering and balancing many of the
same factors, and each agency is making
a decision that at its core is answering
the same basic question of what kind
and degree of technology penetration is
appropriate and required in light of all
of the relevant factors. Each
Administrator is called upon to exercise
judgment and propose standards that
the Administrator determines are a
reasonable balance of these relevant
factors.
As set out in detail in Sections III and
IV of this notice, both EPA and NHTSA
believe the agencies’ proposals are fully
justified under their respective statutory
criteria. The proposed standards can be
achieved within the lead time provided,
based on a projected increased use of
various technologies which in most
cases are already in commercial
application in the fleet to varying
degrees. Detailed modeling of the
technologies that could be employed by
each manufacturer supports this initial
conclusion. The agencies also carefully
assessed the costs of the proposed rules,
both for the industry as a whole and per
manufacturer, as well as the costs per
vehicle, and consider these costs to be
reasonable and recoverable (from fuel
savings). The agencies recognize the
significant increase in the application of
technology that the proposed standards
would require across a high percentage
of vehicles, which will require the
manufacturers to devote considerable
engineering and development resources
before 2012 laying the critical
PO 00000
Frm 00014
Fmt 4701
Sfmt 4702
foundation for the widespread
deployment of upgraded technology
across a high percentage of the 2012–
2016 fleet. This clearly will be
challenging for automotive
manufacturers and their suppliers,
especially in the current economic
climate. However, based on all of the
analyses performed by the agencies, our
judgment is that it is a challenge that
can reasonably be met.
The agencies also evaluated the
impacts of these standards with respect
to the expected reductions in GHGs and
oil consumption and, found them to be
very significant in magnitude. The
agencies considered other factors such
as the impacts on noise, energy, and
vehicular congestion. The impact on
safety was also given careful
consideration. Moreover, the agencies
quantified the various costs and benefits
of the proposed standards, to the extent
practicable. The agencies’ analyses to
date indicate that the overall quantified
benefits of the proposed standards far
outweigh the projected costs. All of
these factors support the reasonableness
of the proposed standards.
The agencies also evaluated
alternatives which were less and more
stringent than those proposed. Less
stringent standards, however, would
forego important GHG emission
reductions and fuel savings that are
technically achievable at reasonable cost
in the lead time provided. In addition,
less stringent GHG standards would not
result in a harmonized National
Program for the country. Based on
California’s letter of May 18, 2009, the
GHG emission standards would not
result in the State of California revising
its regulations such that compliance
with EPA’s GHG standards would be
deemed to be compliance with
California’s GHG standards for these
model years. The substantial cost
advantages associated with a single
national program discussed at the outset
of this section would then be foregone.
The agencies are not proposing any of
the more stringent alternatives analyzed
largely due to concerns over lead time
and economic practicability. The
proposed standards already require
aggressive application of technologies,
and more stringent standards which
would require more widespread use
(including more substantial
implementation of advanced
technologies such as strong hybrids)
raise serious issues of adequacy of lead
time, not only to meet the standards but
to coordinate such significant changes
with manufacturers’ redesign cycles. At
a time when the entire industry remains
in an economically critical state, the
agencies believe that it would be
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
unreasonable to propose more stringent
standards. Even in a case where
economic factors were not a
consideration, there are real-world time
constraints which must be considered
due to the short lead time available for
the early years of this program, in
particular for model years 2012 and
2013. The physical processes which the
automotive industry must follow in
order to introduce reliable, high quality
products require certain minimums of
time during the product development
process. These include time needed for
durability testing which requires
significant mileage accumulation under
a range of conditions (e.g., high and low
temperatures, high altitude, etc.) in both
real-world and laboratory conditions. In
addition, the product development
cycle includes a number of preproduction gateways on the
manufacturing side at both the supplier
level and at the automotive
manufacturer level that are constrained
by time. Thus adequate lead-time is an
important factor that the agencies have
taken into consideration in evaluating
the proposed standards as well as the
alternative standards.
As noted, both agencies also
considered the overall costs of their
respective proposed standards in
relation to the projected benefits. The
fact that the benefits are estimated to
considerably exceed their costs supports
the view that the proposed standards
represent a reasonable balance of the
relevant statutory factors. In drawing
this conclusion, the agencies
acknowledge the uncertainties and
limitations of the analyses. For example,
the analysis of the benefits is highly
dependent on the estimated price of fuel
projected out many years into the
future. There is also significant
uncertainty in the potential range of
values that could be assigned to the
social cost of carbon. There are a variety
of impacts that the agencies are unable
to quantify, such as non-market
damages, extreme weather, socially
contingent effects, or the potential for
longer-term catastrophic events, or the
impact on consumer choice. The
agencies also note the need to consider
factors such as the availability of
technology within the lead time
provided and many of the other factors
discussed above. The cost-benefit
analyses are one of the important things
the agencies consider in making a
judgment as to the appropriate
standards to propose under their
respective statutes. Consideration of the
results of the cost-benefit analyses by
the agencies, however, includes careful
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
consideration of the limitations
discussed above.
One important area where the two
agencies’ authorities are similar but not
identical involves the transfer of credits
between a single firm’s car and truck
fleets. EISA revised EPCA to allow for
such credit transfers, but with a cap on
the amount of CAFE credits which can
be transferred between the car and truck
fleets. 49 U.S.C. 32903(g)(3). Under CAA
section 202(a), EPA is proposing to
allow CO2 credit transfers between a
single manufacturer’s car and truck
fleets, with no corresponding limits on
such transfers. In general, the EPCA
limit on CAFE credit transfers is not
expected to have the practical effect of
limiting the amount of CO2 emission
credits manufacturers may be able to
transfer under the CAA program,
recognizing that manufacturers must
comply with both the proposed CAFE
standards and the proposed EPA
standards. However, it is possible that
in some specific circumstances the
EPCA limit on CAFE credit transfers
could constrain the ability of a
manufacturer to achieve cost savings
through unlimited use of GHG
emissions credit transfers under the
CAA program.
The agencies request comment on the
impact of the EISA credit transfer caps
on the implementation of the proposed
CAFE and GHG standards, including
whether it would impose such a
constraint and the impacts of a
constraint on costs, emissions, and fuel
economy. In addition, the agencies
invite comment on approaches that
could assist in addressing this issue,
recognizing the importance the agencies
place on harmonization, and that would
be consistent with their respective
statutes. For example, any approach
must be consistent with both the EISA
transfer caps and the EPCA requirement
to set annual CAFE standards at the
maximum feasible average fuel economy
level that NHTSA decides the
manufacturers can achieve in that
model year, based on the agency’s
consideration of the four statutory
factors. Manufacturers should submit
publicly available evidence supporting
their position on this issue so that a well
informed decision can be made and
explained to the public.
D. Summary of the Proposed Standards
for the National Program
1. Joint Analytical Approach
NHTSA and EPA have worked closely
together on nearly every aspect of this
joint proposal. The extent and results of
this collaboration is reflected in the
elements of the respective NHTSA and
PO 00000
Frm 00015
Fmt 4701
Sfmt 4702
49467
EPA proposals, as well as the analytical
work contained in the Joint Technical
Support Document (Joint TSD). The
Joint TSD, in particular, describes
important details of the analytical work
that are shared, as well as any
differences in approach. These includes
the build up of the baseline and
reference fleets, the derivation of the
shape of the curve that defines the
standards, a detailed description of the
costs and effectiveness of the technology
choices that are available to vehicle
manufacturers, a summary of the
computer models used to estimate how
technologies might be added to vehicles,
and finally the economic inputs used to
calculate the impacts and benefits of the
rules, where practicable. Some of these
are highlighted below.
EPA and NHTSA have jointly
developed attribute curve shapes that
each agency is using for its proposed
standards. Both agencies reviewed the
shape of the attribute-based curve used
for the model year 2011 CAFE
standards. After a new and thorough
analysis of current vehicle data and the
comments received from previous two
CAFE rules, the two agencies improved
upon the constrained logistic curve and
developed a similarly shaped piece-wise
linear function. Further details of these
functions can be found in Sections III
and IV of this preamble as well as
Chapter 2 of the Joint TSD.
A critical technical underpinning of
each agency’s proposal is the cost and
effectiveness of the various control
technologies. These are used to analyze
the feasibility and cost of potential GHG
and CAFE standards. The technical
work reflected in the joint TSD is the
culmination of over 3 years of literature
research, consultation with experts,
detailed computer simulations, vehicle
tear-downs and engineering review, all
of which will continue into the future
as more data becomes available. To
promote transparency, the vast majority
of this information is collected from
publically available sources, and can be
found in the docket of this rule. Nonpublic (i.e., confidential manufacturer)
information was used only to the
limited extent it was needed to fill a
data void. A detailed description of all
of the technology information
considered can be found in Chapter 3 of
the Joint TSD (and for A/C, Chapter 2
of the EPA RIA).
This detailed technology data forms
the inputs to computer models that each
agency uses to project how vehicle
manufacturers may add those
technologies in order to comply with
new standards. These are the OMEGA
and Volpe models for EPA and NHTSA
respectively. The Volpe model is
E:\FR\FM\28SEP2.SGM
28SEP2
49468
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
tailored for NHTSA’s EPCA and EISA
needs, while the OMEGA model is
tailored for EPA’s CAA needs. In
developing the National Program, EPA
and NHTSA have worked closely to
ensure that consistent and reasonable
results are achieved from both models.
This fruitful collaboration has resulted
in the improvement of both approaches
and now, far from being redundant,
these models serve the purposes of the
respective agencies while also
maintaining an important validating
role. The models and their inputs can
also be found in the docket. Further
description of the model and outputs
can be found in Sections II and IV of
this preamble, and Chapter 3 of the Joint
TSD.
This comprehensive joint analytical
approach has provided a sound and
consistent technical basis for each
agency in developing its proposed
standards, which are summarized in the
sections below.
2. Level of the Standards
In this notice, EPA and NHTSA are
proposing two separate sets of
standards, each under its respective
statutory authorities. EPA is proposing
national CO2 emissions standards for
light-duty vehicles under section 202 (a)
of the Clean Air Act. These standards
would require these vehicles to meet an
estimated combined average emissions
level of 250 grams/mile of CO2 in model
year 2016. NHTSA is proposing CAFE
standards for passenger cars and light
trucks under 49 U.S.C. 32902. These
standards would require them to meet
an estimated combined average fuel
economy level of 34.1 mpg in model
year 2016. The proposed standards for
both agencies begin with the 2012
model year, with standards increasing
in stringency through model year 2016.
They represent a harmonized approach
that will allow industry to build a single
national fleet that will satisfy both the
GHG requirements under the CAA and
CAFE requirements under EPCA/EISA.
Given differences in their respective
statutory authorities, however, the
agencies’ proposed standards include
some important differences. Under the
CO2 fleet average standard proposed
under CAA section 202(a), EPA expects
manufacturers to take advantage of the
option to generate CO2-equivalent
credits by reducing emissions of
hydrofluorocarbons (HFCs) and CO2
through improvements in their air
conditioner systems. EPA accounted for
these reductions in developing its
proposed CO2 standard. EPCA does not
allow vehicle manufacturers to use air
conditioning credits in complying with
CAFE standards for passenger cars.41
CO2 emissions due to air conditioning
operation are not measured by the test
procedure mandated by statute for use
in establishing and enforcing CAFE
standards for passenger cars. As a result,
improvements in the efficiency of
passenger car air conditioners would
not be considered as a possible control
technology for purposes of CAFE.
These differences regarding the
treatment of air conditioning
improvements (related to CO2 and HFC
reductions) affect the relative stringency
of the EPA standard and NHTSA
standard. The 250 grams per mile of CO2
equivalent emissions limit is equivalent
to 35.5 mpg 42 if the automotive industry
were to meet this CO2 level all through
fuel economy improvements. As a
consequence of the prohibition against
NHTSA’s allowing credits for air
conditioning improvements for
purposes of passenger car CAFE
compliance, NHTSA is proposing fuel
economy standards that are estimated to
require a combined (passenger car and
light truck) average fuel economy level
of 34.1 mpg by MY 2016.
NHTSA and EPA’s proposed
standards, like the standards NHTSA
promulgated in March 2009 for model
year 2011 (MY 2011), are expressed as
mathematical functions depending on
vehicle footprint. Footprint is one
measure of vehicle size, and is
determined by multiplying the vehicle’s
wheelbase by the vehicle’s average track
width.43 The standards that must be met
by the fleet of each manufacturer would
be determined by computing the salesweighted harmonic average of the
targets applicable to each of the
manufacturer’s passenger cars and light
trucks. Under these proposed footprintbased standards, the levels required of
individual manufacturers depend, as
noted above, on the mix of vehicles
sold. NHTSA and EPA’s respective
proposed standards are shown in the
tables below. It is important to note that
the standards are the attribute-based
curves proposed by each agency. The
values in the tables below reflect the
agencies’ projection of the
corresponding fleet levels that would
result from these attribute-based curves.
As shown in Table I.D.2–1, NHTSA’s
proposed fleet-wide CAFE-required
levels for passenger cars under the
proposed standards are projected to
increase from 33.6 to 38.0 mpg between
MY 2012 and MY 2016. Similarly, fleetwide CAFE levels for light trucks are
projected to increase from 25.0 to 28.3
mpg. These numbers do not include the
effects of other flexibilities and credits
in the program. NHTSA has also
estimated the average fleet-wide
required levels for the combined car and
truck fleets. As shown, the overall fleet
average CAFE level is expected to be
34.1 mpg in MY 2016. These standards
represent a 4.3 percent average annual
rate of increase relative to the MY 2011
standards.44
TABLE I.D.2–1—AVERAGE REQUIRED FUEL ECONOMY (MPG) UNDER PROPOSED CAFE STANDARDS
2011base
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Passenger Cars .......................................................................................
Light Trucks .............................................................................................
Combined Cars & Trucks ........................................................................
41 There is no such statutory limitation with
respect to light trucks.
42 The agencies are using a common conversion
factor between fuel economy in units of miles per
gallon and CO2 emissions in units of grams per
mile. This conversion factor is 8,887 grams CO2 per
gallon gasoline fuel. Diesel fuel has a conversion
factor of 10,180 grams CO2 per gallon diesel fuel
though for the purposes of this calculation, we are
assuming 100% gasoline fuel.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
30.2
24.1
27.3
2012
33.6
25.0
29.8
43 See 49 CFR 523.2 for the exact definition of
‘‘footprint.’’
44 Because required CAFE levels depend on the
mix of vehicles sold by manufacturers in a model
year, NHTSA’s estimate of future required CAFE
levels depends on its estimate of the mix of vehicles
that will be sold in that model year. NHTSA
currently estimates that the MY 2011 standards will
require average fuel economy levels of 30.5 mpg for
PO 00000
Frm 00016
Fmt 4701
Sfmt 4702
2013
2014
34.4
25.6
30.6
35.2
26.2
31.4
2015
36.4
27.1
32.6
2016
38.0
28.3
34.1
passenger cars, 24.2 mpg for light trucks, and 27.6
mpg for the combined fleet.
E:\FR\FM\28SEP2.SGM
28SEP2
49469
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
Accounting for the expectation that
some manufacturers would continue to
pay civil penalties rather than achieving
required CAFE levels, and the ability to
use FFV credits, NHTSA estimates that
the proposed CAFE standards would
lead to the following average achieved
fuel economy levels, based on the
projections of what each manufacturer’s
fleet will comprise in each year of the
program: 45
TABLE I.D.2–2—PROJECTED FLEET-WIDE ACHIEVED CAFE LEVELS UNDER THE PROPOSED FOOTPRINT-BASED CAFE
STANDARDS (MPG)
2012
Passenger Cars ...............................................................................................................................
Light Trucks .....................................................................................................................................
Combined Cars & Trucks ................................................................................................................
NHTSA is also required by EISA to set
a minimum fuel economy standard for
domestically manufactured passenger
cars in addition to the attribute-based
passenger car standard. The minimum
standard ‘‘shall be the greater of (A) 27.5
miles per gallon; or (B) 92 percent of the
average fuel economy projected by the
Secretary for the combined domestic
and non-domestic passenger automobile
fleets manufactured for sale in the
United States by all manufacturers in
the model year * * *.’’ 46
Based on NHTSA’s current market
forecast, the agency’s estimates of these
minimum standards under the proposed
MY 2012–2016 CAFE standards (and,
32.5
24.1
28.7
2013
33.4
24.6
29.6
2014
34.3
25.3
30.4
2015
35.3
26.3
31.6
2016
36.5
27.0
32.7
for comparison, the final MY 2011
standard) are summarized below in
Table I.D.2–3.47 For eventual
compliance calculations, the final
calculated minimum standards will be
updated to reflect any changes in the
average fuel economy level required
under the final standards.
TABLE I.D.2–3—ESTIMATED MINIMUM STANDARD FOR DOMESTICALLY MANUFACTURED PASSENGER CARS UNDER FINAL
MY 2011 AND PROPOSED MY 2012–2016 CAFE STANDARDS FOR PASSENGER CARS (MPG)
2011
2012
28.0 ..................................................................................................................................................
EPA is proposing GHG emissions
standards, and Table I.D.2–4 provides
EPA’s estimates of their projected
overall fleet-wide CO2 equivalent
emission levels.48 The g/mi values are
CO2 equivalent values because they
30.9
2013
31.6
2014
32.4
2015
33.5
2016
34.9
include the projected use of A/C credits
by manufacturers.
TABLE I.D.2–4—PROJECTED FLEET-WIDE EMISSIONS COMPLIANCE LEVELS UNDER THE PROPOSED FOOTPRINT-BASED
CO2 STANDARDS (G/MI)
2012
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Passenger Cars ...............................................................................................................................
Light Trucks .....................................................................................................................................
Combined Cars & Trucks ................................................................................................................
261
352
295
2013
253
341
286
2014
246
332
276
2015
235
317
263
2016
224
302
250
As shown in Table I.D.2–4, projected
fleet-wide CO2 emission level
requirements for cars under the
proposed approach are projected to
increase in stringency from 261 to 224
grams per mile between MY 2012 and
MY 2016. Similarly, fleet-wide CO2
equivalent emission level requirements
for trucks are projected to increase in
stringency from 352 to 302 grams per
mile. As shown, the overall fleet average
CO2 level requirements are projected to
be 250 g/mile in 2016.
EPA anticipates that manufacturers
will take advantage of program
flexibilities such as flex fueled vehicle
credits, and car/truck credit trading.
Due to the credit trading between cars
and trucks, the estimated improvements
in CO2 emissions are distributed
differently than shown in Table I.D 2–
4, where full manufacturer compliance
is assumed. Table I.D.2–5 shows EPA
projection of the achieved emission
levels of the fleet for MY 2012 through
2016, which does consider the impact of
car/truck credit transfer and the increase
in emissions due to program flexibilities
including flex fueled vehicle credits and
the temporary leadtime allowance
alternative standards. The use of
optional air conditioning credits is
considered both in this analysis of
achieved levels and of the projected
levels described above.. As can be seen
in Table I.D.2–5, the projected achieved
levels are slightly higher for model years
2012–2015 due to the projected use of
the proposed flexibilities, but in model
45 NHTSA’s estimates account for availability of
CAFE credits for the sale of flexibly-fuel vehicles
(FFVs), and for the potential that some
manufacturers would pay civil penalties rather than
complying with the proposed CAFE standards. This
yields NHTSA’s estimates of the real-world fuel
economy that could be achieved under the
proposed CAFE standards. NHTSA has not
included any potential impact of car-truck credit
transfer in its estimate of the achieved CAFE levels.
46 49 U.S.C. 32902(b)(4).
47 In the March 2009 final rule establishing MY
2011 standards for passenger cars and light trucks,
NHTSA estimated that the minimum required
CAFE standard for domestically manufactured
passenger cars would be 27.8 mpg under the MY
2011 passenger car standard. Based on the agency’s
current forecast of the MY 2011 passenger car
market, NHTSA now estimates that the minimum
required CAFE standard will be 28.0 mpg in MY
2011.
48 These levels do not include the effect of
flexible fuel credits, transfer of credits between cars
and trucks, temporary lead time allowance, or any
other credits with the exception of air conditioning.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00017
Fmt 4701
Sfmt 4702
E:\FR\FM\28SEP2.SGM
28SEP2
49470
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
year 2016 the achieved value is
projected to be 250 g/mi for the fleet.
TABLE I.D.2–5—PROJECTED FLEET-WIDE ACHIEVED EMISSION LEVELS UNDER THE PROPOSED FOOTPRINT-BASED CO2
STANDARDS (G/MI)
2012
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Passenger Cars ...............................................................................................................................
Light Trucks .....................................................................................................................................
Combined Cars & Trucks ................................................................................................................
NHTSA’s and EPA’s technology
assessment indicates there is a wide
range of technologies available for
manufacturers to consider in upgrading
vehicles to reduce GHG emissions and
improve fuel economy.49 As noted,
these include improvements to the
engines such as use of gasoline direct
injection and downsized engines that
use turbochargers to provide
performance similar to that of larger
engines, the use of advanced
transmissions, increased use of startstop technology, improvements in tire
performance, reductions in vehicle
weight, increased use of hybrid and
other advanced technologies, and the
initial commercialization of electric
vehicles and plug-in hybrids. EPA is
also projecting improvements in vehicle
air conditioners including more efficient
as well as low leak systems. All of these
technologies are already available today,
and EPA’s and NHTSA’s assessment is
that manufacturers would be able to
meet the proposed standards through
more widespread use of these
technologies across the fleet.
With respect to the practicability of
the standards in terms of lead time,
during MYs 2012–2016 manufacturers
are expected to go through the normal
automotive business cycle of
redesigning and upgrading their lightduty vehicle products, and in some
cases introducing entirely new vehicles
not on the market today. This proposal
would allow manufacturers the time
needed to incorporate technology to
achieve GHG reductions and improve
fuel economy during the vehicle
redesign process. This is an important
aspect of the proposal, as it avoids the
much higher costs that would occur if
manufacturers needed to add or change
technology at times other than their
scheduled redesigns. This time period
would also provide manufacturers the
opportunity to plan for compliance
using a multi-year time frame, again
consistent with normal business
49 The close relationship between emissions of
CO2—the most prevalent greenhouse gas emitted by
motor vehicles—and fuel consumption, means that
the technologies to control CO2 emissions and to
improve fuel economy overlap to a great degree
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
practice. Over these five model years,
there would be an opportunity for
manufacturers to evaluate almost every
one of their vehicle model platforms
and add technology in a cost effective
way to control GHG emissions and
improve fuel economy. This includes
redesign of the air conditioner systems
in ways that will further reduce GHG
emissions.
Both agencies considered other
standards as part of the rulemaking
analyses, both more and less stringent
than those proposed. EPA’s and
NHTSA’s analysis of alternative
standards are contained in Sections III
and IV of this notice, respectively.
The CAFE and GHG standards
described above are based on
determining emissions and fuel
economy using the city and highway
test procedures that are currently used
in the CAFE program. Both agencies
recognize that these test procedures are
not fully representative of real world
driving conditions. For example EPA
has adopted more representative test
procedures that are used in determining
compliance with emissions standards
for pollutants other than GHGs. These
test procedures are also used in EPA’s
fuel economy labeling program.
However, as discussed in Section III, the
current information on effectiveness of
the individual emissions control
technologies is based on performance
over the two CAFE test procedures. For
that reason EPA is proposing to use the
current CAFE test procedures for the
proposed CO2 standards and is not
proposing to change those test
procedures in this rulemaking. NHTSA,
as discussed above, is limited by statute
in what test procedures can be used for
purposes of passenger car testing;
however there is no such statutory
limitation with respect to test
procedures for trucks. However, the
same reasons for not changing the truck
test procedures apply for CAFE as well.
Both EPA and NHTSA are interested
in developing programs that employ test
procedures that are more representative
of real world driving conditions, to the
extent authorized under their respective
statutes. This is an important issue, and
PO 00000
Frm 00018
Fmt 4701
Sfmt 4702
2013
264
365
302
254
355
291
2014
245
346
281
2015
232
332
267
2016
220
311
250
the agencies intend to address it in the
context of a future rulemaking to
address standards for model year 2017
and thereafter. This could include a
range of test procedure changes to better
represent real-world driving conditions
in terms of speed, acceleration,
deceleration, ambient temperatures, use
of air conditioners, and the like. With
respect to air conditioner operation,
EPA discusses the procedures it intends
to use for determining emissions credits
for controls on air conditioners in
Section III. Comment is also invited in
Section IV on the issue of providing air
conditioner credits under 49 U.S.C.
32902 and/or 32904 for light-trucks in
the model years covered by this
proposal.
Finally, based on the information EPA
developed in its recent rulemaking that
updated its fuel economy labeling
program to better reflect average realworld fuel economy, the calculation of
fuel savings and CO2 emissions
reductions obtained by the proposed
CAFE and GHG standards includes
adjustments to account for the
difference between the fuel economy
level measured in the CAFE test
procedure and the fuel economy
actually achieved on average under real
world driving conditions. These
adjustments are industry averages for
the vehicles’ performance as a whole,
however, and are not a substitute for the
information on effectiveness of
individual control technologies that will
be explored for purposes of a future
GHG and CAFE rulemaking.
3. Form of the Standards
In this rule, NHTSA and EPA are
proposing attribute-based standards for
passenger cars and light trucks. NHTSA
adopted an attribute standard based on
vehicle footprint in its Reformed CAFE
program for light trucks for model years
2008–2011,50 and recently extended this
approach to passenger cars in the CAFE
rule for MY 2011 as required by EISA.51
EPA and NHTSA are proposing vehicle
footprint as the attribute for the GHG
50 71
51 74
E:\FR\FM\28SEP2.SGM
FR 17566 (Apr. 6, 2006).
FR 14196 (Mar. 30, 2009).
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
and CAFE standards. Footprint is
defined as a vehicle’s wheelbase
multiplied by its track width—in other
words, the area enclosed by the points
at which the wheels meet the ground.
The agencies believe that the footprint
attribute is the most appropriate
attribute on which to base the standards
under consideration, as further
discussed later in this notice and in
Chapter 2 of the joint TSD.
Under the proposed footprint-based
standards, each manufacturer would
have a GHG and CAFE target unique to
its fleet, depending on the footprints of
the vehicle models produced by that
manufacturer. A manufacturer would
have separate footprint-based standards
for cars and for trucks. Generally, larger
vehicles (i.e., vehicles with larger
footprints) would be subject to less
stringent standards (i.e., higher CO2
grams/mile standards and lower CAFE
standards) than smaller vehicles. This is
because, generally speaking, smaller
vehicles are more capable of achieving
higher standards than larger vehicles.
While a manufacturer’s fleet average
standard could be estimated throughout
the model year based on projected
production volume of its vehicle fleet,
the standard to which the manufacturer
must comply would be based on its final
model year production figures. A
manufacturer’s calculation of fleet
average emissions at the end of the
model year would thus be based on the
production-weighted average emissions
of each model in its fleet.
In designing the footprint-based
standards, the agencies built upon the
footprint standard curves for passenger
cars and light trucks used in the CAFE
rule for MY 2011.52 EPA and NHTSA
mstockstill on DSKH9S0YB1PROD with PROPOSALS
52 74
FR 14407–14409 (Mar. 30, 2009).
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
worked together to design car and truck
footprint curves that followed from
logistic curves used in that rule. The
agencies started by addressing two main
concerns regarding the car curve. The
first concern was that the 2011 car curve
was relatively steep near the inflection
point thus causing concern that small
variations in footprint could produce
relatively large changes in fuel economy
targets. A curve that was directionally
less steep would reduce the potential for
gaming. The second issue was that the
inflection point of the logistic curve was
not centered on the distribution of
vehicle footprints across the industries’
fleet, thus resulting in a flat (universal
or unreformed) standard for over half
the fleet. The proposed car curve has
been shifted and made less steep
compared to the car curve adopted by
NHTSA for 2011, such that it better
aligns the sloped region with higher
production volume vehicle models.
Finally, both the car and truck curves
are defined in terms of a constrained
linear function for fuel consumption
and, equivalently, a piece-wise linear
function for CO2. NHTSA and EPA
include a full discussion of the
development of these curves in the joint
TSD and a summary is found in Section
II below. In addition, a full discussion
of the equations and coefficients that
define the curves is included in Section
III for the CO2 curves and Section IV for
the mpg curves. The following figures
illustrate the standards. First Figure
I.D.3–1 shows the fuel economy (mpg)
car standard curve.
Under an attribute-based standard,
every vehicle model has a performance
target (fuel economy for the CAFE
standards, and CO2 g/mile for the GHG
emissions standards), the level of which
PO 00000
Frm 00019
Fmt 4701
Sfmt 4702
49471
depends on the vehicle’s attribute (for
this proposal, footprint). The
manufacturers’ fleet average
performance is determined by the
production-weighed 53 average (for
CAFE, harmonic average) of those
targets. NHTSA and EPA are proposing
CAFE and CO2 emissions standards
defined by constrained linear functions
and, equivalently, piecewise linear
functions.54 As a possible option for
future rulemakings, the constrained
linear form was introduced by NHTSA
in the 2007 NPRM proposing CAFE
standards for MY 2011–2015.
NHTSA is proposing the attribute
curves below for assigning a fuel
economy level to an individual vehicle’s
footprint value, for model years 2012
through 2016. These mpg values would
be production weighted to determine
each manufacturer’s fleet average
standard for cars and trucks. Although
the general model of the equation is the
same for each vehicle category and each
year, the parameters of the equation
differ for cars and trucks. Each
parameter also changes on an annual
basis, resulting in the yearly increases in
stringency. Figure I.D.3–1 below
illustrates the passenger car CAFE
standard curves for model years 2012
through 2016 while Figure I.D.3–2
below illustrates the light truck standard
curves for model years 2012–2016. The
MY 2011 final standards for cars and
trucks, which are specified by a
constrained logistic function rather than
a constrained linear function, are shown
for comparison.
BILLING CODE 4910–59–P
53 Production
for sale in the United States.
equations are equivalent but are specified
differently due to differences in the agencies’
respective models.
54 The
E:\FR\FM\28SEP2.SGM
28SEP2
VerDate Nov<24>2008
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00020
Fmt 4701
Sfmt 4725
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.000</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49472
EPA is proposing the attribute curves
below for assigning a CO2 level to an
individual vehicle’s footprint value, for
model years 2012 through 2016. These
CO2 values would be production
weighted to determine each
manufacturer’s fleet average standard
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
for cars and trucks. Although the
general model of the equation is the
same for each vehicle category and each
year, the parameters of the equation
differ for cars and trucks. Each
parameter also changes on an annual
basis, resulting in the yearly increases in
PO 00000
Frm 00021
Fmt 4701
Sfmt 4702
49473
stringency. Figure I.D.3–3 below
illustrates the CO2 car standard curves
for model years 2012 through 2016
while Figure I.D.3–4 shows the CO2
truck standard curves for Model Years
2012–2016.
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.001</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
VerDate Nov<24>2008
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00022
Fmt 4701
Sfmt 4725
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.002</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49474
BILLING CODE 4910–59–C
NHTSA and EPA propose to use the
same vehicle category definitions for
determining which vehicles are subject
to the car footprint curves versus the
truck curve standards. In other words, a
vehicle classified as a car under the
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
NHTSA CAFE program would also be
classified as a car under the EPA GHG
program, and likewise for trucks. EPA
and NHTSA are proposing to employ
the same car and truck definitions for
the MY 2012–2016 CAFE and GHG
PO 00000
Frm 00023
Fmt 4701
Sfmt 4702
49475
standards as those used in the CAFE
program for the 2011 model year
standards.55 This proposed approach of
using CAFE definitions allows EPA’s
55 49
E:\FR\FM\28SEP2.SGM
CFR part 523.
28SEP2
EP28SE09.003</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
49476
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
proposed CO2 standards and the
proposed CAFE standards to be
harmonized across all vehicles. EPA is
not changing the car/truck definition for
the purposes of any other previous rule.
Generally speaking, a smaller
footprint vehicle will have lower CO2
emissions relative to a larger footprint
vehicle. A footprint-based CO2 standard
can be relatively neutral with respect to
vehicle size and consumer choice. All
vehicles, whether smaller or larger,
must make improvements to reduce CO2
emissions, and therefore all vehicles
will be relatively more expensive. With
the footprint-based standard approach,
EPA and NHTSA believe there should
be no significant effect on the relative
distribution of different vehicle sizes in
the fleet, which means that consumers
will still be able to purchase the size of
vehicle that meets their needs. Table
I.D.3–1 illustrates the fact that different
vehicle sizes will have varying CO2
emissions and fuel economy targets
under the proposed standards.
TABLE I.D.3–1—MODEL YEAR 2016 CO2 AND FUEL ECONOMY TARGETS FOR VARIOUS MY 2008 VEHICLE TYPES
Vehicle type
Example
model footprint
(sq. ft.)
Example models
CO2 emissions
target
(g/mi)
Fuel economy
target
(mpg)
40
46
53
214
237
270
41.4
37.3
32.8
44
49
55
67
269
289
313
358
32.8
30.6
28.2
24.7
Example Passenger Cars
Compact car ....................................................
Midsize car ......................................................
Fullsize car ......................................................
Honda Fit ........................................................
Ford Fusion ....................................................
Chrysler 300 ...................................................
Example Light-Duty Trucks
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Small SUV .......................................................
Midsize crossover ...........................................
Minivan ............................................................
Large pickup truck ..........................................
E. Summary of Costs and Benefits for
the Joint Proposal
This section summarizes the projected
costs and benefits of the proposed CAFE
and GHG emissions standards. These
projections helped inform the agencies’
choices among the alternatives
considered and provide further
confirmation that proposed standards
fall within the spectrum of choices
allowable under their respective
statutory criteria. The costs and benefits
projected by NHTSA to result from
NHTSA’s proposed CAFE standards are
presented first, followed by those from
EPA’s analysis of the proposed GHG
emissions standards.
The agencies recognize that there are
uncertainties regarding the benefit and
cost values presented in this proposal.
Some benefits and costs are not
quantified. The values of other benefits
and costs could be too low or too high.
For several reasons, the estimates for
costs and benefits presented by NHTSA
and EPA, while consistent, are not
directly comparable, and thus should
not be expected to be identical. Most
important, NHTSA and EPA’s proposed
standards would require slightly
different fuel efficiency improvements.
EPA’s proposed GHG standard is more
stringent in part due to its assumptions
about manufacturers’ use of air
conditioning credits, which result from
reductions in air conditioning-related
emissions of HFCs and CO2. In addition,
the proposed CAFE and GHG standards
offer different program flexibilities, and
the agencies’ analyses differ in their
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
4WD Ford Escape ..........................................
Nissan Murano ...............................................
Toyota Sienna ................................................
Chevy Silverado .............................................
accounting for these flexibilities (for
example, FFVs etc.), primarily because
NHTSA is statutorily prohibited from
considering some flexibilities when
establishing CAFE standards, while EPA
is not. These differences contribute to
differences in the agencies’ respective
estimates of costs and benefits resulting
from the new standards.
Because EPCA prohibits NHTSA from
considering the use of FFV credits when
establishing CAFE standards, the
agency’s primary analysis of costs, fuel
savings, and related benefits from
imposing higher CAFE standards does
not include them. However, EPCA does
not prohibit NHTSA from considering
the fact that manufacturers may pay
civil penalties rather than complying
with CAFE standards, and NHTSA’s
primary analysis accounts for some
manufacturers’ tendency to do so. In
addition, NHTSA performed a
supplemental analysis of the effect of
FFV credits on benefits and costs from
its proposed CAFE standards, to
demonstrate the real-world impacts of
FFVs, and the summary estimates
presented in Section IV include these
effects. Including the use of FFV credits
reduces estimated per-vehicle
compliance costs of the program.
However, as shown below, including
FFV credits does not significantly
change the projected fuel savings and
CO2 reductions, because FFV credits
reduce the fuel economy levels that
manufacturers achieve not only under
the proposed standards, but also under
the baseline MY 2011 CAFE standards.
PO 00000
Frm 00024
Fmt 4701
Sfmt 4702
Also, EPCA, as amended by EISA,
allows manufacturers to transfer credits
between their passenger car and light
truck fleets. However, EPCA also
prohibits NHTSA from considering
manufacturers’ ability to use CAFE
credits when determining the stringency
of the CAFE standards. Because of this
prohibition, NHTSA’s primary analysis
does not account for the extent to which
credit transfers might actually occur.
For purposes of its supplemental
analysis, NHTSA considered accounting
for the fact that EPCA allows some
transfer of CAFE credits between the
passenger car and light truck fleets, but
determined that in NHTSA’s year-byyear analysis, manufacturers’ likely
credit transfers cannot be reasonably
estimated at this time.56
Therefore, NHTSA’s primary analysis
shows the estimates the agency
considered for purposes of establishing
new CAFE standards, and its
supplemental analysis including
manufacturers’ potential use of FFV
credits currently reflects the agency’s
best estimate of the potential real-world
effects of the proposed CAFE standards.
56 NHTSA’s analysis estimates multi-year
planning effects within a context in which each
model year is represented explicitly, and
technologies applied in one model year carry
forward to future model years. NHTSA does not
currently have a basis to estimate how a
manufacturer might, for example, weigh the transfer
of credits from the passenger car to the light truck
fleet in MY 2013 against the potential to carry light
truck technologies forward from MY 2013 through
MY 2016. The agency is considering the possibility
of implementing such analysis for purposes of the
final rule.
E:\FR\FM\28SEP2.SGM
28SEP2
49477
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
EPA made explicit assumptions about
manufacturers’ use of FFV credits under
both the baseline and control
alternatives, and its estimates of costs
and benefits from the proposed GHG
standards reflect these assumptions.
However, under the proposed GHG
standards, FFV credits would be
available through MY 2015; starting in
MY 2016, EPA proposes to allow FFV
credits only based on a manfucturers’s
demonstration that the alternative fuel
is actually being used in the vehicles
and the actual GHG performance for the
vehicle run on that alternative fuel.
EPA’s analysis also assumes that
manufacturers would transfer credits
between their car and truck fleets in the
MY 2011 baseline subject to the
maximum value allowed by EPCA, and
that unlimited car-truck credit transfers
would occur under the proposed GHG
standards. Including these assumptions
in EPA’s analysis increases the resulting
estimates of fuel savings and reductions
in GHG emissions, while reducing
EPA’s estimates of program compliance
costs.
Finally, under the proposed EPA GHG
program, there is no ability for a
manufacturer to intentionally pay fines
in lieu of meeting the standard. Under
EPCA, however, vehicle manufacturers
are allowed to pay fines as an
alternative to compliance with
applicable CAFE standards. NHTSA’s
analysis explicitly estimates the level of
voluntary fine payment by individual
manufacturers, which reduces NHTSA’s
estimates of both the costs and benefits
of its proposed CAFE standards. In
contrast, the CAA does not allow for
fine payment in lieu of compliance with
emission standards, and EPA’s analysis
of costs and benefits from its proposed
standard thus assumes full compliance.
This assumption results in higher
estimates of fuel savings, reductions in
GHG emissions, and manufacturers’
compliance costs to sell fleets that
comply with both NHTSA’s proposed
CAFE program and EPA’s proposed
GHG program.
In summary, the projected costs and
benefits presented by NHTSA and EPA
are not directly comparable, because the
levels being proposed by EPA include
air conditioning-related improvements
in equivalent fuel efficiency and HFC
reductions, because the assumptions
incorporated in EPA’s analysis
regarding car-truck credit transfers, and
because of the projection by EPA of
complete compliance with the proposed
GHG standards. It should also be
expected that overall EPA’s estimates of
GHG reductions and fuel savings
achieved by the proposed GHG
standards will be slightly higher than
those projected by NHTSA only for the
CAFE standards because of the reasons
described above. For the same reasons,
EPA’s estimates of manufacturers’ costs
for complying with the proposed
passenger car and light trucks GHG
standards are slightly higher than
NHTSA’s estimates for complying with
the proposed CAFE standards.
1. Summary of Costs and Benefits of
Proposed NHTSA CAFE Standards
Without accounting for the
compliance flexibilities that NHTSA is
prohibited from considering when
determining the level of new CAFE
standards, since manufacturers’
decisions to use those flexibilities are
voluntary, NHTSA estimates that these
fuel economy increases would lead to
fuel savings totaling 62 billion gallons
throughout the useful lives of vehicles
sold in MYs 2012–2016. At a 3%
discount rate, the present value of the
economic benefits resulting from those
fuel savings is $158 billion.
The agency further estimates that
these new CAFE standards would lead
to corresponding reductions in CO2
emissions totaling 656 million metric
tons (mmt) during the useful lives of
vehicles sold in MYs 2012–2016. The
present value of the economic benefits
from avoiding those emissions is $16.4
billion, based on a global social cost of
carbon value of $20 per metric ton,57
although NHTSA estimated the benefits
associated with five different values of
a one ton GHG reduction ($5, $10, $20,
$34, $56).58 See Section II for a more
detailed discussion of the social cost of
carbon. It is important to note that
NHTSA’s CAFE standards and EPA’s
GHG standards will both be in effect,
and each will lead to increases in
average fuel economy and CO2
emissions reductions. The two agencies’
standards together comprise the
National Program, and this discussion of
costs and benefits of NHTSA’s CAFE
standards does not change the fact that
both the CAFE and GHG standards,
jointly, are the source of the benefits
and costs of the National Program.
TABLE I.E.1–1—NHTSA FUEL SAVED (BILLION GALLONS) AND CO2 EMISSIONS AVOIDED (MMT) UNDER PROPOSED CAFE
STANDARDS (WITHOUT FFV CREDITS)
2012
Fuel (b. gal.) .....................................................................................................................
CO2 (mmt) ........................................................................................................................
4
44
2013
9
96
2014
13
137
2015
16
173
2016
19
206
Total
62
656
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Considering manufacturers’ ability to
earn credit toward compliance by
selling FFVs, NHTSA estimates very
little change in incremental fuel savings
and avoided CO2 emissions, assuming
FFV credits would be used toward both
the baseline and proposed standards:
57 We have developed two interim estimates of
the global social cost of carbon (SCC) ($/tCO2 in
2007 (2006$)): $33 per tCO2 at a 3% discount rate,
and $5 per tCO2 with a 5% discount rate. The 3%
and 5% estimates have independent appeal and at
this time a clear preference for one over the other
is not warranted. Thus, we have also included—and
centered our current attention on—the average of
the estimates associated with these discount rates,
which is $19 (in 2006$) per ton of CO2 emissions.
When converted to 2007$ for consistency with
other economic values used in the agency’s
analysis, this figure corresponds to $20 per metric
ton of CO2 emissions occurring in 2007. This value
is assumed to increase at 3% annually for emissions
occurring after 2007.
58 The $10 and $56 figures are alternative interim
estimates based on uncertainty about interest rates
of long periods of time. They are based on an
approach that models discount rate uncertainty as
something that evolves over time; in contrast, the
preferred approach mentioned in the immediately
preceding paragraph assumes that there is a single
discount rate with equal probability of 3% and 5%.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00025
Fmt 4701
Sfmt 4702
E:\FR\FM\28SEP2.SGM
28SEP2
49478
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
TABLE I.E.1–2—NHTSA FUEL SAVED (BILLION GALLONS) AND CO2 EMISSIONS AVOIDED (MMT) UNDER PROPOSED CAFE
STANDARDS (WITH FFV CREDITS)
2012
Fuel (b. gal.) .....................................................................................................................
CO2 (mmt) ........................................................................................................................
NHTSA estimates that these fuel
economy increases would produce other
benefits both to drivers (e.g., reduced
time spent refueling) and to the U.S.
(e.g., reductions in the costs of
petroleum imports beyond the direct
savings from reduced oil purchases, as
well as some disbenefits (e.g., increase
traffic congestion) caused by drivers’
5
49
tendency to travel more when the cost
of driving declines (as it does when fuel
economy increases). NHTSA has
estimated the total monetary value to
society of these benefits and disbenefits,
and estimates that the proposed
standards will produce significant net
benefits to society. Using a 3% discount
rate, NHTSA estimates that the present
2013
8
90
2014
12
129
2015
15
167
2016
Total
19
204
59
639
value of these benefits would total more
than $200 billion over the useful lives
of vehicles sold during MYs 2012–2016.
More discussion regarding monetized
benefits can be found in Section IV of
this notice and in NHTSA’s Regulatory
Impact Analysis.
TABLE I.E.1–3—NHTSA DISCOUNTED BENEFITS ($BILLION) UNDER PROPOSED CAFE STANDARDS (BEFORE FFV
CREDITS, USING 3 PERCENT DISCOUNT RATE)
2012
Passenger Cars ...............................................................................................................
Light Trucks .....................................................................................................................
Combined .........................................................................................................................
Using a 7% discount rate, NHTSA
estimates that the present value of these
7.6
5.5
13.1
2013
17.0
11.6
28.7
2014
24.4
17.3
41.8
2015
31.2
22.2
53.4
2016
38.7
26.0
64.7
Total
119.1
82.6
201.7
benefits would total more than $159
billion over the same time period.
TABLE I.E.1–4—NHTSA DISCOUNTED BENEFITS ($BILLION) UNDER PROPOSED STANDARDS (BEFORE FFV CREDITS,
USING 7 PERCENT DISCOUNT RATE)
2012
Passenger Cars ...............................................................................................................
Light Trucks .....................................................................................................................
Combined .........................................................................................................................
6.0
4.3
10.3
2013
13.6
9.1
22.6
2014
19.5
13.5
33.1
2015
25.0
17.4
42.4
2016
31.1
20.4
51.5
Total
95.3
64.6
159.8
NHTSA estimates that FFV credits
could reduce achieved benefits by about
4.5%:
TABLE I.E.1–5a—NHTSA DISCOUNTED BENEFITS ($BILLION) UNDER PROPOSED CAFE STANDARDS (WITH FFV CREDITS,
USING A 3 PERCENT DISCOUNT RATE)
2012
Passenger Cars ...............................................................................................................
Light Trucks .....................................................................................................................
Combined .........................................................................................................................
7.8
6.1
13.9
2013
15.9
10.2
26.1
2014
22.5
15.9
38.4
2015
28.6
22.1
50.7
2016
37.1
26.3
63.3
Total
111.9
80.5
192.5
TABLE I.E.1–5b—NHTSA DISCOUNTED BENEFITS ($BILLION) UNDER PROPOSED CAFE STANDARDS (WITH FFV CREDITS,
USING A 7 PERCENT DISCOUNT RATE)
mstockstill on DSKH9S0YB1PROD with PROPOSALS
2012
Passenger Cars ...............................................................................................................
Light Trucks .....................................................................................................................
Combined .........................................................................................................................
NHTSA attributes most of these
benefits—about $158 billion (at a 3%
discount rate and excluding
consideration of FFV credits), as noted
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
6.2
4.7
10.9
above—to reductions in fuel
consumption, valuing fuel (for societal
purposes) at the future pre-tax prices
projected in the Energy Information
PO 00000
Frm 00026
Fmt 4701
Sfmt 4702
2013
12.7
7.9
20.6
2014
18.0
12.4
20.4
2015
23.0
17.3
40.3
2016
29.8
20.6
50.4
Total
89.6
63.0
152.5
Administration’s (EIA’s) reference case
forecast from Annual Energy Outlook
(AEO) 2009. The Preliminary Regulatory
Impact Analysis (PRIA) accompanying
E:\FR\FM\28SEP2.SGM
28SEP2
49479
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
this proposed rule presents a detailed
analysis of specific benefits of the
proposed rule.
TABLE I.E.1–6—SUMMARY OF BENEFITS FUEL SAVINGS AND CO2 EMISSIONS REDUCTION DUE TO THE PROPOSED RULE
(BEFORE FFV CREDITS)
Monetized value (discounted)
Amount
3% Discount rate
Fuel savings ...................................
CO2 emissions reductions .............
61.6 billion gallons ........................
656 million metric tons (mmt) .......
NHTSA estimates that the increases in
technology application necessary to
achieve the projected improvements in
fuel economy will entail considerable
7% Discount rate
$158.0 billion ................................
$16.4 billion ..................................
monetary outlays. The agency estimates
that incremental costs for achieving its
proposed standards—that is, outlays by
vehicle manufacturers over and above
$125.3 billion.
$12.8 billion.
those required to comply with the MY
2011 CAFE standards—will total about
$60 billion (i.e., during MYs 2012–
2016).
TABLE I.E.1–7—NHTSA INCREMENTAL TECHNOLOGY OUTLAYS ($BILLION) UNDER PROPOSED CAFE STANDARDS
(BEFORE FFV CREDITS)
2012
Passenger Cars ...............................................................................................................
Light Trucks .....................................................................................................................
Combined .........................................................................................................................
4.1
1.5
5.7
2013
6.5
2.8
9.3
2014
8.4
4.0
12.5
2015
9.9
5.2
15.1
2016
11.8
5.9
17.6
Total
40.8
19.4
60.2
NHTSA estimates that use of FFV
credits could significantly reduce these
outlays:
TABLE I.E.1–8—NHTSA INCREMENTAL TECHNOLOGY OUTLAYS ($BILLION) UNDER PROPOSED CAFE STANDARDS (WITH
FFV CREDITS)
2012
Passenger Cars ...............................................................................................................
Light Trucks .....................................................................................................................
Combined .........................................................................................................................
The agency projects that
manufacturers will recover most or all
of these additional costs through higher
selling prices for new cars and light
trucks. To allow manufacturers to
2.5
1.3
3.7
recover these increased outlays (and, to
a much lesser extent, the civil penalties
that some companies are expected to
pay for noncompliance), the agency
estimates that the proposed standards
2013
4.4
2.0
6.3
2014
6.1
3.1
9.2
2015
7.4
4.3
11.7
2016
9.3
5.0
14.2
Total
29.6
15.6
45.2
would lead to increases in average new
vehicle prices ranging from $476 per
vehicle in MY 2012 to $1,091 per
vehicle in MY 2016:
TABLE I.E.1–9—NHTSA INCREMENTAL INCREASES IN AVERAGE NEW VEHICLE COSTS ($) UNDER PROPOSED CAFE
STANDARDS (BEFORE FFV CREDITS)
2012
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Passenger Cars ...............................................................................................................................
Light Trucks .....................................................................................................................................
Combined .........................................................................................................................................
591
283
476
2013
735
460
635
2014
877
678
806
2015
979
882
945
2016
1,127
1,020
1,091
NHTSA estimates that use of FFV
credits could significantly reduce these
costs, especially in earlier model years:
TABLE I.E.1–10—NHTSA INCREMENTAL INCREASES IN AVERAGE NEW VEHICLE COSTS ($) UNDER PROPOSED CAFE
STANDARDS (WITH FFV CREDITS)
2012
Passenger Cars ...............................................................................................................................
Light Trucks .....................................................................................................................................
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00027
Fmt 4701
Sfmt 4702
295
231
E:\FR\FM\28SEP2.SGM
2013
448
347
28SEP2
2014
591
533
2015
695
758
2016
851
895
49480
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
TABLE I.E.1–10—NHTSA INCREMENTAL INCREASES IN AVERAGE NEW VEHICLE COSTS ($) UNDER PROPOSED CAFE
STANDARDS (WITH FFV CREDITS)—Continued
2012
Combined .........................................................................................................................................
NHTSA estimates, therefore, that the
total benefits of these proposed
standards would be more than three
times the magnitude of the
corresponding costs. As a consequence,
its proposed standards would produce
net benefits of $142 billion at a 3
percent discount rate (with FFV credits,
$147 billion) or $100 billion at a 7
percent discount rate over the useful
lives of vehicles sold during MYs 2012–
2016.
2. Summary of Costs and Benefits of
Proposed EPA GHG Standards
EPA has conducted a preliminary
assessment of the costs and benefits of
the proposed GHG standards. Table
I.E.2–1 shows EPA’s estimated lifetime
fuel savings and CO2 equivalent
emission reductions for all vehicles sold
in the model years 2012–2016. The
values in Table I.E.2–1 are projected
lifetime totals for each model year and
are not discounted. As documented in
DRIA Chapter 5, the potential credit
transfer between cars and trucks may
change the distribution of the fuel
2013
271
2014
411
571
2015
716
2016
866
savings and GHG emission impacts
between cars and trucks. As discussed
above with respect to NHTSA’s CAFE
standards, it is important to note that
NHTSA’s CAFE standards and EPA’s
GHG standards will both be in effect,
and each will lead to increases in
average fuel economy and CO2
emissions reductions. The two agency’s
standards together comprise the
National Program, and this discussion of
costs and benefits of EPA’s GHG
standards does not change the fact that
both the CAFE and GHG standards,
jointly, are the source of the benefits
and costs of the National Program.
TABLE I.E.2–1—EPA’S ESTIMATED 2012–2016 MODEL YEAR LIFETIME FUEL SAVED AND GHG EMISSIONS AVOIDED
2012
Cars ....................................................
Light Trucks ........................................
Combined ............................................
Fuel (billion gallons) ...........................
Fuel (billion barrels) ............................
CO2 EQ (mmt) ....................................
Fuel (billion gallons) ...........................
Fuel (billion barrels) ............................
CO2 EQ (mmt) ....................................
Fuel (billion gallons) ...........................
Fuel (billion barrels) ............................
CO2 EQ (mmt) ....................................
Table I.E.2–2 shows EPA’s estimated
lifetime discounted benefits for all
vehicles sold in model years 2012–2016.
Although EPA estimated the benefits
associated with five different values of
a one ton GHG reduction ($5, $10, $20,
$34, $56), for the purposes of this
overview presentation of estimated
benefits EPA is showing the benefits
associated with one of these marginal
values, $20 per ton of CO2, in 2007
dollars and 2007 emissions, in this joint
proposal. Table I.E.2–2 presents benefits
based on the $20 value. Section III.H
2013
4
0.1
51
2
0.1
30
7
0.2
81
2014
6
0.1
74
4
0.1
51
10
0.2
125
presents the five marginal values used
to estimate monetized benefits of GHG
reductions and Section III.H presents
the program benefits using each of the
five marginal values, which represent
only a partial accounting of total
benefits due to omitted climate change
impacts and other factors that are not
readily monetized. These factors are
being used on an interim basis while
analysis is conducted to generate new
estimates. The values in the table are
discounted values for each model year
throughout their projected lifetimes.
2015
8
0.2
98
6
0.1
77
14
0.3
174
11
0.3
137
9
0.2
107
19
0.5
244
2016
14
0.3
179
12
0.3
143
26
0.6
323
Total
43
1.0
539
33
0.8
408
76
1.8
947
The benefits include all benefits
considered by EPA such as fuel savings,
GHG reductions, PM benefits, energy
security and other externalities such as
reduced refueling and accidents,
congestion and noise. The lifetime
discounted benefits are shown for one of
five different social cost of carbon (SCC)
values considered by EPA. The values
in Table I.E.2–2 do not include costs
associated with new technology
required to meet the proposal.
TABLE I.E.2–2—EPA’S ESTIMATED 2012–2016 MODEL YEAR LIFETIME DISCOUNTED BENEFITS ASSUMING THE $20/TON
SCC VALUE a
[$Billions of 2007 dollars]
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Model year
Discount rate
2012
3% ....................................................................................................................................
7 .......................................................................................................................................
2013
2014
2015
2016
$20.4
15.8
$31.7
24.7
$44.9
34.9
$63.7
49.3
$87.2
67.7
Total
$248
193
a The benefits include all benefits considered by EPA such as fuel savings, GHG reductions, PM benefits, energy security and other
externalities such as reduced refueling and accidents, congestion and noise.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00028
Fmt 4701
Sfmt 4702
E:\FR\FM\28SEP2.SGM
28SEP2
49481
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
Table I.E.2–3 shows EPA’s estimated
lifetime fuel savings, lifetime CO2
emission reductions, and the monetized
net present values of those fuel savings
and CO2 emission reductions. The
gallons of fuel and CO2 emission
reductions are projected lifetime values
for all vehicles sold in the model years
2012–2016. The estimated fuel savings
in billions of barrels and the GHG
reductions in million metric tons of CO2
shown in Table I.E.2–3 are totals for the
five model years throughout their
projected lifetime and are not
discounted. The monetized values
shown in Table I.E.2–3 are the summed
values of the discounted monetized-fuel
savings and monetized-CO2 reductions
for the five model years 2012–2016
throughout their lifetimes. The
monetized values in Table I.E.2–3
reflect both a 3 percent and a 7 percent
discount rate as noted.
TABLE I.E.2–3—EPA’S ESTIMATED 2012–2016 MODEL YEAR LIFETIME FUEL SAVINGS, CO2 EMISSION REDUCTIONS, AND
DISCOUNTED MONETIZED BENEFITS AT A 3% DISCOUNT RATE
[Monetized values in 2007 dollars]
$ value
(billions)
Amount
Fuel savings .......................................................
1.8 billion barrels ..............................................
CO2 emission reductions (valued assuming
$20/ton CO2 in 2007).
947 MMT CO2e ................................................
$193, 3% discount rate.
$151, 7% discount rate.
$21.0, 3% discount rate.
$15.0, 7% discount rate.
Table I.E.2–4 shows EPA’s estimated
incremental technology outlays for cars
and trucks for each of the model years
2012–2016. The total outlays are also
shown. The technology outlays shown
in Table I.E.2–4 are for the industry as
a whole and do not account for fuel
savings associated with the proposal.
TABLE I.E.2–4—EPA’S ESTIMATED INCREMENTAL TECHNOLOGY OUTLAYS
[$BILLIONS OF 2007 DOLLARS]
2012
Cars ..................................................................................................................................
Trucks ..............................................................................................................................
Combined .........................................................................................................................
Table I.E.2–5 shows EPA’s estimated
incremental cost increase of the average
new vehicle for each model year 2012–
2016. The values shown are incremental
to a baseline vehicle and are not
$3.5
2.0
5.4
cumulative. In other words, the
estimated increase for 2012 model year
cars is $374 relative to a 2012 model
year car absent the proposal. The
estimated increase for a 2013 model
2013
$5.3
3.1
8.4
2014
$7.0
4.0
10.9
2015
$8.9
5.1
13.9
2016
Total
$10.7
6.8
17.5
$35.3
20.9
56.1
year car is $531 relative to a 2013 model
year car absent the proposal (not $374
plus $531).
TABLE I.E.2–5—EPA’S ESTIMATED INCREMENTAL INCREASE IN AVERAGE NEW VEHICLE COST
[2007 Dollars per unit]
2012
Cars ..................................................................................................................................................
Trucks ..............................................................................................................................................
Combined .........................................................................................................................................
mstockstill on DSKH9S0YB1PROD with PROPOSALS
F. Program Flexibilities for Achieving
Compliance
EPA’s and NHTSA’s proposed
programs provide compliance flexibility
to manufacturers, especially in the early
years of the National Program. This
flexibility is expected to provide
sufficient lead time for manufacturers to
make necessary technological
improvements and reduce the overall
cost of the program, without
compromising overall environmental
and fuel economy objectives. The broad
goal of harmonizing the two agencies’
proposed standards includes preserving
manufacturers’ flexibilities in meeting
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
the standards, to the extent appropriate
and required by law. The following
section provides an overview of the
flexibility provisions the agencies are
proposing.
1. CO2/CAFE Credits Generated Based
on Fleet Average Performance
Under the NHTSA and EPA proposal
the fleet average standards that apply to
a manufacturer’s car and truck fleets
would be based on the applicable
footprint-based curves. At the end of
each model year, when production of
the model year is complete, a
production-weighted fleet average
PO 00000
Frm 00029
Fmt 4701
Sfmt 4702
$374
358
368
2013
$531
539
534
2014
$663
682
670
2015
$813
886
838
2016
$968
1,213
1,050
would be calculated for each averaging
set (cars and trucks). Under this
approach, a manufacturer’s car and/or
truck fleet that achieves a fleet average
CO2/CAFE level better than the standard
would generate credits. Conversely, if
the fleet average CO2/CAFE level does
not meet the standard the fleet would
generate debits (also referred to as a
shortfall).
Under the proposed program, a
manufacturer whose fleet generates
credits in a given model year would
have several options for using those
credits, including credit carry-back,
credit carry-forward, credit transfers,
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49482
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
and credit trading. These provisions
exist in the MY 2011 CAFE program
under EPCA and EISA, and similar
provisions are part of EPA’s Tier 2
program for light duty vehicle criteria
pollutant emissions, as well as many
other mobile source standards issued by
EPA under the CAA. EPA is proposing
that the manufacturer would be able to
carry-back credits to offset any deficit
that had accrued in a prior model year
and was subsequently carried over to
the current model year. EPCA already
provides for this. EPCA restricts the
carry-back of CAFE credits to three
years and EPA is proposing the same
limitation, in keeping with the goal of
harmonizing both sets of proposed
standards.
After satisfying any need to offset preexisting deficits, remaining credits
could be saved (banked) for use in
future years. Under the CAFE program,
EISA allows manufacturers to apply
credits earned in a model year to
compliance in any of the five
subsequent model years.59 EPA is also
proposing, under the GHG program, to
allow manufacturers to use these
banked credits in the five years after the
year in which they were generated (i.e.,
five years carry-forward).
EISA required NHTSA to establish by
regulation a CAFE credits transferring
program, which NHTSA established in
a March 2009 final rule codified at 49
CFR part 536, to allow a manufacturer
to transfer credits between its vehicle
fleets to achieve compliance with the
standards. For example, credits earned
by over-compliance with a
manufacturer’s car fleet average
standard could be used to offset debits
incurred due to that manufacturer’s not
meeting the truck fleet average standard
in a given year. EPA’s Tier 2 program
also provides for this type of credit
transfer. For purposes of this NPRM,
EPA proposes unlimited credit transfers
across a manufacturer’s car-truck fleet to
meet the GHG standard. This is based
on the expectation that this kind of
credit transfer provision will allow the
required GHG emissions reductions to
be achieved in the most cost effective
way, and this flexibility will facilitate
the ability of the manufacturers to
comply with the GHG standards in the
lead time provided. Under the CAA,
unlike under EISA, there is no statutory
limitation on car-truck credit transfers.
Therefore EPA is not proposing to
constrain car-truck credit transfers as
doing so would increase costs with no
corresponding environmental benefit.
For the CAFE program, however, EISA
limits the amount of credits that may be
transferred, and also prohibits the use of
transferred credits to meet the statutory
minimum level for the domestic car
fleet standard.60 These and other
statutory limits would continue to apply
to the determination of compliance with
the CAFE standard.
Finally, EISA also allowed NHTSA to
establish by regulation a CAFE credit
trading program, which NHTSA
established in the March 2009 final rule
at 40 CFR Part 536, to allow credits to
be traded (sold) to other vehicle
manufacturers. EPA is also proposing to
allow credit trading in the GHG
program. These sorts of exchanges are
typically allowed under EPA’s current
mobile source emission credit programs,
although manufacturers have seldom
made such exchanges. Under the
NHTSA CAFE program, EPCA also
allows these types of credit trades,
although, as with transferred credits,
traded credits may not be used to meet
the minimum domestic car standards
specified by statute.61
2. Air Conditioning Credits
Air conditioning (A/C) systems
contribute to GHG emissions in two
ways. Hydrofluorocarbon (HFC)
refrigerants, which are powerful GHG
pollutants, can leak from the A/C
system. Operation of the A/C system
also places an additional load on the
engine, which results in additional CO2
tailpipe emissions. EPA is proposing an
approach that allows manufacturers to
generate credits by reducing GHG
emissions related to A/C systems.
Specifically, EPA is proposing a test
procedure and method to calculate CO2
equivalent reductions for the full useful
life on a grams/mile basis that can be
used as credits in meeting the fleet
average CO2 standards. EPA’s analysis
indicates this approach provides
manufacturers with a highly costeffective way to achieve a portion of
GHG emissions reductions under the
EPA program. EPA is estimating that
manufacturers will on average take
advantage of 11 g/mi GHG credit toward
meeting the 250 g/mi by 2016 (though
some companies may have more). EPA
is also proposing to allow manufacturers
to earn early A/C credits starting in MY
2009 through 2011, as discussed further
in a later section.
Comment is also sought on the
approach of providing CAFE credits
under 49 U.S.C. 32904(c) for light trucks
equipped with relatively efficient air
conditioners for MYs 2012–2016. The
agencies invite comment on allowing a
manufacturer to generate additional
60 49
59 49
U.S.C. 32903(a)(2).
VerDate Nov<24>2008
23:31 Sep 25, 2009
61 49
Jkt 217001
PO 00000
U.S.C. 32903(g)(4).
U.S.C. 32903(f)(2).
Frm 00030
Fmt 4701
Sfmt 4702
CAFE credits from the reduction of fuel
consumption through the application of
air conditioning efficiency improvement
technologies to trucks. Currently, the
CAFE program does not induce
manufacturers to install more efficient
air conditioners because the air
conditioners are not turned on during
fuel economy testing. The agencies note
that if such credits were adopted, it may
be necessary to reflect them in the
setting of the CAFE standards for light
trucks for the same model years and
invite comment on that issue.
3. Flex-Fuel and Alternative Fuel
Vehicle Credits
EPCA authorizes an incentive under
the CAFE program for production of
dual-fueled or flexible-fuel vehicles
(FFV) and dedicated alternative fuel
vehicles. FFVs are vehicles that can run
both on an alternative fuel and
conventional fuel. Most FFVs are E–85
capable vehicles, which can run on
either gasoline or a mixture of up to 85
percent ethanol and 15 percent gasoline.
Dedicated alternative fuel vehicles are
vehicles that run exclusively on an
alternative fuel. EPCA was amended by
EISA to extend the period of availability
of the FFV incentive, but to begin
phasing it out by annually reducing the
amount of FFV incentive that can be
used toward compliance with the CAFE
standards.62 EPCA does not premise the
availability of the FFV credits on actual
use of alternative fuel by an FFV
vehicle. Under NHTSA’s CAFE
program, pursuant to EISA, after MY
2019, no FFV credits will be available
for CAFE compliance.63 For dedicated
alternative fuel vehicles, there are no
limits or phase-out of the credits.
Consistent with the statute, NHTSA will
continue to allow the use of FFV credits
for purposes of compliance with the
proposed standards until the end of the
phase-out period.
For the GHG program, EPA is
proposing to allow FFV credits in line
with EISA limits only during the period
from MYs 2012 to 2015. After MY 2015,
EPA proposes to allow FFV credits only
based on a manufacturer’s
demonstration that the alternative fuel
is actually being used in the vehicles.
EPA is seeking comments on how that
demonstration could be made. EPA
discusses this in more detail in Section
III.C of the preamble.
62 EPCA provides a statutory incentive for
production of FFVs by specifying that their fuel
economy is determined using a special calculation
procedure that results in those vehicles being
assigned a higher fuel economy level than would
otherwise occur. This is typically referred to as an
FFV credit.
63 Id.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
4. Temporary Lead-Time Allowance
Alternative Standards
Manufacturers with limited product
lines may be especially challenged in
the early years of the proposed program.
Manufacturers with narrow product
offerings may not be able to take full
advantage of averaging or other program
flexibilities due to the limited scope of
the types of vehicles they sell. For
example, some smaller volume
manufacturers focus on high
performance vehicles with higher CO2
emissions, above the CO2 emissions
target for that vehicle footprint, but do
not have other types of vehicles in their
production mix with which to average.
Often, these manufacturers pay fines
under the CAFE program rather than
meeting the applicable CAFE standard.
EPA believes that these technological
circumstances may call for a more
gradual phase-in of standards so that
manufacturer resources can be focused
on meeting the 2016 levels.
EPA is proposing a temporary leadtime allowance for manufacturers who
sell vehicles in the U.S. in MY 2009
whose vehicle sales in that model year
are below 400,000 vehicles. EPA
proposes that this allowance would be
available only during the MY 2012–
2015 phase-in years of the program. A
manufacturer that satisfies the threshold
criteria would be able to treat a limited
number of vehicles as a separate
averaging fleet, which would be subject
to a less stringent GHG standard.64
Specifically, a standard of 125 percent
of the vehicle’s otherwise applicable
foot-print target level would apply to up
to 100,000 vehicles total, spread over
the four year period of MY 2012 through
2015. Thus, the number of vehicles to
which the flexibility could apply is
limited. EPA also is proposing
appropriate restrictions on credit use for
these vehicles, as discussed further in
Section III. By MY 2016, these
allowance vehicles must be averaged
into the manufacturer’s full fleet (i.e.,
they are no longer eligible for a different
standard). EPA discusses this in more
detail in Section III.B of the preamble.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
5. Additional Credit Opportunities
Under the CAA
EPA is proposing additional
opportunities for early credits in MYs
2009–2011 through over-compliance
with a baseline standard. The baseline
standard would be set to be equivalent,
64 EPCA does not permit such an allowance.
Consequently, manufacturers who may be able to
take advantage of a lead-time allowance under the
proposed GHG standards would be required to
comply with the applicable CAFE standard or be
subject to penalties for non-compliance.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
on a national level, to the California
standards. Potentially, credits could be
generated by over-compliance with this
baseline in one of two ways—overcompliance by the fleet of vehicles sold
in California and the CAA section 177
States (i.e., those States adopting the
California program), or over-compliance
with the fleet of vehicles sold in the 50
States. EPA is also proposing early
credits based on over-compliance with
CAFE, but only for vehicles sold in
States outside of California and the CAA
section 177 States. Under the proposed
early credit provisions, no early FFV
credits would be allowed, except those
achieved by over-compliance with the
California program based on California’s
provisions that manufacturers
demonstrate actual use of the alternative
fuel. EPA’s proposed early credits
options are designed to ensure that there
would be no double counting of early
credits. Consistent with this paragraph,
NHTSA notes, however, that credits for
overcompliance with CAFE standards
during MYs 2009–2011 will still be
available for manufacturers to use
toward compliance in future model
years, just as before.
EPA is proposing additional credit
opportunities to encourage the
commercialization of advanced GHG/
fuel economy control technologies, such
as electric vehicles, plug-in hybrid
electric vehicles, and fuel cell vehicles.
These proposed advanced technology
credits are in the form of a multiplier
that would be applied to the number of
vehicles sold, such that each eligible
vehicle counts as more than one vehicle
in the manufacturer’s fleet average. EPA
is also proposing to allow early
advanced technology credits to be
generated beginning in MYs 2009
through 2011.
EPA is also proposing an Option for
manufacturers to generate credits for
employing technologies that achieve
GHG reductions that are not reflected on
current test procedures. Examples of
such ‘‘off-cycle’’ technologies might
include solar panels on hybrids,
adaptive cruise control, and active
aerodynamics, among other
technologies. EPA is seeking comments
on the best ways to quantify such
credits to ensure any off-cycle credits
applied for by a manufacturer are
verifiable, reflect real-world reductions,
based on repeatable test procedures, and
are developed through a transparent
process allowing appropriate
opportunities for public comment.
G. Coordinated Compliance
Previous NHTSA and EPA regulations
and statutory provisions establish ample
examples on which to develop an
PO 00000
Frm 00031
Fmt 4701
Sfmt 4702
49483
effective compliance program that
achieves the energy and environmental
benefits from CAFE and motor vehicle
GHG standards. NHTSA and EPA are
proposing a program that recognizes,
and replicates as closely as possible, the
compliance protocols associated with
the existing CAA Tier 2 vehicle
emission standards, and with CAFE
standards. The certification, testing,
reporting, and associated compliance
activities closely track current practices
and are thus familiar to manufacturers.
EPA already oversees testing, collects
and processes test data, and performs
calculations to determine compliance
with both CAFE and CAA standards.
Under this proposed coordinated
approach, the compliance mechanisms
for both programs are consistent and
non-duplicative. EPA will also apply
the CAA authorities applicable to its
separate in-use requirements in this
program.
The proposed approach allows
manufacturers to satisfy the new
program requirements in the same
general way they comply with existing
applicable CAA and CAFE
requirements. Manufacturers would
demonstrate compliance on a fleetaverage basis at the end of each model
year, allowing model-level testing to
continue throughout the year as is the
current practice for CAFE
determinations. The proposed
compliance program design establishes
a single set of manufacturer reporting
requirements and relies on a single set
of underlying data. This approach still
allows each agency to assess compliance
with its respective program under its
respective statutory authority.
NHTSA and EPA do not anticipate
any significant noncompliance under
the proposed program. However, failure
to meet the fleet average standards (after
credit opportunities are exhausted)
would ultimately result in the potential
for penalties under both EPCA and the
CAA. The CAA allows EPA
considerable discretion in assessment of
penalties. Penalties under the CAA are
typically determined on a vehiclespecific basis by determining the
number of a manufacturer’s highest
emitting vehicles that caused the fleet
average standard violation. This is the
same mechanism used for EPA’s
National Low Emission Vehicle and Tier
2 corporate average standards, and to
date there have been no instances of
noncompliance. CAFE penalties are
specified by EPCA and would be
assessed for the entire noncomplying
fleet at a rate of $5.50 times the number
of vehicles in the fleet, times the
number of tenths of mpg by which the
fleet average falls below the standard. In
E:\FR\FM\28SEP2.SGM
28SEP2
49484
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
the event of a compliance action arising
out of the same facts and circumstances,
EPA could consider CAFE penalties
when determining appropriate remedies
for the EPA case.
H. Conclusion
This joint proposal by NHTSA and
EPA represents a strong and coordinated
National Program to achieve greenhouse
gas emission reductions and fuel
economy improvements from the lightduty vehicle part of the transportation
sector. EPA’s proposal for GHG
standards under the Clean Air Act is
discussed in Section III of this notice;
NHTSA’s proposal for CAFE standards
under EPCA is discussed in Section IV.
Each agency includes analyses on a
variety of relevant issues under its
respective statute, such as feasibility of
the proposed standards, costs and
benefits of the proposal, and effects on
the economy, auto manufacturers, and
consumers. This joint rulemaking
proposal reflects a carefully coordinated
and harmonized approach to developing
and implementing standards under the
two agencies’ statutes and is in
accordance with all substantive and
procedural requirements required by
law.
NHTSA and EPA believe that the MY
2012 through 2016 standards proposed
would provide substantial reductions in
emissions of GHGs and oil
consumption, with significant fuel
savings for consumers. The proposed
program is technologically feasible at a
reasonable cost, based on deployment of
available and effective control
technology across the fleet, and industry
would have the opportunity to plan over
several model years and incorporate the
vehicle upgrades into the normal
redesign cycles. The proposed program
would result in enormous societal net
benefits, including greenhouse gas
emission reductions, fuel economy
savings, improved energy security, and
cost savings to consumers from reduced
fuel utilization.
II. Joint Technical Work Completed for
This Proposal
mstockstill on DSKH9S0YB1PROD with PROPOSALS
A. Introduction
In this section NHTSA and EPA
discuss several aspects of the joint
technical analyses the two agencies
collaborated on which are common to
the development of each agency’s
proposed standards. Specifically we
discuss: The development of the
baseline vehicle market forecast used by
each agency, the development of the
proposed attribute-based standard curve
shapes, how the relative stringency
between the car and truck fleet
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
standards for this proposal was
determined, which technologies the
agencies evaluated and their costs and
effectiveness, and which economic
assumptions the agencies included in
their analyses. The joint Technical
Support Document (TSD) discusses the
agencies’ joint technical work in more
detail.
B. How Did NHTSA and EPA Develop
the Baseline Market Forecast?
1. Why Do the Agencies Establish a
Baseline Vehicle Fleet?
In order to calculate the impacts of
the EPA and NHTSA proposed
regulations, it is necessary to estimate
the composition of the future vehicle
fleet absent these proposed regulations
in order to conduct comparisons. EPA
and NHTSA have developed a
comparison fleet in two parts. The first
step was to develop a baseline fleet
based on model year 2008 data. The
second step was to project that fleet into
2011–2016. This is called the reference
fleet. The third step was to modify that
2011–2016 reference fleet such that it
had sufficient technologies to meet the
2011 CAFE standards. This final
‘‘reference fleet’’ is the light duty fleet
estimated to exist in 2012–2016 if these
proposed rules are not adopted. Each
agency developed a final reference fleet
to use in its modeling. All of the
agencies’ estimates of emission
reductions, fuel economy
improvements, costs, and societal
impacts are developed in relation to the
respective reference fleets.
2. How Do the Agencies Develop the
Baseline Vehicle Fleet?
EPA and NHTSA have based the
projection of total car and total light
truck sales on recent projections made
by the Energy Information
Administration (EIA). EIA publishes a
long-term projection of national energy
use annually called the Annual Energy
Outlook. This projection utilizes a
number of technical and econometric
models which are designed to reflect
both economic and regulatory
conditions expected to exist in the
future. In support of its projection of
fuel use by light-duty vehicles, EIA
projects sales of new cars and light
trucks. Due to the state of flux of both
energy prices and the economy, EIA
published three versions of its 2009
Annual Energy Outlook. The
Preliminary 2009 report was published
early (in November 2008) in order to
reflect the dramatic increase in fuel
prices which occurred during 2008 and
which occurred after the development
of the 2008 Annual Energy Outlook. The
PO 00000
Frm 00032
Fmt 4701
Sfmt 4702
official 2009 report was published in
March of 2009. A third 2009 report was
published a month later which reflected
the economic stimulus package passed
by Congress earlier this year. We use the
sales projections of this latest report,
referred to as the updated 2009 Annual
Energy Outlook, here.
In their updated 2009 report, EIA
projects that total light-duty vehicle
sales will gradually recover from their
currently depressed levels by roughly
2013. In 2016, car and light truck sales
are projected to be 9.5 and 7.1 million
units, respectively. While the total level
of sales of 16.6 million units is similar
to pre-2008 levels, the fraction of car
sales is higher than that existing in the
2000–2007 timeframe. This presumably
reflects the impact of higher fuel prices
and that fact that cars tend to have
higher levels of fuel economy than
trucks. We note that EIA’s definition of
cars and trucks follows that used by
NHTSA prior to the MY 2011 CAFE
final rule published earlier this year.
That recent CAFE rule, which
established the MY 2011 standards,
reclassified a number of 2-wheel drive
sport utility vehicles from the truck fleet
to the car fleet. This has the impact of
shifting a considerable number of
previously defined trucks into the car
category. Sales projections of cars and
trucks for all future model years can be
found in the draft Joint TSD for this
proposal.
In addition to a shift towards more car
sales, sales of segments within both the
car and truck markets have also been
changing and are expected to continue
to change in the future. Manufacturers
are introducing more crossover models
which offer much of the utility of SUVs
but using more car-like designs. In order
to reflect these changes in fleet makeup,
EPA and NHTSA considered several
available forecasts. After review EPA
purchased and shared with NHTSA
forecasts from two well-known industry
analysts, CSM–Worldwide (CSM), and
J.D. Powers. NHTSA and EPA decided
to use the forecast from CSM, for several
reasons. One, CSM agreed to allow us to
publish the data, on which our forecast
is based, in the public domain.65 Two,
it covered nearly all the timeframe of
greatest relevance to this proposed rule
(2012–2015 model years). Three, it
provided projections of vehicle sales
both by manufacturer and by market
segment. Four, it utilized market
segments similar to those used in the
65 The CSM data made public includes only the
higher level volume projections by market segment
and manufacturer. The projections by nameplate
and model are strictly the agencies’ estimates based
on these higher level CSM segment and
manufacturer distribution.
E:\FR\FM\28SEP2.SGM
28SEP2
49485
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
2014–2015 the changes were relatively
small. Therefore, we assumed 2016
market share and market segments to be
the same as for 2015. To the extent that
the agencies have received CSM
forecasts for 2016, we will consider
using them for the final rule.
We then projected the CSM forecasts
for relative sales of cars and trucks by
manufacturer and by market segment on
to the total sales estimates of the
updated 2009 Annual Energy Outlook.
Tables II.B.1–1 and II.B.1–2 show the
EPA emission certification program and
fuel economy guide. As discussed
further below, this allowed the CSM
forecast to be combined with other data
obtained by NHTSA and EPA. We also
assumed that the breakdowns of car and
truck sales by manufacturer and by
market segment for 2016 model year and
beyond were the same as CSM’s forecast
for 2015 calendar year. The changes
between company market share and
industry market segments were most
significant from 2011–2014, while for
resulting projections for the 2016 model
year and compare these to actual sales
which occurred in 2008 model year.
Both tables show sales using the
traditional or classic definition of cars
and light trucks. Determining which
classic trucks will be defined as cars
using the revised definition established
by NHTSA earlier this year and
included in this proposed rule requires
more detailed information about each
vehicle model which is developed next.
TABLE II.B.2–1—ANNUAL SALES OF LIGHT-DUTY VEHICLES BY MANUFACTURER IN 2008 AND ESTIMATED FOR 2016
Cars
2008 MY
Light trucks
2016 MY
2008 MY
Total
2016 MY
2008 MY
2016 MY
BMW ....................................................................
Chrysler ................................................................
Daimler .................................................................
Ford ......................................................................
General Motors ....................................................
Honda ...................................................................
Hyundai ................................................................
Kia ........................................................................
Mazda ..................................................................
Mitsubishi .............................................................
Porsche ................................................................
Nissan ..................................................................
Subaru ..................................................................
Suzuki ..................................................................
Tata ......................................................................
Toyota ..................................................................
Volkswagen ..........................................................
291,796
537,808
208,052
641,281
1,370,280
899,498
270,293
145,863
191,326
76,701
18,909
653,121
149,370
68,720
9,596
1,143,696
290,385
380,804
110,438
235,205
990,700
1,562,791
1,429,262
437,329
255,954
290,010
49,697
37,064
985,668
128,885
69,452
41,584
1,986,824
476,699
61,324
1,119,397
79,135
1,227,107
1,749,227
612,281
120,734
135,589
111,220
24,028
18,797
370,294
49,211
45,938
55,584
1,067,804
26,999
134,805
133,454
109,917
1,713,376
1,571,037
812,325
287,694
162,515
112,837
10,872
17,175
571,748
75,841
34,307
47,105
1,218,223
99,459
353,120
1,657,205
287,187
1,868,388
3,119,507
1,511,779
391,027
281,452
302,546
100,729
37,706
1,023,415
198,581
114,658
65,180
2,211,500
317,384
515,609
243,891
345,122
2,704,075
3,133,827
2,241,586
725,024
418,469
402,847
60,569
54,240
1,557,416
204,726
103,759
88,689
3,205,048
576,158
Total ..............................................................
6,966,695
9,468,365
6,874,669
7,112,689
13,841,364
16,581,055
TABLE II.B.2–2—ANNUAL SALES OF LIGHT-DUTY VEHICLES BY MARKET SEGMENT IN 2008 AND ESTIMATED FOR 2016
Cars
Light trucks
2008 MY
2016 MY
Full-Size Car .........................................
Mid-Size Car .........................................
Small/Compact Car ...............................
730,355
1,970,494
1,850,522
466,616
2,641,739
2,444,479
Subcompact/Mini Car ............................
599,643
1,459,138
Luxury Car ............................................
Specialty Car .........................................
Others ...................................................
1,057,875
754,547
3,259
1,432,162
1,003,078
21,153
Total Sales .....................................
6,966,695
9,468,365
2008 MY
2016 MY
Full-Size Pickup ...................................
Mid-Size Pickup ...................................
Full-Size Van ........................................
Mid-Size Van ........................................
Mid-Size MAV * ....................................
Small MAV ...........................................
Full-Size SUV* .....................................
Mid-Size SUV .......................................
Small SUV ............................................
Full-Size CUV * .....................................
Mid-Size CUV .......................................
Small CUV ............................................
1,195,073
598,197
33,384
719,529
191,448
235,524
530,748
347,026
377,262
406,554
798,335
1,441,589
1,475,881
510,580
284,110
615,349
158,930
289,880
90,636
110,155
124,397
319,201
1,306,770
1,866,580
...............................................................
6,874,669
7,152,470
mstockstill on DSKH9S0YB1PROD with PROPOSALS
* MAV—Multi-Activity Vehicle, SUV—Sport Utility Vehicle, CUV—Crossover Utility Vehicle.
The agencies recognize that CSM
forecasts a very significant reduction in
market share for Chrysler. This may be
a result of the extreme uncertainty
surrounding Chrysler in early 2009. The
forecast from CSM used in this proposal
is CSM’s forecast from the 2nd quarter
of 2009. CSM also provided to the
agencies an updated forecast in the 3rd
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
quarter of 2009, which we were unable
to use for this proposal due to time
constraints. However, we have placed a
copy of the 3rd Quarter CSM forecast in
the public docket for this rulemaking,
and we will consider its use, and any
further updates from CSM or other data
received during the comment period
when developing the analysis for the
PO 00000
Frm 00033
Fmt 4701
Sfmt 4702
final rule.66 CSM’s forecast for Chrysler
for the 3rd quarter of 2009 was
significantly increased compared to the
2nd quarter, by nearly a factor of two
66 ‘‘CSM North America Sales Forecast
Comparison 2Q09 3Q09 For Docket.’’ 2nd and 3rd
quarter forecasting results from CSM World Wide
(Docket EPA–HQ–OAR–2009–0472).
E:\FR\FM\28SEP2.SGM
28SEP2
49486
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
increase in projected sales over the
2012–2015 time frame.
The forecasts obtained from CSM
provided estimates of car and trucks
sales by segment and by manufacturer,
but not by manufacturer for each market
segment. Therefore, we needed other
information on which to base these
more detailed market splits. For this
task, we used as a starting point each
manufacturer’s sales by market segment
from model year 2008. Because of the
larger number of segments in the truck
market, we used slightly different
methodologies for cars and trucks.
The first step for both cars and trucks
was to break down each manufacturer’s
2008 sales according to the market
segment definitions used by CSM. For
example, we found that Ford’s car sales
in 2008 were broken down as shown in
Table II.B.2–3:
TABLE II.B.2–3—BREAKDOWN OF
FORD’S 2008 CAR SALES
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Full-size cars .................
Mid-size cars .................
Small/Compact cars ......
Subcompact/Mini cars ...
Luxury cars ...................
Specialty cars ................
76,762 units.
170,399 units.
180,249 units.
None.
100,065 units.
110,805 units.
We then adjusted each manufacturer’s
sales of each of its car segments (and
truck segments, separately) so that the
manufacturer’s total sales of cars (and
trucks) matched the total estimated for
each future model year based on EIA
and CSM forecasts. For example, as
indicated in Table II.B.2–1, Ford’s total
car sales in 2008 were 641,281 units,
while we project that they will increase
to 990,700 units by 2016. This
represents an increase of 54.5 percent.
Thus, we increased the 2008 sales of
each Ford car segment by 54.5 percent.
This produced estimates of future sales
which matched total car and truck sales
per EIA and the manufacturer
breakdowns per CSM (and exemplified
for 2016 in Table II.B.1–1). However, the
sales splits by market segment would
not necessarily match those of CSM
(and exemplified for 2016 in Table
II.B.2–2).
In order to adjust the market segment
mix for cars, we first adjusted sales of
luxury, specialty and other cars. Since
the total sales of cars for each
manufacturer were already set, any
changes in the sales of one car segment
had to be compensated by the opposite
change in another segment. For the
luxury, specialty and other car
segments, it is not clear how changes in
sales would be compensated. For
example, if luxury car sales decreased,
would sales of full-size cars increase,
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
mid-size cars, etc.? Thus, any changes in
the sales of cars within these three
segments were assumed to be
compensated for by proportional
changes in the sales of the other four car
segments. For example, for 2016, the
figures in Table II.B.2–2 indicate that
luxury car sales in 2016 are 1,432,162
units. Luxury car sales are 1,057,875
units in 2008. However, after adjusting
2008 car sales by the change in total car
sales for 2016 projected by EIA and a
change in manufacturer market share
per CSM, luxury car sales increased to
1,521,892 units. Thus, overall for 2016,
luxury car sales had to decrease by
89,730 units or 6 percent. We decreased
the luxury car sales by each
manufacturer by this percentage. The
absolute decrease in luxury car sales
was spread across sales of full-size, midsize, compact and subcompact cars in
proportion to each manufacturer’s sales
in these segments in 2008. The same
adjustment process was used for
specialty cars and the ‘‘other cars’’
segment defined by CSM.
A slightly different approach was
used to adjust for changing sales of the
remaining four car segments. Starting
with full-size cars, we again determined
the overall percentage change that
needed to occur in future year full-size
cars sales after (1) adjusting for total
sales per EIA, (2) manufacturer sales
mix per CSM and (3) adjustments in the
luxury, specialty and other car
segments, in order to meet the segment
sales mix per CSM. Sales of each
manufacturer’s large cars were adjusted
by this percentage. However, instead of
spreading this change over the
remaining three segments, we assigned
the entire change to mid-size vehicles.
We did so because, as shown in 2008,
higher fuel prices tend to cause car
purchasers to purchase smaller vehicles.
We are using AEO 2009 for this
analysis, which assumes fuel prices
similar in magnitude to actual high fuel
prices seen in the summer of 2008.67
However, if a consumer had previously
purchased a full-size car, we thought it
unlikely that they would jump all the
way to a subcompact. It seemed more
reasonable to project that they would
drop one vehicle size category smaller.
Thus, the change in each manufacturer’s
sales of full-size cars was matched by an
opposite change (in absolute units sold)
in mid-size cars.
The same process was then applied to
mid-size cars, with the change in midsize car sales being matched by an
67 J.D. Power and Associates, Press Release, May
16, 2007. ‘‘Rising Gas Prices Begin to Sway NewVehicle Owners Toward Smaller Versions of Trucks
and Utility Vehicles.’’
PO 00000
Frm 00034
Fmt 4701
Sfmt 4702
opposite change in compact car sales.
This process was repeated one more
time for compact car sales, with changes
in sales in this segment being matched
by the opposite change in the sales of
subcompacts. The overall result was a
projection of car sales for 2012–2016
which matched the total sales
projections of EIA and the manufacturer
and segment splits of CSM. These sales
splits can be found in Chapter 1 of the
draft Joint Technical Support Document
for this proposal.
As mentioned above, a slightly
different process was applied to truck
sales. The reason for this was we could
not confidently project how the change
in sales from one segment preferentially
went to or came from another particular
segment. Some trend from larger
vehicles to smaller vehicles would have
been possible. However, the CSM
forecasts indicated large changes in total
sport utility vehicle, multi-activity
vehicle and cross-over sales which
could not be connected. Thus, we
applied an iterative, but straightforward
process for adjusting 2008 truck sales to
match the EIA and CSM forecasts.
The first three steps were exactly the
same as for cars. We broke down each
manufacturer’s truck sales into the truck
segments as defined by CSM. We then
adjusted all manufacturers’ truck
segment sales by the same factor so that
total truck sales in each model year
matched EIA projections for truck sales
by model year. We then adjusted each
manufacturer’s truck sales by segment
proportionally so that each
manufacturer’s percentage of total truck
sales matched that forecast by CSM.
This again left the need to adjust truck
sales by segment to match the CSM
forecast for each model year.
In the fourth step, we adjusted the
sales of each truck segment by a
common factor so that total sales for that
segment matched the combination of the
EIA and CSM forecasts. For example,
sales of large pickups across all
manufacturers were 1,144,166 units in
2016 after adjusting total sales to match
EIA’s forecast and adjusting each
manufacturer’s truck sales to match
CSM’s forecast for the breakdown of
sales by manufacturer. Applying CSM’s
forecast of the large pickup segment of
truck sales to EIA’s total sales forecast
indicated total large pickup sales of
1,475,881 units. Thus, we increased
each manufacturer’s sales of large
pickups by 29 percent. The same type
of adjustment was applied to all the
other truck segments at the same time.
The result was a set of sales projections
which matched EIA’s total truck sales
projection and CSM’s market segment
forecast. However, after this step, sales
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
by manufacturer no longer met CSM’s
forecast. Thus, we repeated step three
and adjusted each manufacturer’s truck
sales so that they met CSM’s forecast.
The sales of each truck segment (by
manufacturer) were adjusted by the
same factor. The resulting sales
projection matched EIA’s total truck
sales projection and CSM’s
manufacturer forecast, but sales by
market segment no longer met CSM’s
forecast. However, the difference
between the sales projections after this
fifth step was closer to CSM’s market
segment forecast than it was after step
three. In other words, the sales
projection was converging. We repeated
these adjustments, matching
manufacturer sales mix in one step and
then market segment in the next for a
total of 19 times. At this point, we were
able to match the market segment splits
exactly and the manufacturer splits
were within 0.1% of our goal, which is
well within the needs of this analysis.
The next step in developing the
baseline fleet was to characterize the
vehicles within each manufacturersegment combination. In large part, this
was based on the characterization of the
specific vehicle models sold in 2008.
EPA and NHTSA chose to base our
estimates of detailed vehicle
characteristics on 2008 sales for several
reasons. One, these vehicle
characteristics are not confidential and
can thus be published here for careful
review and comment by interested
parties. Two, being actual sales data,
this vehicle fleet represents the
distribution of consumer demand for
utility, performance, safety, etc.
We gathered most of the information
about the 2008 vehicle fleet from EPA’s
emission certification and fuel economy
database. The data obtained from this
source included vehicle production
volume, fuel economy, engine size,
number of engine cylinders,
transmission type, fuel type, etc. EPA’s
certification database does not include a
detailed description of the types of fuel
economy-improving/CO2-reducing
technologies considered in this
proposal. Thus, we augmented this
description with publicly available data
which includes more complete
technology descriptions from Ward’s
Automotive Group.68 In a few instances
when required vehicle information was
not available from these two sources
(such as vehicle footprint), we obtained
this information from publicly
accessible Internet sites such as
Motortrend.com and Edmunds.com.69
The projections of future car and
truck sales described above apply to
each manufacturer’s sales by market
segment. The EPA emissions
certification sales data are available at a
much finer level of detail, essentially
vehicle configuration. As mentioned
above, we placed each vehicle in the
EPA certification database into one of
the CSM market segments. We then
totaled the sales by each manufacturer
for each market segment. If the
combination of EIA and CSM forecasts
indicated an increase in a given
manufacturer’s sales of a particular
market segment, then the sales of all the
individual vehicle configurations were
adjusted by the same factor. For
example, if the Prius represented 30%
of Toyota’s sales of compact cars in
2008 and Toyota’s sales of compact cars
in 2016 was projected to double by
2016, then the sales of the Prius were
doubled, and the Prius sales in 2016
remained 30% of Toyota’s compact car
sales.
NHTSA and EPA request comment on
the methodology and data sources used
for developing the baseline vehicle fleet
for this proposal and the reasonableness
of the results.
68 Note that WardsAuto.com is a fee-based
service, but all information is public to subscribers.
69 Motortrend.com and Edmunds.com are free,
no-fee Internet sites.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
3. How Is the Development of the
Baseline Fleet for This Proposal
Different From NHTSA’s Historical
Approach, and Why Is This Approach
Preferable?
NHTSA has historically based its
analysis of potential new CAFE
standards on detailed product plans the
agency has requested from
manufacturers planning to produce light
vehicles for sale in the United States.
Although the agency has not attempted
to compel manufacturers to submit such
information, most major manufacturers
and some smaller manufacturers have
voluntarily provided it when requested.
As in this and other prior
rulemakings, NHTSA has requested
extensive and detailed information
regarding the models that manufacturers
plan to offer, as well as manufacturers’
estimates of the volume of each model
they expect to produce for sale in the
U.S. NHTSA’s recent requests have
sought information regarding a range of
engineering and planning characteristics
for each vehicle model (e.g., fuel
economy, engine, transmission, physical
dimensions, weights and capacities,
redesign schedules), each engine (e.g.,
fuel type, fuel delivery, aspiration,
valvetrain configuration, valve timing,
PO 00000
Frm 00035
Fmt 4701
Sfmt 4702
49487
valve lift, power and torque ratings),
and each transmission (e.g., type,
number of gears, logic).
The information that manufacturers
have provided in response to these
requests has varied in completeness and
detail. Some manufacturers have
submitted nearly all of the information
NHTSA has requested, have done so for
most or all of the model years covered
by NHTSA’s requests, and have closely
followed NHTSA’s guidance regarding
the structure of the information. Other
manufacturers have submitted partial
information, information for only a few
model years, and/or information in a
structure less amenable to analysis. Still
other manufacturers have not responded
to NHTSA’s requests or have responded
on occasion, usually with partial
information.
In recent rulemakings, NHTSA has
integrated this information and
estimated missing information based on
a range of public and commercial
sources (such as those used to develop
today’s market forecast). For
unresponsive manufacturers, NHTSA
has estimated fleet composition based
on the latest-available CAFE compliance
data (the same data used as part of the
foundation for today’s market forecast).
NHTSA has then adjusted the size of the
fleet based on AEO’s forecast of the light
vehicle market and normalized
manufacturers’ market shares based on
the latest-available CAFE compliance
data.
Compared to this approach, the
market forecast the agencies have
developed for this analysis has both
advantages and disadvantages.
Most importantly, today’s market
forecast is much more transparent. The
information sources used to develop
today’s market forecast are all either in
the public domain or available
commercially. Therefore, NHTSA and
EPA are able to make public the market
inputs actually used in the agencies’
respective modeling systems, such that
any reviewer may independently repeat
and review the agencies’ analyses.
Previously, although NHTSA provided
this type of information to
manufacturers upon request (e.g., GM
requested and received outputs specific
to GM), NHTSA was otherwise unable
to release market inputs and the most
detailed model outputs (i.e., the outputs
containing information regarding
specific vehicle models) because doing
so would violate requirements
protecting manufacturers’ confidential
business information from disclosure.70
Therefore, this approach provides much
greater opportunity for the public to
70 See
E:\FR\FM\28SEP2.SGM
49 CFR part 512.
28SEP2
49488
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
review every aspect of the agencies’
analyses and comment accordingly.
Another significant advantage of
today’s market forecast is the agencies’
ability to assess more fully the
incremental costs and benefits of the
proposed standards. In the past two
years, NHTSA has requested and
received three sets of future product
plan submissions from the automotive
companies, most recently this past
spring. These submissions are intended
to be the actual future product plans for
the companies. In the most recent
submission it is clear that many of the
firms have been and are clearly
planning for future CAFE standard
increases for model years 2012 and
later. The results for the product plans
for many firms are a significant increase
in their projected future application of
fuel economy improvement technology.
However, for the purposes of assessing
the costs of the model year 2012–2016
standards the use of the product plans
presents a difficulty, namely, how to
assess the increased costs of the
proposed future standards if the
companies have already anticipated the
future standards and the costs are
therefore now part of the agencies’
baseline. This is a real concern with the
most recent product plans received from
the companies, and is one of the reasons
the agencies have decided not to use the
recent product plans to define the
baseline market data for assessing our
proposed standards. The approach used
for this proposal does not raise this
concern, as the underlying data comes
from model year 2008 production.71
In addition, by developing a baseline
fleet from common sources, the agencies
have been able to avoid some errors—
perhaps related to interpretation of
requests—that have been observed in
past responses to NHTSA’s requests. For
example, while reviewing information
submitted to support the most recent
CAFE rulemaking, NHTSA staff
discovered that one manufacturer had
misinterpreted instructions regarding
the specification of vehicle track width,
leading to important errors in estimates
of vehicle footprints. Although the
manufacturer resubmitted the
information with corrections, with this
approach, the agencies are able to
reduce the potential for such errors and
71 However, as discussed below, an alternative
approach that NHTSA is exploring would be to use
only manufacturers’ near-term product plans, e.g.,
from MY 2010 or MY 2011. NHTSA believes
manufacturers’ near-term plans should be less
subject to this concern about missing costs and
benefits already included in the baseline. NHTSA
is also hopeful that in connection with the agencies’
rulemaking efforts, manufacturers will be willing to
make their near-term plans available to the public.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
inconsistencies by utilizing common
data sources and procedures.
An additional advantage of the
approach used for this proposal is a
consistent projection of the change in
fuel economy and CO2 emissions across
the various vehicles from the
application of new technology. In the
past, company product plans would
include the application of new fuel
economy improvement technology for a
new or improved vehicle model with
the resultant estimate from the company
of the fuel economy levels for the
vehicle. However, companies did not
always provide to NHTSA the detailed
analysis which showed how they
forecasted what the fuel economy
performance of the new vehicle was—
that is, whether it came from actual test
data, from vehicle simulation modeling,
from best engineering judgment or some
other methodology. Thus, it was not
possible for NHTSA to review the
methodology used by the manufacturer,
nor was it possible to review what
approach the different manufacturers
utilized from a consistency perspective.
With the approach used for this
proposal, the baseline market data
comes from actual vehicles which have
actual fuel economy test data—so there
is no question what is the basis for the
fuel economy or CO2 performance of the
baseline market data as it is actual
measured data.
Another advantage of today’s
approach is that future market shares
are based on a forecast of what will
occur in the future, rather than a static
value. In the past, NHTSA has utilized
a constant market share for each model
year, based on the most recent year
available, for example from the CAFE
compliance data, that is, a forecast of
the 2011–2015 time frame where
company market shares do not change.
In the approach used today, we have
utilized the forecasts from CSM of how
future market shares among the
companies may change over time.72
The approach the agencies have taken
in developing today’s market forecast
does, however, have some
disadvantages. Most importantly, it
produces a market forecast that does not
represent some important changes likely
to occur in the future.
Some of the changes not captured by
today’s approach are specific. For
example, the agencies’ current market
forecast includes some vehicles for
72 We note that market share forecasts like CSM’s
could, of course, be applied to any data used to
create the baseline market forecast. If, as mentioned
above, manufacturers do consent to make public
MY 2010 or 2011 product plan data for the final
rule, the agencies could consider applying market
share forecast to that data as well.
PO 00000
Frm 00036
Fmt 4701
Sfmt 4702
which manufacturers have announced
plans for elimination or drastic
production cuts such as the Chevrolet
Trailblazer, the Chrysler PT Cruiser, the
Chrysler Pacifica, the Dodge Magnum,
the Ford Crown Victoria, the Hummer
H2, the Mercury Sable, the Pontiac
Grand Prix, and the Pontiac G5. These
vehicle models appear explicitly in
market inputs to NHTSA’s analysis, and
are among those vehicle models
included in the aggregated vehicle types
appearing in market inputs to EPA’s
analysis.
Conversely, the agencies’ market
forecast does not include some
forthcoming vehicle models, such as the
Chevrolet Volt, the Chevrolet Camaro,
the Ford Fiesta and several publicly
announced electric vehicles, including
the announcements from Nissan. Nor
does it include several MY 2009 or 2010
vehicles, such as the Honda Insight, the
Hyundai Genesis and the Toyota Venza,
as our starting point for vehicle
definitions was Model Year 2008.
Additionally, the market forecast does
not account for publicly announced
technology introductions, such as Ford’s
EcoBoost system, whose product plans
specify which vehicles and how many
are planned to have this technology.
Were the agencies to rely on
manufacturers’ product plans (that were
submitted), the market forecast would
account for not only these specific
examples, but also for similar examples
that have not yet been announced
publicly.
The agencies anticipate that including
vehicles after MY 2008 would not
significantly impact our estimates of the
technology required to comply with the
proposed standards. If they were
included, these vehicles could make the
standards appear to cost less relative to
the reference case. First, the projections
of sales by vehicle segment and
manufacturer include these expected
new vehicle models. Thus, to the extent
that these new vehicles are expected to
change consumer demand, they should
be reflected in our reference case. While
we are projecting the characteristics of
the new vehicles with MY 2008
vehicles, the primary difference
between the new vehicles and 2008
vehicles in the same vehicle segment is
the use of additional CO2-reducing and
fuel-saving technology. Both the
NHTSA and EPA models add such
technology to facilitate compliance with
the proposed standards. Thus, our
future projections of the vehicle fleet
generally shift vehicle designs towards
those of these newer vehicles. The
advantage of our approach is that it
helps clarify the costs of this proposal,
as the cost of all fuel economy
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
improvements beyond those required by
the MY 2011 CAFE standards are being
assigned to the proposal. In some cases,
the new vehicles being introduced by
manufacturers are actually in response
to their anticipation of this rulemaking.
Our approach prevents some of these
technological improvements and their
associated cost from being assumed in
the baseline. Thus, the added
technology will not be considered to be
free for the purposes of this rule.
We note that, as a result of these
issues, the market file may show sales
volumes for certain vehicles during MYs
2012–2016 even though they will be
discontinued before that time frame.
Although the agencies recognize that
these specific vehicles will be
discontinued, we continue to include
them in the market forecast because
they are useful for representing
successor vehicles that may appear in
the rulemaking time frame to replace the
discontinued vehicles in that market
segment.
Other market changes not captured by
today’s approach are broader. For
example, Chrysler Group LLC has
announced plans to offer small- and
medium-sized cars using Fiat
powertrains. The product plan
submitted by Chrysler includes vehicles
that appear to reflect these plans.
However, none of these specific vehicle
models are included in the market
forecast the agencies have developed
starting with MY 2008 CAFE
compliance data. The product plan
submitted by Chrysler is also more
optimistic with regard to Chrysler’s
market share during MYs 2012–2016
than the market forecast projected by
CSM and used by the agencies for this
proposal. Similarly, the agencies’
market forecast does not reflect Nissan’s
plans regarding electric vehicles.
Additionally, some technical
information that manufacturers have
provided in product plans regarding
specific vehicle models is, at least
insofar as NHTSA and EPA have been
able to determine, not available from
public or commercial sources. While
such gaps do not bear significantly on
the agencies’ analysis, the diversity of
pickup configurations necessitated
utilizing a sales-weighted average
footprint value 73 for many
73 A full-size pickup might be offered with
various combinations of cab style (e.g., regular,
extended, crew) and box length (e.g., 51⁄2′, 61⁄2′, 8′)
and, therefore, multiple footprint sizes. CAFE
compliance data for MY 2008 data does not contain
footprint information, and does not contain
information that can be used to reliably identify
which pickup entries correspond to footprint values
estimable from public or commercial sources.
Therefore, the agencies have used the known
production levels of average values to represent all
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
manufacturers’ pickups. Since our
modeling only utilizes footprint in order
to estimate each manufacturer’s CO2 or
fuel economy standard and all the other
vehicle characteristics are available for
each pickup configuration, this
approximation has no practical impact
on the projected technology or cost
associated with compliance with the
various standards evaluated. The only
impact which could arise would be if
the relative sales of the various pickup
configurations changed, or if the
agencies were to explore standards with
a different shape. This would
necessitate recalculating the average
footprint value in order to maintain
accuracy.
The agencies have carefully
considered these advantages and
disadvantages of using a market forecast
derived from public and commercial
sources rather than from manufacturers’
product plans, and we believe that the
advantages outweigh the disadvantages
for the purpose of proposing standards
for model years 2012–2016. NHTSA’s
inability to release confidential market
inputs and corresponding detailed
outputs from the CAFE model has raised
serious concerns among many observers
regarding the transparency of NHTSA’s
analysis, as well as related concerns that
the lack of transparency might enable
manufacturers to provide unrealistic
information to try to influence NHTSA’s
determination of the maximum feasible
standards. Although NHTSA does not
agree with some observers’ assertions
that some manufacturers have
deliberately provided inaccurate or
otherwise misleading information,
today’s market forecast is fully open and
transparent, and is therefore not subject
to such concerns.
With respect to the disadvantages, the
agencies are hopeful that manufacturers
will, in the future, agree to make public
their plans regarding model years that
are very near, such as MY 2010 or
perhaps MY 2011, so that this
information can be considered for
purposes of the final rule analysis and
be available for the public. In any event,
because NHTSA and EPA are releasing
market inputs used in the agencies’
respective analyses, manufacturers,
variants of a given pickup line (e.g., all variants of
the F–150 and the Sierra/Silverado) in order to
calculate the sales-weighted average footprint value
for each pickup family. Again, this has no impact
on the results of our modeling effort, although it
would require re-estimation if we were to examine
light truck standards of a different shape. In the
extreme, one single footprint value could be used
for every vehicle sold by a single manufacturer as
long as the fuel economy standard associated with
this footprint value represented the sales-weighted,
harmonic average of the fuel economy standards
associated with each vehicle’s footprint values.
PO 00000
Frm 00037
Fmt 4701
Sfmt 4702
49489
suppliers, and other automobile
industry observers and participant can
submit comments on how these inputs
should be improved, as can all other
reviewers.
4. How Does Manufacturer Product Plan
Data Factor into the Baseline Used in
This Proposal?
In the Spring of 2009, many
manufacturers submitted product plans
in response to NHTSA’s request that
they do so.74 NHTSA and EPA both
have access to these plans, and both
agencies have reviewed them in detail.
A small amount of product plan data
was used in the development of the
baseline. The specific pieces of data are:
• Wheelbase;
• Track Width Front;
• Track Width Rear;
• EPS (Electric Power Steering);
• ROLL (Reduced Rolling Resistance);
• LUB (Advance Lubrication i.e., low
weight oil);
• IACC (Improved Electrical
Accessories);
• Curb Weight;
• GVWR (Gross Vehicle Weight
Rating)
The track widths, wheelbase, curb
weight, and GVWR could have been
looked up on the Internet (159 were),
but were taken from the product plans
when available for convenience. To
ensure accuracy, a sample from each
product plan was used as a check
against the numbers available from
Motortrend.com. These numbers will be
published in the baseline file since they
can be easily looked up on the Internet.
On the other hand, EPS, ROLL, LUB,
and IACC are difficult to determine
without using manufacturer’s product
plans. These items will not be published
in the baseline file, but the data has
been aggregated into the EPA baseline in
the technology effectiveness and cost
effectiveness for each vehicle in a way
that allows the baseline for the model to
be published without revealing the
manufacturers’ data.
Considering both the publiclyavailable baseline used in this proposal
and the product plans provided recently
by manufacturers, however, it is
possible that the latter could potentially
be used to develop a more realistic
forecast of product mix and vehicle
characteristics of the near-future lightduty fleet. At the core of concerns about
using company product plans are two
concerns about doing so: (a) Uncertainty
and possible inaccuracy in
manufacturers’ forecasts and (b) the
transparency of using product plan data.
With respect to the first concern, the
74 74
E:\FR\FM\28SEP2.SGM
FR 9185 (Mar. 3, 2009)
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
agencies note that manufacturers’ nearterm forecasts (i.e., for model years two
or three years into the future) should be
less uncertain and more amenable to
eventual retrospective analysis (i.e.,
comparison to actual sales) than
manufacturers’ longer-term forecasts
(i.e., for model years more than five
years into the future). With respect to
the second concern, NHTSA has
consulted with most manufacturers and
believes that although few, if any,
manufacturers would be willing to make
public their longer-term plans, many
responding manufacturers may be
willing to make public their short-term
plans. In a companion notice, NHTSA is
seeking product plan information from
manufacturers for MYs 2008 to 2020,
and the agencies will also continue to
consult with manufacturers regarding
the possibility of releasing plans for MY
2010 and/or MY 2011 for purposes of
developing and analyzing the final GHG
and CAFE standards for MYs 2012–
2016. The agencies are hopeful that
manufacturers will agree to do so, and
that NHTSA and EPA would therefore
be able to use product plans in ways
that might aid in increasing the
accuracy of the baseline market forecast.
C. Development of Attribute-Based
Curve Shapes
NHTSA and EPA are setting attributebased CAFE and CO2 standards that are
defined by a mathematical function for
MYs 2012–2016 passenger cars and light
trucks. EPCA, as amended by EISA,
expressly requires that CAFE standards
for passenger cars and light trucks be
based on one or more vehicle attributes
related to fuel economy, and be
expressed in the form of a mathematical
function.75 The CAA has no such
requirement, though in past rules, EPA
has relied on both universal and
attribute-based standards (e.g., for
nonroad engines, EPA uses the attribute
of horsepower). However, given the
advantages of using attribute-based
standards and given the goal of
coordinating and harmonizing CO2
standards promulgated under the CAA
and CAFE standards promulgated under
EPCA, as expressed in the joint NOI,
EPA is also proposing to issue standards
that are attribute-based and defined by
mathematical functions.
Under an attribute-based standard,
every vehicle model has a performance
target (fuel economy and GHG
emissions for CAFE and GHG emissions
standards, respectively), the level of
which depends on the vehicle’s
TARGET =
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Because the format is linear on a
gallons-per-mile basis, not on a milesper-gallon basis, it is plotted as fuel
75 49
U.S.C. 32902(a)(3)(A).
for sale in the United States.
76 Production
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
attribute (for this proposal, footprint).
The manufacturers’ fleet average
performance is determined by the
production-weighed 76 average (for
CAFE, harmonic average) of those
targets. NHTSA and EPA are proposing
CAFE and CO2 emissions standards
defined by constrained linear functions
and, equivalently, piecewise linear
functions.77 As a possible option for
future rulemakings, the constrained
linear form was introduced by NHTSA
in the 2007 NPRM proposing CAFE
standards for MY 2011–2015. Described
mathematically, the proposed
constrained linear function is defined
according to the following formula: 78
Where:
TARGET = the fuel economy target (in mpg)
applicable to vehicles of a given
footprint (FOOTPRINT, in square feet),
a = the function’s upper limit (in mpg),
b = the function’s lower limit (in mpg),
c = the slope (in gpm per square foot) of the
sloped portion of the function,
d = the intercept (in gpm) of the sloped
portion of the function (that is, the value
the sloped portion would take if
extended to a footprint of 0 square feet,
and the MIN and MAX functions take the
minimum and maximum, respectively,
of the included values; for example,
MIN(1,2) = 1, MAX(1,2) = 2, and
MIN[MAX(1,2),3)] = 2.
1
1 ⎞ 1⎤
⎡
⎛
MIN ⎢ MAX ⎜ c × FOOTPRINT + d , ⎟ , ⎥
a ⎠ b⎦
⎝
⎣
consumption below. Graphically, the
constrained linear form appears as
shown in Figure II.C.1–1.
BILLING CODE 4910–59–P
77 The equations are equivalent but are specified
differently due to differences in the agencies’
respective models.
PO 00000
Frm 00038
Fmt 4701
Sfmt 4702
78 This function is linear in fuel consumption but
not in fuel economy.
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.004</MATH>
49490
The specific form and stringency for
each fleet (passenger cars and light
trucks) and model year are defined
through specific values for the four
coefficients shown above.
EPA is proposing the equivalent
equation below for assigning CO2 targets
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
to an individual vehicle’s footprint
value. Although the general model of
the equation is the same for each vehicle
category and each year, the parameters
of the equation differ for cars and
trucks. Each parameter also changes on
an annual basis, resulting in the yearly
PO 00000
Frm 00039
Fmt 4701
Sfmt 4702
49491
increases in stringency seen in the
tables above. Described mathematically,
EPA’s proposed piecewise linear
function is as follows:
Target = a, if x ≤ l
Target = cx + d, if l < x ≤ h
Target = b, if x > h
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.005</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
In the constrained linear form applied
by NHTSA, this equation takes the
simplified form:
Target = MIN [MAX (c * x + d, a), b]
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Where:
Target = the CO2 target value for a given
footprint (in g/mi)
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
a = the minimum target value (in g/mi CO2)
b = the maximum target value (in g/mi CO2)
c = the slope of the linear function (in g/mi
per sq ft CO2)
d = is the intercept or zero-offset for the line
(in g/mi CO2)
x = footprint of the vehicle model (in square
feet, rounded to the nearest tenth)
PO 00000
Frm 00040
Fmt 4701
Sfmt 4725
l & h are the lower and higher footprint limits
or constraints or (‘‘kinks’’) or the
boundary between the flat regions and
the intermediate sloped line (in sq ft)
Graphically, piecewise linear form,
like the constrained linear form, appears
as shown in Figure II.C.1–2.
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.006</GPH>
49492
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
BILLING CODE 4910–59–C
As for the constrained linear form, the
specific form and stringency for each
fleet (passenger car and light trucks) and
model year are defined through specific
values for the four coefficients shown
above.
For purposes of this rule, NHTSA and
EPA developed the basic curve shapes
using methods similar to those applied
by NHTSA in fitting the curves defining
the MY 2011 standards. The first step is
defining the reference market inputs (in
the form used by NHTSA’s CAFE
model) described in Section II.B of this
preamble and in Chapter 1 of the joint
TSD. However, because the baseline
fleet is technologically heterogeneous,
NHTSA used the CAFE model to
develop a fleet to which nearly all the
technologies discussed in Chapter 3 of
the joint TSD 79 were applied, by taking
the following steps: (1) Treating all
manufacturers as unwilling to pay civil
penalties rather than applying
technology, (2) applying any technology
at any time, irrespective of scheduled
vehicle redesigns or freshening, and (3)
ignoring ‘‘phase-in caps’’ that constrain
the overall amount of technology that
can be applied by the model to a given
manufacturer’s fleet. These steps helped
to increase technological parity among
vehicle models, thereby providing a
better basis (than the baseline or
reference fleets) for estimating the
statistical relationship between vehicle
size and fuel economy.
In fitting the curves, NHTSA also
continued to apply constraints to limit
the function’s value for both the
smallest and largest vehicles. Without a
limit at the smallest footprints, the
function—whether logistic or linear—
can reach values that would be unfairly
burdensome for a manufacturer that
elects to focus on the market for small
vehicles; depending on the underlying
data, an unconstrained form could
apply to the smallest vehicles targets
that are simply unachievable. Limiting
the function’s value for the smallest
vehicles ensures that the function
remains technologically achievable at
small footprints, and that it does not
unduly burden manufacturers focusing
on small vehicles. On the other side of
the function, without a limit at the
largest footprints, the function may
provide no floor on required fuel
economy. Also, the safety
79 The agencies excluded diesel engines and
strong hybrid vehicle technologies from this
exercise (and only this exercise) because the
agencies expect that manufacturers would not need
to rely heavily on these technologies in order to
comply with the proposed standards. NHTSA and
EPA did include diesel engines and strong hybrid
vehicle technologies in all other portions of their
analyses.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
considerations that support the
provision of a disincentive for
downsizing as a compliance strategy
apply weakly—if at all—to the very
largest vehicles. Limiting the function’s
value for the largest vehicles leads to a
function with an inherent absolute
minimum level of performance, while
remaining consistent with safety
considerations.
Before fitting the sloped portion of the
constrained linear form, NHTSA
selected footprints above and below
which to apply constraints (i.e.,
minimum and maximum values) on the
function. For passenger cars, the agency
noted that several manufacturers offer
small and, in some cases, sporty coupes
below 41 square feet, examples
including the BMW Z4 and Mini, Saturn
Sky, Honda Fit and S2000, Hyundai
Tiburon, Mazda MX–5 Miata, Suzuki
SX4, Toyota Yaris, and Volkswagen
New Beetle. Because such vehicles
represent a small portion (less than 10
percent) of the passenger car market, yet
often have characteristics that could
make it infeasible to achieve the very
challenging targets that could apply in
the absence of a constraint, NHTSA is
proposing to ‘‘cut off’’ the linear portion
of the passenger car function at 41
square feet. For consistency, the agency
is proposing to do the same for the light
truck function, although no light trucks
are currently offered below 41 square
feet. The agency further noted that
above 56 square feet, the only passenger
car model present in the MY 2008 fleet
were four luxury vehicles with
extremely low sales volumes—the
Bentley Arnage and three versions of the
Rolls Royce Phantom. NHTSA is
therefore proposing to ‘‘cut off’’ the
linear portion of the passenger car
function at 56 square feet. Finally, the
agency noted that although public
information is limited regarding the
sales volumes of the many different
configurations (cab designs and bed
sizes) of pickup trucks, most of the
largest pickups (e.g., the Ford F–150,
GM Sierra/Silverado, Nissan Titan, and
Toyota Tundra) appear to fall just above
66 square feet in footprint. NHTSA is
therefore proposing to ‘‘cut off’’ the
linear portion of the light truck function
at 66 square feet.
NHTSA and EPA seek comment on
this approach to fitting the curves. We
note that final decisions on this issue
will play an important role in
determining the form and stringency of
the final CAFE and CO2 standards, the
incentives those standards will provide
(e.g., with respect to downsizing small
vehicles), and the relative compliance
burden faced by each manufacturer.
PO 00000
Frm 00041
Fmt 4701
Sfmt 4702
49493
For purposes of the CAFE and CO2
standards proposed in this NPRM,
NHTSA and EPA recognize that there is
some possibility that low fuel prices
during the years in which MY 2012–
2016 vehicles are in service might lead
to less than currently anticipated fuel
savings and emissions reductions. One
way to assure that emission reductions
are achieved in fact is through the use
of explicit backstops, fleet average
standards established at an absolute
level. For purposes of the CAFE
program, EISA requires a backstop for
domestically-manufactured passenger
cars—a universal minimum, nonattribute-based standard of either ‘‘27.5
mpg or 92 percent of the average fuel
economy projected by the Secretary of
Transportation for the combined
domestic and non-domestic passenger
automobile fleets manufactured for sale
in the United States by all
manufacturers in the model year
* * *,’’ whichever is greater.80 In the
MY 2011 final rule, the first rule setting
standards since EISA added the
backstop provision to EPCA, NHTSA
considered whether the statute
permitted the agency to set backstop
standards for the other regulated fleets
of imported passenger cars and light
trucks. Although commenters expressed
support both for and against a more
permissive reading of EISA, NHTSA
concluded in that rulemaking that its
authority was likely limited to setting
only the backstop standard that
Congress expressly provided, i.e., the
one for domestic passenger cars. A
backstop, however, could be adopted
under section 202(a) of the CAA
assuming it could be justified under the
relevant statutory criteria. EPA and
NHTSA also note that the flattened
portion of the car curve directionally
addresses the issue of a backstop (i.e., a
flat curve is itself a backstop). The
agencies seek comment on whether
backstop standards, or any other method
within the agencies’ statutory authority,
should and can be implemented in
order to guarantee a level of CO2
emissions reductions and fuel savings
under the attribute-based standards.
Having developed a set of baseline
data to which to fit the mathematical
fuel consumption function, the initial
values for parameters c and d were
determined for cars and trucks
separately. c and d were initially set at
the values for which the average
(equivalently, sum) of the absolute
values of the differences was minimized
between the ‘‘maximum technology’’
fleet fuel consumption (within the
footprints between the upper and lower
80 49
E:\FR\FM\28SEP2.SGM
U.S.C. 32902(b)(4).
28SEP2
49494
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
limits) and the straight line the function
defined above at the same
corresponding vehicle footprints. That
is, c and d were determined by
minimizing the average absolute
residual, commonly known as the MAD
(Mean Absolute Deviation) approach, of
the corresponding straight line.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
Finally, NHTSA calculated the values
of the upper and lower values (a and b)
based on the corresponding footprints
discussed above (41 and 56 square feet
for passenger cars, and 41 and 66 square
feet for light trucks).
The result of this methodology is
shown below in Figures II.A.2–2 and
II.A.2–3 for passenger cars and light
PO 00000
Frm 00042
Fmt 4701
Sfmt 4702
trucks, respectively. The fitted curves
are shown with the underlying
‘‘maximum technology’’ passenger car
and light truck fleets. For passenger
cars, the mean absolute deviation of the
sloped portion of the function was 14
percent. For trucks, the corresponding
MAD was 10 percent.
BILLING CODE 4910–59–P
E:\FR\FM\28SEP2.SGM
28SEP2
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00043
Fmt 4701
Sfmt 4725
E:\FR\FM\28SEP2.SGM
28SEP2
49495
EP28SE09.007</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
The agencies used these functional
forms as a starting point to develop
mathematical functions defining the
actual proposed standards as discussed
above. The agencies then transposed
these functions vertically (i.e., on a gpm
or CO2 basis, uniformly downward) to
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
produce the relative car and light truck
standards described in the next section.
D. Relative Car-Truck Stringency
The agencies have determined, under
their respective statutory authorities,
that it is appropriate to propose
fleetwide standards with the projected
levels of stringency of 34.1 mpg or 250
PO 00000
Frm 00044
Fmt 4701
Sfmt 4702
g/mi (as well as the corresponding
intermediate year fleetwide standards)
for NHTSA and EPA respectively. To
determine the relative stringency of
passenger car and light truck standards,
the agencies are concerned that
increasing the difference between the
car and truck standards (either by
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.008</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49496
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
raising the car standards or lowering the
truck standards) could encourage
manufacturers to build fewer cars and
more trucks, likely to the detriment of
fuel economy and CO2 reductions.81 In
order to maintain consistent car/truck
standards, the agencies applied a
constant ratio between the estimated
average required performance under the
passenger car and light truck standards,
in order to maintain a stable set of
mstockstill on DSKH9S0YB1PROD with PROPOSALS
81 For example, since many 2WD SUVs are
classified as passenger cars, manufacturers have
already warned that high car standards relative to
truck standards could create an incentive for them
to drop the 2WD version and sell only the 4WD
version.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
incentives regarding vehicle
classification.
To calculate relative car-truck
stringency in this proposal, the agencies
explored a number of possible
alternatives. In the interest of
harmonization, the agencies agree to use
the Volpe model in order to estimate
stringencies at which net benefits would
be maximized. Further details of the
development of this scenario approach
can be found in Section IV of this
preamble as well as in NHTSA’s PRIA
and DEIS. NHTSA examined passenger
car and light truck standards that would
produce the proposed combined average
fuel economy levels from Table I.B.2–2
above. NHTSA did so by shifting
downward the curves that maximize net
PO 00000
Frm 00045
Fmt 4701
Sfmt 4702
49497
benefits, holding the relative stringency
of passenger car and light truck
standards constant at the level
determined by maximizing net benefits,
such that the average fuel economy
required of passenger cars remains 34
percent higher than the average fuel
economy required of light trucks. This
methodology resulted in the average
fuel economy levels for passenger cars
and light trucks during MYs 2012–2016
as shown in Table I.D.2–1. The
following chart illustrates this
methodology of shifting the standards
from the levels maximizing net benefits
to the levels consistent with the
combined fuel economy standards in
this rule.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
After this analysis was completed,
EPA examined two alternative
approaches to determine whether they
would lead to significantly different
outcomes. First, EPA analyzed the
relative stringencies using a 10-year
payback analysis (with the OMEGA
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
model). This analysis sets the relative
stringencies if increased technology cost
is to be paid back out of fuel savings
over a 10-year period (assuming a 3%
discount rate). Second, EPA also
conducted a technology maximized
analysis, which sets the relative
PO 00000
Frm 00046
Fmt 4701
Sfmt 4702
stringencies if all technologies (with the
exception of strong hybrids and diesels)
are assumed to be utilized in the fleet.
(This is the same methodology that was
used to determine the curve shape as
explained in the section above and in
Chapter 2 of the joint TSD section).
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.009</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49498
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
Compared to NHTSA’s approach based
on stringencies estimated to maximize
net benefits, EPA staff found that these
two other approaches produced very
similar results to NHTSA’s, i.e., similar
ratios of car-truck relative stringency
(the ratio being within a range of 1.34
to 1.37 relative stringency of the car to
the truck fuel economy standard). EPA
believes that this similarity supports the
proposed relative stringency of the two
standards.
The car and truck standards for EPA
(Table I.D. 2–4 above) were
subsequently determined by first
converting the average required fuel
49499
economy levels to average required CO2
emission rates, and then applying the
expected air conditioning credits for
2012–2016. These A/C credits are
shown in the following table. Further
details of the derivation of these factors
can be found in Section III of this
preamble or in the EPA RIA.
TABLE II.D.1–1 EXPECTED FLEET A/C CREDITS (IN CO2 EQUIVALENT G/MI) FROM 2012–2016
Average technology
penetration
(percent)
2012
2013
2014
2015
2016
.............................................................................................................
.............................................................................................................
.............................................................................................................
.............................................................................................................
.............................................................................................................
mstockstill on DSKH9S0YB1PROD with PROPOSALS
The agencies seek comment on the
use of this methodology for
apportioning the fleet stringencies to
relative car and truck standards for
2012–2016.
E. Joint Vehicle Technology
Assumptions
Vehicle technology assumptions, i.e.,
assumptions about their cost,
effectiveness, and the rate at which they
can be incorporated into new vehicles,
are often very controversial as they have
a significant impact on the levels of the
standards. Agencies must, therefore,
take great care in developing and
justifying these assumptions. In
developing technology inputs for MY
2012–2016 standards, the agencies
reviewed the technology assumptions
that NHTSA used in setting the MY
2011 standards and the comments that
NHTSA received in response to its May
2008 Notice of Proposed Rulemaking.
This review is consistent with the
request by President Obama in his
January 26 memorandum to DOT. In
addition, the agencies reviewed the
technology input estimates identified in
EPA’s July 2008 Advanced Notice of
Proposed Rulemaking. The review of
these documents was supplemented
with updated information from more
current literature, new product plans
and from EPA certification testing.
As a general matter, the best way to
derive technology cost estimates is to
conduct real-world tear down studies.
These studies break down each
technology into its respective
components, evaluate the costs of each
component, and build up the costs of
the entire technology based on the
contribution of each component. As
such, tear down studies require a
significant amount of time and are very
costly. EPA has begun conducting tear
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
25
40
55
75
85
down studies to assess the costs of 4–
5 technologies under a contract with
FEV. To date, only two technologies
(stoichiometeric gasoline direct
injection and turbo charging with
engine downsizing for a 4 cylinder
engine to a 4 cylinder engine) have been
evaluated. The agencies relied on the
findings of FEV for estimating the cost
of these technologies in this
rulemaking—directly for the 4 cylinder
engines, and extrapolated for the 6 and
8 cylinder engines. The agencies request
comment on the use of these estimated
costs from the FEV study. For the other
technologies, because tear down studies
were not yet available, the agencies
decided to pursue, to the extent
possible, the Bill of Materials (BOM)
approach as outlined in NHTSA’s MY
2011 final rule. A similar approach was
used by EPA in the EPA 2008 Staff
Technical Report. This approach was
recommended to NHTSA by Ricardo, an
international engineering consulting
firm retained by NHTSA to aid in the
analysis of public comments on its
proposed standards for MYs 2011–2015
because of its expertise in the area of
fuel economy technologies. A BOM
approach is one element of the process
used in tear down studies. The
difference is that under a BOM
approach, the build up of cost estimates
is conducted based on a review of cost
and effectiveness estimates for each
component from available literature,
while under a tear down study, the cost
estimates which go into the BOM come
from the tear down study itself. To the
extent that the agencies departed from
the MY 2011 CAFE final rule estimates,
the agencies explained the reasons and
provided supporting analyses. As tear
down studies are concluded by FEV
during the rulemaking process, the
PO 00000
Frm 00047
Fmt 4701
Average
credit
for cars
Sfmt 4702
3.0
4.8
7.2
9.6
10.2
Average
credit for
trucks
3.4
5.4
8.1
10.8
11.5
Average
credit for
combined
fleet
3.1
5.0
7.5
10.0
10.6
agencies will make them available in the
joint rulemaking docket of this
rulemaking. The agencies will consider
these studies and any comments
received on them, as practicable and
appropriate, as well as any other new
information pertinent to the rulemaking
of which the agencies become aware, in
developing technology cost assumptions
for the final rule.
Similarly, the agencies followed a
BOM approach for developing its
effectiveness estimates, insofar as the
BOM developed for the cost estimates
helped to inform the appropriate
effectiveness values derived from the
literature review. The agencies
supplemented the information with
results from available simulation work
and real world EPA certification testing.
The agencies would also like to note
that per the Energy Independence and
Security Act (EISA), the National
Academies of Sciences is conducting an
updated study to update Chapter 3 of
the 2002 NAS Report, which outlines
technology estimates. The update will
take a fresh look at that list of
technologies and their associated cost
and effectiveness values.
The report is expected to be available
on September 30, 2009. As soon as the
update to the NAS Report is received, it
will be placed in the joint rulemaking
docket for the public’s review and
comment. Because this will occur
during the comment period, the public
is encouraged to check the docket
regularly and provide comments on the
updated NAS Report by the closing of
the comment period of this notice.
NHTSA and EPA will consider the
updated NAS Report and any comments
received, as practicable and appropriate,
on it when considering revisions to the
technology cost and effectiveness
estimates for the final rule.
E:\FR\FM\28SEP2.SGM
28SEP2
49500
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
Consideration of this report is consistent
with the request by President Obama in
his January 26 memorandum to DOT.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
1. What Technologies Do the Agencies
Consider?
The agencies considered over 35
vehicle technologies that manufacturers
could use to improve the fuel economy
and reduce CO2 emissions of their
vehicles during MYs 2012–2016. The
majority of the technologies described
in this section are readily available, well
known, and could be incorporated into
vehicles once production decisions are
made. Other technologies considered
may not currently be in production, but
are beyond the research phase and
under development, and are expected to
be in production in the next few years.
These are technologies which can, for
the most part, be applied both to cars
and trucks, and which are capable of
achieving significant improvements in
fuel economy and reductions in CO2
emissions, at reasonable costs. The
agencies did not consider technologies
in the research stage because the
leadtime available for this rule is not
sufficient to move such technologies
from research to production.
The technologies considered in the
agencies’ analysis are briefly described
below. They fall into five broad
categories: engine technologies,
transmission technologies, vehicle
technologies, electrification/accessory
technologies, and hybrid technologies.
For a more detailed description of each
technology and their costs and
effectiveness, we refer the reader to
Chapter 3 of the joint TSD, Chapter III
of NHTSA’s PRIA, and Chapter 1 of
EPA’s DRIA. Technologies to reduce
CO2 and HFC emissions from air
conditioning systems are discussed in
Section III of this preamble and in EPA’s
DRIA.
Types of engine technologies that
improve fuel economy and reduce CO2
emissions include the following:
• Low-friction lubricants—low
viscosity and advanced low friction
lubricants oils are now available with
improved performance and better
lubrication. If manufacturers choose to
make use of these lubricants, they
would need to make engine changes and
possibly conduct durability testing to
accommodate the low-friction
lubricants.
• Reduction of engine friction
losses—can be achieved through lowtension piston rings, roller cam
followers, improved material coatings,
more optimal thermal management,
piston surface treatments, and other
improvements in the design of engine
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
components and subsystems that
improve engine operation.
• Conversion to dual overhead cam
with dual cam phasing—as applied to
overhead valves designed to increase
the air flow with more than two valves
per cylinder and reduce pumping
losses.
• Cylinder deactivation—deactivates
the intake and exhaust valves and
prevents fuel injection into some
cylinders during light-load operation.
The engine runs temporarily as though
it were a smaller engine which
substantially reduces pumping losses.
• Variable valve timing—alters the
timing of the intake valve, exhaust
valve, or both, primarily to reduce
pumping losses, increase specific
power, and control residual gases.
• Discrete variable valve lift—
increases efficiency by optimizing air
flow over a broader range of engine
operation which reduces pumping
losses. Accomplished by controlled
switching between two or more cam
profile lobe heights.
• Continuous variable valve lift—is
an electromechanically controlled
system in which valve timing is
changed as lift height is controlled. This
yields a wide range of performance
optimization and volumetric efficiency,
including enabling the engine to be
valve throttled.
• Stoichiometric gasoline directinjection technology—injects fuel at
high pressure directly into the
combustion chamber to improve cooling
of the air/fuel charge within the
cylinder, which allows for higher
compression ratios and increased
thermodynamic efficiency.
• Combustion restart—can be used in
conjunction with gasoline directinjection systems to enable idle-off or
start-stop functionality. Similar to other
start-stop technologies, additional
enablers, such as electric power
steering, accessory drive components,
and auxiliary oil pump, might be
required.
• Turbocharging and downsizing—
increases the available airflow and
specific power level, allowing a reduced
engine size while maintaining
performance. This reduces pumping
losses at lighter loads in comparison to
a larger engine.
• Exhaust-gas recirculation boost—
increases the exhaust-gas recirculation
used in the combustion process to
increase thermal efficiency and reduce
pumping losses.
• Diesel engines—have several
characteristics that give superior fuel
efficiency, including reduced pumping
losses due to lack of (or greatly reduced)
throttling, and a combustion cycle that
PO 00000
Frm 00048
Fmt 4701
Sfmt 4702
operates at a higher compression ratio,
with a very lean air/fuel mixture,
relative to an equivalent-performance
gasoline engine. This technology
requires additional enablers, such as
NOx trap catalyst after-treatment or
selective catalytic reduction NOx aftertreatment. The cost and effectiveness
estimates for the diesel engine and
aftertreatment system utilized in this
proposal have been revised from the
NHTSA MY 2011 CAFE final rule, and
the agencies request comment on these
diesel cost estimates.
Types of transmission technologies
considered include:
• Improved automatic transmission
controls—optimizes shift schedule to
maximize fuel efficiency under wide
ranging conditions, and minimizes
losses associated with torque converter
slip through lock-up or modulation.
• Six-, seven-, and eight-speed
automatic transmissions—the gear ratio
spacing and transmission ratio are
optimized for a broader range of engine
operating conditions.
• Dual clutch or automated shift
manual transmissions—are similar to
manual transmissions, but the vehicle
controls shifting and launch functions.
A dual-clutch automated shift manual
transmission uses separate clutches for
even-numbered and odd-numbered
gears, so the next expected gear is preselected, which allows for faster and
smoother shifting.
• Continuously variable
transmission—commonly uses Vshaped pulleys connected by a metal
belt rather than gears to provide ratios
for operation. Unlike manual and
automatic transmissions with fixed
transmission ratios, continuously
variable transmissions can provide fully
variable transmission ratios with an
infinite number of gears, enabling finer
optimization of transmission torque
multiplication under different operating
conditions so that the engine can
operate at higher efficiency.
• Manual 6-speed transmission—
offers an additional gear ratio, often
with a higher overdrive gear ratio, than
a 5-speed manual transmission.
Types of vehicle technologies
considered include:
• Low-rolling-resistance tires—have
characteristics that reduce frictional
losses associated with the energy
dissipated in the deformation of the
tires under load, therefore improving
fuel economy and reducing CO2
emissions.
• Low-drag brakes—reduce the
sliding friction of disc brake pads on
rotors when the brakes are not engaged
because the brake pads are pulled away
from the rotors.
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
• Front or secondary axle disconnect
for four-wheel drive systems—provides
a torque distribution disconnect
between front and rear axles when
torque is not required for the nondriving axle. This results in the
reduction of associated parasitic energy
losses.
• Aerodynamic drag reduction—is
achieved by changing vehicle shape or
reducing frontal area, including skirts,
air dams, underbody covers, and more
aerodynamic side view mirrors.
• Mass reduction and material
substitution—Mass reduction
encompasses a variety of techniques
ranging from improved design and
better component integration to
application of lighter and higherstrength materials. Mass reduction is
further compounded by reductions in
engine power and ancillary systems
(transmission, steering, brakes,
suspension, etc.). The agencies
recognize there is a range of diversity
and complexity for mass reduction and
material substitution technologies and
there are many techniques that
automotive suppliers and manufacturers
are using to achieve the levels of this
technology that the agencies have
modeled in our analysis for this
proposal. The agencies seek comments
on the methods, costs, and effectiveness
estimates associated with mass
reduction and material substitution
techniques that manufacturers intend to
employ for reducing fuel consumption
and CO2 emissions during the
rulemaking time frame.
Types of electrification/accessory and
hybrid technologies considered include:
• Electric power steering (EPS)—is an
electrically-assisted steering system that
has advantages over traditional
hydraulic power steering because it
replaces a continuously operated
hydraulic pump, thereby reducing
parasitic losses from the accessory
drive.
• Improved accessories (IACC)—may
include high efficiency alternators,
electrically driven (i.e., on-demand)
water pumps and cooling fans. This
excludes other electrical accessories
such as electric oil pumps and
electrically driven air conditioner
compressors.
• Air Conditioner Systems—These
technologies include improved hoses,
connectors and seals for leakage control.
They also include improved
compressors, expansion valves, heat
exchangers and the control of these
components for the purposes of
improving tailpipe CO2 emissions as a
result of A/C use. These technologies
are covered separately in the EPA RIA.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
• 12-volt micro-hybrid (MHEV)—also
known as idle-stop or start stop and
commonly implemented as a 12-volt
belt-driven integrated starter-generator,
this is the most basic hybrid system that
facilitates idle-stop capability. Along
with other enablers, this system replaces
a common alternator with a belt-driven
enhanced power starter-alternator, and a
revised accessory drive system.
• Higher Voltage Stop-Start/Belt
Integrated Starter Generator (BISG)—
provides idle-stop capability and uses a
high voltage battery with increased
energy capacity over typical automotive
batteries. The higher system voltage
allows the use of a smaller, more
powerful electric motor. This system
replaces a standard alternator with an
enhanced power, higher voltage, higher
efficiency starter-alternator, that is belt
driven and that can recover braking
energy while the vehicle slows down
(regenerative braking).
• Integrated Motor Assist (IMA)/
Crank integrated starter generator
(CISG)—provides idle-stop capability
and uses a high voltage battery with
increased energy capacity over typical
automotive batteries. The higher system
voltage allows the use of a smaller, more
powerful electric motor and reduces the
weight of the wiring harness. This
system replaces a standard alternator
with an enhanced power, higher
voltage, higher efficiency starteralternator that is crankshaft mounted
and can recover braking energy while
the vehicle slows down (regenerative
braking).
• 2-mode hybrid (2MHEV)—is a
hybrid electric drive system that uses an
adaptation of a conventional steppedratio automatic transmission by
replacing some of the transmission
clutches with two electric motors that
control the ratio of engine speed to
vehicle speed, while clutches allow the
motors to be bypassed. This improves
both the transmission torque capacity
for heavy-duty applications and reduces
fuel consumption and CO2 emissions at
highway speeds relative to other types
of hybrid electric drive systems.
• Power-split hybrid (PSHEV)—a
hybrid electric drive system that
replaces the traditional transmission
with a single planetary gearset and a
motor/generator. This motor/generator
uses the engine to either charge the
battery or supply additional power to
the drive motor. A second, more
powerful motor/generator is
permanently connected to the vehicle’s
final drive and always turns with the
wheels. The planetary gear splits engine
power between the first motor/generator
and the drive motor to either charge the
battery or supply power to the wheels.
PO 00000
Frm 00049
Fmt 4701
Sfmt 4702
49501
• Plug-in hybrid electric vehicles
(PHEV)—are hybrid electric vehicles
with the means to charge their battery
packs from an outside source of
electricity (usually the electric grid).
These vehicles have larger battery packs
with more energy storage and a greater
capability to be discharged. They also
use a control system that allows the
battery pack to be substantially depleted
under electric-only or blended
mechanical/electric operation.
• Electric vehicles (EV)—are vehicles
with all-electric drive and with vehicle
systems powered by energy-optimized
batteries charged primarily from grid
electricity.
The cost estimates for the various
hybrid systems have been revised from
the estimates used in the MY 2011
CAFE final rule, in particular with
respect to estimated battery costs. The
agencies request comment on the hybrid
cost estimates detailed in the draft Joint
Technical Support Document.
2. How Did the Agencies Determine the
Costs and Effectiveness of Each of These
Technologies?
Building on NHTSA’s estimates
developed for the MY 2011 CAFE final
rule and EPA’s Advanced Notice of
Proposed Rulemaking, which relied on
the 2008 Staff Technical Report,82 the
agencies took a fresh look at technology
cost and effectiveness values for
purposes of the joint proposal under the
National Program. For costs, the
agencies reconsidered both the direct or
‘‘piece’’ costs and indirect costs of
individual components of technologies.
For the direct costs, the agencies
followed a bill of materials (BOM)
approach employed by NHTSA in
NHTSA’s MY 2011 final rule based on
recommendation from Ricardo, Inc. EPA
used a similar approach in the 2008
EPA Staff Technical Report. A bill of
materials, in a general sense, is a list of
components or sub-systems that make
up a system—in this case, an item of
fuel economy-improving technology. In
order to determine what a system costs,
one of the first steps is to determine its
components and what they cost.
NHTSA and EPA estimated these
components and their costs based on a
number of sources for cost-related
information. The objective was to use
those sources of information considered
to be most credible for projecting the
costs of individual vehicle technologies.
For example, while NHTSA and Ricardo
engineers had relied considerably in the
82 EPA Staff Technical Report: Cost and
Effectiveness Estimates of Technologies Used to
Reduce Light-Duty Vehicle Carbon Dioxide
Emissions. EPA420–R–08–008, March 2008.
E:\FR\FM\28SEP2.SGM
28SEP2
49502
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
MY 2011 final rule on the 2008 Martec
Report for costing contents of some
technologies, upon further joint review
and for purposes of the MY 2012–2016
standards, the agencies decided that
some of the costing information in that
report was no longer accurate due to
downward trends in commodity prices
since the publication of that report. The
agencies reviewed, then revalidated or
updated cost estimates for individual
components based on new information.
Thus, while NHTSA and EPA found
that much of the cost information used
in NHTSA’s MY 2011 final rule and
EPA’s staff report was consistent to a
great extent, the agencies, in
reconsidering information from many
sources,83,84,85,86,87,88,89 revised several
component costs of several major
technologies: turbocharging with engine
downsizing, mild and strong hybrids,
diesels, stoichiometric gasoline direct
injection fuel systems, and valve train
lift technologies. These are discussed at
length in the joint TSD and in NHTSA’s
PRIA.
For two technologies (stoichiometric
gasoline direct injection and
turbocharging with engine downsizing),
the agencies relied, to the extent
possible, on the tear down data
available and scaling methodologies
used in EPA’s ongoing study with FEV.
This study consists of complete system
tear-down to evaluate technologies
down to the nuts and bolts to arrive at
very detailed estimates of the costs
associated with manufacturing them.90
83 National Research Council, ‘‘Effectiveness and
Impact of Corporate Average Fuel Economy (CAFE)
Standards,’’ National Academy Press, Washington,
DC (2002) (the ‘‘2002 NAS Report’’), available at
https://www.nap.edu/
openbook.php?isbn=0309076013 (last accessed
August 7, 2009).
84 Northeast States Center for a Clean Air Future
(NESCCAF), ‘‘Reducing Greenhouse Gas Emissions
from Light-Duty Motor Vehicles,’’ 2004 (the ‘‘2004
NESCCAF Report’’), available at https://www.
nesccaf.org/documents/rpt040923ghglightduty.pdf
(last accessed August 7, 2009).
85 ‘‘Staff Report: Initial Statement of Reasons for
Proposed Rulemaking, Public Hearing to Consider
Adoption of Regulations to Control Greenhouse Gas
Emissions from Motor Vehicles,’’ California
Environmental Protection Agency, Air Resources
Board, August 6, 2004.
86 Energy and Environmental Analysis, Inc.,
‘‘Technology to Improve the Fuel Economy of Light
Duty Trucks to 2015,’’ 2006 (the ‘‘2006 EEA
Report’’), Docket EPA–HQ–OAR–2009–0472.
87 Martec, ‘‘Variable Costs of Fuel Economy
Technologies,’’ June 1, 2008, (the ‘‘2008 Martec
Report’’) available at Docket No. NHTSA–2008–
0089–0169.1
88 Vehicle fuel economy certification data.
89 Confidential data submitted by manufacturers
in response to the March 2009 and other requests
for product plans.
90 U.S. Environmental Protection Agency, ‘‘Draft
Report—Light-Duty Technology Cost Analysis Pilot
Study,’’ Contract No. EP–C–07–069, Work
Assignment 1–3, September 3, 2009.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
The confidential information provided
by manufacturers as part of their
product plan submissions to the
agencies or discussed in meetings
between the agencies and the
manufacturers and suppliers served
largely as a check on publicly-available
data.
For the other technologies,
considering all sources of information
and using the BOM approach, the
agencies worked together intensively
during the summer of 2009 to determine
component costs for each of the
technologies and build up the costs
accordingly. Where estimates differ
between sources, we have used
engineering judgment to arrive at what
we believe to be the best cost estimate
available today, and explained the basis
for that exercise of judgment.
Once costs were determined, they
were adjusted to ensure that they were
all expressed in 2007 dollars using a
ratio of GDP values for the associated
calendar years,91 and indirect costs were
accounted for using the new approach
developed by EPA and explained in
Chapter 3 of the draft joint TSD, rather
than using the traditional Retail Price
Equivalent (RPE) multiplier approach. A
report explaining how EPA developed
this approach can be found in the
docket for this notice. NHTSA and EPA
also reconsidered how costs should be
adjusted by modifying or scaling
content assumptions to account for
differences across the range of vehicle
sizes and functional requirements, and
adjusted the associated material cost
impacts to account for the revised
content, although some of these
adjustments may be different for each
agency due to the different vehicle
subclasses used in their respective
models. In previous rulemakings,
NHTSA has used the Producer Price
Index (PPI) to adjust vehicle technology
costs to consistent price levels, since the
PPI measures the effects of cost changes
that are specific to the vehicle
manufacturing industry. For purposes of
this NPRM, NHTSA and EPA chose to
use the GDP deflator, which accounts
for the effect of economy-wide price
inflation on technology cost estimates,
in order to express those estimates in
comparable terms with forecasts of fuel
prices and other economic values used
in the analysis of costs and benefits
from the proposed standards. Because it
is specific to the automotive sector, the
PPI tends to be highly volatile from year
to year, reflecting rapidly changing
91 NHTSA examined the use of the CPI multiplier
instead of GDP for adjusting these dollar values, but
found the difference to be exceedingly small—only
$0.14 over $100.
PO 00000
Frm 00050
Fmt 4701
Sfmt 4702
balances between supply and demand
for specific components, rather than
longer-term trends in the real cost of
producing a broad range of powertrain
components. NHTSA and EPA seek
comment on whether the agencies
should use a GDP deflator or a PPI
inflator for purposes of developing
technology cost estimates for the final
rule.
Regarding estimates for technology
effectiveness, NHTSA and EPA also
reexamined the estimates from
NHTSA’s MY 2011 final rule and EPA’s
ANPRM and 2008 Staff Technical
Report, which were largely consistent
with NHTSA’s 2008 NPRM estimates.
The agencies also reconsidered other
sources such as the 2002 NAS Report,
the 2004 NESCCAF report, recent CAFE
compliance data (by comparing similar
vehicles with different technologies
against each other in fuel economy
testing, such as a Honda Civic Hybrid
versus a directly comparable Honda
Civic conventional drive), and
confidential manufacturer estimates of
technology effectiveness. NHTSA and
EPA engineers reviewed effectiveness
information from the multiple sources
for each technology and ensured that
such effectiveness estimates were based
on technology hardware consistent with
the BOM components used to estimate
costs. Together, they compared the
multiple estimates and assessed their
validity, taking care to ensure that
common BOM definitions and other
vehicle attributes such as performance,
refinement, and drivability were taken
into account. However, because the
agencies’ respective models employ
different numbers of vehicle subclasses
and use different modeling techniques
to arrive at the standards, direct
comparison of BOMs was somewhat
more complicated. To address this and
to confirm that the outputs from the
different modeling techniques produced
the same result, NHTSA and EPA
developed mapping techniques,
devising technology packages and
mapping them to corresponding
incremental technology estimates. This
approach helped compare the outputs
from the incremental modeling
technique to those produced by the
technology packaging approach to
ensure results that are consistent and
could be translated into the respective
models of the agencies.
In general, most effectiveness
estimates used in both the MY 2011
final rule and the 2008 EPA staff report
were determined to be accurate and
were carried forward without significant
change into this proposal. When
NHTSA and EPA’s estimates for
effectiveness diverged slightly due to
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
differences in how agencies apply
technologies to vehicles in their
respective models, we report the ranges
for the effectiveness values used in each
model. While the agencies believe that
the ideal estimates for the final rule
would be based on tear down studies or
BOM approach and subjected to a
transparent peer-reviewed process,
NHTSA and EPA are confident that the
thorough review conducted, led to the
best available conclusion regarding
technology costs and effectiveness
estimates for the current rulemaking and
resulted in excellent consistency
between the agencies’ respective
analyses for developing the CAFE and
CO2 standards.
The agencies note that the
effectiveness values estimated for the
technologies considered in the modeling
analyses may represent average values,
and do not reflect the potentiallylimitless spectrum of possible values
that could result from adding the
technology to different vehicles. For
example, while the agencies have
estimated an effectiveness of 0.5 percent
for low friction lubricants, each vehicle
could have a unique effectiveness
estimate depending on the baseline
vehicle’s oil viscosity rating. Similarly,
the reduction in rolling resistance (and
thus the improvement in fuel economy
and the reduction in CO2 emissions) due
to the application of low rolling
resistance tires depends not only on the
unique characteristics of the tires
originally on the vehicle, but on the
unique characteristics of the tires being
applied, characteristics which must be
balanced between fuel efficiency, safety,
and performance. Aerodynamic drag
reduction is much the same—it can
improve fuel economy and reduce CO2
emissions, but it is also highly
dependent on vehicle-specific
functional objectives. For purposes of
this NPRM, NHTSA and EPA believe
that employing average values for
technology effectiveness estimates, as
adjusted depending on vehicle subclass,
is an appropriate way of recognizing the
potential variation in the specific
benefits that individual manufacturers
(and individual vehicles) might obtain
from adding a fuel-saving technology.
However, the agencies seek comment on
whether additional levels of specificity
beyond that already provided would
improve the analysis for the final rule,
and if so, how those levels of specificity
should be analyzed.
Chapter 3 of the draft Joint Technical
Support Document contains a detailed
description of our assessment of vehicle
technology cost and effectiveness
estimates. The agencies note that the
technology costs included in this NPRM
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
take into account only those associated
with the initial build of the vehicle. The
agencies seek comment on the
additional lifetime costs, if any,
associated with the implementation of
advanced technologies including
warranty costs, and maintenance and
replacement costs such as replacement
costs for low rolling resistance tires, low
friction lubricants, and hybrid batteries,
and maintenance on diesel
aftertreatment components.
F. Joint Economic Assumptions
The agencies’ preliminary analysis of
alternative CAFE and GHG standards for
the model years covered by this
proposed rulemaking rely on a range of
forecast information, economic
estimates, and input parameters. This
section briefly describes the agencies’
preliminary choices of specific
parameter values. These proposed
economic values play a significant role
in determining the benefits of both
CAFE and GHG standards.
In reviewing these variables and the
agency’s estimates of their values for
purposes of this NPRM, NHTSA and
EPA reconsidered previous comments
that NHTSA had received and reviewed
newly available literature. As a
consequence, the agencies elected to
revise some economic assumptions and
parameter estimates, while retaining
others. Some of the most important
changes, which are discussed in greater
detail in the agencies’ respective
sections below, as well as in Chapter 4
of the joint TSD and in Chapter VIII of
NHTSA’s PRIA and Chapter 8 of EPA’s
DRIA, include significant revisions to
the markup factors for technology costs;
reducing the rebound effect from 15 to
10 percent; and revising the value of
reducing CO2 emissions based on recent
interagency efforts to develop estimates
of this value for government-wide use.
The agencies seek comment on the
economic assumptions described below.
• Costs of fuel economy-improving
technologies—These estimates are
presented in summary form above and
in more detail in the agencies’
respective sections of this preamble, in
Chapter 3 of the joint TSD, and in the
agencies’ respective RIAs. The
technology cost estimates used in this
analysis are intended to represent
manufacturers’ direct costs for highvolume production of vehicles with
these technologies and sufficient
experience with their application so that
all cost reductions due to ‘‘learning
curve’’ effects have been fully realized.
Costs are then modified by applying
near-term indirect cost multipliers
ranging from 1.11 to 1.64 to the
estimates of vehicle manufacturers’
PO 00000
Frm 00051
Fmt 4701
Sfmt 4702
49503
direct costs for producing or acquiring
each technology to improve fuel
economy, depending on the complexity
of the technology and the time frame
over which costs are estimated.
• Potential opportunity costs of
improved fuel economy—This estimate
addresses the possibility that achieving
the fuel economy improvements
required by alternative CAFE or GHG
standards would require manufacturers
to compromise the performance,
carrying capacity, safety, or comfort of
their vehicle models. If it did so, the
resulting sacrifice in the value of these
attributes to consumers would represent
an additional cost of achieving the
required improvements, and thus of
manufacturers’ compliance with stricter
standards. Currently the agencies
assume that these vehicle attributes do
not change, and include the cost of
maintaining these attributes as part of
the cost estimates for technologies.
However, it is possible that the
technology cost estimates do not
include adequate allowance for the
necessary efforts by manufacturers to
maintain vehicle performance, carrying
capacity, and utility while improving
fuel economy and reducing GHG
emissions. While, in principle,
consumer vehicle demand models can
measure these effects, these models do
not appear to be robust across
specifications, since authors derive a
wide range of willingness-to-pay values
for fuel economy from these models,
and there is not clear guidance from the
literature on whether one specification
is clearly preferred over another. Thus,
the agencies seek comment on how to
estimate explicitly the changes in
vehicle buyers’ welfare from the
combination of higher prices for new
vehicle models, increases in their fuel
economy, and any accompanying
changes in vehicle attributes such as
performance, passenger- and cargocarrying capacity, or other dimensions
of utility.
• The on-road fuel economy ‘‘gap’’—
Actual fuel economy levels achieved by
light-duty vehicles in on-road driving
fall somewhat short of their levels
measured under the laboratory-like test
conditions used by NHTSA and EPA to
establish compliance with the proposed
CAFE and GHG standards. The agencies
use an on-road fuel economy gap for
light-duty vehicles of 20 percent lower
than published fuel economy levels. For
example, if the measured CAFE fuel
economy value of a light truck is 20
mpg, the on-road fuel economy actually
achieved by a typical driver of that
vehicle is expected to be 16 mpg
E:\FR\FM\28SEP2.SGM
28SEP2
49504
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
(20*.80).92 NHTSA previously used this
estimate in its MY 2011 final rule, and
the agencies confirmed it based on
independent analysis for use in this
NPRM.
• Fuel prices and the value of saving
fuel—Projected future fuel prices are a
critical input into the preliminary
economic analysis of alternative
standards, because they determine the
value of fuel savings both to new
vehicle buyers and to society. The
agencies relied on the most recent fuel
price projections from the U.S. Energy
Information Administration’s (EIA)
Annual Energy Outlook (AEO) for this
analysis. Specifically, the agencies used
the AEO 2009 (April 2009 release)
Reference Case forecasts of inflationadjusted (constant-dollar) retail gasoline
and diesel fuel prices, which represent
the EIA’s most up-to-date estimate of the
most likely course of future prices for
petroleum products.93
EIA’s Updated Reference Case reflects
the effects of the American
Reinvestment and Recovery Act of 2009,
as well as the most recent revisions to
the U.S. and global economic outlook.
In addition, it also reflects the
provisions of the Energy Independence
and Security Act of 2007 (EISA),
including the requirement that the
combined mpg level of U.S. cars and
light trucks reach 35 miles per gallon by
model year 2020. Because this provision
would be expected to reduce future U.S.
demand for gasoline and other fuels,
there is some concern about whether the
AEO 2009 forecast of fuel prices already
partly reflects the increases in CAFE
standards considered in this rule, and
thus whether it is suitable for valuing
the projected reductions in fuel use. In
response to this concern, the agencies
note that EIA issued a revised version of
AEO 2008 in June 2008, which modified
its previous December 2007 Early
Release of AEO 2008 to reflect the
effects of the recently-passed EISA
legislation.94 The fuel price forecasts
reported in EIA’s Revised Release of
AEO 2008 differed by less than one cent
per gallon over the entire forecast period
(2008–230) from those previously issued
mstockstill on DSKH9S0YB1PROD with PROPOSALS
92 U.S.
Environmental Protection Agency, Final
Technical Support Document, Fuel Economy
Labeling of Motor Vehicle Revisions to Improve
Calculation of Fuel Economy Estimates, EPA420–R–
06–017, December 2006.
93 Energy Information Administration, Annual
Energy Outlook 2009, Revised Updated Reference
Case (April 2009), Table 12. Available at https://
www.eia.doe.gov/oiaf/servicerpt/stimulus/excel/
aeostimtab_12.xls (last accessed July 26, 2009).
94 Energy Information Administration, Annual
Energy Outlook 2008, Revised Early Release (June
2008), Table 12. Available at https://
www.eia.doe.gov/oiaf/archive/aeo08/excel/
aeotab_12.xls (last accessed September 12, 2009).
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
as part of its initial release of AEO 2008.
Thus, the agencies are reasonably
confident that the fuel price forecasts
presented in AEO 2009 and used to
analyze the value of fuel savings
projected to result from this rule are not
unduly affected by the CAFE provisions
of EISA, and therefore do not cause a
baseline problem. Nevertheless, the
agencies request comment on the use of
the AEO 2009 fuel price forecasts, and
particularly on the potential impact of
the EISA-mandated CAFE
improvements on these projections.
• Consumer valuation of fuel
economy and payback period—In
estimating the value of fuel economy
improvements that would result from
alternative CAFE and GHG standards to
potential vehicle buyers, the agencies
assume that buyers value the resulting
fuel savings over only part of the
expected lifetime of the vehicles they
purchase. Specifically, we assume that
buyers value fuel savings over the first
five years of a new vehicle’s lifetime,
and that buyers discount the value of
these future fuel savings using rates of
3% and 7%. The five-year figure
represents the current average term of
consumer loans to finance the purchase
of new vehicles.
• Vehicle sales assumptions—The
first step in estimating lifetime fuel
consumption by vehicles produced
during a model year is to calculate the
number that are expected to be
produced and sold.95 The agencies
relied on the AEO 2009 Reference Case
for forecasts of total vehicle sales, while
the baseline market forecast developed
by the agencies (see Section II.B)
divided total projected sales into sales
of cars and light trucks.
• Vehicle survival assumptions—We
then applied updated values of agespecific survival rates for cars and light
trucks to these adjusted forecasts of
passenger car and light truck sales to
determine the number of these vehicles
remaining in use during each year of
their expected lifetimes.
95 Vehicles are defined to be of age 1 during the
calendar year corresponding to the model year in
which they are produced; thus for example, model
year 2000 vehicles are considered to be of age 1
during calendar year 2000, age 2 during calendar
year 2001, and to reach their maximum age of 26
years during calendar year 2025. NHTSA considers
the maximum lifetime of vehicles to be the age after
which less than 2 percent of the vehicles originally
produced during a model year remain in service.
Applying these conventions to vehicle registration
data indicates that passenger cars have a maximum
age of 26 years, while light trucks have a maximum
lifetime of 36 years. See Lu, S., NHTSA, Regulatory
Analysis and Evaluation Division, ‘‘Vehicle
Survivability and Travel Mileage Schedules,’’ DOT
HS 809 952, 8–11 (January 2006). Available at
https://www-nrd.nhtsa.dot.gov/Pubs/809952.pdf
(last accessed July 27, 2009).
PO 00000
Frm 00052
Fmt 4701
Sfmt 4702
• Total vehicle use—We then
calculated the total number of miles that
cars and light trucks produced in each
model year will be driven during each
year of their lifetimes using estimates of
annual vehicle use by age tabulated
from the Federal Highway
Administration’s 2001 National
Household Transportation Survey
(NHTS),96 adjusted to account for the
effect on vehicle use of subsequent
increases in fuel prices. In order to
insure that the resulting mileage
schedules imply reasonable estimates of
future growth in total car and light truck
use, we calculated the rate of growth in
annual car and light truck mileage at
each age that is necessary for total car
and light truck travel to increase at the
rates forecast in the AEO 2009 Reference
Case. The growth rate in average annual
car and light truck use produced by this
calculation is approximately 1.1 percent
per year.97 This rate was applied to the
mileage figures derived from the 2001
NHTS to estimate annual mileage
during each year of the expected
lifetimes of MY 2012–2016 cars and
light trucks.98
• Accounting for the rebound effect of
higher fuel economy—The rebound
effect refers to the fraction of fuel
savings expected to result from an
increase in vehicle fuel economy—
particularly an increase required by the
adoption of higher CAFE and GHG
standards—that is offset by additional
vehicle use. The increase in vehicle use
occurs because higher fuel economy
reduces the fuel cost of driving,
typically the largest single component of
the monetary cost of operating a vehicle,
and vehicle owners respond to this
reduction in operating costs by driving
slightly more. For purposes of this
NPRM, the agencies have elected to use
a 10 percent rebound effect in their
analyses of fuel savings and other
benefits from higher standards.
• Benefits from increased vehicle
use—The increase in vehicle use from
the rebound effect provides additional
benefits to their owners, who may make
more frequent trips or travel farther to
reach more desirable destinations. This
96 For a description of the Survey, see https://
nhts.ornl.gov/quickStart.shtml (last accessed July
27, 2009).
97 It was not possible to estimate separate growth
rates in average annual use for cars and light trucks,
because of the significant reclassification of light
truck models as passenger cars discussed
previously.
98 While the adjustment for future fuel prices
reduces average mileage at each age from the values
derived from the 2001 NHTS, the adjustment for
expected future growth in average vehicle use
increases it. The net effect of these two adjustments
is to increase expected lifetime mileage by about 18
percent for passenger cars and about 16 percent for
light trucks.
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
additional travel provides benefits to
drivers and their passengers by
improving their access to social and
economic opportunities away from
home. The benefits from increased
vehicle use include both the fuel
expenses associated with this additional
travel, and the consumer surplus it
provides. We estimate the economic
value of the consumer surplus provided
by added driving using the conventional
approximation, which is one half of the
product of the decline in vehicle
operating costs per vehicle-mile and the
resulting increase in the annual number
of miles driven. Because it depends on
the extent of improvement in fuel
economy, the value of benefits from
increased vehicle use changes by model
year and varies among alternative
standards.
• The value of increased driving
range—By reducing the frequency with
which drivers typically refuel their
vehicles, and by extending the upper
limit of the range they can travel before
requiring refueling, improving fuel
economy and reducing GHG emissions
thus provides some additional benefits
to their owners. No direct estimates of
the value of extended vehicle range are
readily available, so the agencies’
analysis calculates the reduction in the
annual number of required refueling
cycles that results from improved fuel
economy, and applies DOTrecommended values of travel time
savings to convert the resulting time
savings to their economic value.99 The
agencies invite comment on the
assumptions used in this analysis.
Please see the Chapter 4 of the draft
Joint TSD for details.
• Added costs from congestion,
crashes and noise—Although it
provides some benefits to drivers,
increased vehicle use associated with
the rebound effect also contributes to
increased traffic congestion, motor
vehicle accidents, and highway noise.
Depending on how the additional travel
is distributed over the day and on where
it takes place, additional vehicle use can
contribute to traffic congestion and
delays by increasing traffic volumes on
facilities that are already heavily
traveled during peak periods. These
added delays impose higher costs on
drivers and other vehicle occupants in
the form of increased travel time and
operating expenses, increased costs
99 Department of Transportation, Guidance
Memorandum, ‘‘The Value of Saving Travel Time:
Departmental Guidance for Conducting Economic
Evaluations,’’ Apr. 9, 1997. https://ostpxweb.dot.gov/
policy/Data/VOT97guid.pdf (last accessed October
20, 2007); update available at https://ostpxweb.dot.
gov/policy/Data/VOTrevision1_2-11-03.pdf (last
accessed October 20, 2007).
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
associated with traffic accidents, and
increased traffic noise. The agencies rely
on estimates of congestion, accident,
and noise costs caused by automobiles
and light trucks developed by the
Federal Highway Administration to
estimate the increased external costs
caused by added driving due to the
rebound effect.100
• Petroleum consumption and import
externalities—U.S. consumption and
imports of petroleum products also
impose costs on the domestic economy
that are not reflected in the market price
for crude petroleum, or in the prices
paid by consumers of petroleum
products such as gasoline. In economics
literature on this subject, these costs
include (1) higher prices for petroleum
products resulting from the effect of
U.S. oil import demand on the world oil
price (‘‘monopsony costs’’); (2) the risk
of disruptions to the U.S. economy
caused by sudden reductions in the
supply of imported oil to the U.S.; and
(3) expenses for maintaining a U.S.
military presence to secure imported oil
supplies from unstable regions, and for
maintaining the strategic petroleum
reserve (SPR) to cushion against
resulting price increases.101 Reducing
U.S. imports of crude petroleum or
refined fuels can reduce the magnitude
of these external costs. Any reduction in
their total value that results from lower
fuel consumption and petroleum
imports represents an economic benefit
of setting more stringent standards over
and above the dollar value of fuel
savings itself. The agencies do not
include a value for monopsony costs in
order to be consistent with their use of
a global value for the social cost of
carbon. Based on a recently-updated
ORNL study, we estimate that each
gallon of fuel saved that results in a
reduction in U.S. petroleum imports
(either crude petroleum or refined fuel)
will reduce the expected costs of oil
supply disruptions to the U.S. economy
by $0.169 (2007$). The agencies do not
include savings in budgetary outlays to
support U.S. military activities among
the benefits of higher fuel economy and
the resulting fuel savings. Each gallon of
100 These estimates were developed by FHWA for
use in its 1997 Federal Highway Cost Allocation
Study; https://www.fhwa.dot.gov/policy/hcas/final/
index.htm (last accessed July 29, 2009).
101 See, e.g., Bohi, Douglas R. and W. David
Montgomery (1982). Oil Prices, Energy Security,
and Import Policy Washington, DC: Resources for
the Future, Johns Hopkins University Press; Bohi,
D. R., and M. A. Toman (1993). ‘‘Energy and
Security: Externalities and Policies,’’ Energy Policy
21:1093–1109; and Toman, M. A. (1993). ‘‘The
Economics of Energy Security: Theory, Evidence,
Policy,’’ in A. V. Kneese and J. L. Sweeney, eds.
(1993). Handbook of Natural Resource and Energy
Economics, Vol. III. Amsterdam: North-Holland, pp.
1167–1218.
PO 00000
Frm 00053
Fmt 4701
Sfmt 4702
49505
fuel saved as a consequence of higher
standards is anticipated to reduce total
U.S. imports of crude petroleum or
refined fuel by 0.95 gallons.102
• Air pollutant emissions
Æ Impacts on criteria air pollutant
emissions—While reductions in
domestic fuel refining and distribution
that result from lower fuel consumption
will reduce U.S. emissions of criteria
pollutants, additional vehicle use
associated with the rebound effect will
increase emissions of these pollutants.
Thus the net effect of stricter standards
on emissions of each criteria pollutant
depends on the relative magnitudes of
reduced emissions from fuel refining
and distribution, and increases in
emissions resulting from added vehicle
use. Criteria air pollutants emitted by
vehicles and during fuel production
include carbon monoxide (CO),
hydrocarbon compounds (usually
referred to as ‘‘volatile organic
compounds,’’ or VOC), nitrogen oxides
(NOX), fine particulate matter (PM2.5),
and sulfur oxides (SOX). It is assumed
that the emission rates (per mile) stay
constant for future year vehicles.
Æ EPA and NHTSA estimate the
economic value of the human health
benefits associated with reducing
exposure to PM2.5 using a ‘‘benefit-perton’’ method. These PM2.5-related
benefit-per-ton estimates provide the
total monetized benefits to human
health (the sum of reductions in
premature mortality and premature
morbidity) that result from eliminating
one ton of directly emitted PM2.5, or one
ton of a pollutant that contributes to
secondarily-formed PM2.5 (such as NOX,
SOX, and VOCs), from a specified
source. Chapter 4.2.9 of the Technical
Support Document that accompanies
this proposal includes a description of
these values.
Reductions in GHG emissions—
Emissions of carbon dioxide and other
greenhouse gases (GHGs) occur
throughout the process of producing
and distributing transportation fuels, as
well as from fuel combustion itself. By
reducing the volume of fuel consumed
by passenger cars and light trucks,
higher standards will thus reduce GHG
emissions generated by fuel use, as well
as throughout the fuel supply cycle. The
agencies estimated the increases of
GHGs other than CO2, including
102 Each gallon of fuel saved is assumed to reduce
imports of refined fuel by 0.5 gallons, and the
volume of fuel refined domestically by 0.5 gallons.
Domestic fuel refining is assumed to utilize 90%
imported crude petroleum and 10% domesticallyproduced crude petroleum as feedstocks. Together,
these assumptions imply that each gallon of fuel
saved will reduce imports of refined fuel and crude
petroleum by 0.50 gallons + 0.50 gallons*90% =
0.50 gallons + 0.45 gallons = 0.95 gallons.
E:\FR\FM\28SEP2.SGM
28SEP2
49506
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
methane and nitrous oxide, from
additional vehicle use by multiplying
the increase in total miles driven by cars
and light trucks of each model year and
age by emission rates per vehicle-mile
for these GHGs. These emission rates,
which differ between cars and light
trucks as well as between gasoline and
diesel vehicles, were estimated by EPA
using its recently-developed Motor
Vehicle Emission Simulator (Draft
MOVES 2009).103 Increases in emissions
of non-CO2 GHGs are converted to
equivalent increases in CO2 emissions
using estimates of the Global Warming
Potential (GWP) of methane and nitrous
oxide.
Æ Economic value of reductions in
CO2 emissions—EPA and NHTSA
assigned a dollar value to reductions in
CO2 emissions using the marginal dollar
value (i.e., cost) of climate-related
damages resulting from carbon
emissions, also referred to as ‘‘social
cost of carbon’’ (SCC). The SCC is
intended to measure the monetary value
society places on impacts resulting from
increased GHGs, such as property
damage from sea level rise, forced
migration due to dry land loss, and
mortality changes associated with
vector-borne diseases. Published
estimates of the SCC vary widely as a
result of uncertainties about future
economic growth, climate sensitivity to
GHG emissions, procedures used to
model the economic impacts of climate
change, and the choice of discount rates.
EPA and NHTSA’s coordinated
proposals present a set of interim SCC
values reflecting a Federal interagency
group’s interpretation of the relevant
climate economics literature. Sections
III.H and IV.C.3 provide more detail
about SCC.
• Discounting future benefits and
costs—Discounting future fuel savings
and other benefits is intended to
account for the reduction in their value
to society when they are deferred until
some future date, rather than received
immediately. The discount rate
expresses the percent decline in the
value of these benefits—as viewed from
today’s perspective—for each year they
are deferred into the future. In
evaluating the non-climate related
benefits of the proposed standards, the
agencies have employed discount rates
of both 3 percent and 7 percent.
For the reader’s reference, Table
II.F.1–1 below summarizes the values
used to calculate the impacts of each
proposed standard. The values
presented in this table are summaries of
the inputs used for the models; specific
values used in the agencies’ respective
analyses may be aggregated, expanded,
or have other relevant adjustments. See
the respective RIAs for details. The
agencies seek comment on the economic
assumptions presented in the table and
discussed below.
In addition, the agencies have
conducted a range of sensitivities and
present them in their respective RIAs.
For example, NHTSA has conducted a
sensitivity analysis on several
assumptions including (1) forecasts of
future fuel prices, (2) the discount rate
applied to future benefits and costs, (3)
the magnitude of the rebound effect, (4)
the value to the U.S. economy of
reducing carbon dioxide emissions, (5)
the monopsony effect, and (6) the
reduction in external economic costs
resulting from lower U.S. oil imports.
This information is provided in
NHTSA’s PRIA. The agencies will
consider additional sensitivities for the
final rule as appropriate, including
sensitivities on the markup factors
applied to direct manufacturing costs to
account for indirect costs (i.e., the
Indirect Cost Markups (ICMs) which are
discussed in Sections III and IV), and
the learning curve estimates used in this
analysis.
TABLE II.F.1–1—ECONOMIC VALUES FOR BENEFITS COMPUTATIONS (2007$)
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Fuel Economy Rebound Effect ............................................................................................................................................................
‘‘Gap’’ between test and on-road MPG ...............................................................................................................................................
Value of refueling time per ($ per vehicle-hour) .................................................................................................................................
Annual growth in average vehicle use ................................................................................................................................................
Fuel Prices (2012–50 average, $/gallon):
Retail gasoline price .....................................................................................................................................................................
Pre-tax gasoline price ...................................................................................................................................................................
Economic Benefits from Reducing Oil Imports ($/gallon):
‘‘Monopsony’’ Component ............................................................................................................................................................
Price Shock Component ...............................................................................................................................................................
Military Security Component ........................................................................................................................................................
Total Economic Costs ($/gallon) ..................................................................................................................................................
Emission Damage Costs (2020, $/ton or $/metric ton):
Carbon monoxide .........................................................................................................................................................................
Volatile organic compounds (VOC) ..............................................................................................................................................
Nitrogen oxides (NOX)—vehicle use ............................................................................................................................................
Nitrogen oxides (NOX)—fuel production and distribution ............................................................................................................
Particulate matter (PM2.5)—vehicle use .......................................................................................................................................
Particulate matter (PM2.5)—fuel production and distribution ........................................................................................................
Sulfur dioxide (SO2) ......................................................................................................................................................................
Carbon dioxide (CO2) ...................................................................................................................................................................
Annual Increase in CO2 Damage Cost ........................................................................................................................................
External Costs from Additional Automobile Use ($/vehicle-mile):
Congestion ....................................................................................................................................................................................
Accidents ......................................................................................................................................................................................
Noise .............................................................................................................................................................................................
Total External Costs .....................................................................................................................................................................
External Costs from Additional Light Truck Use ($/vehicle-mile):
103 The MOVES model assumes that the per-mile
rates at which cars and light trucks emit these GHGs
are determined by the efficiency of fuel combustion
during engine operation and chemical reactions that
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
occur during catalytic after-treatment of engine
exhaust, and are thus independent of vehicles’ fuel
consumption rates. Thus MOVES’ emission factors
for these GHGs, which are expressed per mile of
PO 00000
Frm 00054
Fmt 4701
Sfmt 4702
10%
20%
24.64
1.1%
3.77
3.40
0.00
0.17
0.00
0.17
0
1,283
5,116
5,339
238,432
292,180
30,896
5
10
20
34
56
3%
0.054
0.023
0.001
0.078
........................
vehicle travel, are assumed to be unaffected by
changes in fuel economy.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
49507
TABLE II.F.1–1—ECONOMIC VALUES FOR BENEFITS COMPUTATIONS (2007$)—Continued
Congestion ....................................................................................................................................................................................
Accidents ......................................................................................................................................................................................
Noise .............................................................................................................................................................................................
Total External Costs .....................................................................................................................................................................
Discount Rates Applied to Future Benefits .........................................................................................................................................
III. EPA Proposal for Greenhouse Gas
Vehicle Standards
mstockstill on DSKH9S0YB1PROD with PROPOSALS
A. Executive Overview of EPA Proposal
1. Introduction
The Environmental Protection Agency
(EPA) is proposing to establish
greenhouse gas emissions standards for
the largest sources of transportation
greenhouse gases—light-duty vehicles,
light-duty trucks, and medium-duty
passenger vehicles (hereafter light
vehicles). These vehicle categories,
which include cars, sport utility
vehicles, minivans, and pickup trucks
used for personal transportation, are
responsible for almost 60% of all U.S.
transportation related greenhouse gas
emissions. This action represents the
first-ever proposal by EPA to regulate
vehicle greenhouse gas emissions under
the Clean Air Act (CAA) and would
establish standards for model years 2012
and later light vehicles sold in the U.S.
EPA is proposing three separate
standards. The first and most important
is a set of fleet-wide average carbon
dioxide (CO2) emission standards for
cars and trucks. These standards are
based on CO2 emissions-footprint
curves, where each vehicle has a
different CO2 emissions compliance
target depending on its footprint value.
Vehicle CO2 emissions would be
measured over the EPA city and
highway tests. The proposed standard
allows for credits based on
demonstrated improvements in vehicle
air conditioner systems, including both
efficiency and refrigerant leakage
improvement, which are not captured
by the EPA tests. The EPA projects that
the average light vehicle tailpipe CO2
level in model year 2011 will be 326
grams per mile while the average
vehicle tailpipe CO2 emissions
compliance level for the proposed
model year 2016 standard will be 250
grams per mile, an average reduction of
23 percent from today’s CO2 levels.
EPA is also proposing standards that
will cap tailpipe nitrous oxide (N2O)
and methane (CH4) emissions at 0.010
and 0.030 grams per mile, respectively.
Even after adjusting for the higher
relative global warming potencies of
these two compounds, nitrous oxide
and methane emissions represent less
than one percent of overall vehicle
greenhouse gas emissions from new
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
vehicles. Accordingly, the goal of these
two proposed standards is to limit any
potential increases in the future and not
to force reductions relative to today’s
low levels.
This proposal represents the secondphase of EPA’s response to the Supreme
Court’s 2007 decision in Massachusetts
v. EPA 104 which found that greenhouse
gases were air pollutants for purposes of
the Clean Air Act. The Court held that
the Administrator must determine
whether or not emissions from new
motor vehicles cause or contribute to air
pollution which may reasonably be
anticipated to endanger public health or
welfare, or whether the science is too
uncertain to make a reasoned decision.
The Court further ruled that, in make
these decisions, the EPA Administrator
is required to follow the language of
section 202(a) of the CAA. The Court
remanded the case back to the Agency
for reconsideration in light of its
finding.
The Administrator responded to the
Court’s remand by issuing two proposed
findings under section 202(a) of the
Clean Air Act.105 First, the
Administrator proposed to find that the
science supports a positive
endangerment finding that a mix of
certain greenhouse gases in the
atmosphere endangers the public health
and welfare of current and future
generations. This is referred to as the
endangerment finding. Second, the
Administrator proposed to find that the
emissions of four of these gases—carbon
dioxide, methane, nitrous oxide, and
hydrofluorocarbons—from new motor
vehicles and new motor vehicle engines
contribute to the atmospheric
concentrations of these key greenhouse
gases and hence to the threat of climate
change. This is referred to as the cause
and contribute finding. Finalizing this
proposed light vehicle regulations is
contingent upon EPA finalizing both the
endangerment finding and cause or
104 549 U.S. 497 (2007). For further information
on Massachusetts v. EPA see the July 30, 2008
Advance Notice of Proposed Rulemaking,
‘‘Regulating Greenhouse Gas Emissions under the
Clean Air Act’’, 73 FR 44354 at 44397. There is a
comprehensive discussion of the litigation’s history,
the Supreme Court’s findings, and subsequent
actions undertaken by the Bush Administration and
the EPA from 2007–2008 in response to the
Supreme Court remand.
105 74 FR 18886, April 24, 2009.
PO 00000
Frm 00055
Fmt 4701
Sfmt 4702
0.048
0.026
0.001
0.075
3%, 7%
contribute finding. Sections III.B.1
through III.B.4 below provide more
details on the legal and scientific bases
for this proposal.
As discussed in Section I, this GHG
proposal is part of a joint National
Program such that a large majority of the
projected benefits are achieved jointly
with NHTSA’s proposed CAFE rule
which is described in detail in Section
IV of this preamble. EPA’s proposal
projects total carbon dioxide emissions
savings of nearly 950 million metric
tons, and oil savings of 1.8 billion
barrels over the lifetimes of the vehicles
sold in model years 2012–2016. EPA
projects net societal benefits of $192
billion at a 3 percent discount rate for
these same vehicles, or $136 billion at
a 7 percent discount rate (both values
assume a $20/ton SCC value).
Accordingly, these proposed light
vehicle greenhouse gas emissions
standards would make an important
‘‘first step’’ contribution as part of the
National Program toward meeting longterm greenhouse gas emissions and
import oil reduction goals, while
providing important economic benefits
as well.
2. Why is EPA Proposing this Rule?
This proposal addresses only light
vehicles. EPA is addressing light
vehicles as a first step in control of
greenhouse gas emissions under the
Clean Air Act for four reasons. First,
light vehicles are responsible for almost
60% of all mobile source greenhouse gas
emissions, a share three times larger
than any other mobile source subsector,
and represent about one-sixth of all U.S.
greenhouse gas emissions. Second,
technology exists that can be readily
and cost-effectively applied to these
vehicles to reduce greenhouse gas
emissions in the near term. Third, EPA
already has an existing testing and
compliance program for these vehicles,
refined since the mid-1970s for
emissions certification and fuel
economy compliance, which would
require only minor modifications to
accommodate greenhouse gas emissions
regulations. Finally, this proposal is an
important first step in responding to the
Supreme Court’s ruling in
Massachusetts vs. EPA. In addition,
EPA is currently evaluating controls for
motor vehicles other than those covered
E:\FR\FM\28SEP2.SGM
28SEP2
49508
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
by this proposal, and is reviewing seven
petitions submitted by various States
and organizations requesting that EPA
use its Clean Air Act authorities to take
action to reduce greenhouse gas
emissions from aircraft (under
§ 231(a)(2)), ocean-going vessels (under
§ 213(a)(4)), and other nonroad engines
and vehicle sources (also under
§ 213(a)(4)).
a. Light Vehicle Emissions Contribute to
Greenhouse Gases and the Threat of
Climate Change
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Greenhouse gases are gases in the
atmosphere that effectively trap some of
the Earth’s heat that would otherwise
escape to space. Greenhouse gases are
both naturally occurring and
anthropogenic. The primary greenhouse
gases of concern are directly emitted by
human activities and include carbon
dioxide, methane, nitrous oxide,
hydrofluorocarbons, perfluorocarbons,
and sulfur hexafluoride.
These gases, once emitted, remain in
the atmosphere for decades to centuries.
Thus, they become well mixed globally
in the atmosphere and their
concentrations accumulate when
emissions exceed the rate at which
natural processes remove greenhouse
gases from the atmosphere. The heating
effect caused by the human-induced
buildup of greenhouse gases in the
atmosphere is very likely106 the cause of
most of the observed global warming
over the last 50 years. The key effects of
climate change observed to date and
projected to occur in the future include,
but are not limited to, more frequent
and intense heat waves, more severe
wildfires, degraded air quality, heavier
and more frequent downpours and
flooding, increased drought, greater sea
level rise, more intense storms, harm to
water resources, continued ocean
acidification, harm to agriculture, and
harm to wildlife and ecosystems. A
detailed explanation of observed and
projected changes in greenhouse gases
and climate change and its impact on
health, society, and the environment is
included in EPA’s technical support
document for the recently released
Proposed Endangerment and Cause or
Contribute Findings for Greenhouse
Gases Under Section 202(a) of the Clean
Air Act.107
106 According to Intergovernmental Panel on
Climate Change (IPCC) terminology, ‘‘very likely’’
conveys a 90 to 99 percent probability of
occurrence. ‘‘Virtually certain’’ conveys a greater
than 99 percent probability, ‘‘likely’’ conveys a 66
to 90 percent probability, and ‘‘about as likely as
not’’ conveys a 33 to 66 percent probability.
107 74 FR18886, April 24, 2009. Both the Federal
Register Notice and the Technical Support
Document for this rulemaking are found in the
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
Transportation sources represent a
large and growing share of United States
greenhouse gases and include
automobiles, highway heavy duty
trucks, airplanes, railroads, marine
vessels and a variety of other sources. In
2006, all transportation sources emitted
31.5% of all U.S. greenhouse gases, and
were the fastest-growing source of
greenhouse gases in the U.S., accounting
for 47% of the net increase in total U.S.
greenhouse gas emissions from 1990–
2006.108 The only sector with larger
greenhouse gas emissions was
electricity generation which emitted
33.7% of all U.S. greenhouse gases.
Light vehicles emit four greenhouse
gases: carbon dioxide, methane, nitrous
oxide and hydrofluorocarbons. Carbon
dioxide (CO2) is the end product of
fossil fuel combustion. During
combustion, the carbon stored in the
fuels is oxidized and emitted as CO2 and
smaller amounts of other carbon
compounds.109 Methane (CH4)
emissions are a function of the methane
content of the motor fuel, the amount of
hydrocarbons passing uncombusted
through the engine, and any postcombustion control of hydrocarbon
emissions (such as catalytic
converters).110 Nitrous oxide (N2O) (and
nitrogen oxide (NOX)) emissions from
vehicles and their engines are closely
related to air-fuel ratios, combustion
temperatures, and the use of pollution
control equipment. For example, some
types of catalytic converters installed to
reduce motor vehicle NOX, carbon
monoxide (CO) and hydrocarbon
emissions can promote the formation of
N2O.111 Hydrofluorocarbons (HFC)
emissions are progressively replacing
chlorofluorocarbons (CFC) and
hydrochlorofluorocarbons (HCFC) in
these vehicles’ cooling and refrigeration
systems as CFCs and HCFCs are being
phased out under the Montreal Protocol
and Title VI of the CAA. There are
multiple emissions pathways for HFCs
with emissions occurring during
charging of cooling and refrigeration
public docket for this rulemaking. Docket is EPA–
OAR–2009–0171.
108 Inventory of U.S. Greenhouse Gases and Sinks:
1990–2006.
109 Mobile source carbon dioxide emissions in
2006 equaled 26 percent of total U.S. CO2
emissions.
110 In 2006, methane emissions equaled 0.32
percent of total U.S. methane emissions Nitrous
oxide is a product of the reaction that occurs
between nitrogen and oxygen during fuel
combustion.
111 In 2006, nitrous oxide emissions for these
sources accounted for 8 percent of total U.S. nitrous
oxide emissions.
PO 00000
Frm 00056
Fmt 4701
Sfmt 4702
systems, during operations, and during
decommissioning and disposal.112
b. Basis for Action Under Clean Air Act
Section 202(a)(1) of the Clean Air Act
(CAA) states that ‘‘the Administrator
shall by regulation prescribe (and from
time to time revise) * * * standards
applicable to the emission of any air
pollutant from any class or classes of
new motor vehicles * * *, which in his
judgment cause, or contribute to, air
pollution which may reasonably be
anticipated to endanger public health or
welfare.’’ As noted above, the
Administrator has proposed to find that
the air pollution of elevated levels of
greenhouse gas concentrations may
reasonably be anticipated to endanger
public health and welfare.113 The
Administrator has proposed to define
the air pollution to be the elevated
concentrations of the mix of six GHGs:
carbon dioxide (CO2), methane (CH4),
nitrous oxide (N2O), hydrofluorocarbons
(HFCs), perfluorocarbons (PFCs), and
sulfur hexafluoride (SF6). The
Administrator has further proposed to
find under CAA section 202(a) that CO2,
methane, N2O and HFC emissions from
new motor vehicles and engines
contribute to this air pollution. This
preamble describes proposed standards
that would control emissions of CO2,
HFCs, nitrous oxide, and methane.
Standards for these GHGs would only be
finalized if EPA determines that the
criteria have been met for endangerment
by the air pollution, and that emissions
of GHGs from new motor vehicles or
engines ‘‘cause or contribute’’ to that air
pollution. In that case, section 202(a)
would authorize EPA to issue standards
applicable to emissions of those
pollutants. For further discussion of
EPA’s authority under section 202(a),
see Section I.C.2 of the proposal.
There are a variety of other CAA Title
II provisions that are relevant to
standards established under section
202(a). As noted above, the standards
are applicable to motor vehicles for their
useful life. EPA has the discretion in
determining what standard applies over
the useful life. For example, EPA may
set a single standard that applies both
when the vehicles are new and
throughout the useful life, or where
appropriate may set a standard that
varies during the term of useful life,
such as a standard that is more stringent
in the early years of the useful life and
less stringent in the later years.
112 In 2006 HFC from these source categories
equaled 56 percent of total U.S. HFC emissions,
making it the single largest source category of U.S.
HFC emissions.
113 74 FR18886, April 24, 2009.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
c. EPA’s Greenhouse Gas Proposal
Under Section 202(a) Concerning
Endangerment and Cause or Contribute
Findings
EPA’s Administrator recently signed a
proposed action with two distinct
findings regarding greenhouse gases
under section 202(a) of the Clean Air
Act. This action is called the Proposed
Endangerment and Cause or Contribute
Findings for Greenhouse Gases under
the Clean Air Act (Endangerment
Proposal).114 The Administrator
proposed an affirmative endangerment
finding that the current and projected
concentrations of a mix of six key
greenhouse gases—carbon dioxide
(CO2), methane (CH4), nitrous oxide
(N2O), hydrofluorocarbons (HFCs),
perfluorocarbons (PFCs), and sulfur
hexafluoride(SF6)—in the atmosphere
threaten the public health and welfare
of current and future generations. She
also proposed to find that the combined
emissions of four of the gases—carbon
dioxide, methane, nitrous oxide and
hydrofluorocarbons from new motor
vehicles and motor vehicle engines—
contribute to the atmospheric
concentrations of these greenhouse
gases and therefore to the climate
change problem.
Specifically, the Administrator
proposed, after a thorough examination
of the scientific evidence on the causes
and impact of current and future climate
change, to find that the science
FR 18886 (April 24, 2009).
VerDate Nov<24>2008
23:31 Sep 25, 2009
U.S. greenhouse gas emissions, and
more than 4% of total global greenhouse
gas emissions.116 The Administrator
also considered whether emissions of
each greenhouse gas individually, as a
separate air pollutant, would contribute
to this air pollution.
If the Administrator makes affirmative
findings under section 202(a) on both
endangerment and cause or contribute,
then EPA is to issue standards
‘‘applicable to emission’’ of the air
pollutant or pollutants that EPA finds
causes or contributes to the air pollution
that endangers public health and
welfare. The Endangerment Proposal
invited public comment on whether the
air pollutant should be considered the
group of GHGs, or whether each GHG
should be treated as a separate air
pollutant. Either way, the emissions
standards proposed today would satisfy
the requirements of section 202(a) as the
Administrator has significant discretion
in how to structure the standards that
apply to the emission of the air
pollutant or air pollutants at issue. For
example, under either approach EPA
would have the discretion under section
202(a) to adopt separate standards for
each GHG, a single composite standard
covering various gases, or any
combination of these. In this rulemaking
EPA is proposing separate standards for
nitrous oxide and methane, and a CO2
standard that provides for credits based
on reductions of HFCs, as the
appropriate way to issue standards
applicable to emissions of these GHGs.
Jkt 217001
compellingly supports a positive finding
that atmospheric concentrations of these
greenhouse gases result in air pollution
which may reasonably be anticipated to
endanger both public health and
welfare. In her proposed finding, the
Administrator relied heavily upon the
major findings and conclusions from the
recent assessments of the U.S. Climate
Change Science Program and the U.N.
Intergovernmental Panel on Climate
Change.115 The Administrator proposed
a positive endangerment finding after
considering both observed and projected
future effects of climate change, key
uncertainties, and the full range of risks
and impacts to public health and
welfare occurring within the United
States. In addition, the proposed finding
noted that the evidence concerning risks
and impacts occurring outside the U.S.
provided further support for the
proposed finding.
The key scientific findings supporting
the proposed endangerment finding are
that:
—Concentrations of greenhouse gases
are at unprecedented levels compared
to recent and distant past. These high
concentrations are the unambiguous
result of anthropogenic emissions and
are very likely the cause of the
observed increase in average
temperatures and other climatic
changes.
—The effects of climate change
observed to date and projected to
occur in the future include more
frequent and intense heat waves, more
severe wildfires, degraded air quality,
heavier downpours and flooding,
increasing drought, greater sea level
rise, more intense storms, harm to
water resources, harm to agriculture,
and harm to wildlife and ecosystems.
These impacts are effects on public
health and welfare within the
meaning of the Clean Air Act.
With regard to new motor vehicles
and engines, the Administrator also
proposed a finding that the combined
emissions of four greenhouse gases—
carbon dioxide, methane, nitrous oxide
and hydrofluorocarbons—from new
motor vehicles and engines contributes
to this air pollution, i.e., the
atmospheric concentrations of the mix
of six greenhouse gases which create the
threat of climate change and its impacts.
Key facts supporting the proposed cause
and contribute finding for on-highway
vehicles regulated under section 202(a)
of the Clean Air Act are that these
sources are responsible for 24% of total
The CO2 emissions standards are by
far the most important of the three
standards and are the primary focus of
this summary. EPA is proposing an
attribute-based approach for the CO2
fleet-wide standard (one for cars and
one for trucks), based on vehicle
footprint as the attribute. These curves
establish different CO2 emissions targets
for each unique car and truck footprint.
Generally, the larger the vehicle
footprint, the higher the corresponding
vehicle CO2 emissions target. Table
III.A.3–1 shows the greenhouse gas
standards for light vehicles that EPA is
proposing for model years (MY) 2012
and later:
115 The U.S. Climate Change Science Program
(CCSP) is now called the U.S. Global Change
Research Program (GCRP).
The standards established under CAA
section 202(a) are implemented and
enforced through various mechanisms.
Manufacturers are required to obtain an
EPA certificate of conformity with the
section 202 regulations before they may
sell or introduce their new motor
vehicle into commerce, according to
CAA section 206(a). The introduction
into commerce of vehicles without a
certificate of conformity is a prohibited
act under CAA section 203 that may
subject a manufacturer to civil penalties
and injunctive actions (see CAA
sections 204 and 205). Under CAA
section 206(b), EPA may conduct testing
of new production vehicles to determine
compliance with the standards. For inuse vehicles, if EPA determines that a
substantial number of vehicles do not
conform to the applicable regulations
then the manufacturer must submit and
implement a remedial plan to address
the problem (see CAA section 207(c)).
There are also emissions-based
warranties that the manufacturer must
implement under CAA section 207(a).
114 74
49509
116 This figure includes the greenhouse gas
contributions of light vehicles, heavy duty vehicles,
and remaining on-highway mobile sources.
PO 00000
Frm 00057
Fmt 4701
Sfmt 4702
3. What is EPA Proposing?
a. Proposed Light-Duty Vehicle, LightDuty Truck, and Medium-Duty
Passenger Vehicle Greenhouse Gas
Emission Standards and Projected
Compliance Levels
E:\FR\FM\28SEP2.SGM
28SEP2
49510
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
TABLE III.A.3–1—PROPOSED INDUSTRY-WIDE GREENHOUSE GAS EMISSIONS STANDARDS
Standard/covered
pollutants
Form of
standard
Level of
standard
Credits
Test cycles
CO2 Standard 117: Tailpipe CO2 ................
Fleetwide average
footprint CO2-curves
for cars and trucks.
See footprint—CO2
curves in Figure I.C–
1 for cars and Figure
I.C–2 for trucks.
CO2-e credits 118 .........
N2O Standard: Tailpipe N2O .....................
CH4 Standard: Tailpipe CH4 ......................
Cap per vehicle ...........
Cap per vehicle ...........
0.010 g/mi ...................
0.030 g/mi ...................
None ...........................
None ...........................
EPA 2-cycle (FTP and
HFET test cycles),
with separate mechanisms for A/C credits.119
EPA FTP test.
EPA FTP test.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
One important flexibility associated
with the proposed CO2 standard is the
proposed option for manufacturers to
obtain credits associated with
improvements in their air conditioning
systems. As will be discussed in greater
detail in later sections, EPA is
establishing test procedures and design
criteria by which manufacturers can
demonstrate improvements in both air
conditioner efficiency (which reduces
vehicle tailpipe CO2 by reducing the
load on the engine) and air conditioner
refrigerants (using lower global warming
potency refrigerants and/or improving
system design to reduce GHG emissions
associated with leaks). Neither of these
strategies to reduce GHG emissions from
air conditioners would be reflected in
the EPA FTP or HFET tests. These
improvements would be translated to a
g/mi CO2-equivalent credit that can be
subtracted from the manufacturer’s
tailpipe CO2 compliance value. EPA
expects a high percentage of
manufacturers to take advantage of this
flexibility to earn air conditioningrelated credits for MY2012–2016
vehicles such that the average credit
earned is about 11 grams per mile CO2–
equivalent in 2016.
A second flexibility being proposed is
CO2 credits for flexible and dual fuel
vehicles, similar to the CAFE credits for
such vehicles which allow
manufacturers to gain up to 1.2 mpg in
their overall CAFE ratings. The Energy
Independence and Security Act of 2007
(EISA) mandated a phase-out of these
flexible fuel vehicle CAFE credits
beginning in 2015, and ending after
2019. EPA is proposing to allow
comparable CO2 credits for flexible fuel
vehicles through MY 2015, but for MY
2016 and beyond, EPA is proposing to
treat flexible and dual fuel vehicles on
a CO2-performance basis, calculating the
overall CO2 emissions for flexible and
dual fuel vehicles based on a fuel useweighted average of the CO2 levels on
gasoline and on a manufacturer’s
demonstrated actual usage of the
alternative fuel in its vehicle fleet.
Table III.A.3–2 summarizes EPA
projections of industry-wide 2-cycle
CO2 emissions and fuel economy levels
that would be achieved by manufacturer
compliance with the proposed GHG
standards for MY2012–2016.
For MY2011, Table III.A.3–2 uses the
projected NHTSA compliance values for
its MY2011 CAFE standards of 30.2 mpg
for cars and 24.1 mpg for trucks,
converted to an equivalent combined
car and truck CO2 level of 325 grams per
mile.120 EPA believes this is a
reasonable estimate with which to
compare the proposed MY2012–2016
CO2 emission standards. Identifying the
proper MY2011 estimate is complicated
for many reasons, among them being the
turmoil in the current automotive
market for consumers and
manufacturers, uncertain and volatile
oil and gasoline prices, the ability of
manufacturers to use flexible fuel
vehicle credits to meet MY2011 CAFE
standards, and the fact that most
manufacturers have been surpassing
CAFE standards (particularly the car
standard) in recent years. Taking all of
these considerations into account, EPA
believes that the MY2011 projected
CAFE compliance values, converted to
CO2 emissions levels, represent a
reasonable estimate.
Table III.A.3–2 shows projected
industry-wide average CO2 emissions
values. The Projected CO2 Emissions for
the Footprint-Based Standard column
shows the CO2 g/mi level corresponding
with the footprint standard that must be
met. It is based on the proposed CO2footprint curves and projected footprint
values, and will decrease each year to
250 grams per mile (g/mi) in MY2016.
For MY2012–2015, the emissions
impact of the projected utilization of
flexible fuel vehicle (FFV) credits and
the temporary lead-time allowance
alternative standard (TLAAS, discussed
below) are shown in the next two
columns. Neither of these programs is
proposed to be available in MY2016.
The Projected CO2 Emissions column
gives the CO2 emissions levels projected
to be achieved given use of the flexible
fuel credits and temporary lead-time
allowance program. This column shows
that, relative to the MY 2011 estimate,
EPA projects that MY2016 CO2
emissions will be reduced by 23 percent
over five years. The Projected A/C
Credit column represents the industry
wide average air conditioner credit
manufacturers are expected to earn on
an equivalent CO2 gram per mile basis
in a given model year. In MY2016, the
projected A/C credit of 10.6 g/mi
represents 14 percent of the 75 g/mi CO2
emissions reductions associated with
the proposed standards. The Projected
2-cycle CO2 Emissions column shows
the projected CO2 emissions as
measured over the EPA 2-cycle tests,
which would allow compliance with the
standard assuming utilization of the
projected FFV, TLAAS, and A/C credits.
117 While over 99 percent of the carbon in
automotive fuels is converted to CO2 in a properly
functioning engine, compliance with the CO2
standard will also account for the very small levels
of carbon associated with vehicle tailpipe
hydrocarbon (HC) and carbon monoxide (CO)
emissions, converted to CO2 on a mass basis, as
discussed further in section x.
118 CO -e refers to CO -equivalent, and is a metric
2
2
that allows non-CO2 greenhouse gases (such as
hydrofluorocarbons used as automotive air
conditioning refrigerants) to be expressed as an
equivalent mass (i.e., corrected for relative global
warming potency) of CO2 emissions.
119 FTP is the Federal Test Procedure which uses
what is commonly referred to as the ‘‘city’’ driving
schedule, and HFET is the Highway Fuel Economy
Test which uses the ‘‘highway’’ driving schedule.
Compliance with the CO2 standard will be based on
the same 2-cycle values that are currently used for
CAFE standards compliance; EPA projects that
fleet-wide in-use or real world CO2 emissions are
approximately 25 percent higher, on average, than
2-cycle CO2 values.
120 74 FR 14196.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00058
Fmt 4701
Sfmt 4702
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
49511
TABLE III.A.3–2—PROJECTED FLEETWIDE CO2 EMISSIONS VALUES (GRAMS PER MILE)
Projected
CO2 emissions for the
footprintbased
standard
Model year
2011
2012
2013
2014
2015
2016
.................................................................................
.................................................................................
.................................................................................
.................................................................................
.................................................................................
.................................................................................
EPA is also proposing a series of
flexibilities for compliance with the CO2
standard which are not expected to
significantly affect the projected
compliance and achieved values shown
above, but which should significantly
reduce the costs of achieving those
reductions. These flexibilities include
the ability to earn: annual credits for a
manufacturer’s over-compliance with its
unique fleet-wide average standard,
early credits from MY2009–2011,
credits for early introduction of
advanced technology vehicles, credit for
‘‘off-cycle’’ CO2 reductions not reflected
in CO2/fuel economy tests, as well as
the carry-forward and carry-backward of
credits, the ability to transfer credits
between a manufacturer’s car and truck
fleets, and a temporary lead-time
allowance alternative standard
(included in the tables above) that will
permit manufacturers with less than
400,000 vehicles produced in MY 2009
to designate a fraction of their vehicles
to meet a 25% higher CO2 standard for
MY 2012–2015. All of these proposed
Projected
FFV credit
Projected
TLAAS
credit
....................
295
286
276
263
250
....................
6
5.7
5.4
4.1
0
....................
0.3
0.2
0.2
0.1
0
flexibilities are discussed in greater
detail in later sections.
EPA is also proposing caps on the
tailpipe emissions of nitrous oxide
(N2O) and methane (CH4)—0.010 g/mi
for N2O and 0.030 g/mi for CH4—over
the EPA FTP test. While N2O and CH4
can be potent greenhouse gases on a
relative mass basis, their emission levels
from modern vehicle designs are
extremely low and represent only about
1% of total light vehicle GHG emissions.
These cap standards are designed to
ensure that N2O and CH4 emissions
levels do not rise in the future, rather
than to force reductions in the already
low emissions levels. Accordingly, these
standards are not designed to require
automakers to make any changes in
current vehicle designs, and thus EPA is
not projecting any environmental or
economic impacts associated with these
proposed standards.
EPA has attempted to build on
existing practice wherever possible in
designing a compliance program for the
proposed GHG standards. In particular,
Projected
CO2 emissions
Projected
A/C credit
(325)
302
291
281
267
250
....................
3.1
5.0
7.5
10.0
10.6
Projected
2-cycle CO2
emissions
(325)
305
296
289
277
261
the program structure proposed will
streamline the compliance process for
both manufacturers and EPA by
enabling manufacturers to use a single
data set to satisfy both the new GHG and
CAFE testing and reporting
requirements. Timing of certification,
model-level testing, and other
compliance activities also follow
current practices established under the
Tier 2 and CAFE programs.
b. Environmental and Economic
Benefits and Costs of EPA’s Proposed
Standards
In Table III.A.3–3 EPA presents
estimated annual net benefits for the
indicated calendar years. The table also
shows the net present values of those
benefits for the calendar years 2012–
2050 using both a 3% and a 7%
discount rate. As discussed previously,
EPA recognizes that much of these same
costs and benefits are also attributed to
the proposed CAFE standard contained
in this joint proposal.
TABLE III.A.3–3—PROJECTED QUANTIFIABLE BENEFITS AND COSTS FOR PROPOSED CO2 STANDARD
[(In million 2007 $s) [Note: B = unquantified benefits]
2020
Quantified Annual
Costs a
........................
2030
2040
¥$25,100
¥$72,500
2050
NPV, 3%
NPV, 7%
¥$105,700
¥$146,100
¥$1,287,600
¥$529,500
Benefits from Reduced GHG Emissions at each assumed SCC value:
SCC
SCC
SCC
SCC
SCC
5% ............................................
5% Newell-Pizer .......................
from 3% and 5% ......................
3% ............................................
3% Newell-Pizer .......................
1,200
2,500
4,700
8,200
14,000
3,300
6,600
12,000
22,000
36,000
5,700
11,000
22,000
38,000
63,000
9,500
19,000
36,000
63,000
100,000
69,200
138,400
263,000
456,900
761,400
28,600
57,100
108,500
188,500
314,200
1,400
2,300
2,500
4,900
¥2,400
3,000
4,800
4,900
10,000
¥4,900
4,600
6,200
6,400
13,600
¥6,300
6,700
7,800
8,000
18,000
¥7,900
59,800
85,800
89,600
184,700
¥88,200
26,300
38,800
41,000
82,700
¥40,200
93,600
96,900
102,300
135,900
141,200
152,200
188,200
197,700
214,700
1,688,500
1,757,700
1,882,300
706,700
735,200
786,600
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Other Quantified Externalities
PM2.5 Related Benefits b c d ......................
Energy Security Impacts (price shock) ....
Reduced Refueling ..................................
Value of Increased Driving e ....................
Accidents, Noise, Congestion ..................
Quantified Net Benefits at each assumed SCC value:
SCC 5% ............................................
SCC 5% Newell-Pizer .......................
SCC from 3% and 5% ......................
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
35,000
36,300
38,500
PO 00000
Frm 00059
Fmt 4701
Sfmt 4702
E:\FR\FM\28SEP2.SGM
28SEP2
49512
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
TABLE III.A.3–3—PROJECTED QUANTIFIABLE BENEFITS AND COSTS FOR PROPOSED CO2 STANDARD—Continued
[(In million 2007 $s) [Note: B = unquantified benefits]
2020
SCC 3% ............................................
SCC 3% Newell-Pizer .......................
2030
42,000
47,800
2040
112,300
126,300
168,200
193,200
2050
NPV, 3%
241,700
278,700
2,076,200
2,380,700
NPV, 7%
866,600
992,300
a Quantified annual costs are negative because fuel savings are included as negative costs (i.e., positive savings). Since the fuel savings outweigh the vehicle technology costs, the costs of as presented here are actually negative (i.e., they represent savings).
b Note that the co-pollutant impacts associated with the standards presented here do not include the full complement of endpoints that, if quantified and monetized, would change the total monetized estimate of rule-related impacts. Instead, the co-pollutant benefits are based on benefitper-ton values that reflect only human health impacts associated with reductions in PM2.5 exposure. Ideally, human health and environmental
benefits would be based on changes in ambient PM2.5 and ozone as determined by full-scale air quality modeling. However, EPA was unable to
conduct a full-scale air quality modeling analysis in time for the proposal. EPA does intend to more fully capture the co-pollutant benefits for the
analysis of the final standards.
c The PM
2.5-related benefits (derived from benefit-per-ton values) presented in this table are based on an estimate of premature mortality derived from the ACS study (Pope et al., 2002). If the benefit-per-ton estimates were based on the Six Cities study (Laden et al., 2006), the values
would be approximately 145% (nearly two-and-a-half times) larger.
d The PM
2.5-related benefits (derived from benefit-per-ton values) presented in this table assume a 3% discount rate in the valuation of premature mortality to account for a twenty-year segmented cessation lag. If a 7% discount rate had been used, the values would be approximately
9% lower.
e Calculated using pre-tax fuel prices.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
4. Basis for the Proposed GHG
Standards Under Section 202(a)
EPA statutory authority under section
202(a)(1) of the Clean Air Act (CAA) is
discussed in more detail in Section
I.C.2. The following is a summary of the
basis for the proposed standards under
section 202(a), which is discussed in
more detail in the following portions of
Section III.
With respect to CO2 and HFCs, EPA
is proposing attribute-based light-duty
car and truck standards that achieve
large and important emissions
reductions of GHGs. EPA has evaluated
the technological feasibility of the
proposed standards, and the
information and analysis performed by
EPA indicates that these standards are
feasible in the lead time provided. EPA
and NHTSA have carefully evaluated
the effectiveness of individual
technologies as well as the interactions
when technologies are combined. EPA’s
projection of the technology that would
be used to comply with the proposed
standards indicates that manufacturers
will be able to meet the proposed
standards by employing a wide variety
of technology that is already
commercially available and can be
incorporated into their vehicle at the
time of redesign. In addition to the use
of the manufacturers’ redesign cycle,
EPA’s analysis also takes into account
certain flexibilities that will facilitate
compliance especially in the early years
of the program when potential lead time
constraints are most challenging. These
flexibilities include averaging, banking,
and trading of various types of credits.
For the industry as a whole, EPA’s
projections indicate that the proposed
standards can be met using technology
that will be available in the lead-time
provided.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
To account for additional lead-time
concerns for various manufacturers of
typically higher performance vehicles,
EPA is proposing a Temporary Leadtime Allowance that will further
facilitate compliance for limited
volumes of such vehicles in the
program’s initial years. For a few very
small volume manufacturers, EPA
projects that manufacturers will likely
comply using a combination of credits
and technology.
EPA has also carefully considered the
cost to manufacturers of meeting the
standards, estimating piece costs for all
candidate technologies, direct
manufacturing costs, cost markups to
account for manufacturers’ indirect
costs, and manufacturer cost reductions
attributable to learning. In estimating
manufacturer costs, EPA took into
account manufacturers’ own standard
practices such as making major changes
to model technology packages during a
planned redesign cycle. EPA then
projected the average cost across the
industry to employ this technology, as
well as manufacturer-by-manufacturer
costs. EPA considers the per vehicle
costs estimated from this analysis to be
well within a reasonable range in light
of the emissions reductions and benefits
received. EPA projects, for example, that
the fuel savings over the life of the
vehicles will more than offset the
increase in cost associated with the
technology used to meet the standards.
EPA has also evaluated the impacts of
these standards with respect to
reductions in GHGs and reductions in
oil usage. For the lifetime of the model
year 2012–2016 vehicles we estimate
GHG reductions of approximately 950
million metric tons CO2 eq. and fuel
reductions of 1.8 billion barrels of oil.
These are important and significant
reductions that would be achieved by
PO 00000
Frm 00060
Fmt 4701
Sfmt 4702
the proposed standards. EPA has also
analyzed a variety of other impacts of
the standards, ranging from the
standards’ effects on emissions of nonGHG pollutants, impacts on noise,
energy, safety and congestion. EPA has
also quantified the cost and benefits of
the proposed standards, to the extent
practicable. Our analysis to date
indicates that the overall quantified
benefits of the proposed standards far
outweigh the projected costs. Utilizing a
3% discount rate and a $20 per ton
social cost of carbon we estimate the
total net social benefits over the life of
the model year 2012–2016 vehicles is
$192 billion, and the net present value
of the net social benefits of the
standards through the year 2050 is $1.9
trillion dollars. These values are
estimated at $136 billion and $787
billion, respectively, using a 7%
discount rate and the $20 per ton SCC
value.
Under section 202(a) EPA is called
upon to set standards that provide
adequate lead-time for the development
and application of technology to meet
the standards. EPA’s proposed
standards satisfy this requirement, as
discussed above. In setting the
standards, EPA is called upon to weigh
and balance various factors, and to
exercise judgment in setting standards
that are a reasonable balance of the
relevant factors. In this case, EPA has
considered many factors, such as cost,
impacts on emissions (both GHG and
non-GHG), impacts on oil conservation,
impacts on noise, energy, safety, and
other factors, and has where practicable
quantified the costs and benefits of the
rule. In summary, given the technical
feasibility of the standard, the moderate
cost per vehicle in light of the savings
in fuel costs over the life time of the
vehicle, the very significant reductions
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
in emissions and in oil usage, and the
significantly greater quantified benefits
compared to quantified costs, EPA is
confident that the proposed standards
are an appropriate and reasonable
balance of the factors to consider under
section 202(a). See Husqvarna AB v.
EPA, 254 F.3d 195, 200 (D.C. Cir. 2001)
(great discretion to balance statutory
factors in considering level of
technology-based standard, and
statutory requirement ‘‘to [give
appropriate] consideration to the cost of
applying * * * technology’’ does not
mandate a specific method of cost
analysis); see also Hercules Inc. v. EPA,
598 F.2d 91, 106 (D.C. Cir. 1978) (‘‘In
reviewing a numerical standard we
must ask whether the agency’s numbers
are within a zone of reasonableness, not
whether its numbers are precisely
right’’); Permian Basin Area Rate Cases,
390 U.S. 747, 797 (1968) (same); Federal
Power Commission v. Conway Corp.,
426 U.S. 271, 278 (1976) (same); Exxon
Mobil Gas Marketing Co. v. FERC, 297
F.3d 1071, 1084 (D.C. Cir. 2002) (same).
EPA recognizes that the vast majority
of technology which we are considering
for purposes of setting standards under
section 202(a) is commercially available
and already being utilized to a limited
extent across the fleet. The vast majority
of the emission reductions which would
result from this proposed rule would
result from the increased use of these
technologies. EPA also recognizes that
this proposed rule would enhance the
development and limited use of more
advanced technologies, such as PHEVs
and EVs. In this technological context,
there is no clear cut line that indicates
that only one projection of technology
penetration could potentially be
considered feasible for purposes of
section 202(a), or only one standard that
could potentially be considered a
reasonable balancing of the factors
relevant under section 202(a). EPA has
therefore evaluated two sets of
alternative standards, one more
stringent than the proposed standards
and one less stringent.
The alternatives are 4% per year
increase in standards which would be
less stringent than our proposal and a
6% per year increase in the standards
which would be more stringent than our
proposal. EPA is not proposing either of
these. As discussed in Section III.D.7,
the 4% per year compared to the
proposal forgoes CO2 reductions which
can be achieved at reasonable costs and
are achievable by the industry within
the rule’s timeframe. The 6% per year
alternative requires a significant
increase in the projected required
technology which may not be
achievable in this timeframe due to the
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
limited available lead time and the
current difficult financial condition of
the automotive industry. (See Section
III.D.7 for a detailed discussion of why
EPA is not proposing either of the
alternatives.) EPA thus believes that it is
appropriate to propose the CO2
standards discussed above. EPA invites
comment on all aspects of this
judgment, as well as comment on the
alternative standards.
EPA is also proposing standards for
N2O and CH4. EPA has designed these
standards to act as emission rate (i.e.,
gram per mile) caps and to avoid future
increases in light duty vehicle
emissions. As discussed in Section
III.B.6, N2O and CH4 emissions are
already generally well controlled by
current emissions standards, and EPA
has not identified clear technological
steps available to manufacturers today
that would significantly reduce current
emission levels for the vast majority of
vehicles manufactured today (i.e.,
stoichiometric gasoline vehicles).
However, for both N2O and CH4, some
vehicle technologies (and, for CH4, use
of natural gas fuel) could potentially
increase emissions of these GHGs in the
future, and EPA believes it is important
that this be avoided. EPA expects that,
almost universally across current car
and truck designs, manufacturers will
be able to meet the ‘‘cap’’ standards
with little if any technological
improvements or cost. EPA has
designed the level of the N2O and CH4
standards with the intent that
manufacturers would be able to meet
them without the need for technological
improvement; in other words, these
emission standards are designed to be
‘‘anti-backsliding’’ standards.
B. Proposed GHG Standards for LightDuty Vehicles, Light-Duty Trucks, and
Medium-Duty Passenger Vehicles
EPA is proposing new emission
standards to control greenhouse gases
(GHGs) from light-duty vehicles. First,
EPA is proposing emission standards for
carbon dioxide (CO2) on a gram per mile
(g/mile) basis that would apply to a
manufacturer’s fleet of cars, and a
separate standard that would apply to a
manufacturer’s fleet of trucks. CO2 is the
primary pollutant resulting from the
combustion of vehicular fuels, and the
amount of CO2 emitted is directly
correlated to the amount of fuel
consumed. Second, EPA is providing
auto manufacturers with the
opportunity to earn credits toward the
fleet-wide average CO2 standards for
improvements to air conditioning
systems, including both
hydrofluorocarbon (HFC) refrigerant
losses (i.e., system leakage) and indirect
PO 00000
Frm 00061
Fmt 4701
Sfmt 4702
49513
CO2 emissions related to the increased
load on the engine. Third, EPA is
proposing separate emissions standards
for two other GHG pollutants: Methane
(CH4) and nitrous oxide (N2O). CH4 and
N2O emissions relate closely to the
design and efficient use of emission
control hardware (i.e., catalytic
converters). The standards for CH4 and
N2O would be set as a cap that would
limit emissions increases and prevent
backsliding from current emission
levels. The proposed standards
described below would apply to
passenger cars, light-duty trucks, and
medium-duty passenger vehicles
(MDPVs). As an overall group, they are
referred to in this preamble as light
vehicles or simply as vehicles. In this
preamble section passenger cars may be
referred to simply as ‘‘cars’’, and lightduty trucks and MDPVs as ‘‘light
trucks’’ or ‘‘trucks.’’ 121
EPA is establishing a system of
averaging, banking, and trading of
credits integral to the fleet averaging
approach, based on manufacturer fleet
average CO2 performance, as discussed
in Section III.B.4. This approach is
similar to averaging, banking, and
trading (ABT) programs EPA has
established in other programs and is
also similar to provisions in the CAFE
program. In addition to traditional ABT
credits based on the fleet emissions
average, EPA is also proposing to
include A/C credits as an aspect of the
standards, as mentioned above. EPA is
also proposing several additional credit
provisions that apply only in the initial
model years of the program. These
include flex fuel vehicle credits, credits
based on the use of advanced
technologies, and generation of credits
prior to model year 2012. The proposed
A/C credits and additional credit
opportunities are described in Section
III.C. These credit programs would
provide flexibility to manufacturers,
which may be especially important
during the early transition years of the
program. EPA is also proposing to allow
a manufacturer to carry a deficit into the
future for a limited number of model
years. A parallel provision, referred to
as credit carry-back, is proposed as part
of the CAFE program.
1. What Fleet-Wide Emissions Levels
Correspond to the CO2 Standards?
The proposed attribute-based CO2
standards, if made final, are projected to
achieve a national fleet-wide average,
covering both light cars and trucks, of
121 As described in Section III.B.2., EPA is
proposing for purposes of GHG emissions standards
to use the same vehicle category definitions as are
used in the CAFE program.
E:\FR\FM\28SEP2.SGM
28SEP2
49514
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
250 grams/mile of CO2 in model year
(MY) 2016. This includes CO2equivalent emission reductions from
A/C improvements, reflected as credits
in the standard. The standards would
begin with MY 2012, with a generally
linear increase in stringency from MY
2012 through MY 2016. EPA is
proposing separate standards for cars
and light trucks. The tables in this
section below provide overall fleet
average levels that are projected for both
cars and light trucks over the phase-in
period which is estimated to correspond
with the proposed standards. The actual
fleet-wide average g/mi level that will
be achieved in any year for cars and
trucks will depend on the actual
production for that year, as well as the
use of the various credit and averaging,
banking, and trading provisions. For
example, in any year, manufacturers
may generate credits from cars and use
them for compliance with the truck
standard. Such transfer of credits
between cars and trucks is not reflected
in the table below. In Section III.F, the
year-by-year estimate of emissions
reductions that are projected to be
achieved by the proposed standards are
discussed.
In general, the proposed schedule of
standards acts as a phase-in to the MY
2016 standards, and reflects
consideration of the appropriate leadtime for each manufacturer to
implement the requisite emission
reductions technology across its product
line.122 Note that 2016 is the final model
year in which standards become more
stringent. The 2016 CO2 standards
would remain in place for 2017 and
later model years, until revised by EPA
in a future rulemaking.
EPA estimates that, on a combined
fleet-wide national basis, the proposed
2016 MY standards would achieve a
level of 250 g/mile CO2, including CO2equivalent credits from A/C related
reductions. The derivation of the 250 g/
mile estimate is described in Section
III.B.2.
EPA has estimated the overall fleetwide CO2-equivalent emission levels
that correspond with the proposed
attribute-based standards, based on the
projections of the composition of each
manufacturer’s fleet in each year of the
program. Tables III.B.1–1 and III.B.1–2
provide these estimates for each
manufacturer.123
TABLE III.B.1–1—ESTIMATED FLEET CO2-EQUIVALENT LEVELS CORRESPONDING TO THE PROPOSED STANDARDS FOR
CARS
Model year
Manufacturer
2012
BMW ..........................................................................................................................................................
Chrysler ......................................................................................................................................................
Daimler .......................................................................................................................................................
Ford ............................................................................................................................................................
General Motors ..........................................................................................................................................
Honda ........................................................................................................................................................
Hyundai ......................................................................................................................................................
Kia ..............................................................................................................................................................
Mazda ........................................................................................................................................................
Mitsubishi ...................................................................................................................................................
Nissan ........................................................................................................................................................
Porsche ......................................................................................................................................................
Subaru .......................................................................................................................................................
Suzuki ........................................................................................................................................................
Tata ............................................................................................................................................................
Toyota ........................................................................................................................................................
Volkswagen ................................................................................................................................................
2013
2014
2015
2016
265
266
270
266
266
259
260
262
258
255
263
242
252
244
286
257
254
257
259
263
259
258
251
252
253
250
247
255
234
244
236
278
250
246
249
251
257
251
250
244
244
246
243
240
247
227
237
229
271
242
239
238
242
245
239
239
232
233
235
231
228
236
215
225
217
259
231
228
227
231
234
228
228
221
221
223
220
217
225
204
214
206
248
220
217
TABLE III.B.1–2—ESTIMATED FLEET CO2-EQUIVALENT LEVELS CORRESPONDING TO THE PROPOSED STANDARDS FOR
LIGHT TRUCKS
Model year
Manufacturer
mstockstill on DSKH9S0YB1PROD with PROPOSALS
2012
BMW ..........................................................................................................................................................
Chrysler ......................................................................................................................................................
Daimler .......................................................................................................................................................
Ford ............................................................................................................................................................
General Motors ..........................................................................................................................................
Honda ........................................................................................................................................................
Hyundai ......................................................................................................................................................
Kia ..............................................................................................................................................................
Mazda ........................................................................................................................................................
Mitsubishi ...................................................................................................................................................
Nissan ........................................................................................................................................................
Porsche ......................................................................................................................................................
Subaru .......................................................................................................................................................
Suzuki ........................................................................................................................................................
Tata ............................................................................................................................................................
Toyota ........................................................................................................................................................
122 See
CAA section 202(a)(2).
VerDate Nov<24>2008
23:31 Sep 25, 2009
123 These levels do not include the effect of
flexible fuel credits, transfer of credits between cars
Jkt 217001
PO 00000
Frm 00062
Fmt 4701
Sfmt 4702
2013
2014
2015
2016
334
349
346
363
372
333
330
341
321
320
352
338
319
324
326
342
324
339
334
352
361
322
320
330
311
310
341
327
308
313
316
332
313
329
323
343
351
311
308
319
300
299
332
316
297
301
305
320
298
315
308
329
337
295
293
303
286
284
318
301
282
286
289
305
283
300
293
314
322
280
278
288
271
269
303
286
267
271
275
291
and trucks, temporary lead time allowance, or any
other credits.
E:\FR\FM\28SEP2.SGM
28SEP2
49515
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
TABLE III.B.1–2—ESTIMATED FLEET CO2-EQUIVALENT LEVELS CORRESPONDING TO THE PROPOSED STANDARDS FOR
LIGHT TRUCKS—Continued
Model year
Manufacturer
2012
2013
2014
2015
2016
344
333
322
307
292
Volkswagen ................................................................................................................................................
These estimates were aggregated
based on projected production volumes
into the fleet-wide averages for cars and
trucks (Table III.B.1–3).124
TABLE III.B.1–3—ESTIMATED FLEETWIDE
CO2-EQUIVALENT
LEVELS
CORRESPONDING TO THE PROPOSED
STANDARDS
Cars
Model year
Trucks
CO2 (g/mi)
CO2 (g/mi)
2012 ..........
2013 ..........
2014 ..........
2015 ..........
2016 and
later .......
261
254
245
234
352
341
331
317
224
303
As shown in Table III.B.1–3, fleetwide CO2-equivalent emission levels for
cars under the proposed approach are
projected to decrease from 261 to 224
grams per mile between MY 2012 and
MY 2016. Similarly, fleet-wide CO2equivalent emission levels for trucks are
projected to decrease from 352 to 303
grams per mile. These numbers do not
include the effects of other flexibilities
and credits in the program. The
estimated achieved values can be found
in Chapter 5 of the Draft Regulatory
Impact Analysis (DRIA).
EPA has also estimated the average
fleet-wide levels for the combined car
and truck fleets. These levels are
provided in Table III.B.1–4. As shown,
the overall fleet average CO2 level is
expected to be 250 g/mile in 2016.
TABLE III.B.1–4—ESTIMATED FLEETWIDE COMBINED CO2-EQUIVALENT
LEVELS CORRESPONDING TO THE
PROPOSED STANDARDS
Combined car
and truck
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Model year
2012
2013
2014
2015
2016
CO2 (g/mi)
......................................
......................................
......................................
......................................
......................................
295
286
276
263
250
124 Due to rounding during calculations, the
estimated fleet-wide CO2-equivalent levels may
vary by plus or minus 1 gram.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
As noted above, EPA is proposing
standards that would result in
increasingly stringent levels of CO2
control from MY 2012 though MY
2016—applying the CO2 footprint
curves applicable in each model year to
the vehicles expected to be sold in each
model year produces fleet-wide annual
reductions in CO2 emissions. As
explained in Section III.D below and the
relevant support documents, EPA
believes that the proposed level of
improvement achieves important CO2
emissions reductions through the
application of feasible control
technology at reasonable cost,
considering the needed lead time for
this program. EPA further believes that
the proposed averaging, banking and
trading provisions, as well as other
credit-generating mechanisms, allow
manufacturers further flexibilities
which reduce the cost of the proposed
CO2 standards and help to provide
adequate lead time. EPA believes this
approach is justified under section
202(a) of the Clean Air Act.
EPA has analyzed the feasibility
under the CAA of achieving the
proposed CO2 standards, based on
projections of what actions
manufacturers are expected to take to
reduce emissions. The results of the
analysis are discussed in detail in
Section III.D below and in the DRIA.
EPA also presents the estimated costs
and benefits of the proposed car and
truck CO2 standards in Section III.H. In
developing the proposal, EPA has
evaluated the kinds of technologies that
could be utilized by the automobile
industry, as well as the associated costs
for the industry and fuel savings for the
consumer, the magnitude of the GHG
reductions that may be achieved, and
other factors relevant under the CAA.
With respect to the lead time and cost
of incorporating technology
improvements that reduce GHG
emissions, EPA and NHTSA place
important weight on the fact that during
MYs 2012–2016 manufacturers are
expected to redesign and upgrade their
light-duty vehicle products (and in
some cases introduce entirely new
vehicles not on the market today). Over
these five model years there would be
an opportunity for manufacturers to
evaluate almost every one of their
PO 00000
Frm 00063
Fmt 4701
Sfmt 4702
vehicle model platforms and add
technology in a cost-effective way to
control GHG emissions and improve
fuel economy. This includes redesign of
the air conditioner systems in ways that
will further reduce GHG emissions. The
time-frame and levels for the proposed
standards, as well as the ability to
average, bank and trade credits and
carry a deficit forward for a limited
time, are expected to provide
manufacturers the time needed to
incorporate technology that will achieve
GHG reductions, and to do this as part
of the normal vehicle redesign process.
This is an important aspect of the
proposal, as it would avoid the much
higher costs that would occur if
manufacturers needed to add or change
technology at times other than these
scheduled redesigns. This time period
would also provide manufacturers the
opportunity to plan for compliance
using a multi-year time frame, again in
accord with their normal business
practice.
Consistent with the requirement of
CAA section 202(a)(1) that standards be
applicable to vehicles ‘‘for their useful
life,’’ EPA is proposing CO2 vehicle
standards that would apply for the
useful life of the vehicle. Under section
202(i) of the Act, which authorized the
Tier 2 standards, EPA established a
useful life period of 10 years or 120,000
miles, whichever first occurs, for all
Tier 2 light-duty vehicles and light-duty
trucks.125 Tier 2 refers to EPA’s
standards for criteria pollutants such as
NOX, HC, and CO. EPA is proposing
new CO2 standards for the same group
of vehicles, and therefore the Tier 2
useful life would apply for CO2
standards as well. The in-use emission
standard will be 10% higher than the
certification standard, to address issues
of production variability and test-to-test
variability. The in-use standard is
discussed in Section III.E.
EPA is proposing to measure CO2 for
certification and compliance purposes
using the same test procedures currently
used by EPA for measuring fuel
economy. These procedures are the
Federal Test Procedure (FTP or ‘‘city’’
test) and the Highway Fuel Economy
125 See
E:\FR\FM\28SEP2.SGM
65 FR 6698 (February 10, 2000).
28SEP2
49516
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
Test (HFET or ‘‘highway’’ test).126 This
corresponds with the data used to
develop the footprint-based CO2
standards, since the data on control
technology efficiency was also
developed in reference to these test
procedures. Although EPA recently
updated the test procedures used for
fuel economy labeling, to better reflect
the actual in-use fuel economy achieved
by vehicles, EPA is not proposing to use
these test procedures for the CO2
standards proposed here, given the lack
of data on control technology
effectiveness under these procedures.127
As stated in Section I, EPA and NHTSA
invite comments on potential
amendments to the CAFE and GHG test
procedures, including but not limited to
air conditioner-related emissions, that
could be implemented beginning in MY
2017.
EPA proposes to include
hydrocarbons (HC) and carbon
monoxide (CO) in its CO2 emissions
calculations on a CO2-equivalent basis.
It is well accepted that HC and CO are
typically oxidized to CO2 in the
atmosphere in a relatively short period
of time and so are effectively part of the
CO2 emitted by a vehicle. In terms of
standard stringency, accounting for the
carbon content of tailpipe HC and CO
emissions and expressing it as CO2equivalent emissions would add less
than one percent to the overall CO2equivalent emissions level. This will
also ensure consistency with CAFE
calculations since HC and CO are
included in the ‘‘carbon balance’’
methodology that EPA uses to
determine fuel usage as part of
calculating vehicle fuel economy levels.
2. What Are the CO2 Attribute-Based
Standards?
EPA proposes to use the same vehicle
category definitions that are used in the
CAFE program for the 2011 model year
standards.128 The CAFE vehicle
category definitions differ slightly from
the EPA definitions for cars and light
trucks used for the Tier 2 program, as
well as other EPA vehicle programs.
Specifically, NHTSA’s reconsideration
of the CAFE program statutory language
has resulted in many two-wheel drive
SUVs under 6000 pounds gross vehicle
weight being reclassified as cars under
the CAFE program. The proposed
approach of using CAFE definitions
allows EPA’s proposed CO2 standards
and the proposed CAFE standards to be
harmonized across all vehicles. In other
words, vehicles would be subject to
either car standards or truck standards
under both programs, and not car
standards under one program and trucks
standards under the other.
EPA is proposing separate car and
truck standards, that is, vehicles defined
as cars have one set of footprint-based
curves for MY 2012–2016 and vehicles
defined as trucks have a different set for
MY 2012–2016. In general, for a given
footprint the CO2 g/mi target for trucks
is less stringent then for a car with the
same footprint.
EPA is not proposing a single fleet
standard where all cars and trucks are
measured against the same footprint
curve for several reasons. First, some
vehicles classified as trucks (such as
pick-up trucks) have certain attributes
not common on cars which attributes
contribute to higher CO2 emissions—
notably high load carrying capability
and/or high towing capability. Due to
these differences, it is reasonable to
separate the light-duty vehicle fleet into
two groups. Second, EPA would like to
harmonize key program design elements
of the GHG standards with NHTSA’s
CAFE program where it is reasonable to
do so. NHTSA is required by statute to
set separate standards for passenger cars
and for non-passenger cars.
Finally, most of the advantages of a
single standard for all light duty
vehicles are also present in the two-fleet
standards proposed here. Because EPA
is proposing to allow unlimited credit
transfer between a manufacturer’s car
and truck fleets, the two fleets can
essentially be viewed as a single fleet
when manufacturers consider
compliance strategies. Manufacturers
can thus choose on which vehicles
within their fleet to focus GHG reducing
technology and then use credit transfers
as needed to demonstrate compliance,
just as they would if there was a single
fleet standard. The one benefit of a
single light-duty fleet not captured by a
two-fleet approach is that a single fleet
prevents potential ‘‘gaming’’ of the car
and truck definitions to try and design
vehicles which are more similar to
passenger cars but which may meet the
regulatory definition of trucks. Although
this is of concern to EPA, we do not
believe at this time that concern is
sufficient to outweigh the other reasons
for proposing separate car and truck
fleet standards. EPA requests comment
on this approach.
For model years 2012 and later, EPA
is proposing a series of CO2 standards
that are described mathematically by a
family of piecewise linear functions
(with respect to vehicle footprint). The
form of the function is as follows:
CO2 = a, if x ≤ l
CO2 = cx + d, if l < x ≤ h
CO2 = b, if x > h
Where:
CO2 = the CO2 target value for a given
footprint (in g/mi)
a = the minimum CO2 target value (in g/mi)
b = the maximum CO2 target value (in g/mi)
c = the slope of the linear function (in g/mi
per sq ft)
d = is the zero-offset for the line (in g/mi CO2)
x = footprint of the vehicle model (in square
feet, rounded to the nearest tenth)
l & h are the lower and higher footprint
limits, constraints, or the boundary
(‘‘kinks’’) between the flat regions and
the intermediate sloped line.
EPA’s proposed parameter values that
define the family of functions for the
proposed CO2 fleetwide average car and
truck standards are as follows:
TABLE III.B.2–1—PARAMETER VALUES FOR CARS
[For CO2 gram per mile targets]
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Model year
2012
2013
2014
2015
2016
a
.........................................................
.........................................................
.........................................................
.........................................................
and later ..........................................
242
234
227
215
204
126 EPA established the FTP for emissions
measurement in the early 1970s. In 1976, in
response to the Energy Policy and Conservation Act
(EPCA) statute, EPA extended the use of the FTP
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
b
c
313
305
297
286
275
4.72
4.72
4.72
4.72
4.72
to fuel economy measurement and added the
HFET.126 The provisions in the 1976 regulation,
effective with the 1977 model year, established
PO 00000
Frm 00064
Fmt 4701
Sfmt 4702
Lower
constraint
d
48.8
40.8
33.2
22.0
10.9
Upper
constraint
41
41
41
41
41
procedures to calculate fuel economy values both
for labeling and for CAFE purposes.
127 See 71 FR 77872, December 27, 2006.
128 See 49 CFR part 523.
E:\FR\FM\28SEP2.SGM
28SEP2
56
56
56
56
56
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
49517
TABLE III.B.2–2—PARAMETER VALUES FOR TRUCKS
[For CO2 gram per mile targets]
Model year
2012
2013
2014
2015
2016
a
.........................................................
.........................................................
.........................................................
.........................................................
and later ..........................................
298
287
276
261
246
mstockstill on DSKH9S0YB1PROD with PROPOSALS
The equations can be shown
graphically for each vehicle category, as
shown in Figures III.B.2–1 and III.B.2–
2. These standards (or functions)
decrease from 2012–2016 with a vertical
shift. A more detailed description of the
development of the attribute based
standard can be found in Chapter 2 of
the Draft Joint TSD. More background
discussion on other alternative
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
b
c
399
388
377
362
347
4.04
4.04
4.04
4.04
4.04
attributes and curves EPA explored can
be found in the EPA DRIA. EPA
recognizes that the CAA does not
mandate that EPA use an attribute based
standard, as compared to NHTSA’s
obligations under EPCA. The EPA
believes that proposing a footprintbased program will harmonize EPA’s
proposed program and the proposed
CAFE program as a single national
PO 00000
Frm 00065
Fmt 4701
Sfmt 4702
Lower
constraint
d
132.6
121.6
110.3
95.2
80.4
Upper
constraint
41
41
41
41
41
66
66
66
66
66
program, resulting in reduced
compliance complexity for
manufacturers. EPA’s reasons for
proposing to use an attribute based
standard are discussed in more detail in
the Joint TSD. Comments are requested
on this proposal to use the attributebased approach for regulating tailpipe
CO2 emissions.
BILLING CODE 4910–59–P
E:\FR\FM\28SEP2.SGM
28SEP2
VerDate Nov<24>2008
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00066
Fmt 4701
Sfmt 4725
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.010</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49518
BILLING CODE 4910–59–C
3. Overview of How EPA’s Proposed
CO2 Standards Would Be Implemented
for Individual Manufacturers
This section provides a brief overview
of how EPA proposes to implement the
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
CO2 standards. Section III.E explains
EPA’s proposed approach for
certification and compliance in detail.
EPA is proposing two kinds of
standards—fleet average standards
determined by a manufacturer’s fleet
PO 00000
Frm 00067
Fmt 4701
Sfmt 4702
49519
profile of various models, and in-use
standards that would apply to the
various models that make up the
manufacturer’s fleet. Although this is
similar in concept to the current lightduty vehicle Tier 2 program, there are
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.011</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49520
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
important differences. In explaining
EPA’s proposal for the CO2 standards, it
is useful to summarize how the Tier 2
program works.
Under Tier 2, manufacturers select a
test vehicle prior to certification and test
the vehicle and/or its emissions
hardware to determine both its
emissions performance when new and
the emissions performance expected at
the end of its useful life. Based on this
testing, the vehicle is assigned to one of
several specified bins of emissions
levels, identified in the Tier 2 rule, and
this bin level becomes the emissions
standard for the test group the test
vehicle represents. All of the vehicles in
the group must meet the emissions level
for that bin throughout their useful life.
The emissions level assigned to the bin
is also used in calculating the
manufacturer’s fleet average emissions
performance.
Since compliance with the Tier 2 fleet
average depends on actual test group
sales volumes and bin levels, it is not
possible to determine compliance at the
time the manufacturer applies for and
receives a certificate of conformity for a
test group. Instead, at certification, the
manufacturer demonstrates that the
vehicles in the test group are expected
to comply throughout their useful life
with the emissions bin assigned to that
test group, and makes a good faith
demonstration that its fleet is expected
to comply with the Tier 2 average when
the model year is over. EPA issues a
certificate for the vehicles covered by
the test group based on this
demonstration, and includes a condition
in the certificate that if the manufacturer
does not comply with the fleet average
then production vehicles from that test
group will be treated as not covered by
the certificate to the extent needed to
bring the manufacturer’s fleet average
into compliance with Tier 2.
EPA proposes to retain the Tier 2
approach of requiring manufacturers to
demonstrate in good faith at the time of
certification that models in a test group
will meet applicable standards
throughout useful life. EPA also
proposes to retain the practice of
conditioning certificates upon
attainment of the fleet average standard.
However, there are several important
differences between a Tier 2 type of
program and the CO2 standards program
EPA is proposing. These differences and
resulting modifications to certification
are summarized below and are
described in detail in Section III.E.
EPA is proposing to certify test groups
as it does for Tier 2, with the CO2
emission results for the test vehicle as
the initial or default standard for all of
the models in the test group. However,
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
manufacturers would later substitute
test data for individual models in that
test group, based on the model level fuel
economy testing that typically occurs
through the course of the model year.
This model level data would then be
used to assign a distinct certification
level for that model, instead of the
initial test group level. These model
level results would then be used to
calculate the fleet average after the end
of production.129 The option to
substitute model level test data for the
test group data is at the manufacturer’s
discretion, except they are required as
under the CAFE test protocols to test, at
a minimum, enough models to represent
90 percent of their production. The test
group level would continue to apply for
any model that is not covered by model
level testing. A related difference is that
the fleet average calculation for Tier 2
is based on test group bin levels and test
group sales whereas under this proposal
the CO2 fleet level would be based on
a combination of test group and modellevel emissions and model-level
production. For the new CO2 standards,
EPA is proposing to use production
rather than sales in calculating the fleet
average in order to more closely
conform with CAFE, which is a
production-based program. EPA does
not expect any significant
environmental effect because there is
little difference between production and
sales, and this will reduce the
complexity of the program for
manufacturers.
4. Averaging, Banking, and Trading
Provisions for CO2 Standards
As explained above, a fleet average
CO2 program for passenger cars and
light trucks is proposed. EPA has
implemented similar averaging
programs for a range of motor vehicle
types and pollutants, from the Tier 2
fleet average for NOX to motorcycle
hydrocarbon (HC) plus oxides of
nitrogen (NOX) emissions to NOX and
particulate matter (PM) emissions from
heavy-duty engines.130 The proposed
program would operate much like EPA’s
existing averaging programs in that
manufacturers would calculate
129 The final in-use vehicle standards for each
model would also be based on the model-level fuel
economy testing. As discussed in Section III.E.4, an
in-use adjustment factor would be applied to the
model level results to determine the in-use standard
that would apply during the useful life of the
vehicle.
130 For example, see the Tier 2 light-duty vehicle
emission standards program (65 FR 6698, February
10, 2000), the 2010 and later model year motorcycle
emissions program (69 FR 2398, January 15, 2004),
and the 2007 and later model year heavy-duty
engine and vehicle standards program (66 FR 5001,
January 18, 2001).
PO 00000
Frm 00068
Fmt 4701
Sfmt 4702
production-weighted fleet average
emissions at the end of the model year
and compare their fleet average with a
fleet average standard to determine
compliance. As in other EPA averaging
programs, the Agency is also proposing
a comprehensive program for averaging,
banking, and trading of credits which
together will help manufacturers in
planning and implementing the orderly
phase-in of emissions control
technology in their production, using
their typical redesign schedules.
Averaging, Banking, and Trading
(ABT) of emissions credits has been an
important part of many mobile source
programs under CAA Title II, both for
fuels programs as well as for engine and
vehicle programs. ABT is important
because it can help to address many
issues of technological feasibility and
lead-time, as well as considerations of
cost. ABT is an integral part of the
standard setting itself, and is not just an
add-on to help reduce costs. In many
cases, ABT resolves issues of lead-time
or technical feasibility, allowing EPA to
set a standard that is either numerically
more stringent or goes into effect earlier
than could have been justified
otherwise. This provides important
environmental benefits at the same time
it increases flexibility and reduces costs
for the regulated industry.
This section discusses generation of
credits by achieving a fleet average CO2
level that is lower than the
manufacturer’s CO2 fleet average
standard. EPA is proposing a variety of
additional ways credits may be
generated by manufacturers. Section
III.C describes these additional
opportunities to generate credits in
detail. EPA is proposing that credits
could be earned through A/C system
improvements beyond a specified
baseline. Credits can also be generated
by producing alternative fuel vehicles,
by producing advanced technology
vehicles including electric vehicles,
plug-in hybrids, and fuel cell vehicles,
and by using technologies that improve
off-cycle emissions. In addition, EPA is
proposing that early credits could be
generated prior to the proposed
program’s MY 2012 start date. The
credits would be used in calculating the
fleet averages at the end of the model
year, with the exception of early credits
which would be tracked separately.
These proposed credit generating
opportunities are described below in
Section III.C.
As explained earlier, manufacturers
would determine the fleet average
standard that would apply to their car
fleet and the standard for their truck
fleet from the applicable attribute-based
curve. A manufacturer’s credit or debit
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
balance would be determined by
comparing their fleet average with the
manufacturer’s CO2 standard for that
model year. The standard would be
calculated from footprint values on the
attribute curve and actual production
levels of vehicles at each footprint. A
manufacturer would generate credits if
its car or truck fleet achieves a fleet
average CO2 level lower than its
standard and would generate debits if
its fleet average CO2 level is above that
standard. At the end of the model year,
each manufacturer would calculate a
production-weighted fleet average for
each averaging set, cars and trucks. A
manufacturer’s car or truck fleet that
achieves a fleet average CO2 level lower
than its standard would generate
credits, and if its fleet average CO2 level
is above that standard its fleet would
generate debits.
EPA is proposing to account for the
difference in expected lifetime vehicle
miles traveled (VMT) between cars and
trucks in order to preserve CO2
reductions when credits are transferred
between cars and trucks. As directed by
EISA, NHTSA accomplishes this in the
CAFE program by using an adjustment
factor that is applied to credits when
they are transferred between car and
truck compliance categories. The CAFE
adjustment factor accounts for two
different influences that can cause the
transfer of car and truck credits
(expressed in tenths of a mpg), if left
unadjusted, to potentially negate fuel
reductions. First, mpg is not linear with
fuel consumption, i.e., a 1 mpg
improvement above a standard will
imply a different amount of actual fuel
consumed depending on the level of the
standard. Second, NHTSA’s conversion
corrects for the fact that the typical
lifetime miles for cars is less than that
for trucks, meaning that credits earned
for cars and trucks are not necessarily
equal. NHTSA’s adjustment factor
essentially converts credits into vehicle
lifetime gallons to ensure preservation
of fuel savings and the transfer credits
on an equal basis, and then converts
back to the statutorily required credit
units of tenths of a mile per gallon. To
convert to gallons NHTSA’s conversion
must take into account the expected
lifetime mileage for cars and trucks.
Because EPA is proposing standards
that are expressed on a CO2 gram per
mile basis, which is linear with fuel
consumption, EPA’s credit calculations
do not need to account for the first issue
noted above. However, EPA is
proposing to account for the second
issue by expressing credits when they
are generated in total lifetime
megagrams (metric tons), rather than
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
through the use of conversion factors
that would apply at certain times. In
this way credits could be freely
exchanged between car and truck
compliance categories without
adjustment. Additional detail regarding
this approach, including a discussion of
the vehicle lifetime mileage estimates
for cars and trucks can be found in
Section III.E.5. A discussion of the
estimated vehicle lifetime miles traveled
can be found in Chapter 4 of the draft
Joint Technical Support Document. EPA
requests comment on the proposed
approach.
A manufacturer that generates credits
in a given year and vehicle category
could use those credits in essentially
four ways, although with some
limitations. These provisions are very
similar to those of other EPA averaging,
banking, and trading programs. These
provisions have the potential to reduce
costs and compliance burden, and
support the feasibility of the standards
being proposed in terms of lead time
and orderly redesign by a manufacturer,
thus promoting and not reducing the
environmental benefits of the program.
First, the manufacturer would have to
offset any deficit that had accrued in
that averaging set in a prior model year
and had been carried over to the current
model year. In such a case, the
manufacturer would be obligated to use
any current model year credits to offset
that deficit. This is referred to in the
CAFE program as credit carry-back.
EPA’s proposed deficit carry-forward, or
credit carry-back provisions are
described further, below.
Second, after satisfying any needs to
offset pre-existing deficits within a
vehicle category, remaining credits
could be banked, or saved for use in
future years. EPA is proposing that
credits generated in this program be
available to the manufacturer for use in
any of the five years after the year in
which they were generated, consistent
with the CAFE program under EISA.
This is also referred to as a credit carryforward provision. For other new
emission control programs, EPA has
sometimes initially restricted credit life
to allow time for the Agency to assess
whether the credit program is
functioning as intended. When EPA first
offered averaging and banking
provisions in its light-duty emissions
control program (the National Low
Emission Vehicle Program), credit life
was restricted to three years. The same
is true of EPA’s early averaging and
banking program for heavy-duty
engines. As these programs matured and
were subsequently revised, EPA became
confident that the programs were
functioning as intended and that the
PO 00000
Frm 00069
Fmt 4701
Sfmt 4702
49521
standards were sufficiently stringent to
remove the restrictions on credit life.
EPA is therefore acting consistently
with our past practice in proposing to
reasonably restrict credit life in this new
program. The Agency believes, subject
to consideration of public comment,
that a credit life of five years represents
an appropriate balance between
promoting orderly redesign and upgrade
of the emissions control technology in
the manufacturer’s fleet and the policy
goal of preventing large numbers of
credits accumulated early in the
program from interfering with the
incentive to develop and transition to
other more advanced emissions control
technologies. As discussed below in
Section III.C, EPA is proposing that any
early credits generated by a
manufacturer, beginning as soon as MY
2009, would also be subject to the fiveyear credit carry-forward restriction
based on the year in which they are
generated. This would limit the effect of
the early credits on the long-term
emissions reductions anticipated to
result from the proposed new standards.
Third, EPA is proposing to allow
manufacturers to transfer credits
between the two averaging sets,
passenger cars and trucks, within a
manufacturer. For example, credits
accrued by over-compliance with a
manufacturer’s car fleet average
standard could be used to offset debits
accrued due to that manufacturer’s not
meeting the truck fleet average standard
in a given year. EPA believes that such
cross-category use of credits by a
manufacturer would provide important
additional flexibility in the transition to
emissions control technology without
affecting overall emission reductions.
Finally, accumulated credits could be
traded to another vehicle manufacturer.
As with intra-company credit use, such
inter-company credit trading would
provide flexibility in the transition to
emissions control technology without
affecting overall emission reductions.
Trading credits to another vehicle
manufacturer would be a
straightforward process between the two
manufacturers, but could also involve
third parties that could serve as credit
brokers. Brokers would not own the
credits at any time. These sorts of
exchanges are typically allowed under
EPA’s current emission credit programs,
e.g., the Tier 2 light-duty vehicle NOX
fleet average standard and the heavyduty engine NOX fleet average
standards, although manufacturers have
seldom made such exchanges. EPA
seeks comment on enhanced reporting
requirements or other methods that
could help EPA assess validity of
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49522
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
credits, especially those obtained from
third-party credit brokers
If a manufacturer had a deficit at the
end of a model year—that is, its fleet
average level failed to meet the required
fleet average standard—EPA proposes
that the manufacturer could carry that
deficit forward (also referred to credit
carry-back) for a total of three model
years after the model year in which that
deficit was generated. As noted above,
such a deficit carry-forward could only
occur after the manufacturer applied
any banked credits or credits from
another averaging set. If a deficit still
remained after the manufacturer had
applied all available credits, and the
manufacturer did not obtain credits
elsewhere, the deficit could be carried
over for up to three model years. No
deficit could be carried into the fourth
model year after the model year in
which the deficit occurred. Any deficit
from the first model year that remained
after the third model year would thus
constitute a violation of the condition
on the certificate, which would
constitute a violation of the Clean Air
Act and would be subject to
enforcement action.
In the Tier 2 rulemaking proposal,
EPA proposed to allow deficits to be
carried forward for one year. In their
comments on that proposal,
manufacturers argued persuasively that
by the time they can tabulate their
average emissions for a particular model
year, the next model year is likely to be
well underway and it is too late to make
calibration, marketing, or production
mix changes to adjust that year’s credit
generation. Based on those comments,
in the Tier 2 final rule EPA finalized
provisions that allowed the deficit to be
carried forward for a total of three years.
EPA continues to believe that three
years is an appropriate amount of time
that gives the manufacturers adequate
time to respond to a deficit situation but
does not create a lengthy period of
prolonged non-compliance with the
fleet average standards.131 Subsequent
EPA emission control programs that
incorporate ABT provisions (e.g., the
Mobile Source Air Toxics rule) have
provided this three-year deficit carryforward provision for this reason.132
The proposed averaging, banking, and
trading provisions are generally
consistent with those included in the
CAFE program, with a few notable
exceptions. As with EPA’s proposed
approach, CAFE allows five year carryforward of credits and three year carryback. Transfers of credits across a
manufacturer’s car and truck averaging
131 See
132 See
65 FR 6745 (February 10, 2000).
71 FR 8427 (February 26, 2007).
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
sets are also allowed, but with limits
established by EISA on the use of
transferred credits. The amount of
transferred credits that can be used in a
year is limited, and transferred credits
may not be used to meet the CAFE
minimum domestic passenger car
standard. CAFE allows credit trading,
but again, traded credits cannot be used
to meet the minimum domestic
passenger car standard. EPA is not
proposing these constraints on the use
of transferred credits.
Additional details regarding the
averaging, banking, and trading
provisions and how EPA proposes to
implement these provisions can be
found in Section III.E.
5. CO2 Optional Temporary Lead-time
Allowance Alternative Standards
EPA is proposing a limited and
narrowly prescribed option, called the
Temporary Lead-time Allowance
Alternative Standards (TLAAS), to
provide additional lead time for a
certain subset of manufacturers. This
option is designed to address two
different situations where we project
that more lead time is needed, based on
the level of emissions control
technology and emissions control
performance currently exhibited by
certain vehicles. One situation involves
manufacturers who have traditionally
paid CAFE fines instead of complying
with the CAFE fleet average, and as a
result at least part of their vehicle
production currently has significantly
higher CO2 and lower fuel economy
levels than the industry average. More
lead time is needed in the program’s
initial years to upgrade these vehicles to
meet the aggressive CO2 emissions
performance levels required by the
proposal. The other situation involves
manufacturers who have a limited line
of vehicles and are unable to take
advantage of averaging of emissions
performance across a full line of
production. For example, some smaller
volume manufacturers focus on high
performance vehicles with higher CO2
emissions, above the CO2 emissions
target for that vehicle footprint, but do
not have other types of vehicles in their
production mix with which to average.
Often, these manufacturers also pay
fines under the CAFE program rather
than meeting the applicable CAFE
standard. Because voluntary noncompliance is impermissible for the
GHG standards proposed under the
CAA, both of these types of
manufacturers need additional lead time
to upgrade vehicles and meet the
proposed standards. EPA is proposing
an optional, temporary alternative
standard, which is only slightly less
PO 00000
Frm 00070
Fmt 4701
Sfmt 4702
stringent, and limited to the first four
model years (2012—2015) of the
National Program, so that these
manufacturers can have sufficient lead
time to meet the tougher MY 2016 GHG
standards, while preserving consumer
choice of vehicles during this time.
In MY 2016, the TLAAS option ends,
and all manufacturers, regardless of
size, and domestic sales volume, must
comply with the same CO2 standards,
while under the CAFE program
companies would continue to be
allowed to pay civil penalties in lieu of
complying with the CAFE standards.
However, because companies must meet
both the CAFE standards and the EPA
CO2 standards, the National Program
will have the practical impact of
providing a level playing field for all
companies beginning in MY 2016—a
situation which has never existed under
the CAFE program. This option thereby
results in more fuel savings and CO2
reductions than would be the case
under the CAFE program.
EPA projects that the environmental
impact of the proposed TLAAS program
will be very small. If all companies
eligible to use the TLAAS use it to the
maximum extent allowed, total GHG
emissions from the proposal will
increase by less than 0.4% over the
lifetime of the MY 2012–2016 vehicles.
EPA believes the impact will be even
smaller, as we do not expect all of the
eligible companies to use this option,
and we do not expect all companies
who do use the program will use it to
the maximum extent allowed, as we
have included provisions which
discourage companies from using the
TLAAS any longer than it is needed.
EPA has structured the TLAAS option
to provide more lead time in these kinds
of situations, but to limit the program so
that it would only be used in situations
where these kinds of lead time concerns
arise. Based on historic data on sales,
EPA is using a specific historic U.S.
sales volume as the best way to identify
the subset of production that falls into
this situation. Under the TLAAS, these
manufacturers would be allowed to
produce up to but no more than 100,000
vehicles that would be subject to a
somewhat less stringent CO2 standard.
This 100,000 volume is not an annual
limit, but is an absolute limit for the
total number of vehicles which can use
the TLAAS program over the model
years 2012–2015. Any additional
production would be subject to the same
standards as any other manufacturer. In
addition, EPA is imposing a variety of
restrictions on the use of the TLAAS
program, discussed in more detail
below, to ensure that only
manufacturers who need more lead-time
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
for the kinds of reasons noted above are
likely to use the program. Finally, the
program is temporary and expires at the
end of MY 2015. A more complete
discussion of the program is provided
below. EPA believes the proposed
program reasonably addresses a real
world lead time constraint, and does it
in a way that balances the need for more
lead time with the need to minimize any
resulting loss in potential emissions
reductions. EPA invites comment as to
whether its proposal is the best way to
balance these concerns.
EPA proposes to establish a TLAAS
for a specified subset of manufacturers.
There are two types of companies who
would make use of TLAAS—those
manufacturers who have paid CAFE
fines in recent years, and who need
additional lead-time to incorporate the
needed technology; and those
companies who are not full-line
manufacturers, who have a smaller
range of models and vehicle types, who
may need additional lead-time as well.
This alternative standard would apply
to manufacturers with total U.S. sales of
less than 400,000 vehicles per year,
using 2009 model year final sales
numbers to determine eligibility for
these alternative standards. EPA
reviewed the sales volumes of
manufacturers over the last few years,
and determined that manufacturers
below this level typically fit the
characteristics discussed above, and
manufacturers above this level did not.
Thus, EPA chose this level because it
functionally identifies the group of
manufacturers described above,
recognizing that there is nothing
intrinsic in the sales volume itself that
warrants this allowance. EPA was not
able to identify any other objective
criteria that would more appropriately
identify the manufacturers and vehicle
fleets described above.
EPA is proposing that manufacturers
qualifying for TLAAS would be allowed
to meet slightly less stringent standards
for a limited number of vehicles for
model years 2012–2015. Specifically, an
eligible manufacturer could have a total
of up to 100,000 units of cars and trucks
combined over model years 2012–2015,
and during those model years those
vehicles would be subject to a standard
1.25 times the standard that would
otherwise apply to those vehicles under
the primary program. In other words,
the footprint curves upon which the
individual manufacturer standards for
the TLAAS fleets are based would be
less stringent by a factor of 1.25 for up
to 100,000 of an eligible manufacturer’s
vehicles for model years 2012–2015. As
noted, this approach seeks to balance
the need to provide additional lead-time
without reducing the environmental
benefits of the proposed program. EPA
believes that 100,000 units over four
model years achieves an appropriate
balance as the emissions impact is quite
small, but does provide companies with
some flexibility during MY 2012–2015.
For example, for a manufacturer
producing 400,000 vehicles per year,
this would be a total of up to 100,000
vehicles out of a total production of up
to 1.6 million vehicles over the four year
period, or about 6 percent of total
production.
Manufacturers with no U.S. sales in
model year 2009 would not qualify for
49523
the TLAAS program. Manufacturers
meeting the cut-point of 400,000 for MY
2009 but with U.S. directed production
above 400,000 in any subsequent model
years would remain eligible for the
TLAAS program. Also, the total sales
number applies at the corporate level, so
if a corporation owns several vehicle
brands the aggregate sales for the
corporation would be used. These
provisions would help prevent gaming
of the provisions through corporate
restructuring. Corporate ownership or
control relationships would be based on
determinations made under CAFE for
model year 2009. In other words,
corporations grouped together for
purposes of meeting CAFE standards,
would be grouped together for
determining whether or not they are
eligible under the 400,000 vehicle cut
point.
EPA derived the 100,000 maximum
unit set aside number based on a
gradual phase-out schedule shown in
Table III.B.5–1, below. However,
individual manufacturers’ situations
will vary significantly and so EPA
believes a flexible approach that allows
manufacturers to use the allowance as
they see fit during these model years
would be most appropriate. As another
example, an eligible manufacturer could
also choose to apply the TLAAS
program to an average of 25,000 vehicles
per year, over the four-year period.
Therefore, EPA is proposing that a total
of 100,000 vehicles of an eligible
manufacturer, with any combination of
cars or trucks, could be subject to the
alternative standard over the four year
period without restrictions.
TABLE III.B.5–1—TLAAS EXAMPLE VEHICLE PRODUCTION VOLUMES
Model year
2012
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Sales Volume ...........................................................................
The TLAAS vehicles would be
separate car and truck fleets for that
model year and would be subject to the
less stringent footprint-based standards
of 1.25 times the primary fleet average
that would otherwise apply. The
manufacturer would determine what
vehicles are assigned to these separate
averaging sets for each model year. EPA
is proposing that credits from the
primary fleet average program can be
transferred and used in the TLAAS
program. Credits within the TLAAS
program may also be transferred
between the TLAAS car and truck
averaging sets for use through 2015
when the TLAAS would end. However,
credits generated under TLAAS would
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
2013
40,000
30,000
not be allowed to be transferred or
traded to the primary program.
Therefore, any unused credits under
TLAAS would expire after model year
2015. EPA believes that this is necessary
to limit the program to situations where
it is needed and to prevent the
allowance from being inappropriately
transferred to the long-term primary
program.
EPA is concerned that some
manufacturers would be able to place
relatively clean vehicles in the TLAAS
to maximize TLAAS credits if credit use
was unrestricted. However, any credits
generated from the primary program
that are not needed for compliance in
the primary program, should be used to
PO 00000
Frm 00071
Fmt 4701
Sfmt 4702
2014
2015
20,000
10,000
offset the TLAAS vehicles. EPA is thus
proposing to restrict the use of banking
and trading between companies of
credits in the primary program in years
in which the TLAAS is being used. For
example, manufacturers using the
TLAAS in MY 2012 could not bank
credits in the primary program during
MY 2012 for use in MY 2013 and later.
No such restriction would be in place
for years when the TLAAS is not being
used. EPA also believes this provision is
necessary to prevent credits from being
earned simply by removing some highemitting vehicles from the primary fleet.
Absent this restriction, manufacturers
would be able to choose to use the
TLAAS for these vehicles and also be
E:\FR\FM\28SEP2.SGM
28SEP2
49524
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
able to earn credits under the primary
program that could be banked or traded
under the primary program without
restriction. EPA is proposing two
additional restrictions regarding the use
of the TLAAS by requiring that for any
of the 2012–2015 model years for which
an eligible manufacturer would like to
use the TLAAS, the manufacturer must
use two of the available flexibilities in
the GHG program first in order to try
and show compliance with the primary
standard before accessing the TLAAS.
Specifically, before using the TLAAS
the manufacturer must: (1) use any
banked emission credits from a previous
model year; and, (2) use any available
credits from the companies’ car or truck
fleet for the specific model year (i.e., use
credit transfer from cars to trucks or
from trucks to cars, that is, before using
the TLAAS for either the car fleet or the
truck fleet, make use of any available
credit transfers first). EPA is requesting
comments on all aspects of the proposed
TLAAS program including comments
on other provisions that might be
needed to ensure that the TLAAS
program is being used as intended and
to ensure no gaming occurs.
Finally, EPA recognizes that there
will be a wide range of companies
within the eligible manufacturers with
sales less than 400,000 vehicles in
model year 2009. Some of these
companies, while having relatively
small U.S. sales volumes, are large
global automotive firms, including
companies such as Mercedes and
Volkswagen. Other companies are
significantly smaller niche firms, with
sales volumes closer to 10,000 vehicles
per year worldwide; an example of this
type of firm is Aston Martin. EPA
anticipates that there are a small
number of such smaller volume
manufacturers, which have claimed that
they may face greater challenges in
meeting the proposed standards due to
their limited product lines across which
to average. EPA requests comment on
whether the proposed TLAAS program,
as described above, provides sufficient
lead-time for these smaller firms to
incorporate the technology needed to
comply with the proposed GHG
standards.
6. Proposed Nitrous Oxide and Methane
Standards
In addition to fleet-average CO2
standards, EPA is proposing separate
per-vehicle standards for nitrous oxide
(N2O) and methane (CH4) emissions.
Standards are being proposed that
would cap vehicle N2O and CH4
emissions at current levels. Our
intention is to set emissions standards
that act to cap emissions to ensure that
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
future vehicles do not increase their
N2O and CH4 emissions above levels
that would be allowed under the
proposal.
EPA considered an approach of
expressing each of these standards in
common terms of CO2-equivalent
emissions and combining them into a
single standard along with CO2 and HFC
emissions. California’s ‘‘Pavley’’
program adopted such a CO2-equivalent
emissions standards approach to GHG
emissions in their program.133 However,
these pollutants are largely independent
of one another in terms of how they are
generated by the vehicle and how they
are tested for during implementation.
Potential control technologies and
strategies for each pollutant also differ.
Moreover, an approach that provided for
averaging of these pollutants could
undermine the stringency of the CO2
standards, as at this time we are
proposing standards which ‘‘cap’’ N2O
and CH4 emissions, rather then
proposing a level which is either at the
industry fleet-wide average or which
would result in reductions from these
pollutants. It is possible that once EPA
begins to receive more detailed
information on the N2O and CH4
performance of the new vehicle fleet as
a result of this proposed rule (if it were
to be finalized as proposed) that for a
future action for model years 2017 and
later EPA could consider a CO2equivalent standard which would not
result in any increases in GHG
emissions due to the current lack of
detailed data on N2O and CH4 emissions
performance. In addition, EPA seeks
comment on whether a CO2-equivalent
emissions standard should be
considered for model years 2012
through 2016, and whether there are
advantages or disadvantages to such an
approach, including potential impacts
on harmonization with CAFE standards.
Almost universally across current car
and truck designs, both gasoline- and
diesel-fueled, these emissions are
relatively low, and our intent is to not
require manufacturers to make
technological improvements in order to
reduce N2O and CH4 at this time.
However, it is important that future
vehicle technologies or fuels do not
result in increases in these emissions,
and this is the intent of the proposed
‘‘cap’’ standards.
EPA requests comments on our
approach to regulating N2O and CH4
emissions including the appropriateness
133 California Environmental Protection Agency
Air Resources Board, Staff Report: Initial Statement
of Reasons for Proposed Rulemaking Public Hearing
To Consider Adoption Of Regulations To Control
Greenhouse Gas Emissions From Motor Vehicles,
August 6, 2004.
PO 00000
Frm 00072
Fmt 4701
Sfmt 4702
of ‘‘cap’’ standards as opposed to
‘‘technology-forcing’’ standards, the
technical bases for the proposed N2O
and CH4 standards, the proposed test
procedures, and timing. Specifically,
EPA seeks comment on the
appropriateness of the proposed levels
of the N2O and CH4 standards to
accomplish our stated intent. In
addition, EPA seeks comment on any
additional emissions data on N2O and
CH4 from current technology vehicles.
a. Nitrous Oxide (N2O) Exhaust
Emission Standard
N2O is a global warming gas with a
high global warming potential.134 It
accounts for about 2.7% of the current
greenhouse gas emissions from cars and
light trucks. EPA is proposing a pervehicle N2O emission standard of 0.010
g/mi, measured over the traditional FTP
vehicle laboratory test cycles. The
standard would become effective in
model year 2012 for all light-duty cars
and trucks. Averaging between vehicles
would not be allowed. The standard is
designed to prevent increases in N2O
emissions from current levels, i.e. a nobacksliding standard.
N2O is emitted from gasoline and
diesel vehicles mainly during specific
catalyst temperature conditions
conducive to N2O formation.
Specifically, N2O can be generated
during periods of emission hardware
warm-up when rising catalyst
temperatures pass through the
temperature window when N2O
formation potential is possible. For
current Tier 2 compatible gasoline
engines with conventional three-way
catalyst technology, N2O is not generally
produced in significant amounts
because the time the catalyst spends at
the critical temperatures during warmup is short. This is largely due to the
need to quickly reach the higher
temperatures necessary for high catalyst
efficiency to achieve emission
compliance of criteria pollutants. N2O is
a more significant concern with diesel
vehicles, and potentially future gasoline
lean-burn engines, equipped with
advanced catalytic NOX emissions
control systems. These systems can but
need not be designed in a way that
emphasizes efficient NOX control while
allowing the formation of significant
quantities of N2O. Excess oxygen
present in the exhaust during lean-burn
conditions in diesel or lean-burn
gasoline engines equipped with these
advanced systems can favor N2O
formation if catalyst temperatures are
not carefully controlled. Without
134 N O has a GWP of 310 according to the IPCC
2
Second Assessment Report (SAR).
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
specific attention to controlling N2O
emissions in the development of such
new NOX control systems, vehicles
could have N2O emissions many times
greater than are emitted by current
gasoline vehicles.
EPA is proposing an N2O emission
standard that EPA believes would be
met by current-technology gasoline
vehicles at essentially no cost. As noted,
N2O formation in current catalyst
systems occurs, but the emission levels
are low, because the time the catalyst
spends at the critical temperatures
during warm-up when N2O can form is
short. At the same time, EPA believes
that the proposed standard would
ensure that the design of advanced NOX
control systems, especially for future
diesel and lean-burn gasoline vehicles,
would control N2O emission levels.
While current NOX control approaches
used on current Tier 2 diesel vehicles
do not tend to form N2O emissions, EPA
believes that the proposed standards
would discourage any new emission
control designs that achieve criteria
emissions compliance at the cost of
increased N2O emissions. Thus, the
proposed standard would cap N2O
emission levels, with the expectation
that current gasoline and diesel vehicle
control approaches that comply with the
Tier 2 vehicle emission standards for
NOX would not increase their emission
levels, and that the cap would ensure
that future vehicle designs would
appropriately control their emissions of
N2O. The proposed N2O level is
approximately two times the average
N2O level of current gasoline passenger
cars and light-duty trucks that meet the
Tier 2 NOX standards.135 Manufacturers
typically use design targets for NOX
emission levels of about 50% of the
standard, to account for in-use
emissions deterioration and normal
testing and production variability, and
manufacturers are expected to utilize a
similar approach for N2O emission
compliance. EPA is not proposing a
more stringent standard for current
gasoline and diesel vehicles because the
stringent Tier 2 program and the
associated NOX fleet average
requirement already result in significant
N2O control, and does not expect
current N2O levels to rise for these
vehicles. EPA requests comment on this
technical assessment of current and
potential future N2O formation in cars
and trucks.
While EPA believes that
manufacturers will likely be able to
acquire and install N2O analytical
135 Memo to docket ‘‘Deriving the standard from
EPA’s MOVES model emission factors, ’’ December
2007.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
equipment, the agency also recognizes
that some companies may face
challenges. Given the short lead-time for
this rule, EPA proposes that
manufacturers be able to apply for a
certificate of conformity with the N2O
standard for model year 2012 based on
a compliance statement based on good
engineering judgment. For 2013 and
later model years, manufacturers would
need to submit measurements of N2O for
compliance purposes.
Diesel cars and light trucks with
advanced emission control technology
are in the early stages of development
and commercialization. As this segment
of the vehicle market develops, the
proposed N2O standard would require
manufacturers to incorporate control
strategies that minimize N2O formation.
Available approaches include using
electronic controls to limit catalyst
conditions that might favor N2O
formation and consider different
catalyst formulations. While some of
these approaches may have modest
associated costs, EPA believes that they
will be small compared to the overall
costs of the advanced NOX control
technologies already required to meet
Tier 2 standards.
Vehicle emissions regulations do not
currently require testing for N2O, and
most test facilities do not have
equipment for its measurement.
Manufacturers without this capability
would need to acquire and install
appropriate measurement equipment.
However, EPA is proposing four N2O
measurement methods, all of which are
commercially available today. EPA
expects that most manufacturers would
use photo-acoustic measurement
equipment, which the Agency estimates
would result in a one-time cost of about
$50,000–$60,000 for each test cell that
would need to be upgraded.
Overall, EPA believes that
manufacturers of cars and light trucks,
both gasoline and diesel, would meet
the proposed standard without
implementing any significantly new
technologies, and there are not expected
to be any significant costs associated
with this proposed standard.
b. Methane (CH4) Exhaust Emission
Standard
CH4 (or methane) is greenhouse gas
with a high global warming potential.136
It accounts for about 0.2% of the
greenhouse gases from cars and light
trucks.
EPA is proposing a CH4 emission
standard of 0.030 g/mi as measured on
the FTP, to apply beginning with model
136 CH has a GWP of 21 according to the IPCC
4
Second Assessment Report (SAR).
PO 00000
Frm 00073
Fmt 4701
Sfmt 4702
49525
year 2012 for both cars and trucks. EPA
believes that this level for the standard
would be met by current gasoline and
diesel vehicles, and would prevent large
increases in future CH4 emissions in the
event that alternative fueled vehicles
with high methane emissions, like some
past dedicated compressed natural gas
(CNG) vehicles, become a significant
part of the vehicle fleet. Currently EPA
does not have separate CH4 standards
because unlike other hydrocarbons it
does not contribute significantly to
ozone formation,137 However CH4
emissions levels in the gasoline and
diesel car and light truck fleet have
nevertheless generally been controlled
by the Tier 2 non-methane organic gases
(NMOG) emission standards. However,
without an emission standard for CH4,
future emission levels of CH4 cannot be
guaranteed to remain at current levels as
vehicle technologies and fuels evolve.
The proposed standard would cap
CH4 emission levels, with the
expectation that current gasoline
vehicles meeting the Tier 2 emission
standards would not increase their
levels, and that it would ensure that
emissions would be addressed if in the
future there are increases in the use of
natural gas or any other alternative fuel.
The level of the standard would
generally be achievable through normal
emission control methods already
required to meet Tier 2 program
emission standards for NMOG and EPA
is therefore not attributing any cost to
this part of this proposal. Since CH4 is
produced in gasoline and diesel engines
similar to other hydrocarbon
components, controls targeted at
reducing overall NMOG levels generally
also work at reducing CH4 emissions.
Therefore, for gasoline and diesel
vehicles, the Tier 2 NMOG standards
will generally prevent increases in CH4
emissions levels from today. CH4 from
Tier 2 light-duty vehicles is relatively
low compared to other GHGs largely
due to the high effectiveness of previous
National Low Emission Vehicle (NLEV)
and current Tier 2 programs in
controlling overall HC emissions.
The level of the proposed standard is
approximately two times the average
Tier 2 gasoline passenger cars and lightduty trucks level.138 As with N2O, this
proposed level recognizes that
manufacturers typically set emission
design targets at about 50% of the
standard. Thus, EPA believes the
proposed standard would be met by
137 But see Ford Motor Co. v. EPA, 604 F. 2d 685
(D.C. Cir. 1979) (permissible for EPA to regulate
CH4 under CAA section 202 (b)).
138 Memo to docket ‘‘Deriving the standard from
EPA’s MOVES model emission factors, ’’ December
2007.
E:\FR\FM\28SEP2.SGM
28SEP2
49526
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
current gasoline vehicles. Similarly,
since current diesel vehicles generally
have even lower CH4 emissions than
gasoline vehicles, EPA believes that
diesels would also meet the proposed
standard. However, EPA also believes
that to set a CH4 emission standard more
stringent than the proposed standard
could effectively make the Tier 2 NMOG
standard more stringent.
In recent model years, a small number
of cars and light trucks were sold that
were designed for dedicated use of
compressed natural gas (CNG) that met
Tier 2 emission standards. While
emission control designs on these recent
dedicated CNG-fueled vehicles
demonstrate CH4 control as effective as
gasoline or diesel equivalent vehicles,
CNG-fueled vehicles have historically
produced significantly higher CH4
emissions than gasoline or diesel
vehicles. This is because their CNG fuel
is essentially methane and any
unburned fuel that escapes combustion
and not oxidized by the catalyst is
emitted as methane. However, even if
these vehicles meet the Tier 2 NMOG
standard and appear to have effective
CH4 control by nature of the NMOG
controls, Tier 2 standards do not require
CH4 control. While the proposed CH4
cap standard should not require any
different emission control designs
beyond what is already required to meet
Tier 2 NMOG standards on a dedicated
CNG vehicle, the cap will ensure that
systems maintain the current level of
CH4 control. EPA is not proposing more
stringent CH4 standards because the
same controls that are used to meet Tier
2 NMOG standards should result in
effective CH4 control. Increased CH4
stringency beyond proposed levels
could inadvertently result in increased
Tier 2 NMOG stringency absent an
emission control technology unique to
CH4. Since CH4 is already measured
under the current Tier 2 regulations (so
that it may be subtracted to calculate
non-methane hydrocarbons), the
proposed standard would not result in
additional testing costs. EPA requests
comment on whether the proposed cap
standard would result in any significant
technological challenges for makers of
CNG vehicles.
for light-duty vehicles: small volume
manufacturers, independent commercial
importers (ICIs), and alternative fuel
vehicle converters. EPA has identified
about 13 entities that fit the Small
Business Administration (SBA) criterion
of a small business. EPA estimates there
are 2 small volume manufacturers, 8
ICIs, and 3 alternative fuel vehicle
converters currently in the light-duty
vehicle market. EPA estimates that these
small entities comprise less than 0.1
percent of the total light-duty vehicle
sales in the U.S., and therefore the
proposed deferment will have a
negligible impact on the GHG emissions
reductions from the proposed standards.
Further detail is provided in Section
III.I.3, below.
To ensure that EPA is aware of which
companies would be deferred, EPA is
proposing that such entities submit a
declaration to EPA containing a detailed
written description of how that
manufacturer qualifies as a small entity
under the provisions of 13 CFR 121.201.
Because such entities are not
automatically exempted from other EPA
regulations for light-duty vehicles and
light-duty trucks, absent such a
declaration, EPA would assume that the
entity was subject to the greenhouse gas
control requirements in this GHG
proposal. The declaration would need to
be submitted at time of vehicle
emissions certification under the EPA
Tier 2 program. Small entities are
currently covered by a number of EPA
motor vehicle emission regulations, and
they routinely submit information and
data on an annual basis as part of their
compliance responsibilities. EPA
expects that the additional paperwork
burden associated with completing and
submitting a small entity declaration to
gain deferral from the proposed GHG
standards would be negligible and
easily done in the context of other
routine submittals to EPA. However,
EPA has accounted for this cost with a
nominal estimate included in the
Information Collection Request
completed under the Paperwork
Reduction Act. Additional information
can be found in the Paperwork
Reduction Act discussion in Section
III.I.2.
7. Small Entity Deferment
EPA is proposing to defer setting GHG
emissions standards for small entities
meeting the Small Business
Administration (SBA) criteria of a small
business as described in 13 CFR
121.201. EPA would instead consider
appropriate GHG standards for these
entities as part of a future regulatory
action. This includes small entities in
three distinct categories of businesses
C. Additional Credit Opportunities for
CO2 Fleet Average Program
The standards being proposed
represent a significant multi-year
challenge for manufacturers, especially
in the early years of the program.
Section III.B.4 described EPA proposals
for how manufacturers could generate
credits by achieving fleet average CO2
emissions below the fleet average
standard, and also how manufacturers
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00074
Fmt 4701
Sfmt 4702
could use credits to comply with
standards. As described in Section
III.B.4, credits could be carried forward
five years, carried back three years,
transferred between vehicle categories,
and traded between manufacturers. The
credits provisions proposed below
would provide manufacturers with
additional ways to earn credits starting
in MY 2012. EPA is also proposing early
credits provisions for the 2009–2011
model years, as described below in
Section III.C.5.
The provisions proposed below
would provide additional flexibility,
especially in the early years of the
program. This flexibility helps to
address issues of lead-time or technical
feasibility for various manufacturers and
in several cases provides an incentive
for promotion of technology pathways
that warrant further development,
whether or not they are an important or
central technology on which critical
features of this program are premised.
EPA is proposing a variety of credit
opportunities because manufacturers are
not likely to be in a position to use
every credit provision. EPA expects that
manufacturers are likely to select the
credit opportunities that best fit their
future plans. EPA believes it is critical
that manufacturers have options to ease
the transition to the final MY 2016
standards. At the same time, EPA
believes these credit programs must be
designed in a way to ensure that they
achieve emission reductions that
achieve real-world reductions over the
full useful life of the vehicle (or, in the
case of FFV credits and Advanced
Technology credits, to incentivize the
introduction of those vehicle
technologies) and are verifiable. In
addition, EPA wants to ensure these
credit programs do not provide an
opportunity for manufacturers to earn
‘‘windfall’’ credits. EPA seeks comments
on how to best ensure these objectives
are achieved in the design of the credit
programs. EPA requests comment on all
aspects of these proposed credits
provisions.
1. Air Conditioning Related Credits
EPA proposes that manufacturers be
able to generate and use credits for
improved air conditioner (A/C) systems
in complying with the CO2 fleetwide
average standards described above. EPA
expects that most manufacturers will
choose to utilize the A/C provisions as
part of its compliance demonstration
(and for this reason cost of compliance
with A/C related emission reductions
are assumed in the cost analysis). The
A/C provisions are structured as credits,
unlike the CO2 standards for which
manufacturers will demonstrate
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
compliance using 2-cycle tests (see
Sections III.B and III.E.). Those tests do
not measure either A/C leakage or
tailpipe CO2 emissions attributable to
A/C load (see Section III.C.1.b below
describing proposed alternative test
procedures for assessing tailpipe CO2
emission attributable to
A/C engine load). Thus, it is a
manufacturer’s option to include A/C
GHG emission reductions as an aspect
of its compliance demonstration. Since
this is an elective alternative, EPA is
referring to the A/C part of the proposal
as a credit.
EPA estimates that direct A/C GHG
emissions—emissions due to the leakage
of the hydrofluorocarbon refrigerant in
common use today—account for 4.3% of
CO2-equivalent GHGs from light-duty
cars and trucks. This includes the direct
leakage of refrigerant as well as the
subsequent leakage associated with
maintenance and servicing, and with
disposal at the end of the vehicle’s life.
The emissions that are impacted by
leakage reductions are the direct leakage
and the maintenance and servicing.
Together these are equivalent to CO2
emissions of approximately 13.6 g/mi
per vehicle (this is 14.9 g/mi if end of
life emissions are also included). EPA
also estimates that indirect GHG
emissions (additional CO2 emitted due
to the load of the A/C system on the
engine) account for another 3.9% of
light-duty GHGs.139 This is equivalent
to CO2 emissions of approximately 14.2
g/mi per vehicle. The derivation of these
figures can be found in the EPA DRIA.
EPA believes that it is important to
address A/C direct and indirect
emissions because the technologies that
manufacturers will employ to reduce
vehicle exhaust CO2 will have little or
no impact on A/C related emissions.
Without addressing A/C-related
emissions, as vehicles become more
efficient, the A/C related contribution
will become a much larger portion of
the overall vehicle GHG emissions.
Over 95% of the new cars and light
trucks in the United States are equipped
with A/C systems and, as noted, there
are two mechanisms by which A/C
systems contribute to the emissions of
greenhouse gases: through leakage of
refrigerant into the atmosphere and
through the consumption of fuel to
provide power to the A/C system. With
leakage, it is the high global warming
potential (GWP) of the current
automotive refrigerant—R134a, with a
GWP of 1430—that results in the CO2equivalent impact of 13.6 g/mi.140 Due
139 See
Chapter 2, section 2.2.1.2 of the DRIA.
global warming potentials (GWP) used in
the NPRM analysis are consistent with
140 The
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
to the high GWP of this HFC, a small
leakage of the refrigerant has a much
greater global warming impact than a
similar amount of emissions of CO2 or
other mobile source GHGs.
Manufacturers can choose to reduce
A/C leakage emissions by using leaktight components. Also, manufacturers
can largely eliminate the global
warming impact of leakage emissions by
adopting systems that use an alternative,
low-GWP refrigerant.141 The A/C system
also contributes to increased CO2
emissions through the additional work
required to operate the compressor,
fans, and blowers. This additional work
typically is provided through the
engine’s crankshaft, and delivered via
belt drive to the alternator (which
provides electric energy for powering
the fans and blowers) and A/C
compressor (which pressurizes the
refrigerant during A/C operation). The
additional fuel used to supply the
power through the crankshaft necessary
to operate the A/C system is converted
into CO2 by the engine during
combustion. This incremental CO2
produced from A/C operation can thus
be reduced by increasing the overall
efficiency of the vehicle’s A/C system,
which in turn will reduce the additional
load on the engine from A/C
operation.142
Manufacturers can make very feasible
improvements to their
A/C systems to address A/C system
leakage and efficiency. EPA proposes
two separate credit approaches to
address leakage reductions and
efficiency improvements independently.
A proposed leakage reduction credit
would take into account the various
technologies that could be used to
reduce the GHG impact of refrigerant
leakage, including the use of an
alternative refrigerant with a lower
GWP. A proposed efficiency
improvement credit would account for
the various types of hardware and
control of that hardware available to
Intergovernmental Panel on Climate Change (IPCC)
Fourth Assessment Report (AR4). At this time, the
IPCC Second Assessment Report (SAR) global
warming potential values have been agreed upon as
the official U.S. framework for addressing climate
change. The IPCC SAR GWP values are used in the
official U.S. greenhouse gas inventory submission
to the climate change framework. When inventories
are recalculated for the final rule, changes in GWP
used may lead to adjustments.
141 Refrigerant emissions during maintenance and
at the end of the vehicle’s life (as well as emissions
during the initial charging of the system with
refrigerant) are also addressed by the CAA Title VI
stratospheric ozone program, as described below.
142 We will not be addressing changes to the
weight of the A/C system, since the issue of CO2
emissions from the fuel consumption of normal
(non-A/C) operation, including basic vehicle
weight, is inherently addressed with the primary
CO2 standards (See III.B above).
PO 00000
Frm 00075
Fmt 4701
Sfmt 4702
49527
increase the A/C system efficiency.
Manufacturers would be required to
attest the durability of the leakage
reduction and the efficiency
improvement technologies over the full
useful life of the vehicle.
EPA believes that both reducing A/C
system leakage and increasing efficiency
are highly cost-effective and
technologically feasible. EPA expects
most manufacturers will choose to use
these A/C credit provisions, although
some may not find it necessary to do so.
a. A/C Leakage Credits
The refrigerant used in vehicle A/C
systems can get into the atmosphere by
many different means. These refrigerant
emissions occur from the slow leakage
over time that all closed high pressure
systems will experience. Refrigerant loss
occurs from permeation through hoses
and leakage at connectors and other
parts where the containment of the
system is compromised. The rate of
leakage can increase due to
deterioration of parts and connections
as well. In addition, there are emissions
that occur during accidents and
maintenance and servicing events.
Finally, there are end-of-life emissions
if, at the time of vehicle scrappage,
refrigerant is not fully recovered.
Because the process of refrigerant
leakage has similar root causes as those
that cause fuel evaporative emissions
from the fuel system, some of the
control technologies are similar
(including hose materials and
connections). There are however, some
fundamental differences between the
systems that require a different
approach. The most notable difference
is that A/C systems are completely
closed systems, whereas the fuel system
is not. Fuel systems are meant to be
refilled as liquid fuel is consumed by
the engine, while the A/C system ideally
should never require ‘‘recharging’’ of the
contained refrigerant. Thus it is critical
that the A/C system leakages be kept to
an absolute minimum. These emissions
are typically too low to accurately
measure in most current SHED
chambers designed for fuel evaporative
emissions measurement, especially for
systems that are new or early in life.
Therefore, if leakage emissions were to
be measured directly, new measurement
facilities would need to be built by the
OEM manufacturers and very accurate
new test procedures would need to be
developed. Especially because there are
indications that much of the industry is
moving toward alternative refrigerants
(post-2016 for most manufacturers), EPA
is not proposing such a direct
measurement approach to addressing
refrigerant leakage.
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49528
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
Instead, EPA proposes that
manufacturers demonstrate
improvements in their A/C system
designs and components through a
design-based method. Manufacturers
implementing systems expected to
result in reduced refrigerant leakage
would be eligible for credits that could
then be used to meet their CO2 emission
compliance requirements. The proposed
‘‘A/C Leakage Credit’’ provisions would
generally assign larger credits to system
designs that are expected to result in
greater leakage reduction. In addition,
EPA proposes that proportionately
larger A/C Leakage Credits be available
to manufacturers that substitute a lowerGWP refrigerant for the current R134a
refrigerant.
Our proposed method for calculating
A/C Leakage Credits is based closely on
an industry-consensus leakage scoring
method, described below. This leakage
scoring method is correlated to
experimentally-measured leakage rates
from a number of vehicles using the
different available A/C components.
Under the proposed approach,
manufacturers would choose from a
menu of A/C equipment and
components used in their vehicles in
order to establish leakage scores which
would characterize their A/C system
leakage performance. The leakage score
can be compared to expected fleetwide
leakage rates in order to quantify
improvements for a given A/C system.
Credits would be generated from leakage
reduction improvements that exceeded
average fleetwide leakage rates.
EPA believes that the design-based
approach would result in estimates of
likely leakage emissions reductions that
would be comparable to those that
would eventually result from
performance-based testing. At the same
time, comments are encouraged on all
developments that may lead to a robust,
practical, performance-based test for
measuring A/C refrigerant leakage
emissions.
The cooperative industry and
government Improved Mobile Air
Conditioning (IMAC) program 143 has
demonstrated that new-vehicle leakage
emissions can be reduced by 50%. This
program has shown that this level of
improvement can be accomplished by
reducing the number and improving the
quality of the components, fittings,
seals, and hoses of the A/C system. All
of these technologies are already in
commercial use and exist on some of
today’s systems.
EPA is proposing that a manufacturer
wishing to earn A/C Leakage Credits
143 Team 1–Refrigerant Leakage Reduction: Final
Report to Sponsors, SAE, 2007.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
would compare the components of its
A/C system with a set of leakagereduction technologies and actions that
is based closely on that being developed
through IMAC and the Society of
Automotive Engineers (as SAE Surface
Vehicle Standard J2727, August 2008
version). The J2727 approach is
developed from laboratory testing of a
variety of A/C related components, and
EPA believes that the J2727 leakage
scoring system generally represents a
reasonable correlation with average realworld leakage in new vehicles. Like the
IMAC approach, our proposed credit
approach would associate each
component with a specific leakage rate
in grams per year identical to the values
in J2727. A manufacturer choosing to
claim Leakage Credits would sum the
leakage values for an A/C system for a
total A/C leakage score. EPA is
proposing a formula for converting the
grams-per-year leakage score to a gramsper-mile CO2eq value, taking vehicle
miles traveled (VMT) and the GWP of
the refrigerant into account. This
formula is:
Credit = (MaxCredit) * [1 ¥ (LeakScore/
AvgImpact) * (GWPRefrigerant/
1430)]
Where:
MaxCredit is 12.6 and 15.7 g/mi CO2eq for
cars and trucks respectively. These
become 13.8 and 17.2 for cars and trucks
if alternative refrigerants are used since
they get additional credits for end-of-life
emissions reductions.
LeakScore is the leakage score of the A/C
system as measured according to
methods similar to the J2727 procedure
in units of g/yr. The minimum score
which is deemed feasible is fixed at 8.3
and 10.4 g/yr for cars and trucks
respectively.
AvgImpact is the average impact of A/C
leakage, which is 16.6 and 20.7 g/yr for
cars and trucks respectively.
GWPRefrigerant is the global warming
potential for direct radiative forcing of
the refrigerant as defined by EPA (or
IPCC).
All of the parameters and limits of the
equation are derived in the EPA DRIA.
For systems using the current
refrigerant, EPA proposes that these
emission rates could at most be feasibly
reduced by half, based on the
conclusions of the IMAC study, and
consideration of emission over the full
life of the vehicle. (This latter point is
discussed further in the DRIA.)
As discussed above, EPA recognizes
that substituting an alternative
refrigerant (one with a significantly
lower global warming potential, GWP),
would potentially be a very effective
way to reduce the impact of all forms of
refrigerant emissions, including
maintenance, accidents, and vehicle
PO 00000
Frm 00076
Fmt 4701
Sfmt 4702
scrappage. To address future GHG
regulations in Europe and California,
systems using alternative refrigerants—
including HFO1234yf, with a GWP of
4—are under serious development and
have been demonstrated in prototypes
by A/C component suppliers. These
alternative refrigerants have remaining
cost, safety and feasibility hurdles for
commercial applications.144 However,
the European Union has enacted
regulations phasing in alternative
refrigerants with GWP less than 150
starting in 2010, and the State of
California proposed providing credits
for alternative refrigerant use in its GHG
rule.
Within the timeframe of 2012–2016,
EPA is not expecting the use of lowGWP refrigerants to be widespread.
However, EPA believes that these
developments are promising, and have
included in our proposed A/C Leakage
Credit system provisions to account for
the effective refrigerant reductions that
could be expected from refrigerant
substitution. The quantity of A/C
Leakage Credits that would be available
would be a function of the GWP of the
alternative refrigerant, with the largest
credits being available for refrigerants
approaching a GWP of zero.145 For a
hypothetical alternative refrigerant with
a GWP of 1, effectively eliminating
leakage as a GHG concern, our proposed
credit calculation method could result
in maximum credits equal total average
emissions, or credits of 13.4 and 17.8
g/mi CO2eq for cars and trucks,
respectively. This option is also
captured in the equation above.
It is possible that alternative
refrigerants could, without
compensating action by the
manufacturer, reduce the efficiency of
the A/C system (see discussion of the A/
C Efficiency Credit below.) However,
EPA believes that manufacturers will
have substantial incentives to design
their systems to maintain the efficiency
of the A/C system, therefore EPA is not
accounting for any potential efficiency
degradation.
EPA requests comment on all aspects
of our proposed A/C Leakage Credit
system.
144 Although see 71 FR 55140 (Sept. 21, 2006)
(proposal pursuant to section 612 of the CAA
finding CO2 and HFC 152a as acceptable refrigerant
substitutes as replacements for CFC–12 in motor
vehicle air conditioning systems, and stating (at
55142) that ‘‘data … indicate that use of CO2 and
HFC 152a with risk mitigation technologies does
not pose greater risks compared to other
substitutes’’).
145 For example, the GWP for R152a is 120, the
GWP of HFO–1234yf is 4, and the GWP of CO2 as
a refrigerant is 1.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
b. A/C Efficiency Credits
EPA is proposing that manufacturers
that make improvements in their A/C
systems to increase efficiency and thus
reduce CO2 emissions due to A/C
system operation be eligible for A/C
Efficiency Credits. As with A/C Leakage
Credits, manufacturers could apply A/C
Efficiency Credits toward compliance
with their overall CO2 standards.
As mentioned above, EPA estimates
that the CO2 emissions due to A/C
related loads on the engine account for
approximately 3.9% of total greenhouse
gas emissions from passenger vehicles
in the United States. Usage of A/C
systems is inherently higher in hotter
and more humid months and climates;
however, vehicle owners may use their
A/C systems all year round in all parts
of the nation. For example, people
commonly use A/C systems to cool and
dehumidify the cabin air for passenger
comfort on hot humid days, but they
also use the systems to de-humidify
cabin air to assist in defogging/de-icing
the front windshield and side glass in
cooler weather conditions for improved
visibility. A more detailed discussion of
seasonal and geographical A/C usage
rates can be found in the DRIA.
Most of the additional load on the
engine from A/C system operation
comes from the compressor, which
pumps the refrigerant around the system
loop. Significant additional load on the
engine may also come from electric or
hydraulic fans, which are used to move
air across the condenser, and from the
electric blower, which is used to move
air across the evaporator and into the
cabin. Manufacturers have several
currently-existing technology options
for improving efficiency, including
more efficient compressors, fans, and
motors, and systems controls that avoid
over-chilling the air (and subsequently
re-heating it to provide the desired air
temperature with an associated loss of
efficiency). For vehicles equipped with
automatic climate-control systems, real-
time adjustment of several aspects of the
overall system (such as engaging the full
capacity of the cooling system only
when it is needed, and maximizing the
use of recirculated air) can result in
improved efficiency. Table III.C.1–1
below lists some of these technologies
and their respective efficiency
improvements.
As with the A/C Leakage Credit
program, EPA is interested in
performance-based standards (or
credits) based on measurement
procedures whenever possible. While
design-based assessments of expected
emissions can be a reasonably robust
way of quantifying emission
improvements, these approaches have
inherent shortcomings, as discussed for
the case of A/C leakage above. Designbased approaches depend on the quality
of the data from which they are
calibrated, and it is possible that
apparently proper equipment may
function less effectively than expected.
Therefore, while the proposal uses a
design-based menu approach to quantify
improvements in A/C efficiency, it is
also proposed to begin requiring
manufacturers to confirm that
technologies applying for Efficiency
Credits are measurably improving
system efficiency.
EPA believes that there is a more
critical need for a test procedure to
quantify A/C Efficiency Credits than for
Leakage Credits, for two reasons. First,
the efficiency gains for various
technologies are more difficult to
quantify using a design-based program
(like the SAEJ2727-based procedure
used to generate Leakage Credits).
Second, while leakage may disappear as
a significant source of GHG emissions if
a shift toward alternate refrigerants
develops, no parallel factor exists in the
case of efficiency improvements. EPA is
thus proposing to phase-in a
performance-based test procedure over
time beginning in 2014, as discussed
below. In the interim, EPA proposes a
49529
design-based ‘‘menu’’ approach for
estimating efficiency improvements
and, thus, quantifying A/C Efficiency
Credits.
For model years 2012 and 2013, EPA
proposes that a manufacturer wishing to
generate A/C Efficiency Credits for a
group of its vehicles with similar A/C
systems would compare several of its
vehicle A/C-related components and
systems with a ‘‘menu’’ of efficiencyrelated technology improvements (see
Table III.C.1–1 below). Based on the
technologies the manufacturer chooses,
an A/C Efficiency Credit value would be
established. This design-based approach
would recognize the relationships and
synergies among efficiency-related
technologies. Manufacturers could
receive credit based on the technologies
they chose to incorporate in their A/C
systems and the associated credit value
for each technology. The total A/C
Efficiency Credit would be the total of
these values, up to a maximum feasible
credit of 5.7 g/mi CO2eq. This would be
the maximum improvement from
current average efficiencies for A/C
systems (see the DRIA for a full
discussion of our derivation of the
proposed reductions and credit values
for individual technologies and for the
maximum total credit available).
Although the total of the individual
technology credit values may exceed 5.7
g/mi CO2eq, synergies among the
technologies mean that the values are
not additive, and thus A/C Efficiency
credit could not exceed 5.7 g/mi CO2eq.
The EPA requests comment on
adjusting the A/C efficiency credit to
account for potential decreases (or
increases) in efficiency when using an
alternative refrigerant by using the
change in the coefficient of
performance. The effects may include
the impact of a secondary loop system
(including the incremental effect on
tailpipe CO2 emissions that the added
weight of such a system would incur).
TABLE III.C.1–1 EFFICIENCY-IMPROVING A/C TECHNOLOGIES AND CREDITS
Estimated reduction in A/C CO2
emissions
(percent)
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Technology description
Reduced reheat, with externally-controlled, variable-displacement compressor ........................................
Reduced reheat, with externally-controlled, fixed-displacement or pneumatic variable-displacement
compressor ...............................................................................................................................................
Default to recirculated air whenever ambient temperature is greater than 75 °F ......................................
Blower motor and cooling fan controls which limit waste energy (e.g. pulse width modulated power
controller) .................................................................................................................................................
Electronic expansion valve ..........................................................................................................................
Improved evaporators and condensers (with system analysis on each component indicating a COP improvement greater than 10%, when compared to previous design) .......................................................
Oil Separator ................................................................................................................................................
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00077
Fmt 4701
Sfmt 4702
E:\FR\FM\28SEP2.SGM
A/C Efficiency
credit
(g/mi CO2)
30
20
30
1.1
1.7
15
20
0.9
1.1
20
10
28SEP2
1.7
1.1
0.6
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49530
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
For model years 2014 and later, EPA
proposes that manufacturers seeking to
generate A/C Efficiency Credits would
need to use a specific performance test
to confirm that the design changes were
also improving A/C efficiency.
Manufacturers would need to perform
an A/C CO2 Idle Test for each A/C
system (family) for which it desired to
generate Efficiency Credits.
Manufacturers would need to
demonstrate at least a 30%
improvement over current average
efficiency levels to qualify for credits.
Upon qualifying on the Idle Test, the
manufacturer would be eligible to use
the menu approach above to quantify
the credits it would earn.
The proposed A/C CO2 Idle Test
procedure, which EPA has designed
specifically to measure A/C CO2
emissions, would be performed while
the vehicle engine is at idle. This
proposed laboratory idle test would be
similar to the idle carbon monoxide
(CO) test that was once a part of EPA
vehicle certification. The test would
determine the additional CO2 generated
at idle when the A/C system is operated.
The A/C CO2 Idle Test would be run
with and without the A/C system
cooling the interior cabin while the
vehicle’s engine is operating at idle and
with the system under complete control
of the engine and climate control system
The proposed A/C CO2 Idle Test is
similar to that proposed in April 2009
for the Mandatory GHG Reporting Rule,
with several improvements. These
improvements include tighter
restrictions on test cell temperatures
and humidity levels in order to more
closely control the loads from operation
of the A/C system. EPA also made
additional refinements to the required
in-vehicle blower fan settings for
manually controlled systems to more
closely represent ‘‘real world’’ usage
patterns. These details can be found in
the DRIA and the regulations.
The design of the A/C CO2 Idle Test
represents a balancing of the need for
performance tests whenever possible to
ensure the most accurate quantification
of efficiency improvements, with
practical concerns for testing burden
and facility requirements. EPA believes
that the proposed Idle Test adds to the
robust quantification of A/C credits that
will result in real-world efficiency
improvements and reductions in A/Crelated CO2 emissions. EPA is proposing
that the Idle Test be required in order
to qualify for A/C Efficiency Credits
beginning in 2014 to allow sufficient
time for manufacturers to make the
necessary facilities improvements and
to establish a comfort level with the test.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
EPA also considered a more
comprehensive testing approach to
quantifying A/C CO2 emissions that
could be somewhat more technically
robust, but would require more test time
and test facility improvements for many
manufacturers. This approach would be
to adapt an existing test procedure, the
Supplemental Federal Test Procedure
(SFTP) for A/C operation, called the
SC03, in specific ways for it to function
as a tool to evaluate A/C CO2 emissions.
The potential test method is described
in some detail here, and EPA
encourages comment on how this type
of test might or might not accomplish
the goals of robust performance-based
testing and reasonable test burdens.
EPA designed the SC03 test to
measure criteria pollutants under severe
air conditioning conditions not
represented in the FTP and Highway
Fuel Economy Tests. EPA did not
specifically design the SC03 to measure
incremental reductions in CO2
emissions from more efficient A/C
technologies. For example, due to the
severity of the SC03 test environmental
conditions and the relatively short
duration of the SC03 cycle, it is difficult
for the A/C system to achieve a
stabilized interior cabin condition that
reflects incremental improvements.
Many potential efficiency improvements
in the A/C components and controls
(i.e., automatic recirculation and heat
exchanger fan control) are specifically
measured only during stabilized
conditions, and therefore become
difficult or impossible to measure and
quantify during this test. In addition,
SC03 testing is also somewhat
constrained and costly due to limited
number of test facilities currently
capable of performing testing under the
required environmental conditions.
One value of using the SC03 as the
basis for a new test to quantify A/Crelated efficiency improvements would
be the significant degree of control of
test cell ambient conditions. The load
placed on an A/C system, and thus the
incremental CO2 emissions, are highly
dependent on the ambient conditions in
the test cell, especially temperature and
humidity, as well as simulated solar
load. Thus, as with the proposed Idle
Test, a new SC03-based test would need
to accurately and reliably control these
conditions. (This contrasts with FTP
testing for criteria pollutants, which
does not require precise control of cell
conditions because test results are
generally much less sensitive to changes
in cell temperature or humidity).
However, for the purpose of
quantifying A/C system efficiency
improvements, EPA believes a test cell
temperature less severe than the 95°F
PO 00000
Frm 00078
Fmt 4701
Sfmt 4702
required by the SC03 would be
appropriate. A cell temperature of 85°F
would better align the initial cooling
phase (‘‘pull-down’’) as well as the
stabilized phase of A/C operation with
real-world driving conditions.
Another value of an SC03-based test
would be the opportunity to create
operating conditions for vehicle A/C
systems that in some ways would better
simulate ‘‘real world’’ operation than
either the proposed Idle Test or the
current SC03. The SC03 test cycle,
roughly 10 minutes in length, has a
similar average speed, maximum speed,
and percentage of time at idle as the
FTP. However, since the SC03 test cycle
was designed principally to measure
criteria pollutants under maximum A/C
load conditions, it is not long enough to
allow temperatures in the passenger
cabin to consistently stabilize. EPA
believes that once the pull-down phase
has occurred and cabin temperatures
have dropped dramatically to a suitable
interior comfort level, additional test
cycle time would be needed to measure
how efficiently the A/C system operates
under stabilized conditions.
To capture the A/C operation during
stabilized operation, EPA would
consider adding two phases to the SC03
test of roughly 10 minutes each. Each
additional phase would simply be
repeats of the SC03 drive cycle, with
two exceptions. During the second
phase, the A/C system would now be
operating at cabin temperature at or
approaching a stabilized condition.
During the third phase, the A/C system
would be turned off. The purpose of the
third phase would be to establish the
base CO2 emissions with no A/C loads
on the engine, which would provide a
baseline for the incremental CO2 due to
A/C use. EPA would likely weight the
CO2 g/mi results for the first and second
phases of the test as follows: 50% for
phase 1, and 50% for phase 2. From this
average CO2 the methodology would
subtract the CO2 result from phase 3,
yielding an incremental CO2 (in g/mi)
due to A/C use.
EPA expects to continue working with
industry, the California Air Resources
Board, and other stakeholders to move
toward increasingly robust performance
tests for A/C and may include such
changes in this final rule. EPA requests
comment on all aspects of our proposed
A/C Efficiency Credits program.
c. Interaction With Title VI Refrigerant
Regulations
Title VI of the Clean Air Act deals
with the protection of stratospheric
ozone. Section 608 establishes a
comprehensive program to limit
emissions of certain ozone-depleting
E:\FR\FM\28SEP2.SGM
28SEP2
substances (ODS). The rules
promulgated under section 608 regulate
the use and disposal of such substances
during the service, repair or disposal of
appliances and industrial process
refrigeration. In addition, section 608
and the regulations promulgated under
it, prohibit knowingly venting or
releasing ODS during the course of
maintaining, servicing, repairing or
disposing of an appliance or industrial
process refrigeration equipment. Section
609 governs the servicing of motor
vehicle air conditioners (MVACs). The
regulations promulgated under section
609 (40 CFR part 82, subpart B)
establish standards and requirements
regarding the servicing of MVACs.
These regulations include establishing
standards for equipment that recovers
and recycles or only recovers refrigerant
(CFC–12, HFC 134a, and for blends only
recovers) from MVACs; requiring
technician training and certification by
an EPA-approved organization;
establishing recordkeeping
requirements; imposing sales
restrictions; and prohibiting the venting
of refrigerants. Section 612 requires EPA
to review substitutes for class I and class
II ozone depleting substances and to
consider whether such substitutes will
cause an adverse effect to human health
or the environment as compared with
other substitutes that are currently or
potentially available. EPA promulgated
regulations for this program in 1992 and
those regulations are located at 40 CFR
part 82, subpart G. When reviewing
substitutes, in addition to finding them
acceptable or unacceptable, EPA may
also find them acceptable so long as the
user meets certain use conditions. For
example, all motor vehicle air
conditioning system must have unique
fittings and a uniquely colored label for
the refrigerant being used in the system.
EPA views this proposed rule as
complementing these Title VI programs,
and not conflicting with them. To the
extent that manufacturers choose to
reduce refrigerant leakage in order to
earn A/C Leakage Credits, this would
dovetail with the Title VI section 609
standards which apply to maintenance
events, and to end-of-vehicle life
disposal. In fact, as noted, a benefit of
the proposed A/C credit provisions is
that there should be fewer and less
impactive maintenance events for
MVACs, since there will be less leakage.
In addition, the credit provisions would
not conflict (or overlap) with the Title
VI section 609 standards. EPA also
believes the menu of leak control
technologies proposed today would
complement the section 612
requirements, because these control
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
technologies would help ensure that
R134a (or other refrigerants) would be
used in a manner that further minimizes
potential adverse effects on human
health and the environment.
2. Flex Fuel and Alternative Fuel
Vehicle Credits
As described in this section, EPA is
proposing credits for flexible-fuel
vehicles (FFVs) and alternative fuel
vehicles starting in the 2012 model year.
FFVs are vehicles that can run both on
an alternative fuel and conventional
fuel. Most FFVs are E–85 vehicles,
which can run on a mixture of up to 85
percent ethanol and gasoline. Dedicated
alternative fuel vehicles are vehicles
that run exclusively on an alternative
fuel (e.g., compressed natural gas).
EPCA includes an incentive under the
CAFE program for production of dualfueled vehicles or FFVs, and dedicated
alternative fuel vehicles.146 EPCA’s
provisions were amended by the EISA
to extend the period of availability of
the FFV credits, but to begin phasing
them out by annually reducing the
amount of FFV credits that can be used
in demonstrating compliance with the
CAFE standards.147 EPCA does not
premise the availability of the FFV
credits on actual use of alternative fuel.
Under EPCA, after MY 2019 no FFV
credits will be available for CAFE
compliance.148 Under EPCA, for
dedicated alternative fuel vehicles, there
are no limits or phase-out. EPA is
proposing that FFV and Alternative Fuel
Vehicle Credits be calculated as a part
of the calculation of a manufacturer’s
overall fleet average fuel economy and
fleet average carbon-related exhaust
emissions (§ 600.510–12).
EPA is not proposing to include
electric vehicles (EVs) or plug-in hybrid
electric vehicles (PHEVs) in these flex
fuel and alternative fuel provisions.
These vehicles would be covered by the
proposed advanced technology vehicle
credits provisions described in Section
III.C.3, so including them here would
lead to a double counting of credits.
a. Model Year 2012—2015 Credits
i. FFVs
For the GHG program, EPA is
proposing to allow FFV credits
corresponding to the amounts allowed
by the amended EPCA only during the
146 49
U.S.C 32905.
49 U.S.C 32906. The mechanism by which
EPCA provides an incentive for production of FFVs
is by specifying that their fuel economy is
determined using a special calculation procedure
that results in those vehicles being assigned a
higher fuel economy level than would otherwise
occur. 49 U.S.C. section 32905(b). This is typically
referred to as an FFV credit.
148 49 U.S.C 32906.
147 See
PO 00000
Frm 00079
Fmt 4701
Sfmt 4702
49531
period from MYs 2012 to 2015. (As
discussed below in Section III.E., EPA is
proposing that CAFE-based FFV credits
would not be permitted as part of the
early credits program.) Several
manufacturers have already taken the
availability of FFV credits into account
in their near-term future planning for
CAFE and this reliance indicates that
these credits need to be considered in
considering adequacy of lead time for
the CO2 standards. EPA thus believes
that allowing these credits, in the near
term, would help provide adequate lead
time for manufacturers to implement the
new multi-year standards, but that for
the longer term there is adequate lead
time without the use of such credits.
This will also tend to harmonize the
GHG and the CAFE program during
these interim years. As discussed below,
EPA is proposing for MY 2016 and later
that manufacturers would not receive
FFV credits unless they reliably
estimate the extent the alternative fuel
is actually being used by vehicles in
order to count the alternative fuel use in
the vehicle’s CO2 emissions level
determination.
As with the CAFE program, EPA
proposes to base credits on the
assumption that the vehicles would
operate 50% of the time on the
alternative fuel and 50% of the time on
conventional fuel, resulting in CO2
emissions that are based on an
arithmetic average of alternative fuel
and conventional fuel CO2 emissions.149
The measured CO2 emissions on the
alternative fuel would be multiplied by
a 0.15 volumetric conversion factor
which is included in the CAFE
calculation as provided by EPCA.
Through this mechanism a gallon of
alternative fuel is deemed to contain
0.15 gallons of fuel. EPA is proposing to
take the same approach for 2012–2015
model years. For example, for a flexiblefuel vehicle that emitted 330 g/mi CO2
operating on E–85 and 350 g/mi CO2
operating on gasoline, the resulting CO2
level to be used in the manufacturer’s
fleet average calculation would be:
⎡( 330 × 0.15 ) + 350 ⎤
⎦ = 199.8 g /mi
CO2 = ⎣
2
EPA understands that by using the
CAFE approach—including the 0.15
factor—the CO2 emissions value for the
vehicle is calculated to be significantly
lower than it actually would be
otherwise, even if the vehicle were
assumed to operate on the alternative
fuel at all times. This represents a
‘‘credit’’ being provided to FFVs.
149 49
E:\FR\FM\28SEP2.SGM
U.S.C 32905 (b).
28SEP2
EP28SE09.012</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
49532
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
EPA notes also that the above
equation and example are based on an
FFV that is an E–85 vehicle. EPCA, as
amended by EISA, also establishes the
use of this approach, including the 0.15
factor, for all alternative fuels, not just
E–85.150 The 0.15 factor is used for B–
20 (20 percent biofuel and 80 percent
diesel) FFVs. EPCA also establishes this
approach, including the 0.15 factor, for
gaseous-fueled FFVs such as a vehicle
able to operate on gasoline and CNG.151
(For natural gas FFVs, EPCA establishes
a factor of 0.823 gallons of fuel for every
100 cubic feet a natural gas used to
calculate a gallons equivalent.) 152 The
EISA statute’s use of the 0.15 factor in
this way provides a similar regulatory
treatment across the various types of
alternative fuel vehicles. EPA also
proposes to use the 0.15 factor for all
FFVs in keeping with the goal of not
disrupting manufacturers’ near-term
compliance planning. EPA, in any case,
expects the vast majority of FFVs to be
E–85 vehicles, as is the case today.
The FFV credit limits for CAFE are
1.2 mpg for model years 2012–2014 and
1.0 mpg for model year 2015.153 In CO2
terms, these CAFE limits translate to
declining CO2 credit limits over the four
model years, as the CAFE standards
increase in stringency (as the CAFE
standard increases numerically, the
limit becomes a smaller fraction of the
standard). EPA proposes credit limits
shown in Table III.C.2–1 based on the
proposed average CO2 standards for cars
and trucks. These have been calculated
by comparing the average proposed
CAFE standards with and without the
FFV credits, converted to CO2. EPA
requests comments on this proposed
approach.
TABLE III.C.2–1—FFV CO2 STANDARD
CREDIT LIMITS (G/MILE)
Model year
mstockstill on DSKH9S0YB1PROD with PROPOSALS
2012
2013
2014
2015
Cars
..........................
..........................
..........................
..........................
Trucks
9.8
9.3
8.9
6.9
17.9
17.1
16.3
12.6
EPA also requests comments on
basing the calculated CO2 credit limit on
the individual manufacturer standards
calculated from the footprint curves. For
example, if a manufacturer’s 2012 car
standard was 260 g/mile, the credit limit
in CO2 terms would be 9.5 g/mile and
if it were 270 g/mile the limit would be
10.2 g/mile. This approach would be
somewhat more complex and would
150 49
U.S.C 32905 (c).
U.S.C 32905 (d).
152 49 U.S.C section 32905 (c).
153 49 U.S.C section 32906 (a).
151 49
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
mean that the FFV CO2 credit limits
would vary by manufacturer as their
footprint based standards vary.
However, it would more closely track
CAFE FFV credit limits.
ii. Dedicated Alternative Fuel
Vehicles
EPA proposes to calculate CO2
emissions from dedicated alternative
fuel vehicles for MY 2012—2015 by
measuring the CO2 emissions over the
test procedure and multiplying the
results by the 0.15 conversion factor
described above. For example, for a
dedicated alternative fuel vehicle that
would achieve 330 g/mi CO2 while
operating on alcohol (ethanol or
methanol), the effective CO2 emissions
of the vehicle for use in determining the
vehicle’s CO2) emissions would be
calculated as follows:
CO2 = 330 × 0.15 = 49.5 g/mi
b. Model Years 2016 and Later
i. FFVs
For 2016 and later model years, EPA
proposes to treat FFVs similarly to
conventional fueled vehicles in that
FFV emissions would be based on
actual CO2 results from emission testing
on the alternative fuel. The
manufacturer would also be required to
demonstrate that the alternative fuel is
actually being used in the vehicles. The
manufacturer would need to establish
the ratio of operation that is on the
alternative fuel compared to the
conventional fuel. The ratio would be
used to weight the CO2 emissions
performance over the 2-cycle test on the
two fuels. The 0.15 conversion factor
would no longer be included in the CO2
emissions calculation. For example, for
a flexible-fuel vehicle that emitted 300
g/mi CO2 operating on E–85 ten percent
of the time and 350 g/mi CO2 operating
on gasoline ninety percent of the time,
the CO2 emissions for the vehicles to be
used in the manufacturer’s fleet average
would be calculated as follows:
CO2 = (300 × 0.10) + (350 × 0.90)= 345
g/mi
The most complex part of this
approach is to establish what data are
needed for a manufacturer to accurately
demonstrate use of the alternative fuel.
One option EPA is considering is
establishing a rebuttable presumption
using a ‘‘top-down’’ approach based on
national E–85 fuel use to assign credits
to FFVs sold by manufacturers under
this program. For example, national E–
85 volumes and national FFV sales
could be used to prorate E–85 use by
manufacturer sales volumes and FFVs
already in-use. EPA would conduct an
analysis of vehicle miles travelled
(VMT) by year for all FFVs using its
PO 00000
Frm 00080
Fmt 4701
Sfmt 4702
emissions inventory MOVES model.
Using the VMT ratios and the overall E–
85 sales, E–85 usage could be assigned
to each vehicle. This method would
account for the VMT of new FFVs and
FFVs already in the existing fleet using
VMT data in the model. The model
could then be used to determine the
ratio of E–85 and gasoline for new
vehicles being sold. Fluctuations in E–
85 sales and FFV sales would be taken
into account to adjust the credits
annually. EPA believes this is a
reasonable way to apportion E–85 use
across the fleet.
If manufacturers decided not to use
EPA’s assigned credits based on the topdown analysis, they would have a
second option of presenting their own
data for consideration as the basis for
credits. Manufacturers have suggested
demonstrations using vehicle on-board
data gathering through the use of onboard sensors and computers.
California’s program allows FFV credits
based on FFV use and envisioned
manufacturers collecting fuel use data
from vehicles in fleets with on-site
refueling. Any approach must
reasonably ensure that no CO2
emissions reductions anticipated under
the program are lost.
EPA proposes that manufacturers
would need to present a statistical
analysis of alternative fuel usage data
collected on actual vehicle operation.
EPA is not attempting to specify how
the data is collected or the amount of
data needed. However, the analysis
must be based on sound statistical
methodology. Uncertainty in the
analysis must be accounted for in a way
that provides reasonable certainty that
the program does not result in loss of
emissions reductions. EPA requests
comment on how this demonstration
could reasonably be made.
EPA recognizes that under EPCA FFV
credits are entirely phased-out of the
CAFE program by MY 2020, and apply
in the prior years with certain
limitations, but without a requirement
that the manufacturers demonstrate
actual use of the alternative fuel. Under
this proposal EPA would treat FFV
credits the same as under EPCA for
model years 2012–2015, but would
apply a different approach starting with
model year 2016. Unlike EPCA, CAA
section 202(a) does not mandate that
EPA treat FFVs in a specific way.
Instead EPA is required to exercise its
own judgment and determine an
appropriate approach that best promotes
the goals of this CAA section. Under
these circumstances, EPA proposes to
treat FFVs for model years 2012–2015
the same as under EPCA, for the lead
time reasons described above. Starting
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
with model year 2016, EPA believes the
appropriate approach is to ensure that
emissions reduction credits are based
upon a demonstration that emissions
reductions have been achieved, to
ensure the credits are for real reductions
instead of reductions that have not
likely occurred. This will promote the
environmental goals of this proposal. At
the same time, the ability to generate
credits upon a demonstration of usage of
the alternative fuel will provide an
actual incentive to see that such fuels
are used. Under the EPCA credit
provision, there is an incentive to
produce FFVs but no actual incentive to
ensure that the alternative fuels are
used. GHG and energy security benefits
are only achieved if the alternative fuel
is actually used, and EPA’s approach
will now provide such an incentive.
This approach will promote greater use
of renewable fuels, as compared to a
situation where there is a credit but no
usage requirement. This is also
consistent with the agency’s overall
commitment to the expanded use of
renewable fuels. Therefore EPA is not
proposing to phase-out the FFV program
for MYs 2016 and later but instead to
base the program on real-world
reductions (i.e., actual vehicle CO2
emissions levels based on actual use of
the two fuels, without the 0.15
conversion factor specified under EISA).
Based on existing certification data, E–
85 FFV CO2 emissions are typically
about 5 percent lower on E–85 than CO2
emissions on 100 percent gasoline.
However, currently there is little
incentive to optimize CO2 performance
for vehicles when running on E–85. EPA
believes the above approach would
provide such an incentive to
manufacturers and that E–85 vehicles
could be optimized through engine
redesign and calibration to provide
additional CO2 reductions. EPA requests
comments on the above.
ii. Dedicated Alternative Fuel
Vehicles
EPA proposes that for model years
2016 and later dedicated alternative fuel
vehicles, CO2 would be measured over
the 2-cycle test in order to be included
in a manufacturer’s fleet average CO2
calculations. As noted above, this is
different than CAFE methodology which
provides a methodology for calculating
a petroleum-based mpg equivalent for
alternative fuel vehicles so they can be
included in CAFE. However, because
CO2 can be measured directly from
alternative fuel vehicles over the test
procedure, EPA believes this is the
simplest and best approach since it is
consistent with all other vehicle testing
under the proposed CO2 program.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
3. Advanced Technology Vehicle
Credits for Electric Vehicles, Plug-in
Hybrids, and Fuel Cells
EPA is proposing additional credit
opportunities to encourage the early
commercialization of advanced vehicle
powertrains, including electric vehicles
(EVs), plug-in hybrid electric vehicles
(PHEVs), and fuel cell vehicles. These
technologies have the potential for more
significant reductions of GHG emissions
than any technology currently in
commercial use, and EPA believes that
encouraging early introduction of such
technologies will help to enable their
wider use in the future, promoting the
technology-based emission reduction
goals of section 202(a)(1) of the Clean
Air Act.
EPA proposes that these advanced
technology credits would take the form
of a multiplier that would be applied to
the number of vehicles sold such that
they would count as more than one
vehicle in the manufacturer’s fleet
average. These advanced technology
vehicles would then count more heavily
when calculating fleet average CO2
levels. The multiplier would not be
applied when calculating the
manufacturer’s foot-print-based
standard, only when calculating the
manufacturer’s fleet average levels. EPA
proposes to use a multiplier in the range
of 1.2 to 2.0 for all EVs, PHEVs, and fuel
cell vehicles produced from MY 2012
through MY 2016. EPA proposes that
starting in MY 2017, the multiplier
would no longer be used. As described
in Section III.C.5, EPA is also proposing
to allow early advanced technology
vehicle credits to be generated for model
years 2009–2011. EPA requests
comment on the level of the multiplier
and whether it should be the same value
for each of these three technologies.
Further, if EPA determines that a
multiplier of 2.0, or another level near
the higher end of this range, is
appropriate for the final rule, EPA
requests comment on whether the
multiplier should be phased down over
time, such as: 2.0 for MY 2009 through
MY 2012, 1.8 in MY 2013, 1.6 in MY
2014, 1.4 in MY 2015, and 1.2 in MY
2016 (i.e., the multiplier could phasedown by 0.2 per year). In addition, EPA
requests comment on whether or not it
would be appropriate to differentiate
between EVs and PHEVs for advanced
technology credits. Under such an
approach, PHEVs could be provided a
lesser multiplier compare to EVs. Also,
the PHEV multiplier could be prorated
based on the equivalent electric range
(i.e., the extent to which the PHEV
operates on average as an EV) of the
vehicle in order to incentivize battery
PO 00000
Frm 00081
Fmt 4701
Sfmt 4702
49533
technology development. This approach
would give more credits to ‘‘stronger’’
PHEV technology.
EPA has provided this type of credit
previously, in the Tier 2 program. This
approach provides an incentive for
manufacturers to prove out ultra-clean
technology during the early years of the
program. In Tier 2, early credits for Tier
2 vehicles certified to the very cleanest
bins (equivalent to California’s
standards for super ultra low emissions
vehicles (SULEVs) and zero emissions
vehicles (ZEVs)) had a multiplier of 1.5
or 2.0.154 The multiplier range of 1.2 to
2.0 being proposed for GHGs is
consistent with the Tier 2 approach.
EPA believes it is appropriate to provide
incentives to manufacturers to produce
vehicles with very low emissions levels
and that these incentives may help pave
the way for greater and/or more cost
effective emission reductions from
future vehicles. EPA would like to
finalize an approach which
appropriately balances the benefits of
encouraging advanced technologies
with the overall environmental
reductions of the proposed standards as
a whole.
As with other vehicles, CO2 for these
vehicles would be determined as part of
vehicle certification, based on emissions
over the 2-cycle test procedures, to be
included in the fleet average CO2 levels.
For electric vehicles, EPA proposes
that manufacturers would include them
in the average with CO2 emissions of
zero grams/mile both for early credits,
and for the MY 2012–2016 time frame.
Similarly, EPA proposes to include as
zero grams/mile of CO2 the electric
portion of PHEVs (i.e., when PHEVs are
operating as electric vehicles) and fuel
cell vehicles. EPA recognizes that for
each EV that is sold, in reality the total
emissions off-set relative to the typical
gasoline or diesel powered vehicle is
not zero, as there is a corresponding
increase in upstream CO2 emissions due
to an increase in the requirements for
electric utility generation. However, for
the time frame of this proposed rule,
EPA is also interested in promoting very
advanced technologies such as EVs
which offer the future promise of
significant reductions in GHG
emissions, in particular when coupled
with a broader context which would
include reductions from the electricity
generation. For the California Paley 1
program, California assigned EVs a CO2
performance value of 130 g/mile, which
was intended to represent the average
CO2 emissions required to charge an EV
using representative CO2 values for the
California electric utility grid. For this
154 See
E:\FR\FM\28SEP2.SGM
65 FR 6746, February 10, 2000.
28SEP2
49534
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
proposal, EPA is assigning an EV a
value of zero g/mile, which should be
viewed as an interim solution for how
to account for the emission reduction
potential of this type of vehicle, and
may not be the appropriate long-term
approach. EPA requests comment on
this proposal and whether alternative
approaches to address EV emissions
should be considered, including
approaches for considering the lifecycle
emissions from such advanced vehicle
technologies.
The criteria and definitions for what
vehicles qualify for the multiplier are
provided in Section III.E. As described
in Section III.E, EPA is proposing
definitions for EVs, PHEVs, and fuel cell
vehicles to ensure that only credible
advanced technology vehicles are
provided credits.
EPA requests comments on the
proposed approach for advanced
technology vehicle credits.
4. Off-Cycle Technology Credits
EPA is proposing an optional credit
opportunity intended to apply to new
and innovative technologies that reduce
vehicle CO2 emissions, but for which
the CO2 reduction benefits are not
captured over the 2-cycle test procedure
used to determine compliance with the
fleet average standards (i.e., ‘‘off-cycle’’).
Eligible innovative technologies would
be those that are relatively newly
introduced in one or more vehicle
models, but that are not yet
implemented in widespread use in the
light-duty fleet. EPA will not approve
credits for technologies that are not
innovative or novel approaches to
reducing greenhouse gas emissions.
Further, any credits for these off-cycle
technologies must be based on realworld GHG reductions not captured on
the current 2-cycle tests and verifiable
test methods, and represent average U.S.
driving conditions.
Similar to the technologies used to
reduce A/C system indirect CO2
emissions such as compressor efficiency
improvements, eligible technologies
would not be active during the 2-cycle
test and therefore the associated
improvements in CO2 emissions would
not be captured. EPA will not consider
technologies to be eligible for these
credits if the technology has a
significant impact on CO2 emissions
over the FTP and HFET tests. Because
these technologies are not nearly so well
developed and understood, EPA is not
prepared to require their utilization to
meet the CO2 standards. However, EPA
is aware of some emerging and
innovative technologies and concepts in
various stages of development with CO2
reduction potential that might not be
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
adequately captured on the FTP or
HFET, and that some of these
technologies might merit some
additional CO2 credit for the
manufacturer. Examples include solar
panels on hybrids or electric vehicles,
adaptive cruise control, and active
aerodynamics. EPA believes it would be
appropriate to provide an incentive to
encourage the introduction of these
types of technologies and that a credit
mechanism is an effective way to do
this. This optional credit opportunity
would be available through the 2016
model year.
EPA is proposing that manufacturers
quantify CO2 reductions associated with
the use of the off-cycle technologies
such that the credits could be applied
on a g/mile equivalent basis, as is
proposed for A/C system improvements.
Credits would have to be based on real
additional reductions of CO2 emissions
and would need to be quantifiable and
verifiable with a repeatable
methodology. Such submissions of data
should be submitted to EPA subject to
public scrutiny. EPA proposes that the
technologies upon which the credits are
based would be subject to full useful life
compliance provisions, as with other
emissions controls. Unless the
manufacturer can demonstrate that the
technology would not be subject to inuse deterioration over the useful life of
the vehicle, the manufacturer would
have to account for deterioration in the
estimation of the credits in order to
ensure that the credits are based on real
in-use emissions reductions over the life
of the vehicle.
As discussed below, EPA is proposing
a two-tiered process for demonstrating
the CO2 reductions of an innovative and
novel technology with benefits not
captured by the FTP and HFET test
procedures. First, a manufacturer would
determine whether the benefit of the
technology could be captured using the
5-cycle methodology currently used to
determine fuel economy label values.
EPA established the 5-cycle test
methods to better represent real-world
factors impacting fuel economy,
including higher speeds and more
aggressive driving, colder temperature
operation, and the use of air
conditioning. If this determination is
affirmative, the manufacturer would
follow the protocol laid out below and
in the proposed regulations. If the
manufacturer finds that the technology
is such that the benefit is not adequately
captured using the 5-cycle approach,
then the manufacturer would have to
develop a robust methodology, subject
to EPA approval, to demonstrate the
benefit and determine the appropriate
CO2 gram per mile credit.
PO 00000
Frm 00082
Fmt 4701
Sfmt 4702
a. Technology Demonstration Using
EPA 5-Cycle Methodology
As noted above, the CO2 reduction
benefit of some innovative technologies
could be demonstrated using the 5-cycle
approach currently used for EPA’s fuel
economy labeling program. The 5-cycle
methodology was finalized in EPA’s
2006 fuel economy labeling rule,155
which provides a more accurate fuel
economy label estimate to consumers
starting with 2008 model year vehicles.
In addition to the FTP and HFET test
procedures, the 5-cycle approach folds
in the test results from three additional
test procedures to determine fuel
economy. The additional test cycles
include cold temperature operation,
high temperature, high humidity and
solar loading, and aggressive and highspeed driving; thus these tests could be
used to demonstrate the benefit of a
technology that reduces CO2 over these
types of driving and environmental
conditions. Using the test results from
these additional test cycles collectively
with the 2-cycle data provides a more
precise estimate of the average fuel
economy and CO2 emissions of a vehicle
for both the city and highway
independently. A significant benefit of
using the 5-cycle methodology to
measure and quantify the CO2
reductions is that the test cycles are
properly weighted for the expected
average U.S. operation, meaning that the
test results could be used without
further adjustments.
The use of these supplemental cycles
may provide a method by which
technologies not demonstrated on the
baseline 2-cycles can be quantified. The
cold temperature FTP can capture new
technologies that improve the CO2
performance of vehicles during colder
weather operation. These improvements
may be related to warm-up of the engine
or other operation during the colder
temperature. An example of such a new,
innovative technology is a waste heat
capture device that provides heat to the
cabin interior, enabling additional
engine-off operation during colder
weather not previously enabled due to
heating and defrosting requirements.
The additional engine-off time would
result in additional CO2 reductions that
otherwise would not have been realized
without the heat capture technology.
While A/C credits for efficiency
improvements will largely be captured
in the A/C credits proposal through the
credit menu of known efficiency
improving components and controls,
155 Fuel Economy Labeling of Motor Vehicles:
Revisions to Improve Calculation of Fuel Economy
Estimates; Final Rule (71 FR 77872, December 27,
2006).
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
certain new technologies may be able to
use the high temperatures, humidity,
and solar load of the SC03 test cycle to
accurately measure their impact. An
example of a new technology may be a
refrigerant storage device that
accumulates pressurized refrigerant
during driving operation or uses
recovered vehicle kinetic energy during
deceleration to pressurize the
refrigerant. Much like the waste heat
capture device used in cold weather,
this device would also allow additional
engine-off operation while maintaining
appropriate vehicle interior occupant
comfort levels. SC03 test data measuring
the relative impact of innovative A/Crelated technologies could be applied to
the 5-cycle equation to quantify the CO2
reductions of the technology. Another
example is glazed windows. This
reflects sunlight away from the cabin so
that the energy required to stabilize the
cabin air to a comfortable level is
decreased. The impact of these windows
may be measureable on an SC03 test
(with and without the window option).
The US06 cycle may be used to
capture innovative technologies
designed to reduce CO2 emissions
during higher speed and more
aggressive acceleration conditions, but
not reflected on the 2-cycle tests. An
example of this is an active
aerodynamic technology. This
technology recognizes the benefits of
reduced aerodynamic drag at higher
speeds and makes changes to the
vehicle at those speeds. The changes
may include active front or grill air
deflection devices designed to redirect
frontal airflow. Certain active
suspension devices designed primarily
to reduce aerodynamic drag by lowering
the vehicle at higher speeds may also be
measured on the US06 cycle. To
properly measure these technologies on
the US06, the vehicle would require
unique load coefficients with and
without the technologies. The different
load coefficient (properly weighted for
the US06 cycle) could effectively result
in reduced vehicle loads at the higher
speeds when the technologies are active.
Similar to the previously discussed
cycles, the results from the US06 test
with and without the technology could
then use the 5-cycle methodology to
quantify CO2 reductions.
If the 5-cycle procedures can be used
to demonstrate the innovative
technology, then the process would be
relatively simple. The manufacturer
would simply test vehicles with and
without the technology installed or
operating and compare results. All
5-cycles would be tested with the
technology enabled and disabled, and
the test results would be used to
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
calculate a combined city/highway CO2
value with the technology and without
the technology. These values would be
compared to determine the amount of
the credit; the combined city/highway
CO2 value with the technology operating
would be subtracted from the combined
city/highway CO2 value without the
technology operating to determine the
gram per mile CO2 credit. It is likely that
multiple tests of each of the five test
procedures would need to be performed
in order to achieve the necessary strong
degree of statistical significance of the
credit determination results. This would
have to be done for each model type for
which a credit was being sought, unless
the manufacturer could demonstrate
that the impact of the technology was
independent of the vehicle
configuration on which it was installed.
In this case, EPA may consider allowing
the test to be performed on an engine
family basis or other grouping. At the
end of the model year, the manufacturer
would determine the number of vehicles
produced subject to each credit amount
and report that to EPA in the final
model year report. The gram per mile
credit value determined with the 5-cycle
comparison testing would be multiplied
by the total production of vehicles
subject to that value to determine the
total number of credits.
b. Alternative Off-Cycle Credit
Methodologies
In cases where the benefit of a
technological approach to reducing CO2
emissions can not be adequately
represented using existing test cycles,
EPA will work with and advise
manufacturers in developing test
procedures and analytical approaches to
estimate the effectiveness of the
technology for the purpose of generating
credits. Clearly the first step should be
a thorough assessment of whether the 5cycle approach can be used, but if the
manufacturer finds that the 5-cycle
process is fundamentally inadequate for
the specific technology being
considered by the manufacturer, then an
alternative approach may be developed
and submitted to EPA for approval. The
demonstration program should be
robust, verifiable, and capable of
demonstrating the real-world emissions
benefit of the technology with strong
statistical significance.
The CO2 benefit of some technologies
may be able to be demonstrated with a
modeling approach, using engineering
principles. An example would be where
a roof solar panel is used to charge the
on-board vehicle battery. The amount of
potential electrical power that the panel
could supply could be modeled for
average U.S. conditions and the units of
PO 00000
Frm 00083
Fmt 4701
Sfmt 4702
49535
electrical power translated to equivalent
fuel energy or annualized CO2 emission
rate reduction from the captured solar
energy. The CO2 reductions from other
technologies may be more challenging
to quantify, especially if they are
interactive with the driver, geographic
location, environmental condition, or
other aspect related to operation on
actual roads. In these cases,
manufacturers might have to design
extensive on-road test programs. Any
such on-road testing programs would
need to be statistically robust and based
on average U.S. driving conditions,
factoring in differences in geography,
climate, and driving behavior across the
U.S.
Whether the approach involves onroad testing, modeling, or some other
analytical approach, the manufacturer
would be required to present a proposed
methodology to EPA. EPA would
approve the methodology and credits
only if certain criteria were met.
Baseline emissions and control
emissions would need to be clearly
demonstrated over a wide range of real
world driving conditions and over a
sufficient number of vehicles to address
issues of uncertainty with the data. Data
would need to be on a vehicle modelspecific basis unless a manufacturer
demonstrated model specific data was
not necessary. Approval of the approach
to determining a CO2 benefit would not
imply approval of the results of the
program or methodology; when the
testing, modeling, or analyses are
complete the results would likewise be
subject to EPA review and approval.
EPA believes that manufacturers could
work together to develop testing,
modeling, or analytical methods for
certain technologies, similar to the SAE
approach used for A/C refrigerant
leakage credits.
EPA requests comments on the
proposed approach for off-cycle
emissions credits, including comments
on how best to structure the program.
EPA particularly requests comments on
how the case-by-case approach to
assessing off-cycle innovative
technology credits could best be
designed, including ways to ensure the
verification of real-world emissions
benefits and to ensure transparency in
the process of reviewing manufacturer’s
proposed test methods.
5. Early Credit Options
EPA is proposing to allow
manufacturers to generate early credits
in model years 2009–2011. As described
below, credits could be generated
through early additional fleet average
CO2 reductions, early A/C system
improvements, early advanced
E:\FR\FM\28SEP2.SGM
28SEP2
49536
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
technology vehicle credits, and early
off-cycle credits. As with other credits,
early credits would be subject to a five
year carry-forward limit based on the
model year in which they are generated.
Early credits could also be transferred
between vehicle categories (e.g.,
between the car and truck fleet) or
traded among manufacturers without
limits. The agencies note that CAFE
credits earned in MYs prior to MY 2011
will still be available to manufacturers
for use in the CAFE program in
accordance with applicable regulations.
EPA is not proposing certification,
compliance, or in-use requirements for
vehicles generating early credits. MY
2009 would be complete and MY 2010
would be well underway by the time the
rule is promulgated. This would make
certification, compliance, and in-use
requirements unworkable. As discussed
below, manufacturers would be required
to submit an early credits report to EPA
for approval no later than the time they
submit their final CAFE report for MY
2011. This report would need to include
details on all early credits the
manufacturer generates, why the credits
are bona fide, how they are quantified,
and how they can be verified.
As a general principle, EPA believes
these early credit programs must be
designed in a way to ensure that they
are capturing real-world reductions. In
addition, EPA wants to ensure these
credit programs do not provide an
opportunity for manufacturers to earn
‘‘windfall’’ credits that do not result in
actual, surplus CO2 emission
reductions. EPA seeks comments on
how to best ensure these objectives are
achieved in the design of the early
credit program options.
a. Credits Based on Early Fleet Average
CO2 Reductions
EPA is proposing opportunities for
early credit generation in MYs 2009–
2011 through over-compliance with a
fleet average CO2 baseline established
by EPA. EPA is proposing four
pathways for doing so. Manufacturers
would select one of the four paths for
credit generation for the entire three
year period and could not switch
between pathways for different model
years. For two pathways, the baseline
would be set by EPA to be equivalent to
the California standards for the relevant
model year. Generally, manufacturers
that over-comply with those CARB
standards would earn credits. Two
additional pathways, described below,
would include credits based on overcompliance with CAFE standards in
States that have not adopted the
California standards.
Pathway 1 would be to earn credits by
over-complying with the California
equivalent baseline over the
manufacturer’s fleet of vehicles sold
nationwide. Pathway 2 would be for
manufacturers to generate credits
against the baseline only for the fleet of
vehicles sold in California and the CAA
section 177 States.156 This approach
would include any CAA 177 States as of
the date of promulgation of the Final
Rule in this proceeding. Manufacturers
would be required to include both cars
and trucks in the program. Under
Pathways 1 and 2, EPA proposes that
manufacturers would be required to
cover any deficits incurred against the
baseline levels established by EPA
during the three year period 2009–2011
before credits could be carried forward
into the 2012 model year. For example,
a deficit in 2011 would have to be
subtracted from the sum of credits
earned in 2009 and 2010 before any
credits could be applied to 2012 (or
later) model year fleets. EPA is
proposing this provision to help ensure
the early credits generated under this
program are consistent with the credits
available under the California program
during these model years.
Table III.C.5–1 provides the California
equivalent baselines EPA proposes to
use as the basis for CO2 credit
generation under the California-based
pathways. These are the California GHG
standards for the model years shown,
with a 2.0 g/mile adjustment to account
for the exclusion of N2O and CH4, which
are included in the California GHG
standards, but not included in the
credits program. Manufacturers would
generate CO2 credits by achieving fleet
average CO2 levels below these
baselines. As shown in the table, the
California-based early credit pathways
are based on the California vehicle
categories. Also, the California-based
baseline levels are not footprint-based,
but universal levels that all
manufacturers would use.
Manufacturers would need to achieve
fleet levels below those shown in the
table in order to earn credits.
TABLE III.C.5–1—CALIFORNIA EQUIVALENT BASELINES CO2 EMISSIONS LEVELS FOR EARLY CREDIT GENERATION
Passenger cars and light
trucks with an LVW of
0–3,750 lbs
Model year
Light trucks with a LVW
of 3,751 or more and a
GVWR of up to 8,500
lbs plus medium-duty
passenger vehicles
321
299
265
437
418
388
mstockstill on DSKH9S0YB1PROD with PROPOSALS
2009 .........................................................................................................................................
2010 .........................................................................................................................................
2011 .........................................................................................................................................
EPA proposes that manufacturers
using Pathways 1 or 2 above would use
year end car and truck sales in each
category. Although production data is
used for the program starting in 2012,
EPA is proposing to use sales data for
the early credits program in order to
apportion vehicles by State. This is
described further below. Manufacturers
would calculate actual fleet average
emissions over the appropriate vehicle
fleet, either for vehicles sold nationwide
for Pathway 1, or California plus 177
States sales for Pathway 2. Early CO2
credits would be based on the difference
between the baseline shown in the table
above and the actual fleet average
emissions level achieved. Any early
A/C credits generated by the
manufacturer, described below in
Section III.C.5.b, would be included in
the fleet average level determination. In
model year 2009, the California CO2
standards for cars (321 g/mi CO2) are
only slightly more stringent than the
2009 CAFE car standard of 27.5 mpg,
which is approximately equivalent to
323 g/mi CO2, and the California lighttruck standard (437 g/mi CO2) is less
stringent than the equivalent CAFE
standard, recognizing that there are
some differences between the way the
California program and the CAFE
156 CAA 177 States refers to States that have
adopted the California GHG standards. At present,
there are thirteen CAA 177 States including New
York, Massachusetts, Maryland, Vermont, Maine,
Connecticut, Arizona, New Jersey, New Mexico,
Oregon, Pennsylvania, Rhode Island, Washington,
and Washington, DC.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00084
Fmt 4701
Sfmt 4702
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
program categorize vehicles. Under the
proposed option, manufacturers would
have to show that they over comply over
the entire three model year time period,
not just the 2009 model year, to generate
early credits under either Pathways 1, 2
or 3. A manufacturer cannot use credits
generated in model year 2009 unless
they offset any debits from model years
2010 and 2011. EPA expects that the
requirement to over comply over the
entire time period covering these three
model years should mean that the
credits that are generated are real and
are in excess of what would have
otherwise occurred. However, because
of the circumstances involving the 2009
model year, in particular for companies
with significant truck sales, there is
some concern that under Pathways 1, 2,
and 3, there is a potential for a large
number of credits generated in 2009
against the California standard, in
particular for a number of companies
who have significantly over-achieved on
CAFE in recent model years. EPA wants
to avoid a situation where, contrary to
expectation, some part of the early
credits generated by a manufacturer are
in fact not excess, where companies
could trade such credits to other
manufacturers, risking a delay in the
addition of new technology across the
industry from the 2012 and later EPA
CO2 standards. For this reason, EPA
requests comment on the merits of
prohibiting the trading of model year
2009 generated early credits between
firms.
In addition, for Pathways 1 and 2,
EPA proposes that manufacturers may
also include alternative compliance
credits earned per the California
alternative compliance program.157
These alternative compliance credits are
based on the demonstrated use of
alternative fuels in flex fuel vehicles. As
with the California program, the credits
would be available beginning in MY
2010. Therefore, these early alternative
compliance credits would be available
under EPA’s program for the 2010 and
2011 model years. FFVs would
otherwise be included in the early credit
fleet average based on their emissions
on the conventional fuel. This would
not apply to EVs and PHEVs. The
emissions of EVs and PHEVs would be
determined as described in Section III.E.
Manufacturers could choose to either
include their EVs and PHEVs in one of
the four pathways described in this
section or under the early advanced
technology emissions credits described
below, but not both due to issues of
credit double counting.
EPA is also proposing two additional
early credit pathways manufacturers
could select. Pathways 3 and 4
incorporate credits based on overcompliance with CAFE standards for
vehicles sold outside of California and
CAA 177 States in MY 2009–2011.
Pathway 3 would allow manufacturers
to earn credits as under Pathway 2, plus
earn CAFE-based credits in other States.
Credits would not be generated for cars
sold in California and CAA 177 States
49537
unless vehicle fleets in those States are
performing better than the standards
which otherwise would apply in those
States, i.e. the baselines shown in Table
III.C.5–1 above.
Pathway 4 would be for
manufacturers choosing to forego
California-based early credits entirely
and earn only CAFE-based credits
outside of California and CAA 177
States. EPA proposes that manufacturers
would not be able to include FFV
credits under the CAFE-based early
credit pathways since those credits do
not automatically reflect actual
reductions in CO2 emissions.
The proposed baselines for CAFEbased early pathways are provided in
Table III.C.5–2 below. They are based on
the CAFE standards for the 2009–2011
model years. For CAFE standards in
2009–2011 model years that are
footprint-based, the baseline would vary
by manufacturer. Footprint-based
standards are in effect for the 2011
model year CAFE standards.158
Additionally, for Reform CAFE truck
standards, footprint standards are
optional for the 2009–2010 model years.
Where CAFE footprint-based standards
are in effect, manufacturers would
calculate a baseline using the footprints
and sales of vehicles outside of
California and CAA 177 States. The
actual fleet CO2 performance calculation
would also only include the vehicles
sold outside of California and CAA 177
States, and as mentioned above, may not
include FFV credits.
TABLE III.C.5–2—CAFE EQUIVALENT BASELINES CO2 EMISSIONS LEVELS FOR EARLY CREDIT GENERATION
Model year
Cars
Trucks
2009 ...................................................................
2010 ...................................................................
2011 ...................................................................
323 ...................................................................
323 ...................................................................
Footprint-based standard .................................
381.*
376.*
Footprint-based standard.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
* Would be footprint-based standard for manufacturers selecting footprint option under CAFE.
For the CAFE-based pathways, EPA
proposes to use the NHTSA car and
truck definitions that are in place for the
model year in which credits are being
generated. EPA understands that the
NHTSA definitions change starting in
the 2011 model year, and would
therefore change part way through the
early credits program. EPA further
recognizes that MDPVs are not part of
the CAFE program until the 2011 model
year, and therefore would not be part of
the early credits calculations for 2009–
2010 under the CAFE-based pathways.
Pathways 2 through 4 involve
splitting the vehicle fleet into two
groups, vehicles sold in California and
CAA 177 States and vehicles sold
outside of these States. This approach
would require a clear accounting of
location of vehicle sales by the
manufacturer. EPA believes it will be
reasonable for manufacturers to
accurately track sales by State, based on
its experience with the National Low
Emissions Vehicle (NLEV) Program.
NLEV required manufacturers to meet
separate fleet average standards for
vehicles sold in two different regions of
157 See Section 6.6.E, California Environmental
Protection Agency Air Resources Board, Staff
Report: Initial Statement of Reasons For Proposed
Rulemaking, Public Hearing to Consider Adoption
of Regulations to Control Greenhouse Gas
Emissions From Motor Vehicles, August 6, 2004.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00085
Fmt 4701
Sfmt 4702
the country.159 As with NLEV, the
determination would be based on where
the completed vehicles are delivered as
a point of first sale, which in most cases
would be the dealer.160
As noted above, EPA proposes that
manufacturers choosing to generate
early credits would select one of the
four pathways for the entire early
credits program and would not be able
to switch among them. EPA proposes
that manufacturers would submit their
early credits report when they submit
their final CAFE report for MY 2011
(which is required to be submitted no
158 74
FR 14196, March 30, 2009.
FR 31211, June 6, 1997.
160 62 FR 31212, June 6, 1997.
159 62
E:\FR\FM\28SEP2.SGM
28SEP2
49538
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
later than 90 days after the end of the
model year). Manufacturers would have
until then to decide which pathway to
select. This would give manufacturers
enough time to determine which
pathway works best for them. This
timing may be necessary in cases where
manufacturers earn credits in MY 2011
and need time to assess data and
prepare an early credits submittal for
final EPA approval.
The table below provides a summary
of the four fleet average-based CO2 early
credit pathways EPA is proposing. As
noted above, EPA is concerned with
potential ‘‘windfall’’ credits and is
seeking comments on how to best
ensure the objective of achieving
surplus, real-world reductions is
achieved in the design of the credit
programs. In addition, EPA requests
comments on the merits of each of these
pathways. Specifically, EPA requests
comment on whether or not any of the
pathways could be eliminated to
simplify the program without
diminishing its overall flexibility. For
example, Pathway 2 may not be
particularly useful to manufacturers if
the California/177 State and overall
national fleets are projected to be
similar during these model years. EPA
also requests comment on proposed
program implementation structure and
provisions.
TABLE III.C.5–3—SUMMARY OF PROPOSED EARLY FLEET AVERAGE CO2 CREDIT PATHWAYS
Common Elements .............................................................
Pathway 1: California-based Credits for National Fleet. ...
Pathway 2: California-based Credits for vehicles sold in
California plus CAA 177 States.
Pathway 3: Pathway 2 plus CAFE-based Credits outside
of California plus CAA 177 States.
Pathway 4: Only CAFE-based Credits outside of California plus CAA 177 States.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
b. Early A/C Credits
EPA proposes that manufacturers
could earn early A/C credits in MYs
2009–2011 using the same A/C system
design-based EPA provisions being
proposed for MYs commencing in 2012,
as described in Section III.C.1, above.
Manufacturers would be able to earn
early A/C CO2-equivalent credits by
demonstrating improved A/C system
performance, for both direct and
indirect emissions. To earn credits for
vehicles sold in California and CAA 177
States, the vehicles would need to be
included in one of the California-based
early credit pathways described above
in III.C.5.a. EPA is proposing this
constraint in order to avoid credit
double counting with the California
program in place in those States, which
also allows A/C system credits in this
time frame. Manufacturers would fold
the A/C credits into the fleet average
CO2 calculations under the Californiabased pathway. For example, the MY
2009 California-based program car
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
—Manufacturers would select a pathway. Once selected, may not switch among
pathways.
—All credits subject to 5 year carry-forward restrictions.
—For Pathways 2–4, vehicles apportioned by State based on point of first sale.
—Manufacturers earn credits based on fleet average emissions compared with California equivalent baseline set by EPA.
—Based on nationwide CO2 sales-weighted fleet average.
—Based on use of California vehicle categories.
—FFV alternative compliance credits per California program may be included.
—Once in the program, manufacturers must make up any deficits that are incurred
prior to 2012 in order to carry credits forward to 2012 and later.
—Same as Pathway 1, but manufacturers only includes vehicles sold in California
and CAA 177 States in the fleet average calculation.
—Manufacturer earns credits as provided by Pathway 2: California-based credits for
vehicles sold in California plus CAA 177 States, plus:
—CAFE-based credits allowed for vehicles sold outside of California and CAA 177
States.
—For CAFE-based credits, manufacturers earn credits based on fleet average emissions compared with baseline set by EPA.
—CAFE-based credits based on NHTSA car and truck definitions.
—FFV credits not allowed to be included for CAFE-based credits.
—Manufacturer elects to only earn CAFE-based credits for vehicles sold outside of
California and CAA 177 States. Earns no California and 177 State credits.
—For CAFE-based credits, manufacturers earn credits based on fleet average emissions compared with baseline set by EPA.
—CAFE-based credits based on NHTSA car and truck definitions.
—FFV credits not allowed to be included for CAFE-based credits.
baseline would be 321 g/mile (see Table
III.C.5–1). If a manufacturer under
Pathway 1 had a MY 2009 car fleet
average CO2 level of 320 g/mile and
then earned an additional 9 g/mile
CO2-equivalent A/C credit, the
manufacturers would earn a total of 10
g/mile of credit. Vehicles sold outside of
California and 177 States would be
eligible for the early A/C credits
whether or not the manufacturers
participate in other aspects of the early
credits program.
c. Early Advanced Technology Vehicle
Credits
EPA is proposing to allow early
advanced technology vehicle credits for
sales of EVs, PHEVs, and fuel cell
vehicles. To avoid double-counting,
manufacturers would not be allowed to
generate advanced technology credits
for vehicles they choose to include in
Pathways 1 through 4 described in
III.C.5.a, above. EPA proposes to use a
similar methodology to that proposed
for MYs 2012 and later, as described in
PO 00000
Frm 00086
Fmt 4701
Sfmt 4702
Section III.C.3, above. EPA proposes to
use a multiplier in the range of 1.2 to
2.0 for all eligible vehicles (i.e., EVs,
PHEVs, and fuel cells). Manufacturers,
however, would track the number of
these vehicles sold in the model years
2009—2011, and the emissions level of
the vehicles, rather than a CO2 credit.
When a manufacturer chooses to use the
vehicle credits to comply with 2012 or
later standards, the vehicle counts
including the multiplier would be
folded into the CO2 fleet average. For
example, if a manufacturer sells 1,000
EVs in MY 2011, and if the final
multiplier level were 2.0, the
manufacturer would apply the
multiplier of 2.0 and then be able to
include 2,000 vehicles at 0 g/mile in
their MY 2012 fleet to decrease the fleet
average for that model year. As with
other early credits, these early advanced
technology vehicle credits would be
tracked by model year (2009, 2010, or
2011) and would be subject to 5 year
carry-forward restrictions. Again,
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
manufacturers would not be allowed to
include the EVs, PHEVs, or fuel cell
vehicles in the early credit pathways
discussed above in Section III.C.5.a,
otherwise the vehicles would be double
counted. As discussed in Section III.C.3,
EPA is requesting comment on a
multiplier in the range of 1.2 to 2.0,
including a potential phase-down in the
multiplier by model year 2016, if a
multiplier near the higher end of this
range is determined for the final rule.
This request for comment also extends
to the potential for early advance
technology vehicle credits. EPA is also
requesting comment on the appropriate
gram/mile metric for EVs and fuel
cellvehicles, as well as for the EV-only
contribution for a PHEV.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
d. Early Off-Cycle Credits
EPA’s proposed off-cycle innovative
technology credit provisions are
provided in Section III.C.4. EPA
requests comment on beginning these
credits in the 2009–2011 time frame,
provided manufacturers are able to
make the necessary demonstrations
outlined in Section III.C.4, above.
D. Feasibility of the Proposed CO2
Standards
This proposal is based on the need to
obtain significant GHG emissions
reductions from the transportation
sector, and the recognition that there are
cost-effective technologies to achieve
such reductions in the 2012–2016 time
frame. As in many prior mobile source
rulemakings, the decision on what
standard to set is largely based on the
effectiveness of the emissions control
technology, the cost and other impacts
of implementing the technology, and the
lead time needed for manufacturers to
employ the control technology. The
standards derived from assessing these
issues are also evaluated in terms of the
need for reductions of greenhouse gases,
the degree of reductions achieved by the
standards, and the impacts of the
standards in terms of costs, quantified
benefits, and other impacts of the
standards. The availability of
technology to achieve reductions and
the cost and other aspects of this
technology are therefore a central focus
of this rulemaking.
EPA is taking the same basic approach
in this rulemaking, although the
technological problems and solutions
involved in this rulemaking differ in
some ways from prior mobile source
rulemakings. Here, the focus of the
emissions control technology is on
reducing CO2 and other greenhouse
gases. Vehicles combust fuel to perform
two basic functions: (1) Transport the
vehicle, its passengers and its contents,
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
and (2) operate various accessories
during the operation of the vehicle such
as the air conditioner. Technology can
reduce CO2 emissions by either making
more efficient use of the energy that is
produced through combustion of the
fuel or reducing the energy needed to
perform either of these functions.
This focus on efficiency calls for
looking at the vehicle as an entire
system. In addition to fuel delivery,
combustion, and aftertreatment
technology, any aspect of the vehicle
that affects the need to produce energy
must also be considered. For example,
the efficiency of the transmission
system, which takes the energy
produced by the engine and transmits it
to the wheels, and the resistance of the
tires to rolling both have major impacts
on the amount of fuel that is combusted
while operating the vehicle. The braking
system, the aerodynamics of the vehicle,
and the efficiency of accessories, such
as the air conditioner, all affect how
much fuel is combusted.
In evaluating vehicle efficiency, we
have excluded fundamental changes in
vehicles’ size and utility. For example,
we did not evaluate converting
minivans and SUVs to station wagons,
converting vehicles with four wheel
drive to two wheel drive, or reducing
headroom in order to lower the roofline
and reduce aerodynamic drag. We have
limited our assessment of technical
feasibility and resultant vehicle cost to
technologies which maintain vehicle
utility as much as possible.
Manufacturers may decide to alter the
utility of the vehicles which they sell in
response to this rule. Assessing the
societal cost of such changes is very
difficult as it involves assessing
consumer preference for a wide range of
vehicle features.
This need to focus on the efficient use
of energy by the vehicle as a system
leads to a broad focus on a wide variety
of technologies that affect almost all the
systems in the design of a vehicle. As
discussed below, there are many
technologies that are currently available
which can reduce vehicle energy
consumption. These technologies are
already being commercially utilized to a
limited degree in the current light-duty
fleet. These technologies include hybrid
technologies that use higher efficiency
electric motors as the power source in
combination with or instead of internal
combustion engines. While already
commercialized, hybrid technology
continues to be developed and offers the
potential for even greater efficiency
improvements. Finally, there are other
advanced technologies under
development, such as lean burn gasoline
engines, which offer the potential of
PO 00000
Frm 00087
Fmt 4701
Sfmt 4702
49539
improved energy generation through
improvements in the basic combustion
process. In addition, the available
technologies are not limited to
powertrain improvements but also
include mass reduction, electrical
system efficiencies, and aerodynamic
improvements.
The large number of possible
technologies to consider and the breadth
of vehicle systems that are affected
mean that consideration of the
manufacturer’s design and production
process plays a major role in developing
the proposed standards. Vehicle
manufacturers typically develop many
different models by basing them on a
limited number of vehicle platforms.
The platform typically consists of a
common vehicle architecture and
structural components. This allows for
efficient use of design and
manufacturing resources. Given the very
large investment put into designing and
producing each vehicle model,
manufacturers typically plan on a major
redesign for the models approximately
every 5 years. At the redesign stage, the
manufacturer will upgrade or add all of
the technology and make most other
changes supporting the manufacturer’s
plans for the next several years,
including plans related to emissions,
fuel economy, and safety regulations.
This redesign often involves a
package of changes designed to work
together to meet the various
requirements and plans for the model
for several model years after the
redesign. This often involves significant
engineering, development,
manufacturing, and marketing resources
to create a new product with multiple
new features. In order to leverage this
significant upfront investment,
manufacturers plan vehicle redesigns
with several model years of production
in mind. Vehicle models are not
completely static between redesigns as
limited changes are often incorporated
for each model year. This interim
process is called a refresh of the vehicle
and generally does not allow for major
technology changes although more
minor ones can be done (e.g., small
aerodynamic improvements, valve
timing improvements, etc). More major
technology upgrades that affect multiple
systems of the vehicle thus occur at the
vehicle redesign stage and not in the
time period between redesigns.
As discussed below, there are a wide
variety of CO2 reducing technologies
involving several different systems in
the vehicle that are available for
consideration. Many can involve major
changes to the vehicle, such as changes
to the engine block and cylinder heads,
redesign of the transmission and its
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49540
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
packaging in the vehicle, changes in
vehicle shape to improve aerodynamic
efficiency and the application of
aluminum in body panels to reduce
mass. Logically, the incorporation of
emissions control technologies would
be during the periodic redesign process.
This approach would allow
manufacturers to develop appropriate
packages of technology upgrades that
combine technologies in ways that work
together and fit with the overall goals of
the redesign. It also allows the
manufacturer to fit the process of
upgrading emissions control technology
into its multi-year planning process, and
it avoids the large increase in resources
and costs that would occur if technology
had to be added outside of the redesign
process.
This proposed rule affects five years
of vehicle production, model years
2012–2016. Given the now-typical five
year redesign cycle, nearly all of a
manufacturer’s vehicles will be
redesigned over this period. However,
this assumes that a manufacturer has
sufficient lead time to redesign the first
model year affected by this proposed
rule with the requirements of this
proposed rule in mind. In fact, the lead
time available for model year 2012 is
relatively short. The time between a
likely final rule and the start of 2013
model year production is likely to be
just over two years. At the same time,
manufacturer product plans indicate
that they are planning on introducing
many of the technologies EPA projects
could be used to show compliance with
the proposed CO2 standards in both
2012 and 2013. In order to account for
the relatively short lead time available
prior to the 2012 and 2013 model years,
albeit mitigated by their existing plans,
EPA has factored this reality into how
the availability is modeled for much of
the technology being considered for
model years 2012–2016 as a whole. If
the technology to control greenhouse
gas emissions is efficiently folded into
this redesign process, then EPA projects
that 85 percent of each manufacturer’s
sales will be able to be redesigned with
many of the CO2 emission reducing
technologies by the 2016 model year,
and as discussed below, to reduce
emissions of HFCs from the air
conditioner.
In determining the level of this first
ever GHG emissions standard under the
CAA for light-duty vehicles, EPA
proposes to use an approach that
accounts for and builds on this redesign
process. This provides the opportunity
for several control technologies to be
incorporated into the vehicle during
redesign, achieving significant
emissions reductions from the model at
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
one time. This is in contrast to what
would be a much more costly approach
of trying to achieve small increments of
reductions over multiple years by
adding technology to the vehicle piece
by piece outside of the redesign process.
As described below, the vast majority
of technology required by this proposal
is commercially available and already
being employed to a limited extent
across the fleet. The vast majority of the
emission reductions which would result
from this proposed rule would result
from the increased use of these
technologies. EPA also believes that this
proposed rule would encourage the
development and limited use of more
advanced technologies, such as PHEVs
and EVs.
In developing the proposed standard,
EPA built on the technical work
performed by the State of California
during its development of its statewide
GHG program. EPA began by evaluating
a nationwide CAA standard for MY
2016 that would require the levels of
technology upgrade, across the country,
which California standards would
require for the subset of vehicles sold in
California under Pavley 1. In essence,
EPA evaluated the stringency of the
California Pavley 1 program but for a
national standard. As mentioned above,
and as described in detail in Section II.C
of this preamble and Chapter 3 of the
Joint TSD, one of the important
technical documents included in EPA
and NHTSA’s assessment of vehicle
technology effectiveness and costs was
the 2004 NESCCAF report which was
the technical foundation for California’s
Pavley 1 standard. However, in order to
evaluate the impact of standards with
similar stringency on a national basis to
the California program EPA chose not to
evaluate the specific California
standards for several reasons. First,
California’s standards are universal
standards (one for cars and one for
trucks), while EPA is proposing
attribute-based standards using vehicle
footprint. Second, California’s
definitions of what vehicles are
classified as cars and which are
classified as trucks are different from
those used by NHTSA for CAFE
purposes and different from EPA’s
proposed classifications in this notice
(which harmonizes with the CAFE
definitions). In addition, there has been
progress in the refinement of the
estimation of the effectiveness and cost
estimation for technologies which can
be applied to cars and trucks since the
California analysis in 2004 which could
lead to different relative stringencies
between cars and trucks than what
California determined for its Pavley 1
program. There have also been
PO 00000
Frm 00088
Fmt 4701
Sfmt 4702
improvements in the fuel economy and
CO2 performance of the actual new
vehicle fleet since California’s 2004
analysis which EPA wanted to reflect in
our current assessment. For these
reasons, EPA developed an assessment
of an equivalent national new vehicle
fleet-wide CO2 performance standards
for model year 2016 which would result
in the new vehicle fleet in the State of
California having CO2 performance
equal to the performance from the
California Pavley 1 standards. This
assessment is documented in Chapter
3.1 of the DRIA. The results of this
assessment predicts that a national
light-duty vehicle fleet which adopts
technology that achieves performance of
250 g/mile CO2 for model year 2016
would result in vehicles sold in
California that would achieve the CO2
performance equivalent to the Pavley 1
standards.
EPA then analyzed a level of 250
g/mi CO2 in 2016 using the OMEGA
model, and the car and truck footprint
curves relative stringency discussed in
Section II to determine what technology
would be needed to achieve a fleet wide
average of 250 g/mi CO2. As discussed
later in this section we believe this level
of technology application to the lightduty vehicle fleet can be achieved in
this time frame, that such standards will
produce significant reductions in GHG
emissions, and that the costs for both
the industry and the costs to the
consumer are reasonable. EPA also
developed standards for the model years
2012 through 2015 that lead up to the
2016 level.
EPA’s independent technical
assessment of the technical feasibility of
the proposed MY2012–2016 standards
is described below. EPA has also
evaluated a set of alternative standards
for these model years, one that is more
stringent than the proposed standards
and one that is less stringent. The
technical feasibility of these alternative
standards is discussed at the end of this
section.
Evaluating the feasibility of these
standards primarily includes identifying
available technologies and assessing
their effectiveness, cost, and impact on
relevant aspects of vehicle performance
and utility. The wide number of
technologies which are available and
likely to be used in combination
requires a more sophisticated
assessment of their combined cost and
effectiveness. An important factor is
also the degree that these technologies
are already being used in the current
vehicle fleet and thus, unavailable for
use to improve energy efficiency beyond
current levels. Finally, the challenge for
manufacturers to design the technology
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
into their products, and the appropriate
lead time needed to employ the
technology over the product line of the
industry must be considered.
Applying these technologies
efficiently to the wide range of vehicles
produced by various manufacturers is a
challenging task. In order to assist in
this task, EPA has developed a
computerized model called the
Optimization Model for reducing
Emissions of Greenhouse gases from
Automobiles (OMEGA) model. Broadly,
the model starts with a description of
the future vehicle fleet, including
manufacturer, sales, base CO2
emissions, footprint and the extent to
which emission control technologies are
already employed. For the purpose of
this analysis, over 200 vehicle platforms
were used to capture the important
differences in vehicle and engine design
and utility of future vehicle sales of
roughly 16 million units in the 2016
timeframe. The model is then provided
with a list of technologies which are
applicable to various types of vehicles,
along with their cost and effectiveness
and the percentage of vehicle sales
which can receive each technology
during the redesign cycle of interest.
The model combines this information
with economic parameters, such as fuel
prices and a discount rate, to project
how various manufacturers would apply
the available technology in order to
meet various levels of emission control.
The result is a description of which
technologies are added to each vehicle
platform, along with the resulting cost.
While OMEGA can apply technologies
which reduce CO2 emissions and HFC
refrigerant emissions associated with air
conditioner use, this task is currently
handled outside of the OMEGA model.
The model can be set to account for
various types of compliance flexibilities,
such as FFV credits.
EPA invites comment on all aspects of
this feasibility assessment. Both the
OMEGA model and its inputs have been
placed in the docket to this proposed
rule and available for review.
The remainder of this section
describes the technical feasibility
analysis in greater detail. Section III.D.1
describes the development of our
projection of the MY 2012–2016 fleet in
the absence of this proposed rule.
Section III.D.2 describes our estimates of
the effectiveness and cost of the control
technologies available for application in
the 2012–2016 timeframe. Section
III.D.3 combines these technologies into
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
packages likely to be applied at the
same time by a manufacturer. In this
section, the overall effectiveness of the
`
technology packages vis-a-vis their
effectiveness when combined
individually is described. Section III.D.4
describes the process which
manufacturers typically use to apply
new technology to their vehicles.
Section III.D.5 describes EPA’s OMEGA
model and its approach to estimating
how manufacturers would add
technology to their vehicles in order to
comply with CO2 emission standards.
Section III.D.6 presents the results of the
OMEGA modeling, namely the level of
technology added to manufacturers’
vehicles and its cost. Section III.D.7
discusses the feasibility of the
alternative 4-percent-per-year and 6percent-per-year standards. Further
detail on all of these issues can be found
in EPA and NHTSA’s draft Joint
Technical Support Document as well as
EPA’s draft Regulatory Impact Analysis.
1. How Did EPA Develop a Reference
Vehicle Fleet for Evaluating Further CO2
Reductions?
In order to calculate the impacts of
this proposed regulation, it is necessary
to project the GHG emissions
characteristics of the future vehicle fleet
absent this proposed regulation. This is
called the ‘‘reference’’ fleet. EPA
developed this reference fleet by
determining the characteristics of a
specific model year (in this case, 2008)
of vehicles, called the baseline fleet, and
then projecting what changes if any
would be made to these vehicles to
comply with the MY2011 CAFE
standards. Thus, the MY 2008 fleet is
our ‘‘baseline fleet,’’ and the projection
of the baseline to MY 2011–2016 is
called the ‘‘reference fleet.’’
EPA used 2008 model year vehicles as
the basis for its baseline fleet. 2008
model year is the most recent model
year for which data is publicly
available. Sources of data for the
baseline include the EPA vehicle
certification data, Ward’s Automotive
Group data, Motortrend.com,
Edmunds.com, manufacturer product
plans, and other sources to a lesser
extent (such as articles about specific
vehicles) revealed from Internet search
engine research. EPA then projects this
fleet out to the 2016 MY, taking into
account factors such as changes in
overall sales volume. Section II.B
describes the development of the EPA
reference fleet, and further details can
PO 00000
Frm 00089
Fmt 4701
Sfmt 4702
49541
be found in Section II.B of this preamble
and Chapter 1 of the Draft Joint TSD.
The light-duty vehicle market is
currently in a state of flux due to the
volatility in fuel prices over the past
several years and the current economic
downturn. These factors have changed
the relative sales of the various types of
light-duty vehicles marketed, as well as
total sales volumes. EPA and NHTSA
desire to account for these changes to
the degree possible in our forecast of the
make-up of the future vehicle fleet. EPA
wants to include improvements in fuel
economy associated with the existing
CAFE program. It is possible that
manufacturers could increase fuel
economy beyond the level of the 2011
MY CAFE standards for marketing
purposes. However, it is difficult to
separate fuel economy improvements in
those years for marketing purposes from
those designed to facilitate compliance
with anticipated CAFE or CO2 emission
standards. Thus, EPA limits fuel
economy improvements in the reference
fleet to those projected to result from the
existing CAFE standards. The addition
of technology to the baseline fleet so
that it complies with the MY 2011 CAFE
standards is described later in Section
III.D.4, as this uses the same
methodology used to project compliance
with the proposed CO2 emission
standards. In summary, the reference
fleet represents vehicle characteristics
and sales in the 2012 and later model
years absent this proposed rule.
Technology is then added to these
vehicles in order to reduce CO2
emissions to achieve compliance with
the proposed CO2 standards. EPA did
not factor in any changes to vehicle
characteristics or sales in projecting
manufacturers’ compliance with this
proposal.
After the reference fleet is created, the
next step aggregates vehicle sales by a
combination of manufacturer, vehicle
platform, and engine design. As
discussed in Section III.D.4 below,
manufacturers implement major design
changes at vehicle redesign and tend to
implement these changes across a
vehicle platform. Because the cost of
modifying the engine depends on the
valve train design (such as SOHC,
DOHC, etc.), the number of cylinders
and in some cases head design, the
vehicle sales are broken down beyond
the platform level to reflect relevant
engine differences. The vehicle
groupings are shown in Table III.D.1–1.
E:\FR\FM\28SEP2.SGM
28SEP2
49542
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
TABLE III.D.1–1—VEHICLE GROUPINGS a
Vehicle
type
Vehicle description
Large SUV (Car) V8+ OHV ..................................................
Large SUV (Car) V6 4v ........................................................
Large SUV (Car) V6 OHV ....................................................
Large SUV (Car) V6 2v SOHC .............................................
Large SUV (Car) I4 and I5 ...................................................
Midsize SUV (Car) V6 2v SOHC ..........................................
Midsize SUV (Car) V6 S/DOHC 4v ......................................
Midsize SUV (Car) I4 ............................................................
Small SUV (Car) V6 OHV .....................................................
Small SUV (Car) V6 S/DOHC ..............................................
Small SUV (Car) I4 ...............................................................
Large Auto V8+ OHV ............................................................
Large Auto V8+ SOHC .........................................................
Large Auto V8+ DOHC, 4v SOHC .......................................
Large Auto V6 OHV ..............................................................
Large Auto V6 SOHC 2/3v ...................................................
Midsize Auto V8+ OHV .........................................................
Midsize Auto V8+ SOHC ......................................................
Midsize Auto V7+ DOHC, 4v SOHC ....................................
Midsize Auto V6 OHV ...........................................................
Midsize Auto V6 2v SOHC ...................................................
Midsize Auto V6 S/DOHC 4v ................................................
Midsize Auto I4 .....................................................................
Compact Auto V7+ S/DOHC ................................................
Compact Auto V6 OHV .........................................................
Compact Auto V6 S/DOHC 4v .............................................
Compact Auto I5 ...................................................................
Compact Auto I4 ...................................................................
Subcompact Auto V8+ OHV .................................................
Subcompact Auto V8+ S/DOHC ...........................................
Subcompact Auto V6 2v SOHC ...........................................
Subcompact Auto I5/V6 S/DOHC 4v ....................................
13
16
12
9
7
8
5
7
12
4
3
13
10
6
12
5
13
10
6
12
8
5
3
6
12
4
7
2
13
6
8
4
Vehicle description
Vehicle
type
Subcompact Auto I4 .............................................................
Large Pickup V8+ DOHC .....................................................
Large Pickup V8+ SOHC 3v ................................................
Large Pickup V8+ OHV ........................................................
Large Pickup V8+ SOHC .....................................................
Large Pickup V6 DOHC .......................................................
Large Pickup V6 OHV ..........................................................
Large Pickup V6 SOHC 2v ..................................................
Large Pickup I4 S/DOHC .....................................................
Small Pickup V6 OHV ..........................................................
Small Pickup V6 2v SOHC ..................................................
Small Pickup I4 ....................................................................
Large SUV V8+ DOHC ........................................................
Large SUV V8+ SOHC 3v ...................................................
Large SUV V8+ OHV ...........................................................
Large SUV V8+ SOHC ........................................................
Large SUV V6 S/DOHC 4v ..................................................
Large SUV V6 OHV .............................................................
Large SUV V6 SOHC 2v .....................................................
Large SUV I4/ ......................................................................
Midsize SUV V6 OHV ..........................................................
Midsize SUV V6 2v SOHC ..................................................
Midsize SUV V6 S/DOHC 4v ...............................................
Midsize SUV I4 S/DOHC .....................................................
Small SUV V6 OHV .............................................................
Minivan V6 S/DOHC ............................................................
Minivan V6 OHV ..................................................................
Minivan I4 .............................................................................
Cargo Van V8+ OHV ...........................................................
Cargo Van V8+ SOHC .........................................................
Cargo Van V6 OHV .............................................................
...............................................................................................
1
19
14
13
10
18
12
11
7
12
8
7
17
14
13
10
16
12
9
7
12
8
5
7
12
16
12
7
13
10
12
................
mstockstill on DSKH9S0YB1PROD with PROPOSALS
a I4 = 4 cylinder engine, I5 = 5 cylinder engine, V6, V7, and V8 = 6, 7, and 8 cylinder engines, respectively, DOHC = Double overhead cam,
SOHC = Single overhead cam, OHV = Overhead valve, v = number of valves per cylinder, ‘‘/’’ = and, ‘‘+’’ = or larger.
As mentioned above, the second
factor which needs to be considered in
developing a reference fleet against
which to evaluate the impacts of this
proposed rule is the impact of the 2011
MY CAFE standards, which were
published earlier this year. Since the
vehicles which comprise the above
reference fleet are those sold in the 2008
MY, when coupled with our sales
projections, they do not necessarily
meet the 2011 MY CAFE standards.
The levels of the 2011 MY CAFE
standards are straightforward to apply to
future sales fleets, as is the potential
fine-paying flexibility afforded by the
CAFE program (i.e., $55 per mpg of
shortfall). However, projecting some of
the compliance flexibilities afforded by
EISA and the CAFE program are less
clear. Two of these compliance
flexibilities are relevant to EPA’s
analysis: (1) The credit for FFVs, and (2)
the limit on the transferring of credits
between car and truck fleets. The FFV
credit is limited to 1.2 mpg in 2011 and
EISA gradually reduces this credit, to
1.0 mpg in 2015 and eventually to zero
in 2020. In contrast, the limit on car
truck transfer is limited to 1.0 mpg in
2011, and EISA increases this to 1.5
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
mpg beginning in 2015 and then to 2.0
mpg beginning in 2020. The question
here is whether to hold the 2011 MY
CAFE provisions constant in the future
or incorporate the changes in the FFV
credit and car-truck credit trading limits
contained in EISA.
EPA decided to hold the 2011 MY
limits on FFV credit and car-truck credit
trading constant in projecting the fuel
economy and CO2 emission levels of
vehicles in our reference case. This
approach treats the changes in the FFV
credit and car-truck credit trading
provisions consistently with the other
EISA-mandated changes in the CAFE
standards themselves. All EISA
provisions relevant to 2011 MY vehicles
are reflected in our reference case fleet,
while all post-2011 MY provisions are
not. Practically, relative to the
alternative, this increases both the cost
and benefit of the proposed standards.
In our analysis of this proposed rule,
any quantified benefits from the
presence of FFVs in the fleet are not
considered. Thus, the only impact of the
FFV credit is to reduce onroad fuel
economy. By assuming that the FFV
credit stays at 1.2 mpg in the future
absent this rule, the assumed level of
PO 00000
Frm 00090
Fmt 4701
Sfmt 4702
onroad fuel economy that would occur
absent this proposal is reduced. As this
proposal eliminates the FFV credit
starting in 2016, the net result is to
increase the projected level of fuel
savings from our proposed standards.
Similarly, the higher level of FFV credit
reduces projected compliance cost for
manufacturers to meet the 2011 MY
standards in our reference case. This
increases the projected cost of meeting
the proposed 2012 and later standards.
As just implied, EPA needs to project
the technology (and resultant costs)
required for the 2008 MY vehicles to
comply with the 2011 MY CAFE
standards in those cases where they do
not automatically do so. The technology
and costs are projected using the same
methodology that projects compliance
with the proposed 2012 and later CO2
standards. The description of this
process is described in the following
four sections.
A more detailed description of the
methodology used to develop these
sales projections can be found in the
Draft Joint TSD. Detailed sales
projections by model year and
manufacturer can also be found in the
TSD. EPA requests comments on both
E:\FR\FM\28SEP2.SGM
28SEP2
49543
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
the methodology used to develop the
reference fleet, as well as the
characteristics of the reference fleet.
2. What Are the Effectiveness and Costs
of CO2-Reducing Technologies?
EPA and NHTSA worked together to
jointly develop information on the
effectiveness and cost of the CO2reducing technologies, and fuel
economy-improving technologies, other
than A/C related control technologies.
This joint work is reflected in Chapter
3 of the Draft Joint TSD and in Section
II of this preamble. A summary of the
effectiveness and cost of A/C related
technology is contained here. For more
detailed information on the
effectiveness and cost of A/C related
technology, please refer to Section III.C
of this preamble and Chapter 2 of EPA’s
DRIA.
A/C improvements are an integral part
of EPA’s technology analysis and have
been included in this section along with
the other technology options. While
discussed in Section III.C as a credit
opportunity, air conditioning-related
improvements are included in Table
III.D.2–1.because A/C improvements are
a very cost-effective technology at
reducing CO2 (or CO2-equivalent)
emissions. EPA expects most
manufacturers will choose to use AC
improvement credit opportunities as a
strategy for meeting compliance with
the CO2 standards. Note that the costs
shown in Table III.D.2–1 do not include
maintenance savings that would be
expected from the new AC systems.
Further, EPA does not include ACrelated maintenance savings in our cost
and benefit analysis presented in
Section III.H. EPA discusses the likely
maintenance savings in Chapter 2 of the
DRIA and requests comment on that
discussion because we may include
maintenance savings in the final rule
and would like to have the best
information available in order to do so.
The EPA approximates that the level of
the credits earned will increase from
2012 to 2016 as more vehicles in the
fleet are redesigned. The penetrations
and average levels of credit are
summarized in Table III.D.2–2, though
the derivation of these numbers (and the
breakdown of car vs. truck credits) is
described in the DRIA. As demonstrated
in the IMAC study (and described in
Section III.C as well as the DRIA), these
levels are feasible and achievable with
technologies that are available and costeffective today.
These improvements are categorized
as either leakage reduction, including
use of alternative refrigerants, or system
efficiency improvements. Unlike the
majority of the technologies described
in this section, A/C improvements will
not be demonstrated in the test cycles
used to quantify CO2 reductions in this
proposal. As described earlier, for this
analysis A/C-related CO2 reductions are
handled outside of OMEGA model and
therefore their CO2 reduction potential
is expressed in grams per mile rather
than a percentage used by the OMEGA
model. See Section III.C for the method
by which potential reductions are
calculated or measured. Further
discussion of the technological basis for
these improvements is included in
Chapter 2 of the DRIA.
TABLE III.D.2–1—TOTAL CO2 REDUCTION POTENTIAL AND 2016 COST FOR A/C RELATED TECHNOLOGIES
FOR ALL VEHICLE CLASSES
[Costs in 2007 dollars]
CO2 reduction
potential
A/C refrigerant leakage reduction ...................................................................................................................
A/C efficiency improvements ..........................................................................................................................
TABLE III.D.2–2 A/C RELATED TECH- ‘‘packages’’ to capture synergistic
NOLOGY PENETRATION AND CREDIT aspects and reflect progressively larger
CO2 reductions with additions or
LEVELS EXPECTED TO BE EARNED
Technology
penetration
(Percent)
2012
2013
2014
2015
2016
..........
..........
..........
..........
..........
Average
credit
over
entire
fleet
25
40
60
80
85
3.1
5.0
7.5
10.0
10.6
mstockstill on DSKH9S0YB1PROD with PROPOSALS
3. How Can Technologies Be Combined
into ‘‘Packages’’ and What Is the Cost
and Effectiveness of Packages?
Individual technologies can be used
by manufacturers to achieve
incremental CO2 reductions. However,
as mentioned in Section III.D.1, EPA
believes that manufacturers are more
likely to bundle technologies into
161 This represents 50% improvement in leakage
and thus 50% of the A/C leakage impact potential
compared to a maximum of 15 g/mi credit that can
be achieved through the incorporation of a low very
GWP refrigerant.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
changes to any given package. In
addition, manufacturers would typically
apply new technologies in packages
during model redesigns—which occur
once roughly every five years—rather
than adding new technologies one at a
time on an annual or biennial basis.
This way, manufacturers can more
efficiently make use of their redesign
resources and more effectively plan for
changes necessary to meet future
standards.
Therefore, the approach taken here is
to group technologies into packages of
increasing cost and effectiveness. EPA
determined that 19 different vehicle
types provided adequate representation
to accurately model the entire fleet. This
was the result of analyzing the existing
light duty fleet with respect to vehicle
size and powertrain configurations. All
vehicles, including cars and trucks,
were first distributed based on their
relative size, starting from compact cars
and working upward to large trucks.
Next, each vehicle was evaluated for
PO 00000
Frm 00091
Fmt 4701
Sfmt 4702
7.5 g/mi 161 .......
5.7 g/mi .............
Incremental
compliance costs
$17
53
powertrain, specifically the engine size,
I4, V6, and V8, and finally by the
number of valves per cylinder. Note that
each of these 19 vehicle types was
mapped into one of the five classes of
vehicles mentioned in Section III.D.2.
While the five classes provide adequate
representation for the cost basis
associated with most technology
application, they do not adequately
account for all existing vehicle
attributes such as base vehicle
powertrain configuration and mass
reduction. As an example, costs and
effectiveness estimates for engine
friction reduction for the small car class
were used to represent cost and
effectiveness for three vehicle types:
Subcompact cars, compact cars, and
small multi-purpose vehicles (MPV)
equipped with a 4-cylinder engine,
however the mass reduction associated
for each of these vehicle types was
based on the vehicle type salesweighted average. In another example, a
vehicle type for V8 single overhead cam
3-valve engines was created to properly
account for the incremental cost in
moving to a dual overhead cam 4-valve
E:\FR\FM\28SEP2.SGM
28SEP2
49544
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
configuration. Note also that these 19
vehicle types span the range of vehicle
footprints—smaller footprints for
smaller vehicles and larger footprints for
larger vehicles—which serve as the
basis for the standards proposed in this
rule. A complete list of vehicles and
their associated vehicle types is shown
above in Table III.D.1–1.
Within each of the 19 vehicle types
multiple technology packages were
created in increasing technology content
and, hence, increasing effectiveness.
Important to note is that the effort in
creating the packages attempted to
maintain a constant utility for each
package as compared to the baseline
package. As such, each package is meant
to provide equivalent driver-perceived
performance to the baseline package.
The initial packages represent what a
manufacturer will most likely
implement on all vehicles, including
low rolling resistance tires, low friction
lubricants, engine friction reduction,
aggressive shift logic, early torque
converter lock-up, improved electrical
accessories, and low drag brakes.162
Subsequent packages include advanced
gasoline engine and transmission
technologies such as turbo/downsizing,
GDI, and dual-clutch transmission. The
most technologically advanced packages
within a segment included HEV, PHEV
and EV designs. The end result being a
list of several packages for each of 19
different vehicle types from which a
manufacturer could choose in order to
modify its fleet such that compliance
could be achieved.
Before using these technology
packages as inputs to the OMEGA
model, the cost and effectiveness for the
package was calculated. The first step—
mentioned briefly above—was to apply
the scaling class for each technology
package and vehicle type combination.
The scaling class establishes the cost
and effectiveness for each technology
with respect to the vehicle size or type.
The Large Car class was provided as an
example in Section III.D.2. Additional
classes include Small Car, Minivan,
Small Truck, and Large Truck and each
of the 19 vehicle types was mapped into
one of those five classes. In the next
step, the cost for a particular technology
package, was determined as the sum of
the costs of the applied technologies.
The final step, determination of
effectiveness, requires greater care due
to the synergistic effects mentioned in
Section III.D.2. This step is described
immediately below.
Usually, the benefits of the engine and
transmission technologies can be
combined multiplicatively. For
example, if an engine technology
reduces CO2 emissions by five percent
and a transmission technology reduces
CO2 emissions by four percent, the
benefit of applying both technologies is
8.8 percent (100%¥(100%¥4%) *
(100%¥5%)). In some cases, however,
the benefit of the transmission-related
technologies overlaps with many of the
engine technologies. This occurs
because the primary goal of most of the
transmission technologies is to shift
operation of the engine to more efficient
locations on the engine map. Some of
the engine technologies have the same
goal, such as cylinder deactivation. In
order to account for this overlap and
avoid over-estimating emissions
reduction effectiveness, EPA has
developed a set of adjustment factors
associated with specific pairs of engine
and transmission technologies.
The various transmission technologies
are generally mutually exclusive. As
such, the effectiveness of each
transmission technology generally
supersedes each other. For example, the
9.5–14.5 percent reduction in CO2
emissions associated with the
automated manual transmission
includes the 4.5–6.5 percent benefit of
a 6-speed automatic transmission.
Exceptions are aggressive shift logic and
early torque converter lock-up. The
former can be applied to any vehicle
and the latter can be applied to any
vehicle with an automatic transmission.
EPA has chosen to use an engineering
approach known as the lumpedparameter technique to determine these
adjustment factors. The results from this
approach were then applied directly to
the vehicle packages. The lumpedparameter technique is well
documented in the literature, and the
specific approach developed by EPA is
detailed in Chapter 3 of the Draft Joint
TSD.
Table III.D.3–1 presents several
examples of the reduction in the
effectiveness of technology pairs. A
complete list and detailed discussion of
these synergies is presented in Chapter
3 of the Draft Joint TSD.
TABLE III.D.3–1—REDUCTION IN EFFECTIVENESS FOR SELECTED TECHNOLOGY PAIRS
Engine technology
Transmission technology
Intake cam phasing ..................................................................
Coupled cam phasing ..............................................................
Coupled cam phasing ..............................................................
Cylinder deactivation ................................................................
Cylinder deactivation ................................................................
Reduction in
combined
effectiveness
(percent)
5 speed automatic ...................................................................
5 speed automatic ...................................................................
Aggressive shift logic ..............................................................
5 speed automatic ...................................................................
Aggressive shift logic ..............................................................
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Table III.D.3–2 presents several
examples of the CO2-reducing
technology vehicle packages used in the
OMEGA model for the large car class.
Similar packages were generated for
each of the 19 vehicle types and the
costs and effectiveness estimates for
each of those packages are discussed in
detail in Chapter 3 of the Draft Joint
TSD.
162 When making reference to low friction
lubricants, the technology being referred to is the
engine changes and possible durability testing that
would be done to accommodate the low friction
lubricants, not the lubricants themselves.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00092
Fmt 4701
Sfmt 4702
E:\FR\FM\28SEP2.SGM
28SEP2
0.5
0.5
0.5
1.0
0.5
49545
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
TABLE III.D.3–2—CO2 REDUCING TECHNOLOGY VEHICLE PACKAGES FOR A LARGE CAR EFFECTIVENESS AND COSTS IN
2016
[Costs in 2007 dollars]
Engine
technology
Transmission
technology
Additional
technology
3.3L V6 ..............................................
4 speed automatic ............................
None .................................................
3.0L
3.0L
3.0L
2.2L
6
6
6
6
3% Mass Reduction .........................
5% Mass Reduction .........................
10% Mass Reduction Start-Stop ......
10% Mass Reduction Start-Stop ......
V6 + GDI + CCP .......................
V6 + GDI + CCP + Deac ..........
V6 + GDI + CCP + Deac ..........
I4 + GDI + Turbo + DCP ..........
speed
speed
speed
speed
mstockstill on DSKH9S0YB1PROD with PROPOSALS
4. Manufacturers’ Application of
Technology
Vehicle manufacturers often
introduce major product changes
together, as a package. In this manner
the manufacturers can optimize their
available resources, including
engineering, development,
manufacturing and marketing activities
to create a product with multiple new
features. In addition, manufacturers
recognize that a vehicle will need to
remain competitive over its intended
life, meet future regulatory
requirements, and contribute to a
manufacturer’s CAFE requirements.
Furthermore, automotive manufacturers
are largely focused on creating vehicle
platforms to limit the development of
entirely new vehicles and to realize
economies of scale with regard to
variable cost. In very limited cases,
manufacturers may implement an
individual technology outside of a
vehicle’s redesign cycle. In following
with these industry practices, EPA has
created a set of vehicle technology
packages that represent the entire light
duty fleet.
EPA has historically allowed
manufacturers of new vehicles or
nonroad equipment to phase in
available emission control technology
over a number of years. Examples of this
are EPA’s Tier 2 program for cars and
light trucks and its 2007 and later PM
and NOX emission standards for heavyduty vehicles. In both of these rules, the
major modifications expected from the
rules were the addition of exhaust
aftertreatment control technologies.
Some changes to the engine were
expected as well, but these were not
expected to affect engine size, packaging
or performance. The CO2 reduction
technologies described above
potentially involve much more
significant changes to car and light truck
designs. Many of the engine
technologies involve changes to the
engine block and heads. The
transmission technologies could change
the size and shape of the transmission
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
automatic ............................
automatic ............................
DCT ....................................
DCT ....................................
and thus, packaging. Improvements to
aerodynamic drag could involve body
design and therefore, the dies used to
produce body panels. Changes of this
sort potentially involve new capital
investment and the obsolescence of
existing investment.
At the same time, vehicle designs are
not static, but change in major ways
periodically. The manufacturers’
product plans indicate that vehicles are
usually redesigned every 5 years on
average. Vehicles also tend to receive a
more modest ‘‘refresh’’ between major
redesigns, as discussed above. Because
manufacturers are already changing
their tooling, equipment and designs at
these times, further changes to vehicle
design at these times involve a
minimum of stranded capital
equipment. Thus, the timing of any
major technological changes is projected
to coincide with changes that
manufacturers would already tend to be
making to their vehicles. This approach
effectively avoids the need to quantify
any costs associated with discarding
equipment, tooling, emission and safety
certification, etc. when CO2-reducing
equipment is incorporated into a
vehicle.
This proposed rule affects five years
of vehicle production, model years
2012–2016. Given the now-typical fiveyear redesign cycle, nearly all of a
manufacturer’s vehicles will be
redesigned over this period. However,
this assumes that a manufacturer has
sufficient lead time to redesign the first
model year affected by this proposed
rule with the requirements of this
proposed rule in mind. In fact, the lead
time available for model year 2012 is
relatively short. The time between a
likely final rule and the start of 2013
model year production is likely to be
just over two years. At the same time,
the manufacturer product plans indicate
that they are planning on introducing
many of the technologies projected to be
required by this proposed rule in both
2012 and 2013. In order to account for
the relatively short lead time available
prior to the 2012 and 2013 model years,
PO 00000
Frm 00093
Fmt 4701
Sfmt 4702
CO2
reduction
Package
cost
Baseline
17.9%
20.6
34.2
34.3
$1,022
1,280
2,108
2,245
albeit mitigated by their existing plans,
EPA projects that only 85 percent of
each manufacturer’s sales will be able to
be redesigned with major CO2 emissionreducing technologies by the 2016
model year. Less intrusive technologies
can be introduced into essentially all a
manufacturer’s sales. This resulted in
three levels of technology penetration
caps, by manufacturer. Common
technologies (e.g., low friction lubes,
aerodynamic improvements) had a
penetration cap of 100%. More
advanced powertrain technologies (e.g.,
stoichiometric GDI, turbocharging) had
a penetration cap of 85%. The most
advanced technologies considered in
this analysis (e.g., diesel engines, as
well as IMA, powersplit and 2-mode
hybrids) had a 15% penetration cap.
5. How Is EPA Projecting That a
Manufacturer Would Decide Between
Options To Improve CO2 Performance
To Meet a Fleet Average Standard?
There are many ways for a
manufacturer to reduce CO2-emissions
from its vehicles. A manufacturer can
choose from a myriad of CO2 reducing
technologies and can apply one or more
of these technologies to some or all of
its vehicles. Thus, for a variety of levels
of CO2 emission control, there are an
almost infinite number of technology
combinations which produce the
desired CO2 reduction. EPA has created
a new vehicle model, the Optimization
Model for Emissions of Greenhouse
gases from Automobiles (OMEGA) in
order to make a reasonable estimate of
how manufacturers will add
technologies to vehicles in order to meet
a fleet-wide CO2 emissions level. EPA
has described OMEGA’s specific
methodologies and algorithms in a
memo to the docket for this rulemaking
(Docket EPA–HQ–OAR–2009–0472).
The OMEGA model utilizes four basic
sets of input data. The first is a
description of the vehicle fleet. The key
pieces of data required for each vehicle
are its manufacturer, CO2 emission
level, fuel type, projected sales and
footprint. The model also requires that
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49546
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
each vehicle be assigned to one of the
19 vehicle types, which tells the model
which set of technologies can be applied
to that vehicle. (For a description of
how the 19 vehicle types were created,
reference Section III.D.3.) In addition,
the degree to which each vehicle
already reflects the effectiveness and
cost of each available technology must
also be input. This avoids the situation,
for example, where the model might try
to add a basic engine improvement to a
current hybrid vehicle. Except for this
type of information, the development of
the required data regarding the reference
fleet was described in Section III.D.1
above and in Chapter 1 of the Draft Joint
TSD.
The second type of input data used by
the model is a description of the
technologies available to manufacturers,
primarily their cost and effectiveness.
Note that the five vehicle classes are not
explicitly used by the model, rather the
costs and effectiveness associated with
each vehicle package is based on the
associated class. This information was
described in Sections III.D.2 and III.D.3
above as well as Chapter 3 of the Draft
Joint TSD. In all cases, the order of the
technologies or technology packages for
a particular vehicle type is determined
by the model user prior to running the
model. Several criteria can be used to
develop a reasonable ordering of
technologies or packages. These are
described in the Draft Joint TSD.
The third type of input data describes
vehicle operational data, such as annual
scrap rates and mileage accumulation
rates, and economic data, such as fuel
prices and discount rates. These
estimates are described in Section II.F
above, Section III.H below and Chapter
4 of the Draft Joint TSD.
The fourth type of data describes the
CO2 emission standards being modeled.
These include the CO2 emission
equivalents of the 2011 MY CAFE
standards and the proposed CO2
standards for 2016. As described in
more detail below, the application of
A/C technology is evaluated in a
separate analysis from those
technologies which impact CO2
emissions over the 2-cycle test
procedure. Thus, for the percent of
vehicles that are projected to achieve
A/C related reductions, the CO2 credit
associated with the projected use of
improved A/C systems is used to adjust
the proposed CO2 standard which
would be applicable to each
manufacturer to develop a target for CO2
emissions over the 2-cycle test which is
assessed in our OMEGA modeling.
As mentioned above for the market
data input file utilized by OMEGA,
which characterizes the vehicle fleet,
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
our modeling must and does account for
the fact that many 2008 MY vehicles are
already equipped with one or more of
the technologies discussed in Section
III.D.2 above. Because of the choice to
apply technologies in packages, and
2008 vehicles are equipped with
individual technologies in a wide
variety of combinations, accounting for
the presence of specific technologies in
terms of their proportion of package cost
and CO2 effectiveness requires careful,
detailed analysis. The first step in this
analysis is to develop a list of individual
technologies which are either contained
in each technology package, or would
supplant the addition of the relevant
portion of each technology package. An
example would be a 2008 MY vehicle
equipped with variable valve timing and
a 6-speed automatic transmission. The
cost and effectiveness of variable valve
timing would be considered to be
already present for any technology
packages which included the addition
of variable valve timing or technologies
which went beyond this technology in
terms of engine related CO2 control
efficiency. An example of a technology
which supplants several technologies
would be a 2008 MY vehicle which was
equipped with a diesel engine. The
effectiveness of this technology would
be considered to be present for
technology packages which included
improvements to a gasoline engine,
since the resultant gasoline engines
have a lower CO2 control efficiency than
the diesel engine. However, if these
packages which included improvements
also included improvements unrelated
to the engine, like transmission
improvements, only the engine related
portion of the package already present
on the vehicle would be considered.
The transmission related portion of the
package’s cost and effectiveness would
be allowed to be applied in order to
comply with future CO2 emission
standards.
The second step in this process is to
determine the total cost and CO2
effectiveness of the technologies already
present and relevant to each available
package. Determining the total cost
usually simply involves adding up the
costs of the individual technologies
present. In order to determine the total
effectiveness of the technologies already
present on each vehicle, the lumped
parameter model described above is
used. Because the specific technologies
present on each 2008 vehicle are
known, the applicable synergies and
dis-synergies can be fully accounted for.
The third step in this process is to
divide the total cost and CO2
effectiveness values determined in step
2 by the total cost and CO2 effectiveness
PO 00000
Frm 00094
Fmt 4701
Sfmt 4702
of the relevant technology packages.
These fractions are capped at a value of
1.0 or less, since a value of 1.0 causes
the OMEGA model to not change either
the cost or CO2 emissions of a vehicle
when that technology package is added.
As described in Section III.D.3 above,
technology packages are applied to
groups of vehicles which generally
represent a single vehicle platform and
which are equipped with a single engine
size (e.g., compact cars with four
cylinder engine produced by Ford).
These groupings are described in Table
III.D.1–1. Thus, the fourth step is to
combine the fractions of the cost and
effectiveness of each technology
package already present on the
individual 2008 vehicles models for
each vehicle grouping. For cost,
percentages of each package already
present are combined using a simple
sales-weighting procedure, since the
cost of each package is the same for each
vehicle in a grouping. For effectiveness,
the individual percentages are
combined by weighting them by both
sales and base CO2 emission level. This
appropriately weights vehicle models
with either higher sales or CO2
emissions within a grouping. Once
again, this process prevents the model
from adding technology which is
already present on vehicles, and thus
ensures that the model does not double
count technology effectiveness and cost
associated with complying with the
2011 MY CAFE standards and the
proposed CO2 standards.
Conceptually, the OMEGA model
begins by determining the specific CO2
emission standard applicable for each
manufacturer and its vehicle class (i.e.,
car or truck). Since the proposed rule
allows for averaging across a
manufacturer’s cars and trucks, the
model determines the CO2 emission
standard applicable to each
manufacturer’s car and truck sales from
the two sets of coefficients describing
the piecewise linear standard functions
for cars and trucks in the inputs, and
creates a combined car-truck standard.
This combined standard considers the
difference in lifetime VMT of cars and
trucks, as indicated in the proposed
regulations which would govern credit
trading between these two vehicle
classes. For both the 2011 CAFE and
2016 CO2 standards, these standards are
a function of each manufacturer’s sales
of cars and trucks and their footprint
values. When evaluating the 2011 MY
CAFE standards, the car-truck trading
was limited to 1.2 mpg. When
evaluating the proposed CO2 standards,
the OMEGA model was run only for MY
2016. OMEGA is designed to evaluate
technology addition over a complete
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
redesign cycle and 2016 represents the
final year of a redesign cycle starting
with the first year of the proposed CO2
standards, 2012. Estimates of the
technology and cost for the interim
model years are developed from the
model projections made for 2016. This
process is discussed in Chapter 6 of
EPA’s DRIA to this proposed rule. When
evaluating the 2016 standards using the
OMEGA model, the proposed CO2
standard which manufacturers would
otherwise have to meet to account for
the anticipated level of A/C credits
generated was adjusted. On an industry
wide basis, the projection shows that
manufacturers would generate 11 g/mi
of A/C credit in 2016. Thus, the 2016
CO2 target for the fleet evaluated using
OMEGA was 261 g/mi instead of 250
g/mi.
The cost of the improved A/C systems
required to generate the 11 g/mi credit
was estimated separately. This is
consistent with our proposed A/C credit
procedures, which would grant
manufacturers A/C credits based on
their total use of improved A/C systems,
and not on the increased use of such
systems relative to some base model
year fleet. Some manufacturers may
already be using improved A/C
technology. However, this represents a
small fraction of current vehicle sales.
To the degree that such systems are
already being used, EPA is overestimating both the cost and benefit of
the addition of improved A/C
technology relative to the true reference
fleet to a small degree.
The model then works with one
manufacturer at a time to add
technologies until that manufacturer
meets its applicable standard. The
OMEGA model can utilize several
approaches to determining the order in
which vehicles receive technologies. For
this analysis, EPA used a
‘‘manufacturer-based net costeffectiveness factor’’ to rank the
technology packages in the order in
which a manufacturer would likely
apply them. Conceptually, this
approach estimates the cost of adding
the technology from the manufacturer’s
perspective and divides it by the mass
of CO2 the technology will reduce. One
component of the cost of adding a
technology is its production cost, as
discussed above. However, it is
expected that new vehicle purchasers
value improved fuel economy since it
reduces the cost of operating the
vehicle. Typical vehicle purchasers are
assumed to value the fuel savings
accrued over the period of time which
they will own the vehicle, which is
estimated to be roughly five years. It is
also assumed that consumers discount
these savings at the same rate as that
PP
ManufCostEff =
TechCost − ∑ [ dFSi × VMTi ] ×
i =1
i + 35
49547
used in the rest of the analysis (3 or 7
percent). Any residual value of the
additional technology which might
remain when the vehicle is sold is not
considered. The CO2 emission reduction
is the change in CO2 emissions
multiplied by the percentage of vehicles
surviving after each year of use
multiplied by the annual miles travelled
by age, again discounted to the year of
vehicle purchase.
Given this definition, the higher
priority technologies are those with the
lowest manufacturer-based net costeffectiveness value (relatively low
technology cost or high fuel savings
leads to lower values). Because the
order of technology application is set for
each vehicle, the model uses the
manufacturer-based net costeffectiveness primarily to decide which
vehicle receives the next technology
addition. Initially, technology package
#1 is the only one available to any
particular vehicle. However, as soon as
a vehicle receives technology package
#1, the model considers the
manufacturer-based net costeffectiveness of technology package #2
for that vehicle and so on. In general
terms, the equation describing the
calculation of manufacturer-based cost
effectiveness is as follows:
1
(1 − Gap )
1
∑ ⎡[ dCO 2] ×VMT ⎤ × (1 − Gap)
⎣
⎦
i
Where:
ManufCostEff = Manufacturer-Based Cost
Effectiveness (in dollars per kilogram
CO2),
TechCost = Marked up cost of the technology
(dollars),
PP = Payback period, or the number of years
of vehicle use over which consumers
value fuel savings when evaluating the
value of a new vehicle at time of
purchase,
dFSi = Difference in fuel consumption due to
the addition of technology times fuel
price in year i,
dCO2 = Difference in CO2 emissions due to
the addition of technology
VMTi = product of annual VMT for a vehicle
of age i and the percentage of vehicles of
age i still on the road,
1- Gap = Ratio of onroad fuel economy to
two-cycle (FTP/HFET) fuel economy
EPA describes the technology ranking
methodology and manufacturer-based
cost effectiveness metric in greater
detail in a technical memo to the Docket
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
for this proposed rule (Docket EPA–HQ–
OAR–2009–0472).
When calculating the fuel savings, the
full retail price of fuel, including taxes
is used. While taxes are not generally
included when calculating the cost or
benefits of a regulation, the net cost
component of the manufacturer-based
net cost-effectiveness equation is not a
measure of the social cost of this
proposal, but a measure of the private
cost, (i.e., a measure of the vehicle
purchaser’s willingness to pay more for
a vehicle with higher fuel efficiency).
Since vehicle operators pay the full
price of fuel, including taxes, they value
fuel costs or savings at this level, and
the manufacturers will consider this
when choosing among the technology
options.
This definition of manufacturer-based
net cost-effectiveness ignores any
change in the residual value of the
vehicle due to the additional technology
PO 00000
Frm 00095
Fmt 4701
Sfmt 4702
when the vehicle is five years old. As
discussed in Chapter 1of the DRIA,
based on historic used car pricing,
applicable sales taxes, and insurance,
vehicles are worth roughly 23% of their
original cost after five years, discounted
to year of vehicle purchase at 7% per
annum. It is reasonable to estimate that
the added technology to improve CO2
level and fuel economy would retain
this same percentage of value when the
vehicle is five years old. However, it is
less clear whether first purchasers, and
thus, manufacturers would consider this
residual value when ranking
technologies and making vehicle
purchases, respectively. For this
proposal, this factor was not included in
our determination of manufacturerbased net cost-effectiveness in the
analyses performed in support of this
proposed rule. Comments are requested
on the benefit of including an increase
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.013</MATH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
i
49548
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
in the vehicle’s residual value after five
years in the calculation of effective cost.
The values of manufacturer-based net
cost-effectiveness for specific
technologies will vary from vehicle to
vehicle, often substantially. This occurs
for three reasons. First, both the cost
and fuel-saving component cost,
ownership fuel-savings, and lifetime
CO2 effectiveness of a specific
technology all vary by the type of
vehicle or engine to which it is being
applied (e.g., small car versus large
truck, or 4-cylinder versus 8-cylinder
engine). Second, the effectiveness of a
specific technology often depends on
the presence of other technologies
already being used on the vehicle (i.e.,
the dis-synergies. Third, the absolute
fuel savings and CO2 reduction of a
percentage an incremental reduction in
fuel consumption depends on the CO2
level of the vehicle prior to adding the
technology. Chapter 1 of the DRIA of
this proposed rule contains further
detail on the values of manufacturerbased net cost-effectiveness for the
various technology packages.
EPA requests comment on the use of
manufacturer-based net costeffectiveness to rank CO2 emission
reduction technologies in the context of
evaluating alternative fleet average
standards for this rule. EPA believes this
manufacturer-based net costeffectiveness metric is appropriate for
ranking technology in this proposed
program because it considers
effectiveness values that may vary
widely among technology packages
when determining the order of
technology addition. Comments are
requested on this option and on any
others thought to be appropriate.
6. Why Are the Proposed CO2 Standards
Feasible?
The finding that the proposed
standards would be technically feasible
is based primarily on two factors. One
is the level of technology needed to
meet the proposed standards. The other
is the cost of this technology. The focus
is on the proposed standards for 2016,
as this is the most stringent standard
and requires the most extensive use of
technology.
With respect to the level of
technology required to meet the
standards, EPA established technology
penetration caps. As described in
Section III.D.4, EPA used two
constraints to limit the model’s
application of technology by
manufacturer. The first was the
application of common fuel economy
enablers such as low rolling resistance
tires and transmission logic changes.
These were allowed to be used on all
vehicles and hence had no penetration
cap. The second constraint was applied
to most other technologies and limited
their application to 85% with the
exception of the most advanced
technologies (e.g., powersplit and 2mode hybrids) whose application was
limited to 15%.
EPA used the OMEGA model to
project the technology (and resultant
cost) required for manufacturers to meet
the current 2011 MY CAFE standards
and the proposed 2016 MY CO2
emission standards. Both sets of
standards were evaluated using the
OMEGA model. The 2011 MY CAFE
standards were applied to cars and
trucks separately with the transfer of
credits from one category to the other
allowed up to an increase in fuel
economy of 1.0 mpg. Chrysler, Ford and
General Motors are assumed to utilize
FFV credits up to the maximum of 1.2
mpg for both their car and truck sales.
Nissan is assumed to utilize FFV credits
up to the maximum of 1.2 mpg for only
their truck sales. The use of any banked
credits from previous model years was
not considered. The modification of the
reference fleet to comply with the 2011
CAFE standards through the application
of technology by the OMEGA model is
the final step in creating the final
reference fleet. This final reference fleet
forms the basis for comparison for the
model year 2016 standards.
Table III.D.6–1 shows the usage level
of selected technologies in the 2008
vehicles coupled with 2016 sales prior
to projecting their compliance with the
2011 MY CAFE standards. These
technologies include converting port
fuel-injected gasoline engines to direct
injection (GDI), adding the ability to
deactivate certain engine cylinders
during low load operation (Deac),
adding a turbocharger and downsizing
the engine (Turbo), increasing the
number of transmission speeds to 6 or,
converting automatic transmissions to
dual-clutch automated manual
transmissions (Dual-Clutch Trans),
adding 42 volt start-stop capability
(Start-Stop), and converting a vehicle to
a intermediate or strong hybrid design.
This last category includes three current
hybrid designs: integrated motor assist
(IMA), power-split (PS) and 2-mode
hybrids.
TABLE III.D.6–1—PENETRATION OF TECHNOLOGY IN 2008 VEHICLES WITH 2016 SALES: CARS AND TRUCKS
[Percent of sales]
mstockstill on DSKH9S0YB1PROD with PROPOSALS
GDI
BMW ................................
Chrysler ............................
Daimler .............................
Ford ..................................
General Motors ................
Honda ...............................
Hyundai ............................
Kia ....................................
Mazda ..............................
Mitsubishi .........................
Nissan ..............................
Porsche ............................
Subaru ..............................
Suzuki ..............................
Tata ..................................
Toyota ..............................
Volkswagen ......................
Overall ..............................
VerDate Nov<24>2008
23:31 Sep 25, 2009
GDI+ deac
6.7
0.0
6.2
0.6
3.3
1.2
0.0
0.0
11.8
0.0
17.7
0.0
0.0
0.0
0.0
7.5
52.2
6.4
Jkt 217001
GDI+ turbo
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
PO 00000
Frm 00096
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Fmt 4701
6 Speed or
CV trans
Diesel
0.0
0.0
6.2
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.1
0.1
Sfmt 4702
Dual clutch
trans
98.8
27.9
74.7
28.1
13.7
4.2
4.9
0.9
37.1
76.1
33.3
3.9
29.0
100.0
0.0
30.6
82.8
27.1
0.8
0.0
11.4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
10.9
0.6
E:\FR\FM\28SEP2.SGM
28SEP2
Start-stop
0.0
0.0
0.0
0.0
0.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Hybrid
0.1
0.0
0.0
0.0
0.1
2.1
0.0
0.0
0.0
0.1
0.0
0.0
0.0
0.0
0.0
12.8
0.0
2.8
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
As can be seen, all of these
technologies except for the direct
injection gasoline engines with either
cylinder deactivation or turbocharging
and downsizing, were already being
used on some 2008 MY vehicles. High
speed transmissions were the most
prevalent, with some manufacturers
(e.g., BMW, Suzuki) using them on
essentially all of their vehicles. Both
Daimler and VW equip many of their
vehicles with automated manual
transmissions, while VW makes
extensive use of direct injection gasoline
engine technology. Toyota has
converted a significant percentage of its
2008 vehicles to strong hybrid design.
Table III.D.6–2 shows the usage level
of the same technologies in the
reference case fleet after projecting their
compliance with the 2011 MY CAFE
standards. Except for mass reduction,
the figures shown represent the
percentages of each manufacturer’s sales
which are projected to be equipped with
the indicated technology. For mass
reduction, the overall mass reduction
projected for that manufacturer’s sales is
shown. The last row in Table III.D.6–2
shows the increase in projected
49549
technology penetration due to
compliance with the 2011 MY CAFE
standards. The results of DOT’s Volpe
Modeling were used to project that all
manufacturers would comply with the
2011 MY standards in 2016 without the
need to pay fines, with one exception.
This exception was Porsche in the case
of their car fleet. When projecting
Porsche’s compliance with the 2011 MY
CAFE standard for cars, the car fleet was
assumed to achieve a CO2 emission
level of 293.2 g/mi instead of the
required 285.2 g/mi level (30.3 mpg
instead of 31.2 mpg).
TABLE III.D.6–2—PENETRATION OF TECHNOLOGY UNDER 2011 MY CAFE STANDARDS IN 2016 SALES: CARS AND
TRUCKS
[Percent of sales]
GDI
mstockstill on DSKH9S0YB1PROD with PROPOSALS
BMW ................................
Chrysler ............................
Daimler .............................
Ford ..................................
General Motors ................
Honda ...............................
Hyundai ............................
Kia ....................................
Mazda ..............................
Mitsubishi .........................
Nissan ..............................
Porsche ............................
Subaru ..............................
Suzuki ..............................
Tata ..................................
Toyota ..............................
Volkswagen ......................
Overall ..............................
Increase over 2008 MY ...
GDI+ deac
7.3
0.0
16.4
0.6
3.3
1.2
0.0
0.0
11.8
0.0
17.7
0.0
0.0
4.5
14.5
7.5
51.2
6.7
0.3
23:31 Sep 25, 2009
Jkt 217001
6 Speed or
CV trans
Dual clutch
trans
0.0
0.0
14.3
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
23.2
0.0
0.0
0.0
0.0
11.8
0.8
0.8
86.3
27.9
45.8
28.1
13.7
4.2
4.9
0.9
37.1
76.0
33.3
0.0
29.0
100.0
14.5
30.6
60.8
25.4
¥1.7
11.1
0.0
36.0
0.0
0.0
0.0
0.0
0.0
0.0
2.2
0.0
48.2
0.0
0.0
60.9
0.0
29.6
2.6
2.0
11.1
0.0
10.3
0.0
0.0
0.0
0.0
0.0
0.0
2.2
0.0
25.0
0.0
0.0
60.9
0.0
6.9
1.2
1.2
As can be seen, the 2011 MY CAFE
standards, when evaluated on an
industry wide basis, require only a
modest increase in the use of these
technologies. Higher speed automatic
transmission use actually decreases due
to conversion of these units to more
efficient designs such as automated
manual transmissions and hybrids.
However, the impact of the 2011 MY
CAFE standards is much greater on
selected manufacturers, particularly
BMW, Daimler, Porsche, Tata (Jaguar/
Land Rover) and VW. All of these
manufacturers are projected to increase
their use of advanced direct injection
gasoline engine technology, advanced
transmission technology, and start-stop
technology. It should be noted that these
manufacturers have traditionally paid
fines under the CAFE program.
However, with higher fuel prices and
the lead-time available by 2016, these
manufacturers would likely find it in
their best interest to improve their fuel
VerDate Nov<24>2008
GDI+ turbo
economy levels instead of continuing to
pay fines (again with the exception of
Porsche cars). While not shown, no
gasoline engines were projected to be
converted to diesel technology.
This 2008 baseline fleet, modified to
meet 2011 standards, becomes our
‘‘reference’’ case. This is the fleet by
which the control program (or 2016
rule) will be compared. Thus, it is also
the fleet that would be assumed to exist
in the absence of this rule. No air
conditioning improvements are
assumed for model year 2011 vehicles.
The average CO2 emission levels of this
reference fleet vary slightly from 2012–
2016 due to small changes in the vehicle
sales by market segments and
manufacturer. CO2 emissions from cars
range from 282–284 g/mi, while those
from trucks range from 382–384 g/mi.
CO2 emissions from the combined fleet
range from 316–320. These estimates are
described in greater detail in Section
5.3.2.2 of the DRIA.
PO 00000
Frm 00097
Fmt 4701
Sfmt 4702
Start-stop
11.1
0.0
24.6
0.0
0.1
0.0
0.0
0.0
0.0
2.2
0.0
37.1
0.0
0.0
60.9
0.0
18.7
2.0
2.0
Hybrid
0.1
0.0
0.0
0.0
0.1
2.1
0.0
0.0
0.0
0.1
0.0
0.0
0.0
0.0
0.0
12.8
0.0
2.8
0.0
Mass
reduction
(percent)
0.5
0.0
0.9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
1.2
0.0
0.0
2.6
0.0
0.3
0.1
0.0
Conceptually, both EPA and NHTSA
perform the same projection in order to
develop their respective reference fleets.
However, because the two agencies use
two different models to modify the
baseline fleet to meet the 2011 CAFE
standards, the technology added will be
slightly different. The differences,
however, are small since most
manufacturers do not require a lot of
additional technology to meet the 2011
standards.
EPA then used the OMEGA model
once again to project the level of
technology needed to meet the proposed
2016 CO2 emission standards. Using the
results of the OMEGA model, every
manufacturer was projected to be able to
meet the proposed 2016 standards with
the technology described above except
for four: BMW, VW, Porsche and Tata
due to the OMEGA cap on technology
penetration by manufacturer. For these
manufacturers, the results presented
below are those with the fully allowable
E:\FR\FM\28SEP2.SGM
28SEP2
49550
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
application of technology and not for
the technology projected to enable
compliance with the proposed
standards. Described below are a
number of potential feasible solutions
for how these companies can achieve
compliance. The overall level of
technology needed to meet the proposed
2016 standards is shown in Table
III.D.6–3. As discussed above, all
manufacturers are projected to improve
the air conditioning systems on 85% of
their 2016 sales.
TABLE III.D.6–3—PENETRATION OF TECHNOLOGY FOR PROPOSED 2016 CO2 STANDARDS: CARS AND TRUCKS
[Percent of sales]
GDI
mstockstill on DSKH9S0YB1PROD with PROPOSALS
BMW ................................
Chrysler ............................
Daimler .............................
Ford ..................................
General Motors ................
Honda ...............................
Hyundai ............................
Kia ....................................
Mazda ..............................
Mitsubishi .........................
Nissan ..............................
Porsche ............................
Subaru ..............................
Suzuki ..............................
Tata ..................................
Toyota ..............................
Volkswagen ......................
Overall ..............................
Increase over 2011 CAFE
GDI+ deac
4
51
3
29
34
24
28
37
54
65
29
7
46
66
4
37
9
30
24
35
28
44
39
26
1
3
0
2
2
26
36
4
5
81
2
26
18
17
As can be seen, the overall average
reduction in vehicle weight is projected
to be 4%. This reduction varies across
the two vehicle classes and vehicle base
weight. For cars below 2,950 pounds
curb weight, the average reduction is
2.3% (62 pounds), while the average
was 4.4% (154 pounds) for cars above
2,950 curb weight. For trucks below
3,850 pounds curb weight, the average
reduction is 3.5% (119 pounds), while
it was 4.5% (215 pounds) for trucks
above 3,850 curb weight. Splitting
trucks at a higher weight, for trucks
below 5,000 pounds curb weight, the
average reduction is 3.3% (140 pounds),
while it was 6.7% (352 pounds) for
trucks above 5,000 curb weight.
The levels of requisite technologies
differ significantly across the various
manufacturers. Therefore, several
analyses were performed to ascertain
the cause. Because the baseline case
fleet consists of 2008 MY vehicle
designs, these analyses were focused on
these vehicles, their technology and
their CO2 emission levels.
Comparing CO2 emissions across
manufacturers is not a simple task. In
addition to widely varying vehicle
styles, designs, and sizes, manufacturers
have implemented fuel efficient
technologies to varying degrees, as
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
GDI+ turbo
47
3
39
13
7
2
14
5
16
7
5
49
14
8
0
0
58
10
9
6 Speed
auto trans
Dual clutch
trans
15
37
11
19
13
10
3
7
31
22
34
10
0
9
14
30
12
19
¥7
indicated in Table III.D.6–1. The
projected levels of requisite technology
to enable compliance with the proposed
2016 standards shown in Table III.D.6–
3 account for two of the major factors
which can affect CO2 emissions: (1)
Level of technology already being
utilized and (2) vehicle size, as
represented by footprint.
For example, the fuel economy of a
manufacturer’s 2008 vehicles may be
relatively high because of the use of
advanced technology. This is the case
with Toyota’s high sales of their Prius
hybrid. However, the presence of this
technology in a 2008 vehicle eliminates
the ability to significantly reduce CO2
further through the use of this
technology. In the extreme, if a
manufacturer were to hybridize a high
level of its sales in 2016, it doesn’t
matter whether this technology was
present in 2008 or whether it would be
added in order to comply with the
standards. The final level of hybrid
technology would be the same. Thus,
the level at which technology is present
in 2008 vehicles does not explain the
difference in requisite technology levels
shown in Table III.D.6–3.
Similarly, the proposed CO2 emission
standards adjust the required CO2 level
according to a vehicle’s footprint,
PO 00000
Frm 00098
Fmt 4701
Sfmt 4702
Start-stop
71
51
73
67
55
22
43
35
43
66
57
70
64
69
70
33
72
49
46
71
51
72
67
55
22
43
35
43
66
56
70
51
69
70
16
70
45
43
Mass
reduction
Hybrid
14
0
13
0
0
2
0
0
0
0
1
15
0
0
15
13
15
4
1
5
6
5
6
5
2
3
3
4
6
5
4
4
4
6
2
4
4
4
requiring lower absolute emission levels
from smaller vehicles. Thus, just
because a manufacturer produces larger
vehicles than another manufacturer
does not explain the differences seen in
Table III.D.6–3.
In order to remove these two factors
from our comparison, the EPA lumped
parameter model described above was
used to estimate the degree to which
technology present on each 2008 MY
vehicle in our reference fleet was
improving fuel efficiency. The effect of
this technology was removed and each
vehicle’s CO2 emissions were estimated
as if it utilized no additional fuel
efficiency technology beyond the
baseline. The differences in vehicle size
were accounted for by determining the
difference between the sales-weighted
average of each manufacturer’s ‘‘no
technology’’ CO2 levels to their required
CO2 emission level under the proposed
2016 standards. The industry-wide
difference was subtracted from each
manufacturer’s value to highlight which
manufacturers had lower and higher
than average ‘‘no technology’’
emissions. The results are shown in
Figure III.D.6–1.
BILLING CODE 4910–59–P
E:\FR\FM\28SEP2.SGM
28SEP2
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00099
Fmt 4701
Sfmt 4725
E:\FR\FM\28SEP2.SGM
28SEP2
49551
EP28SE09.014</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
49552
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
As can be seen in Table III.D.6–3 the
manufacturers projected to require the
greatest levels of technology also show
the highest offsets relative to the
industry. The greatest offset shown in
Figure III.D.6–1 is for Tata’s trucks
(Land Rover). These vehicles are
estimated to have 100 g/mi greater CO2
emissions than the average 2008 MY
truck after accounting for differences in
the use of fuel saving technology and
footprint. The lowest adjustment is for
Subaru’s trucks, which have 50 g/mi
CO2 lower emissions than the average
truck.
While this comparison confirms the
differences in the technology
penetrations shown in Table III.D.6–3, it
does not yet explain why these
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
differences exist. Two well known
factors affecting vehicle fuel efficiency
are vehicle weight and performance.
The footprint-based form of the
proposed CO2 standard accounts for
most of the difference in vehicle weight
seen in the 2008 MY fleet. However,
even at the same footprint, vehicles can
have varying weights. Higher
performing vehicles also tend to have
higher CO2 emissions over the two-cycle
test procedure. So manufacturers with
higher average performance levels will
tend to have higher average CO2
emissions for any given footprint.
The impact of these two factors on
each manufacturer’s ‘‘no technology’’
CO2 emissions was estimated. First, the
‘‘no technology’’ CO2 emissions levels
PO 00000
Frm 00100
Fmt 4701
Sfmt 4702
were statistically analyzed to determine
the average impact of weight and the
ratio of horsepower to weight on CO2
emissions. Both factors were found to be
statistically significant at the 95 percent
confidence level. Together, they
explained over 80 percent of the
variability in vehicles’ CO2 emissions
for cars and over 70 percent for trucks.
These relationships were then used to
adjust each vehicle’s ‘‘no technology’’
CO2 emissions to the average weight for
its footprint value and to the average
horsepower to weight ratio of either the
car or truck fleet. The comparison was
repeated as shown in Figure III.D.6–1.
The results are shown in Figure
III.D.6–2.
E:\FR\FM\28SEP2.SGM
28SEP2
BILLING CODE 4910–59–C
First, note that the scale in Figure
III.D.6–2 is much smaller by a factor of
3 than that in Figure III.D.6–1. In other
words, accounting for differences in
vehicle weight (at constant footprint)
and performance dramatically reduces
the differences in various
manufacturers’ CO2 emissions. Most of
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
the manufacturers with high offsets in
Figure III.D.6–1 now show low or
negative offsets. For example, BMW’s
and VW’s trucks show very low CO2
emissions. Tata’s emissions are very
close to the industry average. Daimler’s
vehicles are no more than 10 g/mi above
the average for the industry. This
analysis indicates that the primary
PO 00000
Frm 00101
Fmt 4701
Sfmt 4702
49553
reasons for the differences in technology
penetrations shown for the various
manufacturers in Table III.D.6–3 are
weight and performance. EPA has not
determined why some manufacturers’
vehicle weight is relatively high for its
footprint value, or whether this weight
provides additional utility for the
consumer. Performance is more
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.015</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49554
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
straightforward. Some consumers desire
high performance and some
manufacturers orient their sales towards
these consumers. However, the cost in
terms of CO2 emissions is clear.
Producing relatively heavy or high
performance vehicles increases CO2
emissions and will require greater levels
of technology in order to meet the
proposed CO2 standards.
As can be seen from Table III.D.6–3
above, widespread use of several
technologies is projected due to the
proposed standards. The vast majority
of engines are projected to be converted
to direct injection, with some of these
engines including cylinder deactivation
or turbocharging and downsizing. More
than 60 percent of all transmissions are
projected to be either high speed
automatic transmissions or dual-clutch
automated manual transmissions. More
than one third of the fleet is projected
to be equipped with 42 volt start-stop
capability. This technology was not
utilized in 2008 vehicles, but as
discussed above, promises significant
fuel efficiency improvement at a
moderate cost.
EPA foresees no significant technical
or engineering issues with the projected
deployment of these technologies across
the fleet, with their incorporation being
folded into the vehicle redesign process.
All of these technologies are
commercially available now. The
automotive industry has already begun
to convert its port fuel-injected gasoline
engines to direct injection. Cylinder
deactivation and turbocharging
technologies are already commercially
available. As indicated in Table III.D.6–
1, high speed transmissions are already
widely used. However, while more
common in Europe, automated manual
transmissions are not currently used
extensively in the U.S. Widespread use
of this technology would require
significant capital investment but does
not present any significant technical or
engineering issues. Start-stop systems
also represent a significant challenge
because of the complications involved
in a changeover to a higher voltage
electrical architecture. However, with
appropriate capital investments (which
are captured in the costs), these
technology penetration rates are
achievable within the timeframe of this
rule. While most manufacturers have
some plans for these systems, our
projections indicate that their use may
exceed 35 percent of sales, with some
manufacturers requiring higher levels.
Most manufacturers would not have
to hybridize any vehicles due to the
proposed standards. The hybrids shown
for Toyota are projected to be sold even
in the absence of the proposed
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
standards. However the relatively high
hybrid penetrations (15%) projected for
BMW, Daimler, Porsche, Tata and
Volkswagen deserve further discussion.
These manufacturers are all projected by
the OMEGA model to utilize the
maximum application of full hybrids
allowed by our model in this time
frame, which is 15 percent.
As discussed in the EPA DRIA, a 2016
technology penetration rate of 85% is
projected for the vast majority of
available technologies, however, for full
hybrid systems the projection shows
that given the available lead-time full
hybrids can only be applied to
approximately 15% of a manufacturer’s
fleet. This number of course can vary by
manufacturer.
While the hybridization levels of
BMW, Daimler, Porsche, Tata and
Volkswagen are relatively high, the sales
levels of these five manufacturers are
relatively low. Thus, industry-wide,
hybridization reaches only 8 percent,
compared with 3 percent in the
reference case. This 8 percent level is
believed to be well within the capability
of the hybrid component industry by
2016. Thus, the primary challenge for
these five companies would be at the
manufacturer level, redesigning a
relatively large percentage of sales to
include hybrid technology. The
proposed TLAAS provisions will
provide significant aid to these
manufacturers in pre-2016 compliance,
since all qualified companies are
expected to be able to take advantage of
these provisions. By 2016, it is likely
that these manufacturers would also be
able to change vehicle characteristics
which currently cause their vehicles to
emit much more CO2 than similar sized
vehicles produced by other
manufacturers. These factors may
include changes in model mix, further
lightweighting, downpowering, electric
and/or plug-in hybrid vehicles, or
downsizing (our current baseline fleet
assumes very little change in footprint
from 2012–2016), as well as
technologies that may not be included
in our packages. Also, companies may
have technology penetration rates of less
costly technologies (listed in the above
tables) greater than 85%, and they may
also be able to apply hybrid technology
to more than 15 percent of their fleet (as
the 15% for hybrid technology is an
industry average). For example, a switch
to a low GWP alternative refrigerant in
a large fraction of a fleet can replace
many other much more costly
technologies, but this option is not
captured in the modeling. In addition,
these manufacturers can also take
advantage of flexibilities, such as early
credits for air conditioning and trading
PO 00000
Frm 00102
Fmt 4701
Sfmt 4702
with other manufacturers. The EPA
expects that there will be certain high
volume manufacturers that will earn a
significant amount of early GHG credits
starting in 2009 and 2010 that will
expire 5 years later, by 2014 and 2015,
unused. The EPA believes that these
manufacturers will be willing to sell
these expiring credits to manufacturers
with whom there is no direct
competition. Furthermore, some of these
manufacturers have also stated either
publicly or in confidential discussions
with EPA that they will be able to
comply with 2016 standards. Because of
the confidential nature of this
information sharing, EPA is unable to
capture these packages specifically in
our modeling. The following companies
have all submitted letters in support of
the national program, including the
2016 MY levels discussed above: BMW,
Chrysler, Daimler, Ford, GM, Honda,
Mazda, Toyota, and Volkswagen. This
supports the view that the emissions
reductions needed to achieve the
standards are technically and
economically feasible for all these
companies, and that EPA’s projection of
non-compliance for four of the
companies is based on an inability of
our model to fully account for the full
flexibilities of the EPA program as well
as the potentially unique technology
approaches or new product offerings
which these manufactures are likely to
employ.
In addition, manufacturers do not
need to apply technology exactly
according to our projections. Our
projections simply indicate one path
which would achieve compliance.
Those manufacturers whose vehicles are
heavier and higher performing than
average in particular have additional
options to facilitate compliance and
reduce their technological burden closer
to the industry average. These options
include decreasing the mass of the
vehicles and/or decreasing the power
output of the engines. Finally, EPA
allows compliance to be shown through
the use of emission credits obtained
from other manufacturers. Especially for
the lower volume sales of some
manufacturers that could be one
component of an effective compliance
strategy, reducing the technology that
needs to be employed on their vehicles.
For the vast majority of light-duty cars
and trucks, manufacturers have
available to them a range of technologies
that are currently commercially
available and can feasibly be employed
in their vehicles by MY 2016. Our
modeling projects widespread use of
these technologies as a technologically
feasible approach to complying with the
proposed standards.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
In sum, EPA believes that the
emissions reductions called for by the
proposed standards are technologically
feasible, based on projections of
widespread use of commercially
available technology, as well as use by
some manufacturers of other technology
approaches and compliance flexibilities
not fully reflected in our modeling.
EPA also projected the cost associated
with these projections of technology
penetration. Table III.D.6–4 shows the
cost of technology in order for
manufacturers to comply with the 2011
MY CAFE standards, as well as those
49555
associated with the proposed 2016 CO2
emission standards. The latter costs are
incremental to those associated with the
2011 MY standards and also include
$60 per vehicle, on average, for the cost
of projected use of improved airconditioning systems.163
TABLE III.D.6–4—COST OF TECHNOLOGY PER VEHICLE IN 2016 ($2007)
2011 MY CAFE standards
Cars
mstockstill on DSKH9S0YB1PROD with PROPOSALS
BMW ................................................................................
Chrysler ............................................................................
Daimler .............................................................................
Ford ..................................................................................
General Motors ................................................................
Honda ...............................................................................
Hyundai ............................................................................
Kia ....................................................................................
Mazda ..............................................................................
Mitsubishi .........................................................................
Nissan ..............................................................................
Porsche ............................................................................
Subaru ..............................................................................
Suzuki ..............................................................................
Tata ..................................................................................
Toyota ..............................................................................
Volkswagen ......................................................................
Overall ..............................................................................
$319
7
431
28
28
0
0
0
0
96
0
535
64
99
691
0
269
47
Trucks
Proposed 2016 CO2 standards
All
$479
125
632
211
136
0
76
48
0
322
19
1,074
100
231
1,574
0
758
141
Cars
$361
59
495
109
73
0
14
8
0
123
6
706
77
133
1,161
0
354
78
$1,701
1,331
1,631
1,435
969
606
739
741
946
1,067
1,013
1,549
903
1,093
1,270
600
1,626
968
Trucks
$1,665
1,505
1,357
1,485
1,782
695
1,680
1,177
1,030
1,263
1,194
666
1,329
1,263
674
436
949
1,214
All
$1,691
1,408
1,543
1,457
1,311
633
907
812
958
1,090
1,064
1,268
1,057
1,137
952
546
1,509
1,051
As can be seen, the industry average
cost of complying with the 2011 MY
CAFE standards is quite low, $78 per
vehicle. The range of costs across
manufacturers is quite large, however.
Honda, Mazda and Toyota are projected
to face no cost, while Daimler, Porsche
and Tata face costs of at least $495 per
vehicle. As described above, these last
three manufacturers face such high costs
to meet even the 2011 MY CAFE
standards due to both their vehicles’
weight per unit footprint and
performance. Also, these cost estimates
apply to sales in the 2016 MY. These
three manufacturers, as well as others
like Volkswagen, may choose to pay
CAFE fines prior to this or even in 2016.
As shown in the last row of Table
III.D.6–4, the average cost of technology
to meet the proposed 2016 standards for
cars and trucks combined relative to the
2011 MY CAFE standards is $1051 per
vehicle. The projection shows that the
average cost for cars would be slightly
lower than that for trucks. Toyota and
Honda show projected costs
significantly below the average, while
BMW, Porsche, Tata and Volkswagen
show significantly higher costs. On
average, the $1051 per vehicle cost is
significant, representing roughly 5% of
the total cost of a new vehicle. However,
as discussed below, the fuel savings
associated with the proposed standards
exceeds this cost significantly.
While the CO2 emission compliance
modeling using the OMEGA model
focused on the proposed 2016 MY
standards, EPA believes that the
proposed standards for 2012–2015
would also be feasible. As discussed
above, EPA believes that manufacturers
develop their vehicle designs with
several model years in view. Generally,
the technology estimated above for 2016
MY vehicles represents the technology
which would be added to those vehicles
which are being redesigned in 2012–
2015. The proposed CO2 standards for
2012–2016 reduce CO2 emissions at a
fairly steady rate. Thus, manufacturers
which redesign their vehicles at a fairly
steady rate will automatically comply
with the interim standard as they plan
for compliance in 2016.
Manufacturers which redesign much
fewer than 20% of their sales in the
early years of the proposed program
would face a more difficult challenge, as
simply implementing the ‘‘2016 MY’’
technology as vehicles are redesigned
may not enable compliance in the early
years. However, even in this case,
manufacturers would have several
options to enable compliance. One, they
Two alternative sets of CO2 standards
were considered. One set would reduce
163 Note that the actual cost of the A/C technology
is estimated at $78 per vehicle as shown in Table
III.D.2–3. However, we expect only 85 percent of
the fleet to add that technology. Therefore, the cost
of the technology when spread across the entire
fleet is $66 per vehicle ($78×85%=$66).
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00103
Fmt 4701
Sfmt 4702
could utilize the proposed debit carryforward provisions described above.
This may be sufficient alone to enable
compliance through the 2012–2016 MY
time period, if their redesign schedule
exceeds 20% per year prior to 2016. If
not, at some point, the manufacturer
might need to increase their use of
technology beyond that projected above
in order to generate the credits
necessary to balance the accrued debits.
For most manufacturers representing the
vast majority of U.S. sales, this would
simply mean extending the same
technology to a greater percentage of
sales. The added cost of this in the later
years of the program would be balanced
by lower costs in the earlier years. Two,
the manufacturer could buy credits from
another manufacturer. As indicated
above, several manufacturers are
projected to require less stringent
technology than the average. These
manufacturers would be in a position to
provide credits at a reasonable
technology cost. Thus, EPA believes the
proposed standards for 2012–2016
would be feasible.
7. What Other Fleet-Wide CO2 Levels
Were Considered?
E:\FR\FM\28SEP2.SGM
28SEP2
49556
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
CO2 emissions at a rate of 4 percent per
year. The second set would reduce CO2
emissions at a rate of 6 percent per year.
The analysis of these standards followed
the exact same process as described
above for the proposed standards. The
only difference was the level of CO2
emission standards. The footprint-based
standard coefficients of the car and
truck curves for these two alternative
control scenarios were discussed above.
The resultant CO2 standards in 2016 for
each manufacturer under these two
alternative scenarios and under the
proposal are shown in Table III.D.7–1.
TABLE III.D.7–1—OVERALL AVERAGE CO2 EMISSION STANDARDS BY MANUFACTURER IN 2016
4% per
year
BMW ....................................................................................................................................................................
Chrysler ................................................................................................................................................................
Daimler .................................................................................................................................................................
Ford ......................................................................................................................................................................
General Motors ....................................................................................................................................................
Honda ..................................................................................................................................................................
Hyundai ................................................................................................................................................................
Kia ........................................................................................................................................................................
Mazda ..................................................................................................................................................................
Mitsubishi .............................................................................................................................................................
Nissan ..................................................................................................................................................................
Porsche ................................................................................................................................................................
Subaru .................................................................................................................................................................
Suzuki ..................................................................................................................................................................
Tata ......................................................................................................................................................................
Toyota ..................................................................................................................................................................
Volkswagen ..........................................................................................................................................................
Overall ..................................................................................................................................................................
Tables III.D.7–2 and III.D.7–3 show
the technology penetration levels for the
6% per
year
Proposed
245
266
257
270
272
243
235
237
231
226
251
234
237
227
267
247
233
254
241
262
253
266
268
239
231
234
227
223
247
230
233
223
263
243
230
250
222
241
233
245
247
219
212
215
208
204
227
210
213
203
241
223
211
230
4 percent per year and 6 percent per
year standards in 2016.
TABLE III.D.7–2—TECHNOLOGY PENETRATION—4% PER YEAR CO2 STANDARDS IN 2016: CARS AND TRUCKS COMBINED
GDI
BMW ................................
Chrysler ............................
Daimler .............................
Ford ..................................
General Motors ................
Honda ...............................
Hyundai ............................
Kia ....................................
Mazda ..............................
Mitsubishi .........................
Nissan ..............................
Porsche ............................
Subaru ..............................
Suzuki ..............................
Tata ..................................
Toyota ..............................
Volkswagen ......................
Overall ..............................
Increase over 2011 CAFE
GDI+ deac
4%
47
3
33
33
20
27
31
34
65
34
7
46
72
4
25
9
28
21
GDI+ turbo
35%
25
44
32
25
1
2
0
2
2
22
36
4
5
81
2
26
17
15
47%
3
39
13
7
0
12
4
16
7
2
49
14
2
0
0
58
9
9
6 Speed
auto trans
15%
33
11
23
19
6
2
1
10
28
40
10
10
15
14
30
12
20
¥5
Dual clutch
trans
71%
48
73
61
48
19
39
34
43
60
51
70
54
63
70
33
72
45
42
Start-stop
71%
48
72
61
48
19
39
34
43
60
51
70
46
63
70
5
70
40
38
Hybrid
Mass reduction (%)
14%
0
13
0
0
2
0
0
0
0
1
15
0
0
15
13
15
4
1
5
5
5
5
5
2
3
2
3
6
5
4
3
4
6
1
4
4
4
TABLE III.D.7–3—TECHNOLOGY PENETRATION—6% PER YEAR ALTERNATIVE STANDARDS IN 2016: CARS AND TRUCKS
COMBINED
mstockstill on DSKH9S0YB1PROD with PROPOSALS
GDI
BMW ................................
Chrysler ............................
Daimler .............................
Ford ..................................
General Motors ................
Honda ...............................
Hyundai ............................
Kia ....................................
Mazda ..............................
VerDate Nov<24>2008
23:31 Sep 25, 2009
GDI+ deac
4%
29
3
8
24
38
36
48
65
Jkt 217001
GDI+ turbo
35%
50
44
37
54
1
9
0
2
PO 00000
Frm 00104
47%
6
39
40
8
15
28
25
16
Fmt 4701
6 Speed
auto trans
15%
4
11
4
6
8
7
18
4
Sfmt 4702
Dual clutch
trans
71%
85
73
74
81
50
66
55
81
E:\FR\FM\28SEP2.SGM
Start-stop
71%
85
72
74
81
50
66
55
76
28SEP2
Hybrid
14%
0
13
11
0
2
0
0
0
Weight reduction (%)
5
8
5
7
8
4
5
4
6
49557
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
TABLE III.D.7–3—TECHNOLOGY PENETRATION—6% PER YEAR ALTERNATIVE STANDARDS IN 2016: CARS AND TRUCKS
COMBINED—Continued
GDI
Mitsubishi .........................
Nissan ..............................
Porsche ............................
Subaru ..............................
Suzuki ..............................
Tata ..................................
Toyota ..............................
Volkswagen ......................
Overall ..............................
Increase over 2011 CAFE
GDI+ deac
59
34
7
66
2
4
40
9
28
22
GDI+ turbo
7
17
36
4
12
81
7
26
24
23
With respect to the 4 percent per year
standards, the levels of requisite control
technology decreased relative to those
under the proposed standards, as would
be expected. Industry-wide, the largest
decrease was a 2 percent decrease in the
application of start-stop technology. On
a manufacturer specific basis, the most
significant decreases were a 6 percent
decrease in hybrid penetration for BMW
and a 2 percent drop for Daimler. These
are relatively small changes and are due
to the fact that the 4 percent per year
standards only require 4 g/mi CO2 less
control than the proposed standards in
19
35
49
14
71
0
11
58
23
22
6 Speed
auto trans
Dual clutch
trans
7
9
10
0
0
14
25
12
11
¥15
Start-stop
80
76
70
85
80
70
50
72
67
65
2016. Porsche, Tata and Volkswagen
continue to be unable to comply with
the CO2 standards in 2016.
With respect to the 6 percent per year
standards, the levels of requisite control
technology increased relative to those
under the proposed standards, as again
would be expected. Industry-wide, the
largest increase was an 8 percent
increase in the application of start-stop
technology. On a manufacturer specific
basis, the most significant increases
were a 42 percent increase in hybrid
penetration for BMW and a 38 percent
increase for Daimler. These are more
Weight reduction (%)
Hybrid
80
76
70
80
80
70
50
70
67
65
5
10
15
0
5
15
13
15
7
4
8
7
4
6
7
6
3
4
6
6
significant changes and are due to the
fact that the 6 percent per year
standards require 20 g/mi CO2 more
control than the proposed standards in
2016. Porsche, Tata and Volkswagen
continue to be unable to comply with
the CO2 standards in 2016. However,
BMW joins this list, as well, though just
by 1 g/mi. Most manufacturers
experience the increase in start-stop
technology application, with the
increase ranging from 5 to 17 percent.
Table III.D.7–4 shows the projected
cost of the two alternative sets of
standards.
TABLE III.D.7–4—TECHNOLOGY COST PER VEHICLE IN 2016—ALTERNATIVE STANDARDS ($2007)
4 Percent per year standards
Cars
mstockstill on DSKH9S0YB1PROD with PROPOSALS
BMW ................................................................................
Chrysler ............................................................................
Daimler .............................................................................
Ford ..................................................................................
General Motors ................................................................
Honda ...............................................................................
Hyundai ............................................................................
Kia ....................................................................................
Mazda ..............................................................................
Mitsubishi .........................................................................
Nissan ..............................................................................
Porsche ............................................................................
Subaru ..............................................................................
Suzuki ..............................................................................
Tata ..................................................................................
Toyota ..............................................................................
Volkswagen ......................................................................
Overall ..............................................................................
As can be seen, the average cost of the
4 percent per year standards is only $73
per vehicle less than that for the
proposed standards. In contrast, the
average cost of the 6 percent per year
standards is nearly $500 per vehicle
more than that for the proposed
standards. Compliance costs are
entering the region of non-linearity. The
$73 cost savings of the 4 percent per
year standards relative to the proposal
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
$1,701
1,340
1,631
1,429
969
633
685
741
851
1,132
910
1,549
903
1,093
1,270
518
1,626
940
Trucks
All
$1,665
1,211
1,357
1,305
1,567
402
1,505
738
914
247
1,194
666
1,131
1,026
674
366
949
1,054
Frm 00105
Fmt 4701
Sfmt 4702
Cars
$1,691
1,283
1,543
1,374
1,221
564
832
741
860
1,028
991
1,268
985
1,076
952
468
1,509
978
represents $18 per g/mi CO2 increase.
The $493 cost increase of the 6 percent
per year standards relative to the
proposal represents $25 per g/mi CO2
increase.
EPA does not believe the 4% per year
alternative is an appropriate standard
for the MY2012–2016 time frame. As
discussed above, the 250 g/mi proposal
is technologically feasible in this time
frame at reasonable costs, and provides
PO 00000
6 Percent per year standards
$1,701
1,642
1,631
2,175
1,722
777
1,275
1,104
1,369
1,495
1,654
1,549
1,440
1,718
1,270
762
1,626
1,385
Trucks
$1,665
2,211
1,357
2,396
2,154
1,580
1,680
1,772
1,030
2,065
2,274
666
1,615
2,219
674
1,165
949
1,859
All
$1,691
1,893
1,543
2,273
1,904
1,016
1,347
1,213
1,320
1,563
1,830
1,268
1,503
1,846
952
895
1,509
1,544
higher GHG emission reductions at a
modest cost increase over the 4% per
year alternative (less than $100 per
vehicle). In addition, the 4% per year
alternative does not result in a
harmonized National Program for the
country. Based on California’s letter of
May 18, 2009, the emission standards
under this alternative would not result
in the State of California revising its
regulations such that compliance with
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49558
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
EPA’s GHG standards would be deemed
to be in compliance with California’s
GHG standards for these model years.
Thus, the consequence of promulgating
a 4% per year standard would be to
require manufacturers to produce two
vehicle fleets: a fleet meeting the 4% per
year Federal standard, and a separate
fleet meeting the more stringent
California standard for sale in California
and the section 177 States. This further
increases the costs of the 4% per year
standard and could lead to additional
difficulties for the already stressed
automotive industry.
EPA also does not believe the 6% per
year alternative is an appropriate
standard for the MY 2012–2016 time
frame. As shown in Tables III.D.7–3 and
III.D.7–4, the 6% per year alternative
represents a significant increase in both
the technology required and the overall
costs compared to the proposed
standards. In absolute percent increases
in the technology penetration, compared
to the proposed standards the 6% per
year alternative requires for the industry
as a whole: an 18% increase in GDI fuel
systems, an 11% increase in turbodownsize systems, a 6% increase in
dual-clutch automated manual
transmissions (DCT), and a 9% increase
in start-stop systems. For a number of
manufacturers the expected increase in
technology is greater: for GM, a 15%
increase in both DCTs and start-stop
systems, for Nissan a 9% increase in full
hybrid systems, for Ford an 11%
increase in full hybrid systems, for
Chrysler a 34% increase in both DCT
and start-stop systems and for Hyundai
a 23% increase in the overall
penetration of DCT and start-stop
systems. For the industry as a whole,
the per-vehicle cost increase for the 6%
per year alternative is nearly $500. On
average this is a 50% increase in costs
compared to the proposed standards. At
the same time, CO2 emissions would be
reduced by about 8%, compared to the
250 g/mi target level.
These technology and cost increases
are significant, given the amount of
lead-time between now and model years
2012–2016. In order to achieve the
levels of technology penetration for the
proposed standards, the industry needs
to invest significant capital and product
development resources right away, in
particular for the 2012 and 2013 model
year, which is only 2–3 years from now.
For the 2014–2016 time frame,
significant product development and
capital investments will need to occur
over the next 2–3 year in order to be
ready for launching these new products
for those model years. Thus a major part
of the required capital and resource
investment will need to occur in the
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
next few years, under the proposed
standards. EPA believes that the
proposal (a target of 250 gram/mile in
2016) already requires significant
investment and product development
costs for the industry, focused on the
next few years.
It is important to note, and as
discussed later in this preamble, as well
as in the draft Joint Technical Support
Document and the draft EPA Regulatory
Impact Analysis document, the average
model year 2016 per-vehicle cost
increase of nearly $500 includes an
estimate of both the increase in capital
investments by the auto companies and
the suppliers as well as the increase in
product development costs. These costs
can be significant, especially as they
must occur over the next 2–3 years.
Both the domestic and transplant auto
firms, as well as the domestic and
world-wide automotive supplier base, is
experiencing one of the most difficult
markets in the U.S. and internationally
that has been seen in the past 30 years.
One major impact of the global
downturn in the automotive industry
and certainly in the U.S. is the
significant reductions in product
development engineers and staffs, as
well as a tightening of the credit markets
which allow auto firms and suppliers to
make the near-term capital investments
necessary to bring new technology into
production. EPA is concerned that the
significantly increased pressure on
capital and other resources from the 6%
per year alternative may be too stringent
for this time frame, given both the
relatively limited amount of lead-time
between now and model years 2012–
2016, the need for much of these
resources over the next few years, as
well the current financial and related
circumstances of the automotive
industry. EPA is not concluding that the
6% per year alternative standards are
technologically infeasible, but EPA
believes such standards for this time
frame would be overly stringent given
the significant strain it would place on
the resources of the industry under
current conditions. EPA believes this
degree of stringency is not warranted at
this time. Therefore EPA does not
believe the 6% per year alternative
would be an appropriate balance of
various relevant factors for model years
2012–1016.
These alternative standards represent
two possibilities out of many. The EPA
believes that the current proposed
standards represent an appropriate
balance of the factors relevant under
section 202(a). For further discussion of
this issue, see Chapter 4 of the DRIA.
PO 00000
Frm 00106
Fmt 4701
Sfmt 4702
E. Certification, Compliance, and
Enforcement
1. Compliance Program Overview
This section of the preamble describes
EPA’s proposal for a comprehensive
program to ensure compliance with
EPA’s proposed emission standards for
carbon dioxide (CO2), nitrous oxide
(N2O), and methane (CH4), as described
in Section III.B. An effective compliance
program is essential to achieving the
environmental and public health
benefits promised by these mobile
source GHG standards. EPA’s proposal
for a GHG compliance program is
designed around two overarching
priorities: (1) To address Clean Air Act
(CAA) requirements and policy
objectives; and (2) to streamline the
compliance process for both
manufacturers and EPA by building on
existing practice wherever possible, and
by structuring the program such that
manufacturers can use a single data set
to satisfy both the new GHG and
Corporate Average Fuel Economy
(CAFE) testing and reporting
requirements. The program proposed by
EPA and NHTSA recognizes, and
replicates as closely as possible, the
compliance protocols associated with
the existing CAA Tier 2 vehicle
emission standards, and with CAFE
standards. The certification, testing,
reporting, and associated compliance
activities closely track current practices
and are thus familiar to manufacturers.
EPA already oversees testing, collects
and processes test data, and performs
calculations to determine compliance
with both CAFE and CAA standards.
Under this proposed coordinated
approach, the compliance mechanisms
for both programs are consistent and
non-duplicative.
Vehicle emission standards
established under the CAA apply
throughout a vehicle’s full useful life. In
this case EPA is proposing fleet average
standards where compliance with the
fleet average is determined based on the
testing performed at time of production,
as with the current CAFE fleet average.
EPA is also proposing in-use standards
that apply throughout a vehicle’s useful
life, with the standard determined by
adding a 10% adjustment factor to the
model-level emission results used to
calculate the fleet average. Therefore,
EPA’s proposed program must not only
assess compliance with the fleet average
standards described in Section III.B, but
must also assess compliance with the
in-use standards. As it does now, EPA
would use a variety of compliance
mechanisms to conduct these
assessments, including pre-production
certification and post-production, in-use
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
monitoring once vehicles enter
customer service. Specifically, EPA is
proposing a compliance program for the
fleet average that utilizes CAFE program
protocols with respect to testing, a
certification procedure that operates in
conjunction with the existing CAA Tier
2 certification procedures, and
assessment of compliance with the inuse standards concurrent with existing
EPA and manufacturer Tier 2 emission
compliance testing programs. Under the
proposed compliance program
manufacturers would also be afforded
numerous flexibilities to help achieve
compliance, both stemming from the
program design itself in the form of a
manufacturer-specific CO2 fleet average
standard, as well as in various credit
banking and trading opportunities, as
described in Section III.C. EPA’s
proposed compliance program is
outlined in further detail below. EPA
requests comment on all aspects of the
compliance program design including
comments about whether differences
between the proposed compliance
scheme for GHG and the existing
compliance scheme for other regulated
pollutants are appropriate.
2. Compliance With Fleet-Average CO2
Standards
Fleet average emission levels can only
be determined when a complete fleet
profile becomes available at the close of
the model year. Therefore, EPA is
proposing to determine compliance
with the fleet average CO2 standards
when the model year closes out, as is
currently the protocol under EPA’s Tier
2 program as well as under the current
CAFE program. The compliance
determination would be based on actual
production figures for each model and
on model-level emissions data collected
through testing over the course of the
model year. Manufacturers would
submit this information to EPA in an
end-of-year report which is discussed in
detail in Section III.E.5.h below.
Manufacturers currently conduct their
CAFE testing over an entire model year
to maximize efficient use of testing and
engineering resources. Manufacturers
submit their CAFE test results to EPA
and EPA conducts confirmatory fuel
economy testing at its laboratory on a
subset of these vehicles under EPA’s
Part 600 regulations. EPA is proposing
that manufacturers continue to perform
the model level testing currently
required for CAFE fuel economy
performance and measure and report the
CO2 values for all tests conducted. Thus,
manufacturers will submit one data set
in satisfaction of both CAFE and GHG
requirements such that EPA’s proposed
program would not impose additional
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
timing or testing requirements on
manufacturers beyond that required by
the CAFE program. For example,
manufacturers currently submit fuel
economy test results at the
subconfiguration and configuration
levels to satisfy CAFE requirements.
Under this proposal manufacturers
would also submit CO2 values for the
same vehicles. Section III.E.3 discusses
how this will be implemented in the
certification process.
a. Compliance Determinations
As described in Section III.B above,
the fleet average standards would be
determined on a manufacturer by
manufacturer basis, separately for cars
and trucks, using the proposed footprint
attribute curves. Under this proposal,
EPA would calculate the fleet average
emission level using actual production
figures and, for each model type, CO2
emission test values generated at the
time of a manufacturer’s CAFE testing.
EPA would then compare the actual
fleet average to the manufacturer’s
footprint standard to determine
compliance, taking into consideration
use of averaging and/or other types of
credits.
Final determination of compliance
with fleet average CO2 standards may
not occur until several years after the
close of the model year due to the
flexibilities of carry-forward and carryback credits and the remediation of
deficits (see Section III.C). A failure to
meet the fleet average standard after
credit opportunities have been
exhausted could ultimately result in
penalties and injunctive orders under
the CAA as described in Section III.E.6
below.
EPA periodically provides mobile
source emissions and fuel economy
information to the public, for example
through the annual Compliance
Report 164 and Fuel Economy Trends
Report.165 EPA plans to expand these
reports to include GHG performance
and compliance trends information,
such as annual status of credit balances
or debits, use of various credit
programs, attained versus projected fleet
average emission levels, and final
compliance status for a model year after
credit reconciliation occurs. We seek
comment on all aspects of public
164 2007 Progress Report Vehicle and Engine
Compliance Activities; EPA–420–R–08–011;
October 2008. This document is available
electronically at https://www.epa.gov/otaq/about/
420r08011.pdf.
165 Light-Duty Automotive Technology and FuelEconomy Trends: 1975 Through 2008; EPA–420–S–
08–003; September 2008. This document is
available electronically at https://www.epa.gov/otaq/
fetrends.htm.
PO 00000
Frm 00107
Fmt 4701
Sfmt 4702
49559
dissemination of GHG compliance
information
b. Required Minimum Testing for Fleet
Average CO2
As noted, EPA is proposing that the
same test data required for determining
a manufacturer’s compliance with the
CAFE standard also be used to
determine the manufacturer’s
compliance with the fleet average CO2
emissions standard. CAFE requires
manufacturers to submit test data
representing at least 90% of the
manufacturer’s model year production,
by configuration.166 The CAFE testing
covers the vast majority of models in a
manufacturer’s fleet. Manufacturers
industry-wide currently test more than
1,000 vehicles each year to meet this
requirement. EPA believes this
minimum testing requirement is
necessary and applicable for calculating
accurate CO2 fleet average emissions.
Manufacturers may test additional
vehicles, at their option. As described
above, EPA would use the emissions
results from the model-level testing to
calculate a manufacturer’s fleet average
CO2 emissions and to determine
compliance with the CO2 standard.
EPA is proposing to continue to allow
certain testing flexibilities that exist
under the CAFE program. EPA has
always permitted manufacturers some
ability to reduce their test burden in
tradeoff for lower fuel economy
numbers. Specifically the practice of
‘‘data substitution’’ enables
manufacturers to apply fuel economy
test values from a ‘‘worst case’’
configuration to other configurations in
lieu of testing them. The substituted
values may only be applied to
configurations that would be expected
to have better fuel economy and for
which no actual test data exist.
Substituted data would only be
accepted for the GHG program if it is
also used for CAFE purposes.
EPA’s regulations for CAFE fuel
economy testing permit the use of
analytically derived fuel economy data
in lieu of an actual fuel economy test in
certain situations.167 Analytically
derived data is generated
mathematically using expressions
determined by EPA and is allowed on
a limited basis when a manufacturer has
not tested a specific vehicle
configuration. This has been done as a
means to reduce some of the testing
burden on manufacturers without
sacrificing accuracy in fuel economy
measurement. EPA has issued guidance
that provides details on analytically
166 See
167 40
E:\FR\FM\28SEP2.SGM
40 CFR 600.010–08(d).
CFR 600.006–08(e).
28SEP2
49560
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
derived data and that specifies the
conditions when analytically derived
fuel economy may be used. EPA would
also apply the same guidance to the
GHG program and would allow any
analytically derived data used for CAFE
to also satisfy the GHG data reporting
requirements. EPA would, however,
need to revise the terms in the current
equations for analytically derived fuel
economy to specify them in terms of
CO2. Analytically derived CO2 data
would not be permitted for the Emission
Data Vehicle representing a test group
for pre-production certification, only for
the determination of the model level test
results used to determine actual fleetaverage CO2 levels.
EPA is retaining the definitions
needed to determine CO2 levels of each
model type (such as ‘‘subconfiguration,’’
‘‘configuration,’’ ‘‘base level,’’ etc.) as
they are currently defined in EPA’s fuel
economy regulations.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
3. Vehicle Certification
CAA section 203(a)(1) prohibits
manufacturers from introducing a new
motor vehicle into commerce unless the
vehicle is covered by an EPA-issued
certificate of conformity. Section
206(a)(1) of the CAA describes the
requirements for EPA issuance of a
certificate of conformity, based on a
demonstration of compliance with the
emission standards established by EPA
under section 202 of the Act. The
certification demonstration requires
emission testing, and must be done for
each model year.168
Under Tier 2 and other EPA emission
standard programs, vehicle
manufacturers certify a group of
vehicles called a test group. A test group
typically includes multiple vehicle car
lines and model types that share critical
emissions-related features.169 The
manufacturer generally selects and tests
one vehicle to represent the entire test
group for certification purposes. The
test vehicle is the one expected to be the
worst case for the emission standard at
issue. Emission results from the test
vehicle are used to assign the test group
to one of several specified bins of
emissions levels, identified in the Tier
2 rule, and this bin level becomes the
in-use emissions standard for that test
group.170
168 CAA
section 206(a)(1).
specific test group criteria are described
in 40 CFR 86.1827–01, car lines and model types
have the meaning given in 40 CFR 86.1803–01.
170 Initially in-use standards were different from
the bin level determined at certification as the
useful life level. The current in-use standards,
however, are the same as the bin levels. In all cases,
the bin level, reflecting useful life levels, has been
used for determining compliance with the fleet
average.
169 The
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
Since compliance with the Tier 2 fleet
average depends on actual test group
sales volumes and bin levels, it is not
possible to determine compliance at the
time the manufacturer applies for and
receives a certificate of conformity for a
test group. Instead, EPA requires the
manufacturer to make a good faith
demonstration in the certification
application that vehicles in the test
group will both (1) comply throughout
their useful life with the emissions bin
assigned, and (2) contribute to fleetwide
compliance with the Tier 2 average
when the year is over. EPA issues a
certificate for the vehicles included in
the test group based on this
demonstration, and includes a condition
in the certificate that if the manufacturer
does not comply with the fleet average,
then production vehicles from that test
group will be treated as not covered by
the certificate to the extent needed to
bring the manufacturer’s fleet average
into compliance with Tier 2.
The certification process often occurs
several months prior to production and
manufacturer testing may occur months
before the certificate is issued. The
certification process for the Tier 2
program is an efficient way for
manufacturers to conduct the needed
testing well in advance of certification,
and to receive the needed certificates in
a time frame which allows for the
orderly production of vehicles. The use
of a condition on the certificate has been
an effective way to ensure compliance
with the Tier 2 fleet average.
EPA is proposing to similarly
condition each certificate of conformity
for the GHG program upon a
manufacturer’s good faith
demonstration of compliance with the
manufacturer’s fleetwide average CO2
standard. The following discussion
explains how EPA proposes to integrate
the proposed vehicle certification
program into the existing certification
program.
a. Compliance Plans
EPA is proposing that manufacturers
submit a compliance plan to EPA prior
to the beginning of the model year and
prior to the certification of any test
group. This plan would include the
manufacturer’s estimate of its footprintbased standard (Section III.B), along
with a demonstration of compliance
with the standard based on projected
model-level CO2 emissions, and
production estimates. Manufacturers
would submit the same information to
NHTSA in the pre-model year report
required for CAFE compliance.
However, the GHG compliance plan
could also include additional
information relevant only to the EPA
PO 00000
Frm 00108
Fmt 4701
Sfmt 4702
program. For example, manufacturers
seeking to take advantage of air
conditioning or other credit flexibilities
(Section III.C) would include these in
their compliance demonstration.
Similarly, the compliance
demonstration would need to include a
credible plan for addressing deficits
accrued in prior model years. EPA
would review the compliance plan for
technical viability and conduct a
certification preview discussion with
the manufacturer. EPA would view the
compliance plan as part of the
manufacturer’s good faith
demonstration, but understands that
initial projections can vary considerably
from the reality of final production and
emission results. EPA requests comment
on the proposal to evaluate
manufacturer compliance plans prior to
the beginning of model year
certification. EPA also requests
comment on what criteria the agency
should use to evaluate the sufficiency of
the plan and on what steps EPA should
take if it determines that a plan is
unlikely to offset a deficit.
b. Certification Test Groups and Test
Vehicle Selection
Manufacturers currently divide their
fleet into ‘‘test groups’’ for certification
purposes. The test group is EPA’s unit
of certification; one certificate is issued
per test group. These groupings cover
vehicles with similar emission control
system designs expected to have similar
emissions performance.171 The factors
considered for determining test groups
include combustion cycle, engine type,
engine displacement, number of
cylinders and cylinder arrangement,
fuel type, fuel metering system, catalyst
construction and precious metal
composition, among others. Vehicles
having these features in common are
generally placed in the same test
group.172 Cars and trucks may be
included in the same test group as long
as they have similar emissions
performance (manufacturers frequently
produce cars and trucks that have
identical engine designs and emission
controls).
EPA is proposing to retain the current
Tier 2 test group structure for cars and
light trucks in the certification
requirements for CO2. At the time of
certification, manufacturers would use
the CO2 emission level from the Tier 2
Emission Data Vehicle as a surrogate to
represent all of the models in the test
group. However, following certification
171 40
CFR 86.1827–01.
provides for other groupings in certain
circumstances, and can establish its own test groups
in cases where the criteria do not apply. 40 CFR
86.1827–01(b), (c) and (d).
172 EPA
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
further testing would generally be
required for compliance with the fleet
average CO2 standard as described
below. EPA’s issuance of a certificate
would be conditioned upon the
manufacturer’s subsequent model level
testing and attainment of the actual fleet
average. Further discussion of these
requirements is presented in Section
III.E.6.
EPA recognizes that the Tier 2 test
group criteria do not necessarily relate
to CO2 emission levels. For instance,
while some of the criteria, such as
combustion cycle, engine type and
displacement, and fuel metering, may
have a relationship to CO2 emissions,
others, such as those pertaining to the
catalyst, may not. In fact, there are many
vehicle design factors that impact CO2
generation and emission but are not
included in EPA’s test group criteria.173
Most important among these may be
vehicle weight, horsepower,
aerodynamics, vehicle size, and
performance features.
EPA considered, but is not proposing,
a requirement for separate CO2 test
groups established around criteria more
directly related to CO2 emissions.
Although CO2-specific test groups might
more consistently predict CO2 emissions
of all vehicles in the test group, the
addition of a CO2 test group requirement
would greatly increase the preproduction certification burden for both
manufacturers and EPA. For example, a
current Tier 2 test group would need to
be split into two groups if automatic and
manual transmissions models had been
included in the same group. Two- and
four-wheel drive vehicles in a current
test group would similarly require
separation, as would weight differences
among vehicles. This would at least
triple the number of test groups. EPA
believes that the added burden of
creating separate CO2 test groups is not
warranted or necessary to maintain an
appropriately rigorous certification
program because the test group data are
later replaced by model specific data
which are used as the basis for
determining compliance with a
manufacturer’s fleet average standard.
EPA believes that the current test
group concept is appropriate for N2O
and CH4 because the technologies that
would be employed to control N2O and
CH4 emissions would generally be the
same as those used to control the
criteria pollutants.
As just discussed, the ‘‘worst case’’
vehicle a manufacturer selects as the
173 EPA noted this potential lack of connection
between fuel economy testing and testing for
emissions standard purposes when it first adopted
fuel economy test procedures. See 41 FR at 38677
(Sept. 10, 1976).
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
Emissions Data Vehicle to represent a
test group under Tier 2 (40 CFR
86.1828–01) may not have the highest
levels of CO2 in that group. For instance,
there may be a heavier, more powerful
configuration that would have higher
CO2, but may, due to the way the
catalytic converter has been matched to
the engine, actually have lower NOX,
CO, PM or HC.
Therefore, in lieu of a separate CO2specific test group, EPA considered
requiring manufacturers to select a CO2
test vehicle from within the Tier 2 test
group that would be expected, based on
good engineering judgment, to have the
highest CO2 emissions within that test
group. The CO2 emissions results from
this vehicle would be used to establish
an in-use CO2 emission standard for the
test group. The requirement for a
separate, worst case CO2 vehicle would
provide EPA with some assurance that
all vehicles within the test group would
have CO2 emission levels at or below
those of the selected vehicle, even if
there is some variation in the CO2
control strategies within the test group
(such as different transmission types).
Under this approach, the test vehicle
might or might not be the same one that
would be selected as worst case for
criteria pollutants. Thus, manufacturers
might be required to test two vehicles in
each test group, rather than a single
vehicle. This would represent an added
timing burden to manufacturers because
they might need to build additional test
vehicles at the time of certification that
previously weren’t required to be tested.
Instead, EPA is proposing to require a
single Emission Data Vehicle that would
represent the test group for both Tier 2
and CO2 certification. The manufacturer
would be allowed to initially apply the
Emission Data Vehicle’s CO2 emissions
value to all models in the test group,
even if other models in the test group
are expected to have higher CO2
emissions. However, as a condition of
the certificate, this surrogate CO2
emissions value would generally be
replaced with actual, model-level CO2
values based on results from CAFE
testing that occurs later in the model
year. This model level data would
become the official certification test
results (as per the conditioned
certificate) and would be used to
determine compliance with the fleet
average. Only if the test vehicle is in fact
the worst case CO2 vehicle for the test
group could the manufacturer elect to
apply the Emission Data Vehicle
emission levels to all models in the test
group for purposes of calculating fleet
average emissions. Manufacturers
would be unlikely to make this choice,
because doing so would ignore the
PO 00000
Frm 00109
Fmt 4701
Sfmt 4702
49561
emissions performance of vehicle
models in their fleet with lower CO2
emissions and would unnecessarily
inflate their CO2 fleet average. Testing at
the model level already occurs and data
are already being submitted to EPA for
CAFE and labeling purposes, so it
would be an unusual situation that
would cause a manufacturer to ignore
these data and choose to accept a higher
CO2 fleet average.
EPA requests comment regarding
whether the Tier 2 test group can
adequately represent CO2 emissions for
certification purposes, and whether the
Emission Data Vehicle’s CO2 emission
level is an appropriate surrogate for all
vehicles in a test group at the time of
certification, given that the certificate
would be conditioned upon additional
model level testing occurring during the
year (see Section III.E.6) and that the
surrogate CO2 emission values would be
replaced with model-level emissions
data from those tests. Comments should
also address EPA’s desire to minimize
the up-front pre-production testing
burden and whether the proposed
efficiencies would be balanced by the
requirement to test all model types in
the fleet by the conclusion of the model
year in order to establish the fleet
average CO2 levels.
There are two standards that the
manufacturer would be subject to, the
fleet average standard and the in-use
standard for the useful life of the
vehicle. Compliance with the fleet
average standard is based on
production-weighted averaging of the
test data that applies for each model.
For each model, the in-use standard is
set at 10% higher than the level used for
that model in calculating the fleet
average. The certificate would cover
both of these standards, and the
manufacturer would have to
demonstrate compliance with both of
these standards for purposes of
receiving a certificate of conformity. The
certification process for the in-use
standard is discussed below in Section
III.E.4.
c. Certification Testing Protocols and
Procedures
To be consistent with CAFE, EPA
proposes to combine the CO2 emissions
results from the FTP and HFET tests
using the same calculation method used
to determine fuel economy for CAFE
purposes. This approach is appropriate
for CO2 because CO2 and fuel economy
are so closely related. Other than the
fact that fuel economy is calculated
using a harmonic average and CO2
emissions can be calculated using a
conventional average, the calculation
methods are very similar. The FTP CO2
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49562
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
data will be weighted at 55%, and the
highway CO2 data at 45%, and then
averaged to determine the combined
number. See Section III.B.1 for more
detailed information on CO2 test
procedures, Section III.C.1 on Air
Conditioning Emissions, and Section
III.B.6 for N2O and CH4 test procedures.
For the purposes of compliance with
the fleet average and in-use standards,
the emissions measured from each test
vehicle will include hydrocarbons (HC)
and carbon monoxide (CO), in addition
to CO2. All three of these exhaust
constituents are currently measured and
used to determine the amount of fuel
burned over a given test cycle using a
‘‘carbon balance equation’’ defined in
the regulations, and thus measurement
of these is an integral part of current
fuel economy testing. As explained in
Section III.C, it is important to account
for the total carbon content of the fuel.
Therefore the carbon-related
combustion products HC and CO must
be included in the calculations along
with CO2. CO emissions are adjusted by
a coefficient that reflects the carbon
weight fraction (CWF) of the CO
molecule, and HC emissions are
adjusted by a coefficient that reflects the
CWF of the fuel being burned (the
molecular weight approach doesn’t
work since there are many different
hydrocarbons being accounted for).
Thus, EPA is proposing that the carbonrelated exhaust emissions of each test
vehicle be calculated according to the
following formula, where HC, CO, and
CO2 are in units of grams per mile:
Carbon-related exhaust emissions
(grams/mile) = CWF*HC +
1.571*CO + CO2
As part of the current CAFE and Tier
2 compliance programs, EPA selects a
subset of vehicles for confirmatory
testing at its National Vehicle and Fuel
Emissions Laboratory. The purpose of
confirmatory testing is to validate the
manufacturer’s emissions and/or fuel
economy data. Under this proposal, EPA
would add CO2, N2O, and CH4 to the
emissions measured in the course of
Tier 2 and CAFE confirmatory testing.
The emission values measured at the
EPA laboratory would continue to stand
as official, as under existing regulatory
programs.
As is the current practice with fuel
economy testing, if during EPA’s
confirmatory testing the EPA CO2 value
differs from the manufacturer’s value by
more than 3%, manufacturers could
request a re-test. Also as with current
practice, the results of the re-test would
stand as official, even if they differ from
the manufacturer value by more than
3%. EPA is proposing to allow a re-test
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
request based on a 3% or greater
disparity since a manufacturer’s fleet
average emissions level would be
established on the basis of model level
testing only (unlike Tier 2 for which a
fixed bin standard structure provides
the opportunity for a compliance
buffer). EPA requests comment on
whether the 3% value currently used
during CAFE confirmatory testing is
appropriate and should be retained
under the proposed GHG program.
4. Useful Life Compliance
Section 202(a)(1) of the CAA requires
emission standards to apply to vehicles
throughout their statutory useful life, as
further described in Section III.A. For
emission programs that have fleet
average standards, such as Tier 2 and
the proposed CO2 standards, the useful
life requirement applies to individual
vehicles rather than to the fleet average
standard. For example, in Tier 2 the
useful life requirements apply to the
individual emission standard levels or
‘‘bins’’ that the vehicles are certified to,
not the fleet average standard. For Tier
2, the useful life requirement is 10 years
or 120,000 miles with an optional 15
year or 150,000 mile provision. For each
model, the proposed CO2 standards inuse are the model specific levels used in
calculating the fleet average, adjusted to
be 10% higher. EPA is proposing the
10% adjustment factor to provide some
margin for production and test-to-test
variability that could result in
differences between initial model-level
emission results used in calculating the
fleet average and any subsequent in-use
testing. EPA requests comment on
whether a separate in-use standard is an
appropriate means of addressing issues
of variability and whether 10% is an
appropriate adjustment.
This in-use standard would apply for
the same useful life period as in Tier 2.
Section 202(i)(3)(D) of the CAA allows
EPA to adopt useful life periods for
light-duty vehicles and light-duty trucks
which differ from those in section
202(d). Similar to Tier 2, the useful life
requirements would be applicable to the
model-level CO2 certification values
(similar to the Tier 2 bins), not to the
fleet average standard.
EPA believes that the useful life
period established for criteria pollutants
under Tier 2 is also appropriate for CO2.
Data from EPA’s current in-use
compliance test program indicate that
CO2 emissions from current technology
vehicles increase very little with age
and in some cases may actually improve
slightly. The stable CO2 levels are
expected because unlike criteria
pollutants, CO2 emissions in current
technology vehicles are not controlled
PO 00000
Frm 00110
Fmt 4701
Sfmt 4702
by after treatment systems that may fail
with age. Rather, vehicle CO2 emission
levels depend primarily on fundamental
vehicle design characteristics that do
not change over time. Therefore,
vehicles designed for a given CO2
emissions level would be expected to
sustain the same emissions profile over
their full useful life.
The CAA requires emission standards
to be applicable for the vehicle’s full
useful life. Under Tier 2 and other
vehicle emission standard programs,
EPA requires manufacturers to
demonstrate at the time of certification
that the new vehicles being certified
will continue to meet emission
standards throughout their useful life.
EPA allows manufacturers several
options for predicting in-use
deterioration, including full vehicle
testing, bench-aging specific
components, and application of a
deterioration factor based on data and/
or engineering judgment.
In the specific case of CO2, EPA does
not currently anticipate notable
deterioration and is therefore proposing
that an assigned deterioration factor be
applied at the time of certification. EPA
is further proposing an additive
assigned deterioration factor of zero, or
a multiplicative factor of one. EPA
anticipates that the deterioration factor
would be updated from time to time, as
new data regarding emissions
deterioration for CO2 are obtained and
analyzed. Additionally, EPA may
consider technology-specific
deterioration factors, should data
indicate that certain CO2 control
technologies deteriorate differently than
others.
During compliance plan discussions
prior to the beginning of the
certification process, EPA would
explore with each manufacturer any
new technologies that could warrant use
of a different deterioration factor.
Manufacturers would not be allowed to
use the assigned deterioration factor but
rather would be required to establish an
appropriate factor for any vehicle model
determined likely to experience
increases in CO2 emissions over the
vehicle’s useful life. If such an instance
were to occur, EPA is also proposing to
allow manufacturers to use the wholevehicle mileage accumulation method
currently offered in EPA’s regulations.
EPA requests comments on the
proposal to allow manufacturers to use
an EPA-assigned deterioration factor for
CO2 useful life compliance, and to set
that factor at zero (additive) or one
(multiplicative). Particularly helpful
would be data from in-use vehicles that
demonstrate the rate of change in CO2
emissions over a vehicle’s useful life,
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
separated according to vehicle
technology.
N2O and CH4 emissions are directly
affected by vehicle emission control
systems. Any of the durability options
offered under EPA’s current compliance
program can be used to determine how
emissions of N2O and CH4 change over
time.
a. Ensuring Useful Life Compliance
The CAA requires a vehicle to comply
with emission standards over its
regulatory useful life and affords EPA
broad authority for the implementation
of this requirement. As such, EPA has
authority to require a manufacturer to
remedy any noncompliance issues. The
remedy can range from the voluntary or
mandatory recall of any noncompliant
vehicles to the recalculation of a
manufacturers fleet average emissions
level. This provides manufacturers with
a strong incentive to design and build
complying vehicles.
Currently, EPA regulations require
manufacturers to conduct in-use testing
as a condition of certification.
Specifically, manufacturers must
commit to later procure and test
privately-owned vehicles that have been
normally used and maintained. The
vehicles are tested to determine the inuse levels of criteria pollutants when
they are in their first and third years of
service. This testing is referred to as the
In-Use Verification Program (IUVP)
testing, which was first implemented as
part of EPA’s CAP 2000 certification
program.174 The emissions data
collected from IUVP serves several
purposes. It provides EPA with annual
real-world in-use data representing the
majority of certified vehicles. EPA uses
IUVP data to identify in-use problems,
validate the accuracy of the certification
program, verify the manufacturer’s
durability processes, and support
emission modeling efforts.
Manufacturers are required to test low
mileage and high mileage vehicles over
the FTP and US06 test cycles. They are
also required to provide evaporative
emissions and on-board diagnostics
(OBD) data.
Manufacturers are required to provide
data for all regulated criteria pollutants.
Some manufacturers voluntarily submit
CO2 data as part of IUVP. EPA is
proposing that for IUVP testing, all
manufacturers will provide emission
data for CO2 and also for N2O and CH4.
EPA is also proposing that
manufacturers perform the highway test
cycle as part of IUVP. Since the
proposed CO2 standard reflects a
combined value of FTP and highway
174 64
FR 23906, May 4, 1999.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
results, it is necessary to include the
highway emission test in IUVP to enable
EPA to compare an in-use CO2 level
with a vehicle’s in-use standard. EPA
requests comments on adding the
highway test cycle as part of the IUVP
requirements.
Another component of the CAP 2000
certification program is the In-Use
Confirmatory Program (IUCP). This is a
manufacturer-conducted recall quality
in-use test program that can be used as
the basis for EPA to order an emission
recall. In order to qualify for IUCP, there
is a threshold of 1.30 times the
certification emission standard and an
additional requirement that at least 50%
of the test vehicles for the test group fail
for the same pollutant. EPA is proposing
to exclude IUVP data for CO2, N2O, and
CH4 emissions from the IUCP
thresholds. At this time, EPA does not
have sufficient data to determine if the
existing thresholds are appropriate or
even applicable to those emissions.
Once EPA can gather more data from the
IUVP program and from EPA’s internal
surveillance program described below,
EPA will reassess the need to exclude
IUCP thresholds, and if warranted,
propose a separate rulemaking
establishing IUCP threshold criteria
which may include CO2, N2O, and CH4
emissions. EPA requests comment on
the proposal to exclude CO2, N2O, and
CH4 from the IUCP threshold.
EPA has also administered its own inuse testing program for light-duty
vehicles under authority of section
207(c) of the CAA for more than 30
years. In this program, EPA procures
and tests representative privately owned
vehicles to determine whether they are
complying with emission standards.
When testing indicates noncompliance,
EPA works with the manufacturer to
determine the cause of the problem and
to conduct appropriate additional
testing to determine its extent or the
effectiveness of identified remedies.
This program operates in conjunction
with the IUVP program and other
sources of information to provide a
comprehensive picture of the
compliance profile for the entire fleet
and address compliance problems that
are identified. EPA proposes to add CO2,
N2O, and CH4 to the emissions
measurements it collects during
surveillance testing.
b. In-Use Compliance Standard
For Tier 2, the in-use standard and the
certification standard are the same. Inuse compliance for an individual
vehicle is determined by comparing the
vehicle’s in-use emission results with
the emission standard levels or ‘‘bin’’ to
which the vehicle is certified rather
PO 00000
Frm 00111
Fmt 4701
Sfmt 4702
49563
than to the Tier 2 fleet average standard
for the manufacturer. This is because as
part of a fleet average standard,
individual vehicles can be certified to
various emission standard levels, which
could be higher or lower than the fleet
average standard. Thus, comparing an
individual vehicle to the fleet average,
where that vehicle was certified to an
emission level that could be different
than the fleet average level, would be
inappropriate.
This would also be true for the
proposed CO2 fleet average standard.
Therefore, to ensure that an individual
vehicle complies with the proposed CO2
standards in-use, it is necessary to
compare the vehicle’s in-use CO2
emission result with the appropriate
model-level certification CO2 level used
in determining the manufacturer’s fleet
average result.
There is a fundamental difference
between the proposed CO2 standards
and Tier 2 standards. For Tier 2, the
certification standard is one of eight
different emission levels, or ‘‘bins,’’
whereas for the proposed CO2 fleet
average standard, the certification
standard is the model-level certification
CO2 result. The Tier 2 fleet average
standard is calculated using the ‘‘bin’’
emission level or standard, not the
actual certification emission level of the
certification test vehicle. So no matter
how low a manufacturer’s actual
certification emission results are, the
fleet average is still calculated based on
the ‘‘bin’’ level rather than the lower
certification result. In contrast, EPA is
proposing that the CO2 fleet average
standard would be calculated using the
actual vehicle model-level CO2 values
from the certification test vehicles. With
a known certification emission
standard, such as the Tier 2 ‘‘bins,’’
manufacturers typically attempt to overcomply with the standard to give
themselves some cushion for potentially
higher in-use testing results due to
emissions performance deterioration
and/or variability that could result in
higher emission levels during
subsequent in-use testing. For our
proposed CO2 standards, the
certification standard is the actual
certification vehicle test result, thus
manufacturers cannot over comply since
the certification test vehicle result will
always be the value used in determining
the CO2 fleet average. If the
manufacturer attempted to design the
vehicle to achieve a lower CO2 value,
similar to Tier 2 for in-use purposes, the
new lower CO2 value would simply
become the new certification standard.
The CO2 fleet average standard is
based on the performance of preproduction technology that is
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49564
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
representative of the point of
production, and while there is expected
to be limited if any deterioration in
effectiveness for any vehicle during the
useful life, the fleet average standard
does not take into account the test to
test variability or production variability
that can affect in-use levels. Therefore,
EPA believes that unlike Tier 2, it is
necessary to have a different in-use
standard for CO2 to account for these
variabilities. EPA is proposing to set the
in-use standard at 10% higher than the
appropriate model-level certification
CO2 level used in determining the
manufacturer’s fleet average result.
As described above, manufacturers
typically design their vehicles to emit at
emission levels considerably below the
standards. This intentional difference
between the actual emission level and
the emission standard is referred to as
‘‘certification margin,’’ since it is
typically the difference between the
certification emission level and the
emission standard. The certification
margin can provide manufacturers with
some protection from exceeding
emission standards in-use, since the inuse standards are typically the same as
the certification standards. For Tier 2,
the certification margin is the delta
between the specific emission standard
level, or ‘‘bin,’’ to which the vehicle is
certified, and the vehicle’s certification
emission level.
Since the level of the fleet average
standard does not reflect this kind of
variability, EPA believes it is
appropriate to set an in-use standard
that provides manufacturers with an inuse compliance factor of 10% that will
act as a surrogate for a certification
margin. The factor would only be
applicable to CO2 emissions, and would
be applied to the model-level test results
that are used to establish the modellevel in-use standard.
If the in-use emission result for the
vehicle exceeds the model-level CO2
certification result multiplied by the inuse compliance factor of 10%, then the
vehicle would have exceeded the in-use
emission standard. The in-use
compliance factor would apply to all inuse compliance testing including IUVP,
selective enforcement audits, and EPA’s
internal test program.
The intent of the separate in-use
standard, based on a 10% compliance
factor adjustment, is to provide a
reasonable margin such that vehicles are
not automatically deemed as exceeding
standards simply because of normal
variability in test results. EPA has some
concerns however that this in-use
compliance factor could be perceived as
providing manufacturers with the
ability to design their fleets to generate
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
CO2 emissions up to 10% higher than
the actual values they use to certify and
to calculate the year end fleet average
value that determines compliance with
the fleet average standard. This concern
provides additional rationale for
requiring FTP and HFET IUVP data for
CO2 emissions to ensure that in-use
values are not regularly 10% higher
than the values used in the fleet average
calculation. If in the course of reviewing
a manufacturer’s IUVP data it becomes
apparent that a manufacturer’s CO2
results are consistently higher than the
values used for certification, EPA would
discuss the matter with the
manufacturer and consider possible
resolutions such as changes to ensure
that the emissions test data more
accurately reflects the emissions level of
vehicles at the time of production,
increased EPA confirmatory testing, and
other similar measures.
EPA selected a value of 10% for the
in-use standard based on a review of
EPA’s fuel economy labeling and CAFE
confirmatory test results for the past
several vehicle model years. The EPA
data indicate that it is common for test
variability to range between three to six
percent and only on rare occasions to
exceed 10%. EPA believes that a value
of 10% should be sufficient to account
for testing variability and any
production variability that a
manufacturer may encounter. EPA
considered both higher and lower
values. The Tier 2 fleet as a whole, for
example, has a certification margin
approaching 50%.175 However, there are
some fundamental differences between
CO2 emissions and other criteria
pollutants in the magnitude of the
pollutants. Tier 2 NMOG and NOX
emission standards are hundredths of a
gram per mile (e.g., 0.07 g/mi NOX &
0.09 g/mi NMOG), whereas the CO2
standards are four orders of magnitude
greater (e.g., 250 g/mi). Thus EPA does
not believe it is appropriate to consider
a value on the order of 50 percent. In
addition, little deterioration in
emissions control is expected in-use.
The adjustment factor addresses only
one element of what is usually built into
a compliance margin.
EPA requests comments regarding a
proposed in-use standard that uses an
in-use compliance factor. Specifically, is
a factor the best way to address the
technical and other feasibility of the inuse standard; is 10% the appropriate
factor; can EPA expect variability to
decrease as manufacturing experience
175 See
pages 39–41 of EPA’s Vehicle and Engine
Compliance Activities 2007 Progress Report (EPA–
420–R–08–011) published in October 2008. This
document is available electronically at https://
epa.gov/otaq/about/420r08011.pdf.
PO 00000
Frm 00112
Fmt 4701
Sfmt 4702
increases, in which case would it be
appropriate for the in-use compliance
factor of 10% to decrease over time?
EPA especially requests any data to
support such comments.
5. Credit Program Implementation
As described in Section III.E.2 above,
for each manufacturer’s model year
production, EPA is proposing that the
manufacturer would average the CO2
emissions within each of the two
averaging sets (passenger cars and
trucks) and compare that with its
respective fleet average CO2 standards
(which in turn would have been
determined from the appropriate
footprint curve applicable to that model
year). In addition to this withincompany averaging, EPA is proposing
that when a manufacturer’s fleet average
CO2 emissions of vehicles produced in
an averaging set over-complies
compared to the applicable fleet average
standard, the manufacturer could
generate credits that it could save for
later use (banking) or could transfer to
another manufacturer (trading). Section
III.C discusses opportunities that EPA is
proposing for manufacturers to earn
additional credits, beyond those simply
calculated by ‘‘over-achieving’’ their
applicable standard. Implementation of
the credit program generally involves
two steps: calculation of the credit
amount and reporting the amount and
the associated data and calculations to
EPA.
Of the various credit programs being
proposed by EPA, there are two broad
types. One type of credit directly lowers
a manufacturer’s actual fleet average by
virtue of being applied to the
methodology for calculating the fleet
average emissions. Examples of this
type of credit include the credits
available for alternative fuel vehicles
and for advanced technology vehicles.
The second type of credit is
independent of the calculation of a
manufacturer’s fleet average. Rather
than giving credit by lowering a
manufacturer’s fleet average via a credit
mechanism, these credits (in
megagrams) are calculated separately
and are simply added to the
manufacturer’s overall ‘‘bank’’ of credits
(or debits). Using a fictional example,
the remainder of this section will step
through the different types of credits
and show where and how they are
calculated and how they impact a
manufacturer’s available credits.
a. Basic Credits for a Fleet With Average
CO2 Emissions Below the Standard
Basic credits are earned by doing
better than the applicable standard.
Manufacturers calculate their standards
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
(separate standards are calculated for
cars and trucks) using the footprintbased equations described in Section
III.B. A manufacturer’s actual end-ofyear fleet average CO2 is calculated
similarly to the way in which CAFE
values are currently calculated; in fact,
the regulations are essentially identical.
The current CAFE calculation methods
are in 40 CFR Part 600. EPA is
proposing to amend key subparts and
sections of Part 600 to require that fleet
average CO2 be calculated in a manner
parallel to the way CAFE values are
calculated. First manufacturers would
determine a CO2-equivalent value for
each model type. The CO2-equivalent
value is a summation of the carboncontaining constituents of the exhaust
emissions, with each weighted by a
coefficient that reflects the carbon
weight fraction of that constituent. For
gasoline and diesel vehicles this simply
involves measurement of total
hydrocarbons and carbon monoxide in
addition to CO2, but becomes somewhat
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
more complex for alternative fuel
vehicles due to the different nature of
their exhaust emissions. For example,
for ethanol-fueled vehicles, the emission
tests must measure ethanol, methanol,
formaldehyde, and acetaldehyde in
addition to CO2. However, all these
measurements are necessary to
determine fuel economy and thus no
new testing or data collection would be
required. Second, manufacturers would
calculate a fleet average by weighting
the CO2-equivalent value for each model
type by the production of that model
type, as they currently do for the CAFE
program. Again, this would be done
separately for cars and trucks. Finally,
the manufacturer would compare the
calculated standard with the average
that is actually achieved to determine
the credits (or debits). Both the
determination of the applicable
standard and the actual fleet average
would be done after the model year is
complete and using final model year
production data.
PO 00000
Frm 00113
Fmt 4701
Sfmt 4702
49565
Consider a basic example where
Manufacturer ‘‘A’’ has calculated a car
standard of 300 grams/mile and a fleet
average of 290 grams/mile (Figure
III.E.5–1). Further assume that the
manufacturer produced 500,000 cars.
The credit is calculated by taking the
difference between the standard and the
fleet average (300–290=10) and
multiplying it by the production of
500,000. This result is then multiplied
by the lifetime vehicle miles travelled
(for cars this is 190,971 miles), then
finally divided by 1,000,000 to convert
from grams to total megagrams. The
result is the number of CO2 megagrams
of credit (or deficit, if the manufacturer
was not able to comply with the fleet
average standard) generated by the
manufacturer’s car fleet. In this
example, the result is 954,855
megagrams.
BILLING CODE 4910–59–P
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
b. Advanced Technology Credits
Advanced technology credits directly
impact a manufacturer’s fleet average,
thus increasing the amount of credits
they earn (or reducing the amount of
debits that would otherwise accrue). To
earn these credits, manufacturers that
produce electric vehicles, plug-in
hybrid electric vehicles, or fuel cell
electric vehicles would include these
vehicles in the fleet average calculation
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
with their model type emission values
(0 g/m for electric vehicles and fuel cell
electric vehicles, and a measured CO2
value for plug-in hybrid electric
vehicles), but would apply the proposed
multiplier of 2.0 to the production
volume of each of these vehicles. This
approach would thus enhance the
impact that each of these low-CO2
advanced technology vehicles has on
the manufacturer’s fleet average.
PO 00000
Frm 00114
Fmt 4701
Sfmt 4702
EPA is proposing to limit availability
of advanced technology credits to the
technologies noted above, with the
additional limitation that the vehicles
must be certified to Tier 2 Bin 5
emission standards or cleaner (this
obviously applies primarily to plug-in
hybrid electric vehicles). EPA is
proposing to use the following
definitions to determine which vehicles
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.016</GPH>
49566
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
are eligible for the advanced technology
credits:
• Electric vehicle means a motor
vehicle that is powered solely by an
electric motor drawing current from a
rechargeable energy storage system,
such as from storage batteries or other
portable electrical energy storage
devices, including hydrogen fuel cells,
provided that:
Æ (1) Recharge energy must be drawn
from a source off the vehicle, such as
residential electric service; and
Æ (2) The vehicle must be certified to
the emission standards of Bin #1 of
Table S04–1 in paragraph (c)(6) of
§ 86.1811.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
• Fuel cell electric vehicle means a
motor vehicle propelled solely by an
electric motor where energy for the
motor is supplied by a fuel cell.
• Fuel cell means an electrochemical
cell that produces electricity via the
reaction of a consumable fuel on the
anode with an oxidant on the cathode
in the presence of an electrolyte.
• Plug-in hybrid electric vehicle
(PHEV) means a hybrid electric vehicle
that: (1) Has the capability to charge the
battery from an off-vehicle electric
source, such that the off-vehicle source
cannot be connected to the vehicle
while the vehicle is in motion, and (2)
has an equivalent all-electric range of no
less than 10 miles.
PO 00000
Frm 00115
Fmt 4701
Sfmt 4702
49567
With some simplifying assumptions,
assume that 25,000 of Manufacturer A’s
fleet are now plug-in hybrid electric
vehicles with CO2 emissions of 100
g/mi, and the remaining 475,000 are
conventional technology vehicles with
average CO2 emissions of 290 grams/
mile. By applying the factor of 2.0 to the
electric vehicle production numbers in
the appropriate places in the fleet
average calculation formula
Manufacturer A now has more than 2.6
million credits (Figure III.E.5–2).
Without the use of the multiplier
Manufacturer A’s fleet average would be
281 instead of 272, which would
generate about 1.8 million credits.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
c. Flexible-Fuel Vehicle Credits
As noted in Section III.C, treatment of
flexible-fuel vehicle (FFV) credits differs
between 2012 to 2015 and 2016 and
later. For the 2012 through 2015 model
years the FFV credits will be calculated
as they are in the CAFE program for the
same model years, except that formulae
in the regulations would be modified as
needed to do the calculations in terms
of grams per mile of CO2 rather than
miles per gallon. Like the advanced
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
technology vehicle credits, these credits
are integral to the fleet average
calculation, but rather than crediting the
vehicles with an artificially inflated
quantity as in the advanced technology
credit program described above, the FFV
credit program allows the vehicles to be
represented by artificially reduced
emissions. To use this credit program,
the CO2 emissions of FFVs will be
represented by the average of two
things: the CO2 emissions while
PO 00000
Frm 00116
Fmt 4701
Sfmt 4702
operating on gasoline, and the CO2
emissions operating on the alternative
fuel multiplied by 0.15.
For example, Manufacturer A now
makes 30,000 FFVs with CO2 emissions
of 280 g/mi using gasoline and 260
g/mi using ethanol. The CO2 emissions
that would represent the FFVs in the
fleet average calculation would be
calculated as follows:
FFV emissions = (280 + 260×0.15) ÷ 2
= 160 g/mi
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.017</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49568
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
49569
III.E.5–3, further reduces the fleet
average to 256 grams/mile and increases
the manufacturer’s credits to about 4.2
million megagrams.
In the 2016 and later model years the
calculation of FFV emissions would be
much the same except that the
determination of the CO2 value to
represent an FFV model type would be
based upon the actual use of the
alternative fuel and on actual CO2
emissions while operating on that fuel.
EPA’s default assumption in the
regulations is that the alternative fuel is
used negligibly, and the CO2 value that
would apply to an FFV by default
would be the value determined for
operation on conventional fuel.
However, if the manufacturer believes
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00117
Fmt 4701
Sfmt 4702
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.018</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Including these FFVs with the
applicable credit in Manufacturer A’s
fleet average, as shown below in Figure
49570
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
that the alternative fuel is used in realworld driving and that accounting for
this use could improve the fleet average,
the manufacturer would have two
options. First, the regulations would
allow a manufacturer to request that
EPA determine an appropriate
weighting value for an alternative fuel to
reflect the degree of use of that fuel in
FFVs relative to real-world use of the
conventional fuel. Section III.C
describes how EPA might make this
determination. Any value determined
by EPA would be published via
guidance letter to manufacturers, and
that weighting value would be available
for all manufacturers to use for that fuel.
A second option proposed in the
regulations would allow a manufacturer
to determine the degree of alternative
fuel use for their own vehicle(s), using
a variety of potential methods. Both the
method and the use of the final results
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
would have to be approved by EPA
before their use would be allowed. In
either case, whether EPA supplies the
weighting factors or the manufacturer
determines them, the CO2 emissions of
an FFV in 2016 and later would be as
follows (assuming non-zero use of the
alternative fuel):
(W1×CO2conv)+(W2×CO2alt),
Where,
W1 and W2 are the proportion of miles
driven using conventional fuel and
alternative fuel, respectively, CO2conv is the
CO2 value while using conventional fuel, and
CO2alt is the CO2 value while using the
alternative fuel.
d. Dedicated Alternative Fuel Vehicle
Credits
Like the FFV credit program
described above, these credits would be
treated differently in the first years of
the program than in the 2016 and later
model years. In fact, these credits are
PO 00000
Frm 00118
Fmt 4701
Sfmt 4702
essentially identical to the FFV credits
except for two things: (1) There is no
need to average CO2 values for gasoline
and alternative fuel, and (2) in 2016 and
later there is no demonstration needed
to get a benefit from the alternative fuel.
The CO2 values are essentially
determined the same way they are for
FFVs operating on the alternative fuel.
For the 2012 through 2015 model years
the CO2 test results are multiplied by
the credit adjustment factor of 0.15, and
the result is production-weighted in the
fleet average calculation. For example,
assume that Manufacturer A now
produces 20,000 dedicated CNG
vehicles with CO2 emissions of 220
grams/mile, in addition to the FFVs and
PHEVs already included in their fleet
(Figure III.E.5–4). Prior to the 2016
model year the CO2 emissions
representing these CNG vehicles would
be 33 grams/mile (220 × 0.15).
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
BILLING CODE 4910–59–C
The calculation for 2016 and later
would be exactly the same except the
0.15 credit adjustment factor would be
removed from the equation, and the
CNG vehicles would simply be
production-weighted in the equation
using their actual emissions value of
220 grams/mile instead of the
‘‘credited’’ value of 33 grams/mile.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
e. Air Conditioning Leakage Credits
Unlike the credit programs described
above, air conditioning-related credits
do not affect the overall calculation of
the fleet average. Whether a
manufacturer generates zero air
conditioning credits or many, the
calculated fleet average remains the
same. Air conditioning credits are
calculated and added to any credits (or
deficit) that results from the fleet
PO 00000
Frm 00119
Fmt 4701
Sfmt 4702
49571
average calculation. Thus, these credits
can increase a manufacturer’s credit
balance or offset a deficit, but their
calculation is external to the fleet
average calculation. As noted in Section
III.C, manufacturers could generate
credits for reducing the leakage of
refrigerant from their air conditioning
systems. To do this the manufacturer
would identify an air conditioning
system improvement, indicate that they
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.019</GPH>
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
49572
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
intend to use the improvement to
generate credits, and then calculate an
annual leakage rate (grams/year) for that
system based on the method defined by
the proposed regulations. Air
conditioning credits would be
determined separately for cars and
trucks using the car and truck-specific
equations described in Section III.C.
In order to put these credits on the
same basis as the basic and other credits
describe above, the air conditioning
leakage credits would need to be
calculated separately for cars and
trucks. Thus, the resulting grams per
mile credit determined from the
appropriate car or truck equation would
be multiplied by the lifetime VMT
(190,971 for cars; 221,199 for trucks),
and then divided by 1,000,000 to get the
total megagrams of CO2 credits
generated by the improved air
conditioning system. Although the
calculations are done separately for cars
and trucks, the total megagrams would
be summed and then added to the
overall credit balance maintained by the
manufacturer.
For example, assume that
Manufacturer A has improved an air
conditioning system that is installed in
250,000 cars and that the calculated
leakage rate is 12 grams/year. Assume
that the manufacturer has also
implemented a new refrigerant with a
Global Warming Potential of 850. In this
case the credit per air conditioning unit,
rounded to the nearest gram per mile
would be:
[13.8 × [1—(12/16.6 × 850/1430)] = 7.9
g/mi.
Total megagrams of credits would
then be:
[ 7.9 × 250,000 × 190971 ] ÷ 1,000,000
= 377,168 Mg.
These credits would be added directly
to a manufacturer’s total balance; thus
in this example Manufacturer A would
now have, after consideration of all the
above credits, a total of 5,437,900
Megagrams of credits.
f. Air Conditioning Efficiency Credits
As noted in Section III.C.1.b,
manufacturers could earn credits for
improvements in air conditioning
efficiency that reduce the impact of the
air conditioning system on fuel
consumption. These credits are similar
to the air conditioning leakage credits
described above, in that these credits are
determined independently from the
manufacturer’s fleet average calculation,
and the resulting credits are added to
the manufacturer’s overall balance for
the respective model year. Like the air
conditioning leakage credits, these
credits can increase a manufacturer’s
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
credit balance or offset a deficit, but
their calculation is external to the fleet
average calculation.
In order to put these credits on the
same basis as the basic and other credits
describe above, the air conditioning
leakage credits would need to be
calculated separately for cars and
trucks. Thus, the resulting grams per
mile credit determined in the above
equation would be multiplied by the
lifetime VMT (190,971 for cars; 221,199
for trucks), and then divided by
1,000,000 to get the total megagrams of
CO2 credits generated by the improved
air conditioning system. Although the
calculations are done separately for cars
and trucks, the total megagrams can be
summed and then added to the overall
credit balance maintained by the
manufacturer.
As described in Section III.C,
manufacturers would determine their
credit based on selections from a menu
of technologies, each of which provides
a gram per mile credit amount. The
credits would be summed for all the
technologies implemented by the
manufacturer, but could not exceed 5.7
grams per mile. Once this is done, the
calculation is a straightforward
translation of a gram per mile credit to
total car or truck megagrams, using the
same methodology described above. For
example, if Manufacturer A implements
enough technologies to get the
maximum 5.7 grams per mile for an air
conditioning system that sells 250,000
units in cars, the calculation of total
credits would be as follows:
[5.7 × 250,000 × 190971] ÷ 1,000,000 =
272,134 Mg.
These credits would be added directly
to a manufacturer’s total balance; thus
in this example Manufacturer A would
now have, after consideration of all the
above credits, a total of 5,710,034
Megagrams of credits.
g. Off-Cycle Technology Credits
As described in Section III.C, these
credits would be available for certain
technologies that achieve real-world
CO2 reductions that aren’t adequately
captured on the city or highway test
cycles used to determine compliance
with the fleet average standards. Like
the air conditioning credits, these
credits are independent of the fleet
average calculation. Section III.C.4
describes two options for generating
these credits: either using EPA’s 5-cycle
fuel economy labeling methodology, or
if that method fails to capture the CO2reducing impact of the technology, the
manufacturer could propose and use,
with EPA approval, a different
analytical approach to determining the
PO 00000
Frm 00120
Fmt 4701
Sfmt 4702
credit amount. Like the air conditioning
credits above, these credits would have
to be determined separately for cars and
trucks because of the differing lifetime
mileage assumptions between cars and
trucks.
Using the 5-cycle approach would be
relatively straightforward, and because
the 5-cycle formulae account for
nationwide variations in driving
conditions, no additional adjustments to
the test results would be necessary. The
manufacturer would simply calculate a
5-cycle CO2 value with the technology
installed and operating and compare it
with a 5-cycle CO2 value determined
without the technology installed and/or
operating. Existing regulations describe
how to calculate 5-cycle fuel economy
values, and the proposed regulations
contain provisions that describe how to
calculate 5-cycle CO2 values. The
manufacturer would have to design a
test program that accounts for vehicle
differences if the technology is installed
in different vehicle types, and enough
data would have to be collected to
address data uncertainty issues. A
description of such a test program and
the results would be submitted to EPA
for approval.
As noted in Section III.C.4, a
manufacturer-developed testing, data
collection and analysis program would
require some additional EPA approval
and oversight. Once the demonstration
of the CO2 reduction of an off-cycle
technology is complete, however, and
the resulting value accounts for
variations in driving, climate and other
conditions across the country, the two
approaches are treated fundamentally
the same way and in a way that parallels
the approach for determining the air
conditioning credits described above.
Once a gram per mile value is approved
by the EPA, the manufacturer would
determine the total credit value by
multiplying the gram per mile per
vehicle credit by the volume of vehicles
with that technology and approved for
use of the credit. This would then be
multiplied by the lifetime vehicle miles
for cars or trucks, whichever applies,
and divided by 1,000,000 to obtain total
Megagrams of CO2 credits. These credits
would then be added to the
manufacturer’s total balance for the
given model year. Just like the above air
conditioning case, an off-cycle
technology that is demonstrated to
achieve an average CO2 reduction of 4
grams/mile and that is installed in
175,000 cars would generate credits as
follows:
[4 × 175,000 × 190971] ÷ 1,000,000 =
133,680 Mg.
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
h. End-of-Year Reporting
In general, implementation of the
averaging, banking, and trading (ABT)
program, including the calculation of
credits and deficits, would be
accomplished via existing reporting
mechanisms. EPA’s existing regulations
define how manufacturers calculate
fleet average miles per gallon for CAFE
compliance purposes, and EPA is
proposing to modify these regulations to
also require the parallel calculation of
fleet average CO2 levels for car and light
truck compliance categories. These
regulations already require an end-ofyear report for each model year,
submitted to EPA, which details the test
results and calculations that determine
each manufacturer’s CAFE levels. EPA
is proposing to require that this report
also include fleet average CO2 levels. In
addition to requiring reporting of the
actual fleet average achieved, this endof-year report would also contain the
calculations and data determining the
manufacturer’s applicable fleet average
standard for that model year. As under
the existing Tier 2 program, the report
would be required to contain the fleet
average standard, all values required to
calculate the fleet average standard, the
actual fleet average CO2 that was
achieved, all values required to
calculate the actual fleet average, the
number of credits generated or debits
incurred, all the values required to
calculate the credits or debits, and the
resulting balance of credits or debits.
Because of the multitude of credit
programs that are available, the end-ofyear report will be required to have
more data and a more defined and
specific structure than the CAFE end–
of-year report does today. Although
requiring ‘‘all the data required’’ to
calculate a given value should be
inclusive, the proposed report would
contain some requirements specific to
certain types of credits.
For advanced technology credits that
apply to vehicles like electric vehicles
and plug-in hybrid electric vehicles,
manufacturers would be required to
identify the number and type of these
vehicles and the effect of these credits
on their fleet average. The same would
be true for credits due to flexible-fuel
and alternative-fuel vehicles, although
for 2016 and later flexible-fuel credits
manufacturers would also have to
provide a demonstration of the actual
use of the alternative fuel in-use and the
resulting calculations of CO2 values for
such vehicles. For air conditioning
leakage credits manufacturers would
have to include a summary of their use
of such credits that would include
which air conditioning systems were
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
subject to such credits, information
regarding the vehicle models which
were equipped with credit-earning air
conditioning systems, the production
volume of these air conditioning
systems, the leakage score of each air
conditioning system generating credits,
and the resulting calculation of leakage
credits. Air conditioning efficiency
reporting will be somewhat more
complicated given the phase-in of the
efficiency test, and reporting would
have to detail compliance with the
phase-in as well as the test results and
the resulting efficiency credits
generated. Similar reporting
requirements would also apply to the
variety of possible off-cycle credit
options, where manufacturers would
have to report the applicable
technology, the amount of credit per
unit, the production volume of the
technology, and the total credits from
that technology.
Although it is the final end-of-year
report, when final production numbers
are known, that will determine the
degree of compliance and the actual
values of any credits being generated by
manufacturers, EPA is also proposing
that manufacturers be prepared to
discuss their compliance approach and
their potential use of the variety of
credit options in pre-certification
meetings that EPA routinely has with
manufacturers. In addition, and in
conjunction with a pre-model year
report required under the CAFE
program, the manufacturer would be
required to submit projections of all of
the elements described above.
Finally, to the extent that there are
any credit transactions, the
manufacturer would have to detail in
the end-of-year report documentation on
all credit transactions that the
manufacturer has engaged in.
Information for each transaction would
include: The name of the credit
provider, the name of the credit
recipient, the date the transfer occurred,
the quantity of credits transferred, and
the model year in which the credits
were earned. Failure by the
manufacturer to submit the annual
report in the specified time period
would be considered to be a violation of
section 203(a)(1) of the Clean Air Act.
6. Enforcement
As discussed above in Section III.E.5
under the proposed program,
manufacturers would report to EPA
their fleet average standard for a given
model year (reporting separately for
each of the car and truck averaging sets),
the credits or deficits generated in the
current year, the balance of credit
balances or deficits (taking into account
PO 00000
Frm 00121
Fmt 4701
Sfmt 4702
49573
banked credits, deficit carry-forward,
etc. see Section III.E.5), and whether
they were in compliance with the fleet
average standard under the terms of the
regulations. EPA would review the
annual reports, figures, and calculations
submitted by the manufacturer to
determine any nonconformance. EPA
requests comments on the above
approach for monitoring and
enforcement of the fleet average
standard.
Each certificate, required prior to
introduction into commerce, would be
conditioned upon the manufacturer
attaining the CO2 fleet average standard.
If a manufacturer failed to meet this
condition and had not generated or
purchased enough credits to cover the
fleet average exceedance following the
three year deficit carry-forward (Section
III.B.4, then EPA would review the
manufacturer’s sales for the most recent
model year and designate which
vehicles caused the fleet average
standard to be exceeded. EPA would
designate as nonconforming those
vehicles with the highest emission
values first, continuing until a number
of vehicles equal to the calculated
number of non-complying vehicles as
determined above is reached and those
vehicles would be considered to be not
covered by the certificates of conformity
covering those model types. In a test
group where only a portion of vehicles
would be deemed nonconforming, EPA
would determine the actual
nonconforming vehicles by counting
backwards from the last vehicle sold in
that model type. A manufacturer would
be subject to penalties and injunctive
orders on an individual vehicle basis for
sale of vehicles not covered by a
certificate. This is the same general
mechanism used for the National LEV
and Tier 2 corporate average standards,
except that these programs operate
slightly differently in that the noncompliant vehicles would be designated
not in the most recent model year, but
in the model year in which the deficit
originated. EPA requests comment on
which approach is most appropriate; the
Tier 2 approach of penalizing vehicles
from the year in which the deficit was
generated, or the proposed approach
that would penalize vehicles from the
year in which the manufacturer failed to
make up the deficit as required.
Section 205 of the CAA authorizes
EPA to assess penalties of up to $37,500
per vehicle for violations of the
requirements or prohibitions of this
proposed rule.176 This section of the
176 42 U.S.C. 7524(a), Civil Monetary Penalty
Inflation Adjustment, 69 FR 7121 (Feb. 13, 2004)
E:\FR\FM\28SEP2.SGM
Continued
28SEP2
49574
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
CAA provides that the agency shall take
the following penalty factors into
consideration in determining the
appropriate penalty for any specific
case: The gravity of the violation, the
economic benefit or savings (if any)
resulting from the violation, the size of
the violator’s business, the violator’s
history of compliance with this title,
action taken to remedy the violation, the
effect of the penalty on the violator’s
ability to continue in business, and such
other matters as justice may require.
EPA recognizes that it may be
appropriate, should a manufacturer fail
to comply with the NHTSA fuel
economy standards as well as the CO2
standard proposed today in a case
arising out of the same facts and
circumstances, to take into account the
civil penalties that NHTSA has assessed
for violations of the CAFE standards
when determining the appropriate
penalty amount for violations of the CO2
emissions standards. This approach is
consistent with EPA’s broad discretion
to consider ‘‘such other matters as
justice may require,’’ and will allow
EPA to exercise its discretion to prevent
injustice and ensure that penalties for
violations of the CO2 rule are assessed
in a fair and reasonable manner.
The statutory penalty factor that
allows EPA to consider ‘‘such other
matters as justice may require’’ vests
EPA with broad discretion to reduce the
penalty when other adjustment factors
prove insufficient or inappropriate to
achieve justice.177 The underlying
principle of this penalty factor is to
operate as a safety mechanism when
necessary to prevent injustice.178
In other environmental statutes,
Congress has specifically required EPA
to consider penalties assessed by other
government agencies where violations
arise from the same set of facts. For
instance, section 311(b)(8) of the Clean
Water Act, 33 U.S.C. 1321(b)(8)
authorizes EPA to consider any other
penalty for the same incident when
determining the appropriate Clean
Water Act penalty. Likewise, section
113(e) of the CAA authorizes EPA to
consider ‘‘payment by the violator of
penalties previously assessed for the
same violation’’ when assessing
penalties for certain violations of Title
I of the Act.
7. Prohibited Acts in the CAA
Section 203 of the Clean Air Act
describes acts that are prohibited by
and Civil Monetary Penalty Inflation Adjustment
Rule, 73 FR 75340 (Dec. 11, 2008).
177 In re Spang & Co., 6 E.A.D. 226, 249 (EAB
1995).
178 B.J. Carney Industries, 7 E.A.D. 171, 232, n. 82
(EAB 1997).
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
law. This section and associated
regulations apply equally to the
greenhouse standards proposed today as
to any other regulated pollutant.
8. Other Certification Issues
a. Carryover/Carry Across Certification
Test Data
EPA’s certification program for
vehicles allows manufacturers to carry
certification test data over and across
certification testing from one model year
to the next, when no significant changes
to models are made. EPA expects that
this policy could also apply to CO2, N2O
and CH4 certification test data. A
manufacturer may also be eligible to use
carryover and carry across data to
demonstrate CO2 fleet average
compliance if they had done so for
CAFE purposes.
b. Compliance Fees
The CAA allows EPA to collect fees
to cover the costs of issuing certificates
of conformity for the classes of vehicles
and engines covered by this proposal.
On May 11, 2004, EPA updated its fees
regulation based on a study of the costs
associated with its motor vehicle and
engine compliance program (69 FR
51402). At the time that cost study was
conducted the current rulemaking was
not considered.
At this time the extent of any added
costs to EPA as a result of this proposal
is not known. EPA will assess its
compliance testing and other activities
associated with the proposed rule and
may amend its fees regulations in the
future to include any warranted new
costs.
c. Small Entity Deferment
EPA is proposing to defer CO2
standards for certain small entities, and
these entities (necessarily) would not be
subject to the certification requirements
of this proposal.
As discussed in Section III.B.7,
businesses meeting the Small Business
Administration (SBA) criterion of a
small business as described in 13 CFR
121.201 would not be subject to the
proposed GHG requirements, pending
future regulatory action. EPA is
proposing that such entities submit a
declaration to EPA containing a detailed
written description of how that
manufacturer qualifies as a small entity
under the provisions of 13 CFR 121.201
in order to ensure EPA is aware of the
deferred companies. This declaration
would have to be signed by a chief
officer of the company, and would have
to be made at least 30 days prior to the
introduction into commerce of any
vehicles for each model year for which
the small entity status is requested, but
PO 00000
Frm 00122
Fmt 4701
Sfmt 4702
not later than December of the calendar
year prior to the model year for which
deferral is requested. For example, if a
manufacturer will be introducing model
year 2012 vehicles in October of 2011,
then the small entity declaration would
be due in September of 2011. If 2012
model year vehicles are not planned for
introduction until March of 2012, then
the declaration would have to be
submitted in December of 2011. Such
entities are not automatically exempted
from other EPA regulations for lightduty vehicles and light-duty trucks;
therefore, absent this annual declaration
EPA would assume that each entity was
not deferred from compliance with the
proposed greenhouse gas standards.
d. Onboard Diagnostics (OBD) and CO2
Regulations
The light-duty on-board diagnostics
(OBD) regulations require manufacturers
to detect and identify malfunctions in
all monitored emission-related
powertrain systems or components.179
Specifically, the OBD system is required
to monitor catalysts, oxygen sensors,
engine misfire, evaporative system
leaks, and any other emission control
systems directly intended to control
emissions, such as exhaust gas
recirculation (EGR), secondary air, and
fuel control systems. The monitoring
threshold for all of these systems or
components is 1.5 times the applicable
standards, which typically include
NMHC, CO, NOX, and PM. EPA is
confident that many of the emissionrelated systems and components
currently monitored would effectively
catch any malfunctions related to CO2
emissions. For example, malfunctions
resulting from engine misfire, oxygen
sensors, the EGR system, the secondary
air system, and the fuel control system
would all have an impact on CO2
emissions. Thus, repairs made to any of
these systems or components should
also result in an improvement in CO2
emissions. In addition, EPA does not
have data on the feasibility or
effectiveness of monitoring various
emission systems and components for
CO2 emissions and does not believe it
would be prudent to include CO2
emissions without such information.
Therefore, at this time, EPA does not
plan to require CO2 emissions as one of
the applicable standards required for the
OBD monitoring threshold. EPA plans
to evaluate OBD monitoring technology,
with regard to monitoring CO2
emissions-related systems and
components, and may choose to propose
to include CO2 emissions as part of the
OBD requirements in a future regulatory
179 40
E:\FR\FM\28SEP2.SGM
CFR 86.1806–04.
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
action. EPA requests comment as to
whether this is appropriate at this time,
and specifically requests any data that
would support the need for CO2-related
components that could or should be
monitored via an OBD system.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
e. Applicability of Current High
Altitude Provisions to Greenhouse
Gases
EPA is proposing that vehicles
covered by this proposal meet the CO2,
N2O and CH4 standard at altitude. The
CAA requires emission standards under
section 202 to apply at all altitudes.180
EPA does not expect vehicle CO2, CH4,
or N2O emissions to be significantly
different at high altitudes based on
vehicle calibrations commonly used at
all altitudes. Therefore, EPA is
proposing to retain its current high
altitude regulations so manufacturers
would not normally be required to
submit vehicle CO2 test data for high
altitude. Instead, they would submit an
engineering evaluation indicating that
common calibration approaches will be
utilized at high altitude. Any deviation
in emission control practices employed
only at altitude would need to be
included in the auxiliary emission
control device (AECD) descriptions
submitted by manufacturers at
certification. In addition, any AECD
specific to high altitude would be
required to include emissions data to
allow EPA evaluate and quantify any
emission impact and validity of the
AECD. EPA requests comment on this
approach, and specifically requests data
on impact of altitude on FTP and HFET
CO2 emissions.
f. Applicability of Standards to
Aftermarket Conversions
With the exception of the small entity
deferment option EPA is proposing,
EPA’s emission standards, including the
proposed greenhouse gas standards,
would continue to apply as stated in the
applicability sections of the relevant
regulations. The proposed greenhouse
gas standards are being incorporated
into 40 CFR part 86, subpart S, the
provisions of which include exhaust
and evaporative emission standards for
criteria pollutants. Subpart S includes
requirements for new light-duty
vehicles, light-duty trucks, mediumduty passenger vehicles, Otto-cycle
complete heavy-duty vehicles, and some
incomplete light-duty trucks. Subpart S
is currently specifically applicable to
aftermarket conversion systems,
aftermarket conversion installers, and
aftermarket conversion certifiers, as
those terms are defined in 40 CFR
180 See
CAA 206(f).
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
85.502. EPA expects that some
aftermarket conversion companies
would qualify for and seek the small
entity deferment, but those that do not
qualify would be required to meet the
applicable emission standards,
including the proposed greenhouse gas
standards.
9. Miscellaneous Revisions to Existing
Regulations
a. Revisions and Additions to
Definitions
EPA is proposing to amend its
definitions of ‘‘engine code,’’
‘‘transmission class,’’ and ‘‘transmission
configuration’’ in its vehicle
certification regulations (Part 86) to
conform with the definitions for those
terms in its fuel economy regulations
(Part 600). The exact terms in Part 86 are
used for reporting purposes and are not
used for any compliance purpose (e.g.,
an engine code would not determine
which vehicle was selected for emission
testing). However, the terms are used for
this purpose in Part 600 (e.g., engine
codes, transmission class, and
transmission configurations are all
criteria used to determine which
vehicles are to be tested for the purposes
of establishing corporate average fuel
economy). Here, EPA is proposing that
the same vehicles tested to determine
corporate average fuel economy also be
tested to determine fleet average CO2, so
the same definitions should apply. Thus
EPA is proposing to amend its Part 86
definitions of the above terms to
conform to the definitions in Part 600.
To bring EPA’s fuel economy
regulations in Part 600 into conformity
with this proposal for fleet average CO2
and NHTSA’s reform truck regulations
two amendments are proposed. First,
the definition of ‘‘footprint’’ that is
proposed in this rule is also being
proposed for addition to EPA’s Part 86
and 600 regulations. This definition is
based on the definition promulgated by
NHTSA at 49 CFR 523.2. Second, EPA
is proposing to amend its model year
CAFE reporting regulations to include
the footprint information necessary for
EPA to determine the reformed truck
standards and the corporate average fuel
economy. This same information is
proposed to be included in this proposal
for fleet average CO2 and fuel economy
compliance.
b. Addition of Ethanol Fuel Economy
Calculation Procedures
EPA is proposing to add calculation
procedures to part 600 for determining
the carbon-related exhaust emissions
and calculating the fuel economy of
vehicles operating on ethanol fuel.
PO 00000
Frm 00123
Fmt 4701
Sfmt 4702
49575
Manufacturers have been using these
procedures as needed, but the regulatory
language—which specifies how to
determine the fuel economy of gasoline,
diesel, compressed natural gas, and
methanol fueled vehicles—has not
previously been brought up-to-date to
provide procedures for vehicles
operating on ethanol. Thus EPA is
proposing a carbon balance approach
similar to other fuels for the
determination of carbon-related exhaust
emissions for the purpose of
determining fuel economy and for
compliance with the proposed fleet
average CO2 standards. The carbon
balance formula is similar to that for
methanol, except that ethanol-fueled
vehicles must also measure the
emissions of ethanol and acetaldehyde.
The proposed carbon balance equation
for determining fuel economy is as
follows, where CWF is the carbon
weight fraction of the fuel and CWFexHC
is the carbon weight fraction of the
exhaust hydrocarbons:
mpg = (CWF × SG × 3781.8)/((CWFexHC× HC)
+ (0.429 × CO) + (0.273 × CO2) + (0.375
× CH3OH) + (0.400 × HCHO) + (0.521 ×
C2H5OH) + (0.545 × C2H4O))
The proposed equation for
determining the total carbon-related
exhaust emissions for compliance with
the CO2 fleet average standards is the
following, where CWFexHC is the carbon
weight fraction of the exhaust
hydrocarbons:
CO2-eq = (CWFexHC× HC) + (0.429 × CO) +
(0.375 × CH3OH) + (0.400 × HCHO) +
(0.521 × C2H5OH) + (0.545 × C2H4O) +
CO2.
EPA requests comment on the use of
these formulae to determine fuel
economy and carbon emissions.
c. Revision of Electric Vehicle
Applicability Provisions
In 1980 EPA issued a rule that
provided for the inclusion of electric
vehicles in the CAFE program.181 EPA
now believes that certain provisions of
the regulations should be updated to
reflect the current state of motor vehicle
emission and fuel economy regulations.
In particular, EPA believes that the
exemption of electric vehicles in certain
cases from fuel economy labeling and
CAFE requirements should be
reevaluated and revised.
The rule created an exemption for
electric vehicles from fuel economy
labeling in the following cases: (1) If the
electric vehicles are produced by a
company that produces only electric
vehicles; and (2) if the electric vehicles
are produced by a company that
181 45
E:\FR\FM\28SEP2.SGM
FR 49256, July 24, 1980.
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49576
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
produces fewer than 10,000 vehicles of
all kinds worldwide. EPA believes that
this exemption language is no longer
appropriate and proposes to delete it
from the affected regulations. First,
since 1980 many regulatory provisions
have been put in place to address the
concerns of small manufacturers and
enable them to comply with fuel
economy and emission programs with
reduced burden. EPA believes that all
small volume manufacturers should
compete on a fair and level regulatory
playing field and that there is no longer
a need to treat small volume electric
vehicles any differently than small
volume manufacturers of other types of
vehicles. Current regulations contain
streamlined certification procedures for
small companies, and because electric
vehicles emit no direct pollution there
is effectively no certification emission
testing burden. For example, the
proposed greenhouse gas regulations
contain a provision allowing the
exemption of certain small entities.
Meeting the requirements for fuel
economy labeling and CAFE will entail
a testing, reporting, and labeling burden,
but these burdens are not extraordinary
and should be applied equally to all
small volume manufacturers, regardless
of the fuel that moves their vehicles.
EPA has been working with existing
electric vehicle manufacturers on fuel
economy labeling, and EPA believes it
is important for the consumer to have
impartial, accurate, and useful label
information regarding the energy
consumption of these vehicles. Second,
EPCA does not provide for an
exemption of electric vehicles from
NHTSA’s CAFE program, and NHTSA
regulations regarding the applicability
of the CAFE program do not provide an
exemption for electric vehicles. Third,
the blanket exemption for any
manufacturer of only electric vehicles
assumed at the time that these
companies would all be small, but the
exemption language inappropriately did
not account for size and would allow
large manufacturers to be exempt as
well. Finally, because of growth
expected in the electric vehicle market
in the future, EPA believes that the
labeling and CAFE regulations need to
be designed to more specifically
accommodate electric vehicles and to
require that consumers be provided
with appropriate information regarding
these vehicles. For these reasons EPA is
proposing revisions to 40 CFR Part 600
applicability regulations such that these
electric vehicle exemptions are deleted
starting with the 2012 model year.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
d. Miscellaneous Conforming
Regulatory Amendments
reporting provisions under this
proposal.
Throughout the regulations EPA has
made a number of minor amendments to
update the regulations as needed or to
conform with amendments discussed in
this preamble. For example, for
consistency with the ethanol fuel
economy calculation procedures
discussed above, EPA has amended
regulations where necessary to require
the collection of emissions of ethanol
and acetaldehyde. Other changes are
made to applicability sections to remove
obsolete regulatory requirements such
as phase-ins related to EPA’s Tier 2
emission standards program, and still
other changes are made to better
accommodate electric vehicles in EPA
emission control regulations. Not all of
these minor amendments are noted in
this preamble, thus the reader should
carefully evaluate the proposed
regulatory text to ensure a complete
understanding of the regulatory changes
being proposed by EPA.
11. Light Duty Vehicles and Fuel
Economy Labeling
10. Warranty, Defect Reporting, and
Other Emission-Related Components
Provisions
Under section 207(a) of the CAA,
manufacturers must warrant that a
vehicle is designed to comply with the
standards and will be free from defects
that may cause it to not comply over the
specified period which is 2 years/24,000
miles (whichever is first) or, for major
emission control components, 8 years/
80,000 miles. Under certain conditions,
manufacturers may be liable to replace
failed emission components at no
expense to the owner. EPA regulations
define ‘‘emission related parts’’ for the
purpose of warranty. This definition
includes parts which must function
properly to assure continued
compliance with the emission
standards.182
The air conditioning system and its
components have not previously been
covered under the CAA warranty
provisions. However, the proposed A/C
leakage and A/C-related CO2 emission
standards are dependent upon the
proper functioning of a number of
components on the A/C system, such as
rings, fittings, compressors, and hoses.
Therefore, EPA is proposing that these
components be included under the CAA
section 207(a) emission warranty
provisions, with a warranty of 2 years/
24,000 miles.
EPA requests comment as to whether
any other parts or components should
be designated as ‘‘emission related
parts’’ subject to warranty and defect
182 40
PO 00000
CFR 85.2102(14).
Frm 00124
Fmt 4701
Sfmt 4702
American consumers need accurate
and meaningful information about the
environmental and fuel economy
performance of new light vehicles. EPA
believes it is important that the fueleconomy label affixed to the new
vehicles provide consumers with the
critical information they need to make
smart purchase decisions. This is a
special challenge in light of the
expected increase in market share of
electric and other advanced technology
vehicles. Consumers may need new and
different information than today’s
vehicle labels provide in order to help
them understand the energy use and
associated cost of owning these electric
and advanced technology vehicles. As
discussed below, these two issues are
key to determining whether the current
MPG-based fuel-economy label is
adequate.
Therefore, as part of this action, EPA
seeks comments on issues surrounding
consumer vehicle labeling in general,
and labeling of advanced technology
vehicles in particular. EPA also plans to
initiate a separate rulemaking to explore
in detail the information displayed on
the fuel economy label and the
methodology for deriving that
information. The purposes of this new
rulemaking would be to ensure that
American consumers continue to have
the most accurate, meaningful, and
useful information available to them
when purchasing new vehicles, and that
the information is presented to them in
clear and understandable terms.
a. Background
EPA has considerable experience in
providing vehicle information to
consumers through its fuel-economy
labeling activities and related web-based
programs. Under 49 U.S.C. 32908(b)
EPA is responsible for developing the
fuel economy labels that are posted on
window stickers of all new light duty
cars and trucks sold in the U.S. and,
beginning with the 2011 model year, on
all new medium-duty passenger
vehicles (a category that includes large
sport-utility vehicles and passenger
vans). The statutory requirements
established by EPCA require that the
label contain the following:
• The fuel economy of the vehicle; 183
• The estimated annual fuel cost of
operating the vehicle;
183 ‘‘Fuel economy’’ per the statute is miles per
gallon of gasoline (or equivalent amount of other
fuel).
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
• The range of fuel economy of
comparable vehicles among all
manufacturers;
• A statement that a fuel economy
booklet is available from the dealer; 184
and
• The amount of the ‘‘gas guzzler’’ tax
imposed on the vehicle by the Internal
Revenue Service.
• Other information required or
authorized by EPA that is related to the
information required above.
Fuel economy is defined as the
number of miles traveled by an
automobile for each gallon of gasoline
(or equivalent amount of other fuel). It
is relatively easy to determine the miles
per gallon (MPG) for vehicles that use
liquid fuels (e.g., gasoline or diesel), but
an expression that uses gallons—
whether miles per gallon or gallons per
mile—may not be a useful metric for
vehicles that have limited to no
operation on liquid fuel such as electric
or compressed natural gas vehicles. The
mpg metric is the one generally used
today to provide comparative fuel
economy information to consumers.
As part of its vehicle certification,
CAFE, and fuel economy labeling
authorities, EPA works with
stakeholders on the testing and other
regulatory requirements necessary to
bring advanced technology vehicles to
market. With increasing numbers of
advanced technology vehicles beginning
to be sold, EPA believes it is now
appropriate to address potential
regulatory and certification issues
associated with these technologies
including how best to provide relevant
consumer information about their
environmental impact, energy
consumption, and cost.
b. Test Procedures
As discussed in this notice, there are
explicit and very long-standing test
procedures and calculation
methodologies associated with CAFE
that EPA uses to test conventionallyfueled vehicles and to calculate their
fuel economy. These test procedures
and calculations also generally apply to
advanced technology vehicles (e.g., an
electric (EV) or plug-in hybrid vehicle
(PHEV)).
The basic test procedure for an
electric vehicle follows a standardized
practice—an EV is fully charged and
then driven over the city cycle (Urban
Dynamometer Drive Schedule) until the
vehicle can no longer maintain the
required drive cycle vehicle speed. For
some vehicles, this could require
operation over multiple drive cycles.
184 EPA and DOE jointly publish the annual Fuel
Economy Guide and distribute it to dealers.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
The EV is then fully recharged and the
AC energy to the charger is recorded.
To derive the CAFE value for electric
vehicles, the amount of AC energy
needed to recharge the battery is
divided by the range the vehicle reached
in the repeated city drive cycle. This
calculation provides a raw CAFE energy
consumption value expressed in
kilowatt hours per 100 miles. The raw
CAFE number is then converted to miles
per gallon of equivalent gasoline using
a Department of Energy (DOE)
conversion factor of 82,700 Kwhr/gallon
of gasoline.185 The DOE conversion
factor combines several adjustments
including: an adjustment similar to the
statutory 6.67 multiplier credit 186 used
in deriving the final CAFE value for
alternative fueled vehicles; a factor
representing the gasoline-equivalent
energy content of electricity; and
various adjustments to account for the
relative efficiency of producing and
transporting the electricity. The
resulting value after the DOE conversion
factor is applied becomes the final
CAFE city value.
The label value calculation for an EV
uses a different conversion factor than
the CAFE value calculation. To come up
with the final city fuel economy label
value for an EV, a conversion factor of
33,705 Kwhr/gallon of gasoline
equivalent is applied to the raw
consumption number instead of the
82,700 Kwhr/gallon used for CAFE. The
conversion factor used for labeling
purposes represents only the gasolineequivalent energy content of electricity,
without the multiplier credit and other
adjustments used in the CAFE
calculation. The consumption, now
expressed as a fuel economy in miles
per gallon equivalent, is then applied to
the derived 5-cycle equation required
under EPA’s fuel economy labeling
regulations. The above process is then
repeated for the EV highway fuel
economy label number. Finally, the
combined city/highway numbers for the
EV use the same 55/45 weighting as
conventional vehicles to determine the
final fuel economy label values. CAFE
numbers end up being significantly
higher for EVs than the associated fuel
economy label values, both because a
higher adjustment factor applies under
CAFE regulations and also because
other real-world adjustments such as the
5-cycle test are not applied to the CAFE
values.
For PHEVs, a similar process would
be followed, except that PHEVs require
testing in both charge sustain (CS) and
charge depleting (CD) modes to capture
185 49
186 49
PO 00000
U.S.C. 32904 and 10 CFR 474.3.
U.S.C. 32905.
Frm 00125
Fmt 4701
Sfmt 4702
49577
how these vehicles operate. For charge
sustain modes, PHEVs essentially
operate as conventional Hybrid Electric
Vehicles (HEVs). PHEVs therefore test in
all 5-cycles (for further information on
these test cycles, see Section III.C.4) just
as HEVs do for CS fuel economy. For CD
fuel economy, PHEVs are only required
to test on the Urban Dynamometer Drive
Schedule and Highway Fuel Economy
cycles just like other alternative fueled
vehicles—the 5-cycle fuel economy
testing is optional in the CD mode.
There are additional processes that
address different PHEV modes, such as
for PHEVs that operate solely on
electricity throughout the CD mode.
As this discussion shows, the CAFE
and fuel economy labeling test
procedures and calculations for
advanced technology vehicles such as
EVs and PHEVs can be very
complicated. EPA is interested in
comments on these processes, including
views on the appropriate use of
adjustment factors. Currently in
guidance, EPA references SAE J1634 for
EV range and consumption test
procedures. EPA currently includes the
‘‘California Exhaust Emission Standards
and Test Procedures for 2003 and
Subsequent Model Zero-Emission
Vehicles, in the Passenger Car, Light
Truck, and Medium-duty Vehicle
Classes’’ by reference in 40 CFR 86.1. As
California requirements and SAE test
procedures are updated these may be
included by reference in the future.
c. Current Fuel Economy Label
In 2006 EPA redesigned the window
stickers to make them more informative
for consumers. More particular, the
redesigned stickers more prominently
feature annual fuel cost information, to
provide contemporary and easy-to-use
graphics for comparing the fuel
economy of different vehicles, to use
clearer text, and to include a Web site
reference to www.fueleconomy.gov
which provides additional information.
In addition, EPA updated how the city
and highway fuel economy values were
calculated, to reflect typical real-world
driving patterns.187 This rulemaking
involved significant stakeholder
outreach in determining how best to
calculate and display this new
information. The feedback EPA has
received to date on the new label design
and values has been generally very
positive.
During the 2006 label rulemaking
process EPA requested comments on
187 71 FR 77872 (December 27, 2006). Fuel
Economy Labeling of Motor Vehicles: Revisions to
Improve Calculations of Fuel Economy Estimates.
U.S. EPA.
E:\FR\FM\28SEP2.SGM
28SEP2
49578
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
how a fuel consumption metric (such as
gallons per 100 miles) could be used
and represented to the public, including
presentation in the annual Fuel
Economy Guide. EPA received a number
of comments from both vehicle
manufacturers and consumer
organizations, suggesting that the MPG
measures can be misleading and that a
fuel consumption metric might be more
meaningful to consumers than the
established MPG metric found on fuel
economy labels. The reason is that fuel
consumption metric, directly measures
the amount of fuel used and is thus
directly related to cost that consumers
incur when filling up.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
The problem with the MPG metric is
that it is inversely related to fuel
consumption and cost. As higher MPG
values are reached, the relative impact
of these higher values on fuel
consumption and fuel costs decreases.
For example, a 25 percent increase in
gallons per 100 miles will always lead
to a 25 percent increase in the fuel cost,
but a similar 25 percent increase in
MPG will have varying impacts on
actual fuel cost depending on whether
the percent increase occurs to a low or
high MPG value. Many consumers do
not understand this nonlinear
relationship between MPG and fuel
costs. Evidence suggest that people tend
PO 00000
Frm 00126
Fmt 4701
Sfmt 4702
to see the MPG as being linear with fuel
cost, which will lead to erroneous
decisions regarding vehicle purchases.
Figure III.E.11–1 below illustrates the
issue; one can see that changes in MPG
at low MPG levels can result in large
changes in the fuel cost, while changes
in MPG values at high MPG levels result
in small changes in the fuel cost. For
example, a change from 10 to 15 MPG
will reduce the 10-mile fuel cost from
$2.50 to $1.60, but a similar increase in
MPG from 20 to 25 MPG will only
reduce the 10-mile fuel cost by less than
$0.30.
E:\FR\FM\28SEP2.SGM
28SEP2
Because of the potential for
consumers to misunderstand this MPG/
cost relationship, commenters on the
2006 labeling rule universally agreed
that any change to the label metric
should involve a significant public
education campaign directed toward
both dealers and consumers.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
In 2006, EPA did not include a
consumption-based metric on the
redesigned fuel economy label in 2006.
It was concerned about potential
confusion associated with introducing a
second metric on the label (MPG is a
required element, as noted above). EPA
has developed an interactive feature on
www.fueleconomy.gov which allows
PO 00000
Frm 00127
Fmt 4701
Sfmt 4702
49579
consumers, while viewing data on a
specific vehicle, to switch units between
the MPG and gallons per 100 miles
metrics. The tool also displays the cost
and the amount of fuel needed to drive
25 miles. As indicated above, however,
EPA is alert to the problems with the
MPG measure and the importance of
providing consumers with a clear sense
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.020</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
of the consequences of their purchasing
decisions; a gallon-per mile measure
would have significant advantages. EPA
plans to seek comment and engage in
extensive public debate about fuel
consumption and other appropriate
consumer information metrics as part of
a new labeling rule initiative. EPA also
welcomes comments on this topic in
response to this GHG proposal.
d. Labeling for Advanced Technology
Vehicles
Even though a fuel consumption
metric may more directly represent
likely fuel costs than a fuel economy
metric, any expression that uses
gallons—whether miles per gallon or
gallons per mile—is not a useful metric
for vehicles that have limited to no
operation on liquid fuel (e.g., electricity
or compressed natural gas). For
example, PHEVs and extended range
electric vehicles (EREVs) can use two
types of energy sources: (1) An onboard
battery, charged by plugging the vehicle
into the electrical grid via a
conventional wall outlet, to power an
electric motor, as well as (2) a gas or
diesel-powered engine to propel the
vehicle or power a generator used to
provide electricity to the electric motor.
Depending on how these vehicles are
operated, they can use electricity
exclusively, never use electricity and
operate like a conventional hybrid, or
operate in some combination of these
two modes. The use of a MPG figure
alone would not account for the
electricity used to propel the vehicle.
EPA has worked closely with
numerous stakeholders including
vehicle manufacturers, the Society of
Automotive Engineers (SAE), the State
of California, the Department of Energy
(DOE) and others to develop possible
approaches for both estimating fuel
economy and labeling vehicles that can
operate using more than one energy
source. At the present time, EPA
believes the appropriate method for
estimating fuel economy of PHEVs and
EREVs would be a weighted average of
fuel economy for the two modes of
operation. A methodology developed by
SAE and DOE to predict the fractions of
total distance driven in each mode of
operation (electricity and gas) uses a
term known as a utility factor (UF). By
using a utility factor, it is possible to
determine a weighted average for fuel
economy of the electric and gasoline
modes. For example, a UF of 0.8 would
indicate that a PHEV or EREV operates
in an all electric mode 80% of the time
and uses the gasoline engine the other
20% of the time. In this example, the
weighted average fuel economy value
would be influenced more by the
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
electrical operation than the gasoline
operation.
Under this approach, a UF could be
assigned to each successive fuel
economy test until the battery charge
was depleted and the PHEV or EREV
needed power from the gasoline engine
to propel the vehicle or to recharge the
battery. One minus the sum of all the
utility factors would then represent the
fraction of driving performed in this
‘‘gasoline mode.’’ Fuel economy could
then be expressed as:
FEMPG =
UFi
∑ FE
+
1
1 − ∑ UFi
i
FEgasoline
Likewise, the electrical consumption
would be expressed by adding the fuel
consumption from each mode. Since
there is no electrical consumption in
hybrid mode, the equation for electricity
consumption would be as follows:
Utility factors could be cycle specific
not only due to different battery ranges
on different test cycles but also due to
the fact that ‘‘highway’’ type driving
may imply longer trips than urban
driving. That is to say that the average
city trip could be shorter than the
average highway trip.
e. Request for Comments
EPA is interested in comments on
both topics raised in this section. For
the methodology, we are interested in
comments addressing how the utility
factor is calculated and which data
should be used in establishing the UF.
Additionally, commenters should
address: The appropriateness of this
approach for estimating fuel economy
for PHEVs and EREVs, including the
concept of using a UF to determine the
fuel economy for vehicles operated in
multiple modes; the appropriate form
and value of the factor, including the
type of data that would be necessary to
confidently develop it accurately; and
availability of other potential
methodologies for determining fuel
economy for vehicles that can operate in
multiple modes, such as ‘‘all electric’’
and ‘‘hybrid,’’ including the use of fuel
consumption, cost, GHG emissions, or
other metrics in addition to miles per
gallon.
EPA is also requesting comment on
how the agency can satisfy statutory
labeling requirements while providing
relevant information to consumers. For
example, the statute indicates that EPA
may provide other related items on the
PO 00000
Frm 00128
Fmt 4701
Sfmt 4702
label beyond those that are required.188
EPA is interested in receiving comments
on the potential approaches and
supporting data we might consider for
adding additional information regarding
fuel economics while maintaining our
statutory obligation to report MPG on
the label.
There are a number of different
metrics that are available that could be
useful in this regard. Two possible
options would be to show consumption
in fuel use per distance (e.g., gallons/
100 miles) or in cost per distance (e.g.,
$/100 miles). As discussed above, these
two metrics have benefits over a straight
mpg value in showing a more direct
relationship between fuel consumption
and cost. The cost/distance metric has
an added potential benefit of providing
a common basis for comparing
differently fueled or powered vehicles,
for example being able to show the cost
of gasoline used over a specified
distance or time for a conventional
gasoline-powered vehicle in comparison
to the gasoline and electricity used over
the same period for a plug-in hybrid
vehicle. Another approach would be to
use a metric that provides information
about a vehicle’s greenhouse gas
emissions per unit of travel, such as
carbon dioxide equivalent grams per
mile (g CO2e/mi). This type of metric
would allow consumers to directly
compare among vehicles on the basis of
their overall greenhouse gas impact. A
total annual energy cost would be
another way to look at this information,
and is currently used on the fuel
economy label. As is currently done,
EPA would need to determine and show
a common set of fuel costs used to
calculate such values, recognizing that
energy costs vary across the country.
The Agency is also interested in
comments on the usefulness of adding
other types of information, such as an
estimated driving range for electric
vehicles. The label design is also an
important issue to consider and any
changes to the existing label would need
to show information in a technologically
accurate, meaningful and
understandable manner, while ensuring
that the label does not become
overcrowded and difficult for
consumers to comprehend. EPA is also
interested in what and how other
information paths, such as web-based
programs, could be used to enhance the
consumer education process.
188 49
E:\FR\FM\28SEP2.SGM
U.S.C. 3290(b)(F).
28SEP2
EP28SE09.074</MATH>
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
EP28SE09.021</MATH>
49580
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
F. How Would This Proposal Reduce
GHG Emissions and Their Associated
Effects?
This action is an important step
towards curbing steady growth of GHG
emissions from cars and light trucks. In
the absence of control, GHG emissions
worldwide and in the U.S. are projected
to continue steady growth; Table
III.F–1 shows emissions of CO2,
methane, nitrous oxide and air
conditioning refrigerants on a CO2equivalent basis for calendar years 2010,
2020, 2030, 2040 and 2050. U.S. GHGs
are estimated to make up roughly 15
percent of total worldwide emissions,
and the contribution of direct emissions
from cars and light trucks to this U.S.
49581
share is growing over time, reaching an
estimated 20 percent of U.S. emissions
by 2030 in the absence of control. As
discussed later in this section, this
steady rise in GHG emissions is
associated with numerous adverse
impacts on human health, food and
agriculture, air quality, and water and
forestry resources.
TABLE III.F–1—REFERENCE CASE GHG EMISSIONS BY CALENDAR YEAR
[MMTCO2 Eq]
2010
All Sectors (Worldwide) a .............................................................................................
All Sectors (U.S. Only) a ...............................................................................................
U.S. Cars/Light Truck Only b ........................................................................................
a ADAGE
b MOVES
2030
2040
2050
41,016
7,118
1,359
48,059
7,390
1,332
52,870
7,765
1,516
56,940
8,101
1,828
60,209
8,379
2,261
model projections, U.S. EPA.189
(2010), OMEGA Model (2020–50) U.S. EPA. See DRIA Chapter 5.3 for modeling details.
EPA’s proposed GHG rule, if
finalized, will result in significant
reductions as newer, cleaner vehicles
come into the fleet, and the rule is
estimated to have a measurable impact
on world global temperatures. As
discussed in Section I, this GHG
proposal is part of a joint National
Program such that a large majority of the
projected benefits would be achieved
jointly with NHTSA’s proposed CAFE
standards which are described in detail
in Section IV of this preamble. EPA
estimates the reductions attributable to
the GHG program over time assuming
the proposed 2016 standards continue
indefinitely post-2016,190 compared to a
baseline scenario in which the 2011
model year fuel economy standards
continue beyond 2011.
Using this approach, EPA estimates
these standards would cut annual
fleetwide car and light truck tailpipe
CO2 emissions 21 percent by 2030,
when 90 percent of car and light truck
miles will be travelled by vehicles
meeting the new standards. Roughly 20
percent of these reductions are due to
emission reductions from gasoline
extraction, production and distribution
processes as a result of reduced gasoline
demand associated with this proposal.
Some of the overall emission reductions
also come from projected improvements
mstockstill on DSKH9S0YB1PROD with PROPOSALS
2020
189 U.S. EPA (2009). ‘‘EPA Analysis of the
American Clean Energy and Security Act of 2009:
H.R. 2454 in the 111th Congress.’’ U.S.
Environmental Protection Agency, Washington, DC,
USA. (www.epa.gov/climatechange/economics/
economicanalyses.html)
190 This analysis does not include the EISA
requirement for 35 MPG through 2020 or
California’s Pavley 1 GHG standards. The proposed
standards are intended to supersede these
requirements, and the baseline case for comparison
is the emissions that would result without further
action above the currently promulgated fuel
economy standards.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
in the efficiency of vehicle air
conditioning systems, which will
substantially reduce direct emissions of
HFCs, one of the most potent
greenhouse gases, as well as indirect
emissions of tailpipe CO2 emissions
attributable to reduced engine load from
air conditioning. In total, EPA estimates
that compared to a baseline of indefinite
2011 model year standards, net GHG
emission reductions from the proposed
program would be 325 million metric
tons CO2-equivalent (MMTCO2eq)
annually by 2030, which represents a
reduction of 4 percent of total U.S. GHG
emissions and 0.6 percent of total
worldwide GHG emissions projected in
that year. This estimate accounts for all
upstream fuel production and
distribution emission reductions,
vehicle tailpipe emission reductions
including air conditioning benefits, as
well as increased vehicle miles travelled
(VMT) due to the ‘‘rebound’’ effect
discussed in Section III.H. EPA
estimates this would be the equivalent
of removing nearly 60 million cars and
light trucks from the road in this
timeframe.
EPA projects the total reduction of the
program over the full life of model year
2012–2016 vehicles is about 950
MMTCO2eq, with fuel savings of 76
billion gallons (1.8 billion barrels) of
gasoline over the life of these vehicles,
assuming that some manufacturers take
advantage of low-cost HFC reduction
strategies to help meet these proposed
standards.
These reductions are projected to
reduce global mean temperature by
approximately 0.007–0.016°C by 2100,
and global mean sea level rise is
projected to be reduced by
approximately 0.06–0.15 cm by 2100.
PO 00000
Frm 00129
Fmt 4701
Sfmt 4702
1. Impact on GHG Emissions
a. Calendar Year Reductions Due to
GHG Standards
This action, if finalized, will reduce
GHG emissions emitted directly from
vehicles due to reduced fuel use and
more efficient air conditioning systems.
In addition to these ‘‘downstream’’
emissions, reducing CO2 emissions
translates directly to reductions in the
emissions associated with the processes
involved in getting petroleum to the
pump, including the extraction and
transportation of crude oil, and the
production and distribution of finished
gasoline (termed ‘‘upstream’’
emissions). Reductions from tailpipe
GHG standards grow over time as the
fleet turns over to vehicles affected by
the standards, meaning the benefit of
the program will continue as long as the
oldest vehicles in the fleet are replaced
by newer, lower CO2 emitting vehicles.
EPA is not projecting any reductions
in tailpipe CH4 or N2O emissions as a
result of these proposed emission caps,
which are meant to prevent emission
backsliding and to bring diesel vehicles
equipped with advanced technology
aftertreatment into alignment with
current gasoline vehicle emissions.
As detailed in the DRIA, EPA
estimated calendar year tailpipe CO2
reductions based on pre- and postcontrol CO2 gram per mile levels from
EPA’s OMEGA model and assumed to
continue indefinitely into the future,
coupled with VMT projections from
AEO2009. These estimates reflect the
real-world CO2 emissions reductions
projected for the entire U.S. vehicle fleet
in a specified calendar year, including
the projected effect of air conditioning
credits, TLAASP credits and FFV
credits. EPA also estimated full lifetime
reductions for model years 2012–2016
E:\FR\FM\28SEP2.SGM
28SEP2
49582
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
using pre- and post-control CO2 levels
projected by the OMEGA model,
coupled with projected vehicle sales
and lifetime mileage estimates. These
estimates reflect the real-world CO2
emissions reductions projected for
model years 2012 through 2016 vehicles
over their entire life.
This proposal would allow
manufacturers to earn credits for
improved vehicle air conditioning
efficiency. Since these improvements
are relatively low cost, EPA projects that
manufacturers will take advantage of
this flexibility, leading to reductions
from emissions associated with vehicle
air conditioning systems. As explained
above, these reductions will come from
both direct emissions of air conditioning
refrigerant over the life of the vehicle
and tailpipe CO2 emissions produced by
the increased load of the A/C system on
the engine. In particular, EPA estimates
that direct emissions of HFCs, one of the
most potent greenhouse gases, would be
reduced 40 percent from light-duty
vehicles when the fleet has turned over
to more efficient vehicles. The fuel
savings derived from lower tailpipe CO2
would also lead to reductions in
upstream emissions. Our estimated
reductions from the A/C credits program
are based on our analysis of how
manufacturers are expected to take
advantage of this credit opportunity in
complying with the CO2 fleetwide
average tailpipe standards.
Upstream emission reductions
associated with the production and
distribution of fuel were estimated using
emission factors from DOE’s GREET1.8
model, with some modifications as
detailed in the DRIA. These estimates
include both international and domestic
emission reductions, since reductions in
foreign exports of finished gasoline and/
or crude would make up a significant
share of the fuel savings resulting from
the proposed GHG standards. Thus,
significant portions of the upstream
GHG emission reductions will occur
outside of the U.S.; a breakdown of
projected international versus domestic
reductions is included in the DRIA.
Table III.F.1–1 shows reductions
estimated from these proposed GHG
standards assuming a pre-control case of
2011 MY standards continuing
indefinitely beyond 2011, and a postcontrol case in which 2016 MY
standards continue indefinitely beyond
2016. These reductions are broken down
by upstream and downstream
components, including air conditioning
improvements, and also account for the
offset from a 10 percent VMT ‘‘rebound’’
effect as discussed in Section III.H.
Including the reductions from upstream
emissions, total reductions are
estimated to reach 325 MMTCO2eq
annually by 2030 (a 21 percent
reduction in U.S. car and light truck
emissions), and grow to over 500
MMTCO2eq in 2050 as cleaner vehicles
continue to come into the fleet (a 23
percent reduction in U.S. car and light
truck emissions).
TABLE III.F.1–1—PROJECTED NET GHG REDUCTIONS
[MMTCO2 Eq per year]
Calendar year
2020
Net Reduction Due to Tailpipe Standards * .....................................................
Tailpipe Standards ...........................................................................................
A/C—indirect CO2 ............................................................................................
A/C—direct HFCs ............................................................................................
Upstream .........................................................................................................
Percent reduction relative to U.S. reference (cars + light trucks) ...................
Percent reduction relative to U.S. reference (all sectors) ...............................
Percent reduction relative to worldwide reference ..........................................
2030
165.2
107.7
11.0
13.5
33.1
12.4%
2.2%
0.3%
2040
324.6
211.4
21.1
27.2
64.9
21.4%
4.2%
0.6%
417.5
274.1
27.3
32.1
84.1
22.8%
5.2%
0.7%
2050
518.5
344.0
34.2
34.9
105.5
22.9%
6.2%
0.9%
* Includes impacts of 10% VMT rebound rate presented in Table III.F.1–3.
b. Lifetime Reductions for 2012–2016
Model Years
EPA also analyzed the emission
reductions over the full life of the 2012–
2016 model year cars and trucks
affected by this proposal.191 These
results, including both upstream and
downstream GHG contributions, are
presented in Table III.F.1–2, showing
lifetime reductions of nearly 950
MMTCO2eq, with fuel savings of 76
billion gallons (1.8 billion barrels) of
gasoline.
TABLE III.F.1–2—PROJECTED NET GHG REDUCTIONS
[MMTCO2 Eq per year]
Lifetime GHG
reduction
(MMT CO2 EQ)
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Model year
2012
2013
2014
2015
2016
Lifetime fuel
savings
(billion gallons)
.................................................................................................................................................................
.................................................................................................................................................................
.................................................................................................................................................................
.................................................................................................................................................................
.................................................................................................................................................................
81.4
125.0
174.1
243.2
323.6
6.6
10.0
13.9
19.5
26.3
Total Program Benefit ..............................................................................................................................
947.4
76.2
191 As detailed in the DRIA, for this analysis the
full life of the vehicle is represented by average
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
lifetime mileages for cars (190,000 miles) and trucks
(221,000 miles) averaged over calendar years 2012
PO 00000
Frm 00130
Fmt 4701
Sfmt 4702
through 2030, a function of how far vehicles drive
per year and scrappage rates.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
c. Impacts of VMT Rebound Effect
As noted above and discussed more
fully in Section III.H., the effect of fuel
cost on VMT (‘‘rebound’’) was
accounted for in our assessment of
economic and environmental impacts of
this proposed rule. A 10 percent
rebound case was used for this analysis,
meaning that VMT for affected model
years is modeled as increasing by 10
percent as much as the increase in fuel
economy; i.e., a 10 percent increase in
fuel economy would yield a 1.0 percent
increase in VMT. Results are shown in
Table III.F.1–3; using the 10 percent
rebound rate results in an overall
emission increase of 26.4 MMTCO2eq
annually in 2030 (this increase is
accounted for in the reductions
presented in Tables III.F.1–1 and III.F.1–
2). Our estimated changes in CH4 or N2O
emissions as a result of these proposed
vehicle GHG standards are attributed
solely to this rebound effect.
As discussed in Section III.H, EPA
will be reassessing the appropriate rate
49583
of VMT rebound for the final rule.
Although EPA has not directly
quantified the GHG emissions effect of
using a lower rebound rate for this
analysis, lowering the rebound rate
would reduce the emission increases in
Tables III.F.1–1 and III.F.1–2 in
proportion (i.e., zero rebound equals
zero emissions effect), and, thus, would
increase our estimates of emission
reductions due to these proposed
standards.
TABLE III.F.1–3—GHG IMPACT OF 10% VMT REBOUND a
[MMTCO2 Eq per year]
2020
Total GHG Increase .................................................................................
Tailpipe & Indirect A/C CO2 .....................................................................
Upstream GHGs b ....................................................................................
Tailpipe N2O ............................................................................................
Tailpipe CH4 .............................................................................................
2030
13.6
10.6
2.95
0.040
0.008
2040
26.4
20.6
5.74
0.085
0.016
2050
34.2
26.6
7.43
0.113
0.021
42.9
33.4
9.32
0.142
0.027
a These
impacts are included in the reductions shown in Table III.F.1–1 and III.F.1–2.
rebound impact calculated as upstream total CO2 effect times ratio of downstream tailpipe rebound CO2 effect to downstream tailpipe total CO2 effect.
b Upstream
d. Analysis of Alternatives
EPA analyzed two alternative
scenarios, including 4% and 6% annual
increases in 2 cycle (CAFE) fuel
economy. In addition to this annual
increase, EPA assumed that
As in the primary scenario, EPA
assumed that the fleet complied with
the standards. For full details on
modeling assumptions, please refer to
DRIA Chapter 5.
manufacturers would use air
conditioning improvements in identical
penetrations as in the primary scenario.
Under these assumptions, EPA expects
achieved fleetwide average emission
levels of 254 g/mile CO2 EQ (4%), and
230 g/mile CO2 EQ (6%) in 2016.
TABLE III.F.1–4—CALENDAR YEAR IMPACTS OF ALTERNATIVE SCENARIOS
Calendar year
Scenario
Total GHG Reductions (MMT CO2EQ) ...........................
Fuel Savings (Billion Gallons Gasoline Equivalent) .......
CY 2020
Primary ...............................
4% ......................................
6% ......................................
Primary ...............................
4% ......................................
6% ......................................
165.2
152.8
215.2
13.4
12.2
17.8
CY 2030
324.6
305.9
426.2
26.2
24.5
35.1
CY 2040
417.5
394.1
549.3
33.9
31.8
45.5
CY 2050
518.5
489.3
683.9
42.6
39.9
57.1
TABLE III.F.1–5—MODEL YEAR IMPACTS OF ALTERNATIVE SCENARIOS
Model year lifetime
Scenario
Total GHG
CO2EQ).
Reductions
(MMT
MY 2013
MY 2014
MY 2015
MY 2016
Total
Primary ...............
81.4
125.0
174.1
243.2
323.6
947.4
4% ......................
6% ......................
Primary ...............
41.8
60.2
6.6
93.5
146.4
10.0
160.8
239.9
13.9
231.0
333.3
19.5
305.2
424.9
26.3
832.3
1,204.7
76.2
4% ......................
6% ......................
Fuel Savings (Billion Gallons Gasoline Equivalent).
mstockstill on DSKH9S0YB1PROD with PROPOSALS
MY 2012
3.1
4.7
7.2
11.9
12.7
19.7
18.4
27.4
24.7
35.2
66.1
99.0
2. Overview of Climate Change Impacts
From GHG Emissions
Once emitted, greenhouse gases
(GHG) that are the subject of this
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
regulation can remain in the atmosphere
for decades to centuries, meaning that
(1) their concentrations become wellmixed throughout the global atmosphere
regardless of emission origin, and (2)
PO 00000
Frm 00131
Fmt 4701
Sfmt 4702
their effects on climate are long lasting.
Greenhouse gas emissions come mainly
from the combustion of fossil fuels
(coal, oil, and gas), with additional
contributions from the clearing of
E:\FR\FM\28SEP2.SGM
28SEP2
49584
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
forests and agricultural activities. The
transportation sector accounts for a
portion, 28%, of US GHG emissions.192
This section provides a broad
overview of some of the impacts of GHG
emissions. The best sources of
information include the major
assessment reports of both the
Intergovernmental Panel on Climate
Change (IPCC) and the U.S. Global
Change Research Program (USGCRP,
formerly referred to as the U.S. Climate
Change Science Program). The IPCC and
USGCRP assessments base their findings
on the large body of individual, peerreviewed studies in the literature, and
then the IPCC and USGCRP assessments
themselves go through a transparent
peer-reviewed process. The USGCRP
reports, where possible, are specific to
impacts in the U.S. and therefore
represent the best available syntheses of
relevant impacts.
Most recently, the USGCRP released a
report entitled ‘‘Global Climate Change
Impacts in the United States’’.193 The
report summarizes the science and the
impacts of climate change on the United
States, now and in the future. It focuses
on climate change impacts in different
regions of the U.S. and on various
aspects of society and the economy such
as energy, water, agriculture, and
human health. It’s also a report written
in plain language, with the goal of better
informing public and private decision
making at all levels. The foundation of
this report is a set of 21 Synthesis and
Assessment Products (SAPs), which
were designed to address key policyrelevant issues in climate science. The
report was extensively reviewed and
revised based on comments from
experts and the public. The report was
approved by its lead USGCRP Agency,
the National Oceanic and Atmospheric
Administration, the other USGCRP
agencies, and the Committee on the
Environment and Natural Resources on
behalf of the National Science and
Technology Council. This report meets
all Federal requirements associated with
the Information Quality Act, including
those pertaining to public comment and
transparency. Readers are encouraged to
review this report.
The source document for the section
below is the draft endangerment
Technical Support Document (TSD). In
192 U.S. EPA (2008) Inventory of U.S. Greenhouse
Gas Emissions and Sinks: 1990–2006. EPA–430–R–
08–005, Washington, DC. https://www.epa.gov/
climatechange/emissions/usgginv_archive.html.
193 Global Climate Change Impacts in the United
States, Thomas R. Karl, Jerry M. Melillo, and
Thomas C. Peterson, (eds.). Cambridge University
Press, 2009. https://www.globalchange.gov/
publications/reports/scientific-assessments/usimpacts.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
EPA’s Proposed Endangerment and
Cause or Contribute Findings Under the
Clean Air Act,194 EPA provides a
summary of the USGCRP and IPCC
reports in a draft TSD. The draft TSD
reviews observed and projected changes
in climate based on current and
projected atmospheric GHG
concentrations and emissions, as well as
the related impacts and risks from
climate change that are projected in the
absence of GHG mitigation actions,
including this proposal and other U.S.
and global actions. The TSD serves as an
important support document to EPA’s
proposed Endangerment Finding;
however, the document is a draft and is
still undergoing comment and review as
part of EPA’s rulemaking process, and is
subject to change based upon comments
to the final endangerment finding.
a. Changes in Atmospheric
Concentrations of GHGs From Global
and U.S. Emissions
Concentrations of six key GHGs
(carbon dioxide, methane, nitrous oxide,
hydrofluorocarbons, perfluorocarbons
and sulfur hexafluoride) are at
unprecedented levels compared to the
recent and distant past. The global
atmospheric CO2 concentration has
increased about 38% from pre-industrial
levels to 2009, and almost all of the
increase is due to anthropogenic
emissions.
Based on data from the most recent
Inventory of U.S. Greenhouse Gas
Emissions and Sinks (2008),195 total
U.S. GHG emissions increased by 905.9
teragrams of CO2-equivalent (Tg CO2
Eq), or 14.7%, between 1990 and 2006.
U.S. transportation sources subject to
control under section 202(a) of the
Clean Air Act (passenger cars, light duty
trucks, other trucks and buses,
motorcycles, and cooling 196) emitted
1665 Tg CO2 Eq in 2006, representing
almost 24% of the total U.S. GHG
emissions. Total global emissions,
calculated by summing emissions of the
six greenhouse gases by country, for
2005 was 38,725.9 Tg CO2 Eq. This
represents an increase of 26% from the
1990 level. See the EPA report
‘‘Inventory of U.S. Greenhouse Gas
Emissions and Sinks: 1990–2006’’,197
194 See Federal Register/Vol. 74, No. 78/Friday,
April 24, 2009/Proposed Rules; also Docket Number
EPA–HQ–OAR–2009–0171; FRL–8895–5.
195 U.S. EPA (2008) Inventory of U.S. Greenhouse
Gas Emissions and Sinks: 1990–2006. EPA–430–R–
08–005, Washington, DC.
196 Cooling refers to refrigerants/air conditioning
from all transportation sources and is related to
HFCs.
197 U.S. EPA (2008) Inventory of U.S. Greenhouse
Gas Emissions and Sinks: 1990–2006. EPA–430–R–
08–005, Washington, DC. https://www.epa.gov/
climatechange/emissions/usgginv_archive.html.
PO 00000
Frm 00132
Fmt 4701
Sfmt 4702
Section 2 of the proposed Endangerment
TSD, and IPCC’s Working Group I (WGI)
Fourth Assessment Report (AR4) 198 for
a more complete discussion of GHG
emissions and concentrations.
b. Observed Changes in Climate
i. Temperature
The warming of the climate system is
unequivocal, as is now evident from
observations of increases in global air
and ocean temperatures, widespread
melting of snow and ice, and rising
global average sea level. The global
average net effect of the increase in
atmospheric GHG concentrations, plus
other human activities (e.g., land use
change and aerosol emissions), on the
global energy balance since 1750 has
been one of warming. The global mean
surface temperature 199 over the last 100
years (1906–2005) has risen by about
0.74 °C (1.5 °F) +/¥ 0.18 °C, and climate
model simulations suggest that natural
variation alone (e.g., changes in solar
irradiance) cannot explain the observed
warming. The rate of warming over the
last 50 years is almost double that over
the last 100 years. Most of the observed
increase in global mean surface
temperature since the mid-20th century
is very likely due to the observed
increase in anthropogenic GHG
concentrations.
It can be stated with confidence that
global mean surface temperature was
higher during the last few decades of the
20th century than during any
comparable period during the preceding
four centuries. Like global mean surface
temperatures, U.S. surface temperatures
also warmed during the 20th and into
the 21st century. U.S. average annual
temperatures are now approximately
0.69°C (1.25°F) warmer than at the start
of the 20th century, with an increased
rate of warming over the past 30 years.
Temperatures in winter have risen more
than any other season, with winters in
the Midwest and northern Great Plains
increasing more than 7 °F.200 Some of
these changes have been faster than
previous assessments had suggested.
For additional information, please see
Section 4 of the proposed Endangerment
198 Climate Change 2007: The Physical Science
Basis. Contribution of Working Group I to the
Fourth Assessment Report of the Intergovernmental
Panel on Climate Change [Solomon, S., D. Qin, M.
Manning, Z. Chen, M. Marquis, K.B. Averyt,
M.Tignor and H.L. Miller (eds.)]. Cambridge
University Press, Cambridge, United Kingdom and
New York, NY, USA.
199 Surface temperature is calculated by
processing data from thousands of world-wide
observation sites on land and sea.
200 Global Climate Change Impacts in the United
States, Thomas R. Karl, Jerry M. Melillo, and
Thomas C. Peterson, (eds.) Cambridge University
Press, 2009.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
TSD, IPCC WGI AR4,201 and the report
‘‘Global Climate Change Impacts in the
United States’’.202
ii. Precipitation
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Observations show that changes are
occurring in the amount, intensity,
frequency and type of precipitation.
Global, long-term trends from 1900 to
2005 have been observed in the amount
of precipitation over many large regions.
Patterns in precipitation change are
more spatially and seasonally variable
than temperature change, but where
significant precipitation changes do
occur they are consistent with measured
changes in stream flow. Significantly
increased precipitation has been
observed in eastern parts of North and
South America, northern Europe and
northern and central Asia.200 More
intense and longer droughts have been
observed over wider areas since the
1970s, particularly in the tropics and
subtropics. It is likely there has been an
increase in heavy precipitation events
(e.g., 95th percentile) within many land
regions, even in those where there has
been a reduction in total precipitation
amount, consistent with a warming
climate and observed significant
increasing amounts of water vapor in
the atmosphere. Rising temperatures
have generally resulted in rain rather
than snow in locations and seasons such
as in northern and mountainous regions
where the average (1961–1990)
temperatures were close to 0 °C. Over
the contiguous U.S., total annual
precipitation increased at an average
rate of 6.5% from 1901–2006, with the
greatest increases in precipitation in the
East and North Central climate regions
(11.2% per century).
For additional information, please see
Section 4 of the proposed Endangerment
TSD, IPCC WGI AR4,203 and the
201 Climate Change 2007: The Physical Science
Basis. Contribution of Working Group I to the
Fourth Assessment Report of the Intergovernmental
Panel on Climate Change [Solomon, S., D. Qin, M.
Manning, Z. Chen, M. Marquis, K.B. Averyt,
M.Tignor and H.L. Miller (eds.)]. Cambridge
University Press, Cambridge, United Kingdom and
New York, NY, USA.
202 Global Climate Change Impacts in the United
States, Thomas R. Karl, Jerry M. Melillo, and
Thomas C. Peterson, (eds.). Cambridge University
Press, 2009. https://www.globalchange.gov/
publications/reports/scientific-assessments/usimpacts.
203 Climate Change 2007: The Physical Science
Basis. Contribution of Working Group I to the
Fourth Assessment Report of the Intergovernmental
Panel on Climate Change [Solomon, S., D. Qin, M.
Manning, Z. Chen, M. Marquis, K.B. Averyt,
M.Tignor and H.L. Miller (eds.)]. Cambridge
University Press, Cambridge, United Kingdom and
New York, NY, USA.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
USGCRP report ‘‘Global Climate Change
Impacts in the United States’’.204
iii. Extreme Events
Changes in climate extremes have
been observed related to temperature,
precipitation, tropical cyclones, and sea
level. In the last 50 years, there have
been widespread changes in extreme
temperatures observed across the globe.
For example, cold days, cold nights, and
frost have become less frequent, while
hot days, hot nights, and heat waves
have become more frequent. Globally, a
reduction in the number of daily cold
extremes has been observed in 70 to
75% of the land regions where data is
available. Cold nights (lowest or coldest
10% of nights, based on the period
1961–1990) have become rarer over the
last 50 years.
Observational evidence indicates an
increase in intense tropical cyclone (i.e.,
tropical storms and/or hurricanes)
activity in the North Atlantic. Since
about 1970, increases in cyclone
developments that affect the U.S. East
and Gulf Coasts have been correlated
with increases of tropical sea surface
temperatures In the contiguous U.S.,
studies find statistically significant
increases in heavy precipitation (the
heaviest 5%) and very heavy
precipitation (the heaviest 1%) of 14
and 20%, respectively. Much of this
increase occurred during the last three
decades of the 20th century and is most
apparent over the eastern parts of the
country. Trends in drought also have
strong regional variations. In much of
the Southeast and large parts of the
western U.S., the frequency of drought
has increased coincident with rising
temperatures over the past 50 years.
Although there has been an overall
increase in precipitation and no clear
trend in drought for the nation as a
whole, increasing temperatures have
made droughts more severe and
widespread than they would have
otherwise been.
For additional information, please see
Section 4 of the proposed Endangerment
TSD, the CCSP report ‘‘Weather and
Climate Extremes in a Changing
Climate. Regions of Focus: North
America, Hawaii, Caribbean, and U.S.
204 Global Climate Change Impacts in the United
States, Thomas R. Karl, Jerry M. Melillo, and
Thomas C. Peterson, (eds.). Cambridge University
Press, 2009. https://www.globalchange.gov/
publications/reports/scientific-assessments/usimpacts.
PO 00000
Frm 00133
Fmt 4701
Sfmt 4702
49585
Pacific Islands’’,205 IPCC WGI AR4,206
and the report ‘‘Global Climate Change
Impacts in the United States’’.207
iv. Physical and Biological Changes
Observations show that climate
change is currently affecting U.S.
physical and biological systems in
significant ways. Observations of the
cryosphere (the ‘‘frozen’’ component of
the climate system) have revealed
changes in sea ice, glaciers and snow
cover, freezing and thawing, and
permafrost. Satellite data since 1978
show that annual average Arctic sea ice
extent has shrunk by 2.7% (+/¥ 0.6%)
per decade, with larger decreases in
summer. Subtropical and tropical corals
in shallow waters have already suffered
major bleaching events that are
primarily driven by increases in sea
surface temperatures. Heat stress from
warmer ocean water can cause corals to
expel the microscopic algae that live
inside them which are essential to their
survival. Another stressor on coral
populations is ocean acidification
which occurs as CO2 is absorbed from
the atmosphere by the oceans. About
one-third of the carbon dioxide emitted
by human activities has been absorbed
by the ocean, resulting in a decrease in
the ocean’s pH. A lower pH affects the
ability of living things to create and
maintain shells or skeletons of calcium
carbonate. Other documented biophysical impacts include a significant
lengthening of the growing season and
increase in net primary productivity 208
in higher latitudes of North America.
Over the last 19 years, global satellite
data indicate an earlier onset of spring
across the temperate latitudes by 10 to
14 days.
205 Weather and Climate Extremes in a Changing
Climate. Regions of Focus: North America, Hawaii,
Caribbean, and U.S. Pacific Islands. A Report by
the U.S. Climate Change Science Program and the
Subcommittee on Global Change Research. [Thomas
R. Karl, Gerald A. Meehl, Christopher D. Miller,
Susan J. Hassol, Anne M. Waple, and William L.
Murray (eds.)]. Department of Commerce, NOAA’s
National Climatic Data Center, Washington, D.C.,
USA, 164 pp.
206 Climate Change 2007: The Physical Science
Basis. Contribution of Working Group I to the
Fourth Assessment Report of the Intergovernmental
Panel on Climate Change [Solomon, S., D. Qin, M.
Manning, Z. Chen, M. Marquis, K.B. Averyt,
M.Tignor and H.L. Miller (eds.)]. Cambridge
University Press, Cambridge, United Kingdom and
New York, NY, USA.
207 Global Climate Change Impacts in the United
States, Thomas R. Karl, Jerry M. Melillo, and
Thomas C. Peterson, (eds.). Cambridge University
Press, 2009. https://www.globalchange.gov/
publications/reports/scientific-assessments/usimpacts.
208 Net primary productivity is the rate at which
an ecosystem accumulates energy or biomass,
excluding the energy it uses for the process of
respiration.
E:\FR\FM\28SEP2.SGM
28SEP2
49586
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
For additional information, please see
Section 4 of the proposed Endangerment
TSD and IPCC WGI AR4.209
c. Projected Changes in Climate
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Most future scenarios that assume no
explicit GHG mitigation actions (beyond
those already enacted) project
increasing global GHG emissions over
the century, with corresponding
climbing GHG concentrations. Carbon
dioxide is expected to remain the
dominant anthropogenic GHG over the
course of the 21st century. The radiative
forcing 210 associated with the non-CO2
GHGs is still significant and increasing
over time. As a result, warming over this
century is projected to be considerably
greater than over the last century and
climate related changes are expected to
continue while new ones develop.
Described below are projected changes
in climate for the U.S.
See Section 6 of the proposed
Endangerment TSD, IPCC WGI AR4,211
the USGCRP report ‘‘Global Climate
Change Impacts in the United
States’’,212 and the CCSP report
‘‘Weather and Climate Extremes in a
Changing Climate, Regions of Focus:
North America, Hawaii, Caribbean, and
U.S. Pacific Islands’’ 213 for a more
complete discussion of projected
changes in climate.
209 IPCC (2007a) Climate Change 2007: The
Physical Science Basis. Contribution of Working
Group I to the Fourth Assessment Report of the
Intergovernmental Panel on Climate Change
[Solomon, S., D. Qin, M. Manning, Z. Chen, M.
Marquis, K.B. Averyt, M. Tignor and H.L. Miller
(eds.)]. Cambridge University Press, Cambridge,
United Kingdom and New York, NY, USA.
210 Radiative forcing is a measure of the change
that a factor causes in altering the balance of
incoming (solar) and outgoing (infrared and
reflected shortwave) energy in the Earth-atmosphere
system and thus shows the relative importance of
different factors in terms of their contribution to
climate change.
211 Climate Change 2007: The Physical Science
Basis. Contribution of Working Group I to the
Fourth Assessment Report of the Intergovernmental
Panel on Climate Change [Solomon, S., D. Qin, M.
Manning, Z. Chen, M. Marquis, K.B. Averyt,
M.Tignor and H.L. Miller (eds.)]. Cambridge
University Press, Cambridge, United Kingdom and
New York, NY, USA.
212 Global Climate Change Impacts in the United
States, Thomas R. Karl, Jerry M. Melillo, and
Thomas C. Peterson, (eds.). Cambridge University
Press, 2009. https://www.globalchange.gov/
publications/reports/scientific-assessments/usimpacts.
213 Weather and Climate Extremes in a Changing
Climate. Regions of Focus: North America, Hawaii,
Caribbean, and U.S. Pacific Islands. A Report by
the U.S. Climate Change Science Program and the
Subcommittee on Global Change Research. [Thomas
R. Karl, Gerald A. Meehl, Christopher D. Miller,
Susan J. Hassol, Anne M. Waple, and William L.
Murray (eds.)]. Department of Commerce, NOAA’s
National Climatic Data Center, Washington, DC,
USA, 164 pp.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
i. Temperature
Future warming over the course of the
21st century, even under scenarios of
low emissions growth, is very likely to
be greater than observed warming over
the past century. The range of IPCC
SRES scenarios provides a global
warming range of 1.8 °C to 4.0 °C (3.2
°F to 7.2 °F) with an uncertainty range
of 1.1 °C to 6.4 °C (2.0 °F to 11.5 °F).
All of the U.S. is very likely to warm
during this century, and most areas of
the U.S. are expected to warm by more
than the global average. The average
warming in the U.S. through 2100 is
projected by nearly all the models used
in the IPCC assessment to exceed 2 °C
(3.6 °F) for all scenarios, with 5 out of
21 models projecting average warming
in excess of 4 °C (7.2 °F) for the midrange emissions scenario. The number
of days with high temperatures above 90
°F is projected to increase throughout
the U.S. Temperature increases in the
next couple of decades will be primarily
determined by past emissions of heattrapping gases. As a result, there is less
difference in projected temperature
scenarios in the near-term (around 2020)
than in the middle (2050) and end of the
century, which will be determined more
by future emissions.
ii. Precipitation
Increases in the amount of
precipitation are very likely in higher
latitudes, while decreases are likely in
most subtropical latitudes and the
southwestern U.S., continuing observed
patterns. The mid-continental area is
expected to experience drying during
the summer, indicating a greater risk of
drought. Climate models project
continued increases in the heaviest
downpours during this century, while
the lightest precipitation is projected to
decrease. With more intense
precipitation expected to increase, the
risk of flooding and greater runoff and
erosion will also increase. In contrast,
droughts are likely to become more
frequent and severe in some regions.
The Southwest, in particular, is
expected to experience increasing
drought as changes in atmospheric
circulation patterns cause the dry zone
just outside the tropics to expand farther
northward into the United States.
iii. Extreme Events
It is likely that hurricanes will
become more intense, especially along
the Gulf and Atlantic coasts, with
stronger peak winds and more heavy
precipitation associated with ongoing
increases of tropical sea surface
temperatures. Heavy rainfall events are
expected to increase, increasing the risk
PO 00000
Frm 00134
Fmt 4701
Sfmt 4702
of flooding, greater runoff and erosion,
and thus the potential for adverse water
quality effects. These projected trends
can increase the number of people at
risk from suffering disease and injury
due to floods, storms, droughts, and
fires. Severe heat waves are projected to
intensify, which can increase heatrelated mortality and sickness.
iv. Physical and Biological Changes
IPCC projects a six-inch to two-foot
rise in sea level during the 21st century
from processes such as thermal
expansion of sea water and the melting
of land-based polar ice sheets. Ocean
acidification is projected to continue,
resulting in the reduced biological
production of marine calcifiers,
including corals. In addition to ocean
acidification, coastal waters are very
likely to continue to warm by as much
as 4 to 8 °F in this century, both in
summer and winter. This will result in
a northward shift in the geographic
distribution of marine life along the
coasts. Warmer ocean temperatures will
also contribute to increased coral
bleaching.
d. Key Climate Change Impacts and
Risks
The effects of climate changes
observed to date and/or projected to
occur in the future include: More
frequent and intense heat waves, more
wildfires, degraded air quality, more
heavy downpours and flooding,
increased drought, greater sea level rise,
more intense storms, water quantity and
quality problems, and negative impacts
to human health, water supply,
agriculture, forestry, coastal areas,
wildlife and ecosystems, and many
other aspects of society and the natural
environment.
i. Human Health
Warm temperatures and extreme
weather already cause and contribute to
adverse human health outcomes
through heat-related mortality and
morbidity, storm-related fatalities and
injuries, and disease. In the absence of
effective adaptation, these effects are
likely to increase with climate change.
Health effects related to climate change
include increased deaths, injuries,
infectious diseases, and stress-related
disorders and other adverse effects
associated with social disruption and
migration from more frequent extreme
weather. Severe heat waves are
projected to intensify in magnitude and
duration over the portions of the U.S.
where these events already occur, with
potential increases in mortality and
morbidity, especially among the elderly,
young and other sensitive populations.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
However, reduced human mortality
from cold exposure is projected through
2100. It is not clear whether reduced
mortality from cold will be greater or
less than increased heat-related
mortality, especially among the elderly,
young and frail. Public health effects
from climate change will likely
disproportionately impact the health of
certain segments of the population, such
as the poor, the very young, the elderly,
those already in poor health, the
disabled, those living alone and/or
indigenous populations dependent on
one or a few resources. Increases are
expected in potential ranges and
exposure of certain diseases affected by
temperature and precipitation changes,
including vector and waterborne
diseases (i.e., malaria, dengue fever,
West Nile virus). See the CCSP Report
‘‘Analyses of the effects of global change
on human health and welfare and
human systems’’,214 IPCC’s Working
Group II (WG2) AR4,215 and Section 7
of the proposed Endangerment TSD for
a more complete discussion regarding
climate change and impacts on human
health.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
ii. Air Quality
Climate change can be expected to
influence the concentration and
distribution of air pollutants through a
variety of direct and indirect processes,
including the modification of biogenic
emissions, the change of chemical
reaction rates, wash-out of pollutants by
precipitation, and modification of
weather patterns that influence
pollutant build-up. Higher temperatures
and weaker circulation patterns
associated with climate change are
expected to worsen regional ozone
pollution in the U.S., with associated
risks in respiratory infection,
aggravation of asthma, and premature
death. In addition to human health
effects, elevated levels of tropospheric
ozone have significant adverse effects
on crop yields, pasture and forest
growth, and species composition. See
Section 8 of the proposed Endangerment
TSD, EPA’s report ‘‘Assessment of the
Impacts of Global Change on Regional
U.S. Air Quality: A Synthesis of Climate
214 Analyses of the effects of global change on
human health and welfare and human systems. A
Report by the U.S. Climate Change Science Program
and the Subcommittee on Global Change Research.
[Gamble, J.L. (ed.), K.L. Ebi, F.G. Sussman, T.J.
Wilbanks, (Authors)]. U.S. Environmental
Protection Agency, Washington, DC, USA.
215 Climate Change 2007: Impacts, Adaptation
and Vulnerability. Contribution of Working Group
II to the Fourth Assessment Report of the
Intergovernmental Panel on Climate Change [M.L.
Parry, O.F. Canziani, J.P. Palutikof, P.J. van der
Linden and C.E. Hanson (eds.)]. Cambridge
University Press, Cambridge, United Kingdom and
New York, NY, USA.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
Change Impacts on Ground-Level
Ozone’’, 216 the CCSP report ‘‘Analyses
of the effects of global change on human
health and welfare and human
systems’’ 217 and IPCC WGII AR4 218 for
a more complete discussion regarding
human health impacts resulting from
climate change effects on air quality.
iii. Food and Agriculture
The CCSP concluded that, with
increased CO2 and temperature, the life
cycle of grain and oilseed crops will
likely progress more rapidly. But, as
temperature rises, these crops will
increasingly begin to experience failure,
especially if climate variability
increases and precipitation lessens or
becomes more variable. Furthermore,
the marketable yield of many
horticultural crops (e.g., tomatoes,
onions, fruits) is very likely to be more
sensitive to climate change than grain
and oilseed crops. Higher temperatures
will very likely reduce livestock
production during the summer season,
but these losses will very likely be
partially offset by warmer temperatures
during the winter season. Cold water
fisheries will likely be negatively
affected; warm-water fisheries will
generally benefit; and the results for
cool-water fisheries will be mixed, with
gains in the northern and losses in the
southern portions of ranges. See Section
9 of the proposed Endangerment TSD,
the CCSP report ‘‘The Effects of Climate
Change on Agriculture, Land Resources,
Water Resources, and Biodiversity in
the United States’’, and the USGCRP
report ‘‘Global Climate Change Impacts
in the United States’’ for a more
complete discussion regarding climate
science and impacts to food production
and agriculture.
iv. Forestry
Climate change has very likely
increased the size and number of forest
fires, insect outbreaks, and tree
216 EPA (2009) Assessment of the Impacts of
Global Change on Regional U.S. Air Quality: A
Synthesis of Climate Change Impacts on GroundLevel Ozone. An Interim Report of the U.S. EPA
Global Change Research Program. U.S.
Environmental Protection Agency, Washington, DC,
EPA/600/R–07/094.
217 Analyses of the effects of global change on
human health and welfare and human systems. A
Report by the U.S. Climate Change Science Program
and the Subcommittee on Global Change Research.
[Gamble, J.L. (ed.), K.L. Ebi, F.G. Sussman, T.J.
Wilbanks, (Authors)]. U.S. Environmental
Protection Agency, Washington, DC, USA.
218 Climate Change 2007: Impacts, Adaptation
and Vulnerability. Contribution of Working Group
II to the Fourth Assessment Report of the
Intergovernmental Panel on Climate Change [M.L.
Parry, O.F. Canziani, J.P. Palutikof, P.J. van der
Linden and C.E. Hanson (eds.)]. Cambridge
University Press, Cambridge, United Kingdom and
New York, NY, USA.
PO 00000
Frm 00135
Fmt 4701
Sfmt 4702
49587
mortality in the interior west, the
Southwest, and Alaska, and will
continue to do so. Disturbances like
wildfire and insect outbreaks are
increasing and are likely to intensify in
a warmer future with drier soils and
longer growing seasons. Although recent
climate trends have increased vegetation
growth, continuing increases in
disturbances are likely to limit carbon
storage, facilitate invasive species, and
disrupt ecosystem services. Overall
forest growth for North America as a
whole will likely increase modestly (10–
20%) as a result of extended growing
seasons and elevated CO2 over the next
century, but with important spatial and
temporal variation. Forest growth is
slowing in areas subject to drought and
has been subject to significant loss due
insect infestations such as the spruce
bark beetle in Alaska. See Section 10 of
the proposed Endangerment TSD, the
CCSP report ‘‘The Effects of Climate
Change on Agriculture, Land Resources,
Water Resources, and Biodiversity in
the United States’’, IPCC WGII, and the
USGCRP report ‘‘Global Climate Change
Impacts in the United States’’ for a more
complete discussion regarding climate
science and impacts to forestry.
v. Water Resources
The vulnerability of freshwater
resources in the United States to climate
change varies from region to region.
Climate change will likely further
constrain already over-allocated water
resources in some sections of the U.S.,
increasing competition among
agricultural, municipal, industrial, and
ecological uses. Although water
management practices in the U.S. are
generally advanced, particularly in the
western U.S climate change may
increasingly create conditions well
outside of historic observations
impacting managed water systems.
Rising temperatures will diminish
snowpack and increase evaporation,
affecting seasonal availability of water.
Groundwater systems generally respond
more slowly to climate change than
surface water systems. In semi-arid and
arid areas, groundwater resources are
particularly vulnerable because of
precipitation and stream flow are
concentrated over a few months, yearto-year variability is high, and deep
groundwater wells or reservoirs
generally do not exist. Availability of
groundwater is likely to be influenced
by changes in withdrawals (reflecting
development, demand, and availability
of other sources).
In the Great Lakes and major river
systems, lower levels are likely to
exacerbate challenges relating to water
quality, navigation, recreation,
E:\FR\FM\28SEP2.SGM
28SEP2
49588
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
hydropower generation, water transfers,
and bi-national relationships. Decreased
water supply and lower water levels are
likely to exacerbate challenges relating
to aquatic navigation. Higher water
temperatures, increased precipitation
intensity, and longer periods of low
flows will exacerbate many forms of
water pollution, potentially making
attainment of water quality goals more
difficult. As waters become warmer, the
aquatic life they now support will be
replaced by other species better adapted
to warmer water. In the long-term,
warmer water and changing flow may
result in deterioration of aquatic
ecosystems. See Section 11 of the
proposed Endangerment TSD, the CCSP
report ‘‘The Effects of Climate Change
on Agriculture, Land Resources, Water
Resources, and Biodiversity in the
United States’’, IPCC WGII, and the
USGCRP report ‘‘Global Change Impacts
in the United States’’ for a more
complete discussion regarding climate
science and impacts to water resources.
vi. Sea Level Rise and Coastal Areas
Warmer temperatures raise sea level
by expanding ocean water, melting
glaciers, and possibly increasing the rate
at which ice sheets discharge ice and
water into the oceans. Rising sea level
and the potential for stronger storms
pose an increasing threat to coastal
cities, residential communities,
infrastructure, beaches, wetlands, and
ecosystems. Coastal communities and
habitats will be increasingly stressed by
climate change effects interacting with
development and pollution. Sea level is
rising along much of the U.S. coast, and
the rate of change will increase in the
future, exacerbating the impacts of
progressive inundation, storm-surge
flooding, and shoreline erosion. Studies
find 75% of the shoreline removed from
the influence of spits, tidal inlets and
engineering structures is eroding along
the U.S. East Coast probably due to sea
level rise. Storm impacts are likely to be
more severe, especially along the Gulf
and Atlantic coasts. Salt marshes,
estuaries, other coastal habitats, and
dependent species will be further
threatened by sea level rise. The
interaction with coastal zone
development and climate change effects
such as sea level rise will further stress
coastal communities and habitats.
Population growth and rising value of
infrastructure in coastal areas increases
vulnerability and risk of climate
variability and future climate change.
Sea level rise and high rates of water
withdrawal promote the intrusion of
saline water in to groundwater supplies,
which adversely affects water quality.
See Section 12 of the proposed
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
Endangerment TSD, the CCSP report
‘‘Coastal Sensitivity to Sea Level Rise: A
Focus on the Mid-Atlantic Region’’,219
the USGCRP report ‘‘Global Change
Impacts in the United States’’, and IPCC
WGII for a more complete discussion
regarding climate science and impacts
to sea level rise and coastal areas.
vii. Energy, Infrastructure and
Settlements
Most of the effects of climate change
on the U.S. energy sector will be related
to energy use and production. The
research evidence is relatively clear that
climate warming will mean reductions
in total U.S. heating requirements and
increases in total cooling requirements
for building. These changes will vary by
region and by season and will affect
household and business energy costs.
Studies project that temperature
increases due to global warming are
very likely to increase peak demand for
electricity in most regions of the country
as rising temperatures are expected to
increase energy requirements for cooling
residential and commercial buildings.
An increase in peak demand for
electricity can lead to a disproportionate
increase in energy infrastructure
investment. Extreme weather events can
threaten coastal energy infrastructures
and electricity transmission and
distribution in the U.S. Increases in
hurricane intensity are likely to cause
further disruptions to oil and gas
operations in the Gulf, like those
experienced in 2005 with Hurricane
Katrina. Climate change is likely to
affect some renewable energy sources
across the nation, such as hydropower
production in regions subject to
changing patterns of precipitation or
snowmelt. The U.S. energy sector,
which relies heavily on water for both
hydropower and cooling capacity, may
be adversely impacted by changes to
water supply and quality in reservoirs
and other water bodies.
Water infrastructure, including
drinking water and wastewater
treatment plants, and sewer and storm
water management systems, will be at
greater risk of flooding, sea level rise
and storm surge, low flows, and other
factors that could impair performance.
In addition, as water supply is
constrained and demand increases it
will become more likely that water will
219 CCSP (2009) Coastal Sensitivity to Sea-Level
Rise: A Focus on the Mid-Atlantic Region. A report
by the U.S. Climate Change Science Program and
the Subcommittee on Global Change Research.
[James G. Titus (Coordinating Lead Author), K. Eric
Anderson, Donald R. Cahoon, Dean B. Gesch,
Stephen K. Gill, Benjamin T. Gutierrez, E. Robert
Thieler, and S. Jeffress Williams (Lead Authors)],
U.S. Environmental Protection Agency, Washington
DC, USA, 320 pp.
PO 00000
Frm 00136
Fmt 4701
Sfmt 4702
have to be transported and moved
which will require additional energy
capacity. See Section 13 of the proposed
Endangerment TSD, the CCSP reports
‘‘the Effects of Climate Change on
Energy Production in the United
States’’ 220 and ‘‘Impacts of Climate
Change and Variability on
Transportation Systems and
Infrastructure’’,221 and the USGCRP
report ‘‘Global Change Impacts in the
United States’’ for a more complete
discussion regarding climate science
and impacts to energy, infrastructure
and settlements.
viii. Ecosystems and Wildlife
Disturbances such as wildfires and
insect outbreaks are increasing in the
U.S. and are likely to intensify in a
warmer future with drier soils and
longer growing seasons. Although recent
climate trends have increased vegetation
growth, continuing increases in
disturbances are likely to limit carbon
storage, facilitate invasive species, and
disrupt ecosystem services. Over the
21st century, changes in climate will
cause species to shift north and to
higher elevations and fundamentally
rearrange U.S. ecosystems. Differential
capacities for range shifts are
constrained by development, habitat
fragmentation, invasive species, and
broken ecological connections. IPCC
consequently predicts significant
disruption of ecosystem structure,
function, and services. See Section 14 of
the proposed Endangerment TSD, IPCC
WGII, the CCSP report ‘‘The Effects of
Climate Change on Agriculture, Land
Resources, Water Resources, and
Biodiversity in the United States’’, and
the USGCRP report ‘‘Global Change
Impacts in the United States’’ for a more
complete discussion regarding climate
science and impacts to ecosystems and
wildlife.
220 CCSP (2007): Effects of Climate Change on
Energy Production and Use in the United States. A
Report by the U.S. Climate Change Science Program
and the subcommittee on Global Change Research.
Thomas J. Wilbanks, Vatsal Bhatt, Daniel E. Bilello,
Stanley R. Bull, James Ekmann, William C. Horak,
Y. Joe Huang, Mark D. Levine, Michael J. Sale,
David K. Schmalzer, and Michael J. Scott).
Department of Energy, Office of Biological &
Environmental Research, Washington, DC, USA,
160 pp.
221 CCSP (2008) Impacts of Climate Change and
Variability on Transportation Systems and
Infrastructure: Gulf Coast Study, Phase I. A Report
by the U.S. Climate Change Science Program and
the Subcommittee on Global Change Research
[Savonis, M.J., V.R. Burkett, and J.R. Potter (eds.)].
Department of Transportation, Washington, DC,
USA, 445 pp.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
3. Changes in Global Mean Temperature
and Sea Level Rise Associated With the
Proposal’s GHG Emissions Reductions
EPA examined 222 the reductions in
CO2 and other GHGs associated with the
proposal and analyzed the projected
effects on global mean surface
temperature and sea level, two common
indicators of climate change. The
analysis projects that the proposal will
reduce climate warming and sea level
rise. Although the projected reductions
are small in overall magnitude by
themselves, they are quantifiable and
would contribute to reducing climate
change risks.
a. Estimated Projected Reductions in
Global Mean Surface Temperatures and
Sea Level Rise
EPA estimated changes in the
atmospheric CO2 concentration, global
mean surface temperature and sea level
to 2100 resulting from the emissions
reductions in this proposal using the
Model for the Assessment of
Greenhouse Gas Induced Climate
Change (MAGICC, version 5.3). This
widely used, peer reviewed modeling
tool was also used to project
temperature and sea level rise under
different emissions scenarios in the
Third and Fourth Assessments of the
Intergovernmental Panel on Climate
Change (IPCC).
GHG emissions reductions from
Section III.F.1a were applied as net
reductions to a peer reviewed global
reference case (or baseline) emissions
scenario to generate an emissions
scenario specific to this proposal. For
the proposal scenario, all emissions
reductions were assumed to begin in
2012, with zero emissions change in
2011 (from the reference case) followed
by emissions linearly increasing to
equal the value supplied in Section
III.F.1.a for 2020 and then continuing to
2100. Details about the reference case
scenario and how the emissions
reductions were applied to generate the
proposal scenario can be found in the
DRIA Chapter 7.
The atmospheric CO2 concentration,
temperature, and sea-level increases for
both the reference case and the proposal
emissions scenarios were computed
using MAGICC. To compute the
reductions in the atmospheric CO2
concentrations as well as in temperature
and sea level resulting from the
proposal, the output from the proposal
222 Using the Model for the Assessment of
Greenhouse Gas Induced Climate Change (MAGICC,
https://www.cgd.ucar.edu/cas/wigley/magicc/), EPA
estimated the effects of this action’s greenhouse gas
emissions reductions on global mean temperature
and sea level. Please refer to Chapter 7.4 of the
DRIA for additional information.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
scenario was subtracted from an existing
MiniCAM emission scenario. To capture
some key uncertainties in the climate
system with the MAGICC model,
changes in temperature and sea-level
rise were projected across the most
current IPCC range for climate
sensitivities which ranges from 1.5 °C to
6.0 °C (representing the 90% confidence
interval).223 This wide range reflects the
uncertainty in this measure of how
much the global mean temperature
would rise if the concentration of
carbon dioxide in the atmosphere were
to double. Details about this modeling
analysis can be found in the DRIA
Chapter 7.4.
The results of this modeling show
small, but quantifiable, reductions in
the atmospheric CO2 concentration, the
projected global mean surface
temperature and sea level resulting from
this proposal (assuming it is finalized),
across all climate sensitivities. As a
result of this proposal’s emission
reductions, the atmospheric CO2
concentration is projected to be reduced
by approximately 2.9 to 3.2 parts per
million (ppm), the global mean
temperature is projected to be reduced
by approximately 0.007–0.016 °C by
2100, and global mean sea level rise is
projected to be reduced by
approximately 0.06–0.15cm by 2100.
The reductions are small relative to the
IPCC’s 2100 ‘‘best estimates’’ for global
mean temperature increases (1.8–4.0 °C)
and sea level rise (0.20–0.59m) for all
global GHG emissions sources for a
range of emissions scenarios. EPA used
a peer reviewed model, the MAGICC
model, to do this analysis. This analysis
is specific to the proposed rule and
therefore cannot come from some
previously published work. The Agency
welcomes comment on the use of the
MAGICC model for these purposes.
Further discussion of EPA’s modeling
analysis is found in Chapter 7 of the
Draft RIA.
As a substantial portion of CO2
emitted into the atmosphere is not
removed by natural processes for
millennia, each unit of CO2 not emitted
into the atmosphere avoids essentially
permanent climate change on centennial
time scales. Though the magnitude of
the avoided climate change projected
223 In IPCC reports, equilibrium climate
sensitivity refers to the equilibrium change in the
annual mean global surface temperature following
a doubling of the atmospheric equivalent carbon
dioxide concentration. The IPCC states that climate
sensitivity is ‘‘likely’’ to be in the range of 2 °C to
4.5 °C, ‘‘very unlikely’’ to be less than 1.5 °C, and
‘‘values substantially higher than 4.5 °C cannot be
excluded.’’ IPCC WGI, 2007, Climate Change
2007—The Physical Science Basis, Contribution of
Working Group I to the Fourth Assessment Report
of the IPCC, https://www.ipcc.ch/.
PO 00000
Frm 00137
Fmt 4701
Sfmt 4702
49589
here is small, these reductions would
represent a reduction in the adverse
risks associated with climate change
(though these risks were not formally
estimated for this proposal) across all
climate sensitivities.
4. Weight Reduction and Potential
Safety Impacts
In this section, EPA will discuss
potential safety impacts of the proposed
standards. In the joint technology
analysis, EPA and NHTSA agree that
automakers could reduce weight as one
part of the industry’s strategy for
meeting the proposed standards. As
shown in table III.D.6–3, of this
Preamble, EPA’s modeling projects that
vehicle manufacturers will reduce the
weight of their vehicles by 4% on
average between 2011 and 2016
although individual vehicles may have
greater or smaller weight reduction
(NHTSA’s results are similar using the
Volpe model). The penetration and
magnitude of these modeled changes are
consistent with the public
announcements made by many
manufacturers since early 2008 and are
consistent with meetings that EPA has
had with senior engineers and technical
leadership at many of the automotive
companies during 2008 and 2009.
EPA also projects that automakers
will not reduce footprint in order to
meet the proposed CO2 standards in our
modeling analysis. NHTSA and EPA
have taken two measures to help ensure
that the proposed rules provide no
incentive for mass reduction to be
accompanied by a corresponding
decrease in the footprint of the vehicle
(with its concomitant decrease in crush
and crumple zones). The first design
feature of the proposed rule is that the
CO2 or fuel economy targets are based
on the attribute of footprint (which is a
surrogate for vehicle size).224 The
second design feature is that the shape
of the footprint curve (or function) has
been carefully chosen such that it
neither encourages manufacturers to
increase, nor decrease the footprint of
their fleet. Thus, the standard curves are
designed to be approximately ‘‘footprint
neutral’’ within the sloped portion of
the function.225 For further discussion
on this, refer to Section II.C of the
preamble, or Chapter 2 of the joint TSD.
Thus the agencies are assuming in their
224 As the footprint attribute is defined as
wheelbase times track width, the footprint target
curves do not discourage manufacturers from
reducing vehicle size by reducing front, rear, or side
overhang, which can impact safety by resulting in
less crush space.
225 This neutrality with respect to footprint does
not extend to the smallest and largest vehicles,
because the function is limited, or flattened, in
these footprint ranges.
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49590
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
modeling analysis that the
manufacturers could reduce vehicle
mass without reducing vehicle footprint
as one way to respond to the proposed
rule.226
In Section IV of this preamble,
NHTSA presents a safety analysis of the
proposed CAFE standards based on the
2003 Kahane analysis. As discussed in
Section IV, NHTSA has developed a
worse case estimate of the impact of
weight reductions on fatalities. The
underlying data used for that analysis
does not allow NHTSA to analyze the
specific impact of weight reduction at
constant footprint because historically
there have not been a large number of
vehicles produced that relied
substantially on material substitution.
Rather, the data set includes vehicles
that were either smaller and lighter or
larger and heavier. The numbers in the
NHTSA analysis predict the safetyrelated fatality consequences that would
occur in the unlikely event that weight
reduction for model years 2012–2016 is
accomplished by reducing mass and
reducing footprint. EPA concurs with
NHTSA that the safety analysis
conducted by NHTSA and presented in
Section IV is a worst case analysis for
fatalities, and that the actual impacts on
vehicle safety could be much less.
However, EPA and NHTSA are not able
to quantify the lower-bound potential
impacts at this time.
The agencies believe that reducing
vehicle mass without reducing the size
of the vehicle or the structural integrity
is technically feasible in the rulemaking
time frame. Many of the technical
options for doing so are outlined in
Chapter 3 of the joint TSD and in EPA’s
DRIA. Weight reduction can be
accomplished by the proven methods
described below. Every manufacturer
will employ these methodologies to
some degree, the magnitude to which
each will be used will depend on
opportunities within individual vehicle
design.
• Material Substitution: Substitution
of lower density and/or higher strength
materials in a manner that preserves or
improves the function of the
component. This includes substitution
of high-strength steels, aluminum,
magnesium or composite materials for
components currently fabricated from
mild steel (e.g., the magnesium-alloy
front structure used on the 2009 Ford
F150 pickups).227 Light-weight
226 See Chapter 1 of the joint TSD for a
description of potential footprint changes in the
2016 reference fleet.
227 We note that since these MY 2009 F150s have
only begun to enter the fleet, there is little realworld crash data available to evaluate the safety
impacts of this new design.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
materials with acceptable energy
absorption properties can maintain
structural integrity and absorption of
crash energy relative to previous designs
while providing a net decrease in
component weight.
• Smart Design: Computer aided
engineering (CAE) tools can be used to
better optimize load paths within
structures by reducing stresses and
bending moments without adversely
affecting structural integrity. This
allows better optimization of the
sectional thicknesses of structural
components to reduce mass while
maintaining or improving the function
of the component. Smart designs also
integrate separate parts in a manner that
reduces mass by combining functions or
the reduced use of separate fasteners. In
addition, some ‘‘body on frame’’
vehicles are redesigned with a lighter
‘‘unibody’’ construction with little
compromise in vehicle functionality.
• Reduced Powertrain Requirements:
Reducing vehicle weight sufficiently
can allow for the use of a smaller,
lighter and more efficient engine while
maintaining or even increasing
performance. Approximately half of the
reduction is due to these reduced
powertrain output requirements from
reduced engine power output and/or
displacement, lighter weight
transmission and final drive gear ratios.
The subsequent reduced rotating mass
(e.g. transmission, driveshafts/
halfshafts, wheels and tires) via weight
and/or size reduction of components are
made possible by reduced torque output
requirements.
• Mass Compounding: Following
from the point above, the compounded
weight reductions of the body, engine
and drivetrain can reduce stresses on
the suspension components, steering
components, brakes, and thus allow
further reductions in the weight of these
subsystems. The reductions in weight
for unsprung masses such as brakes,
control arms, wheels and tires can
further reduce stresses in the
suspension mounting points which can
allow still further reductions in weight.
For example, lightweighting can allow
for the reduction in the size of the
vehicle brake system, while maintaining
the same stopping distance.
Therefore, EPA believes it is both
technically feasible to reduce weight
without reducing vehicle size, footprint
or structural strength and manufacturers
have indicated to the agencies that they
will use these approaches to accomplish
these tasks. We request written
comment on this assessment and this
projection, including up-to-date plans
regarding the extent of use by each
PO 00000
Frm 00138
Fmt 4701
Sfmt 4702
manufacturer of each of the
methodologies described above.
For this proposed rule, as noted
earlier, EPA’s modeling analysis
projects that weight reduction by model
year 2016 on the order of 4% on average
for the fleet will occur (see Section
III.D.6 for details on our estimated mass
reduction). EPA believes that such
modeled changes in the fleet could
result in much smaller fatality impacts
than those in the worst case scenario
presented in Section IV by NHTSA,
since manufacturers have many safer
options for reducing vehicle weight than
doing so by simultaneously reducing
footprint. The NHTSA analysis, based
solely on 4-door vehicles, does not
independently differentiate between
weight reduction which comes from
vehicle downsizing (a physically
smaller vehicle) and vehicle weight
reduction solely through design and
material changes (i.e., making a vehicle
weigh less without changing the size of
the vehicle or reducing structural
integrity).
Dynamic Research Incorporated (DRI)
has assessed the independent effects of
vehicle weight and size on safety in
order to determine if there are tradeoffs
between improving vehicle safety and
fuel consumption. In their 2005
studies 228 229 one of which was
published as a Society of Automotive
Engineers Technical Paper and received
peer review through that body, DRI
presented results that indicate that
vehicle weight reduction tends to
decrease fatalities, but vehicle
wheelbase and track reduction tends to
increase fatalities. The DRI work
focused on four major points, with #1
and #4 being discussed with additional
detail below:
1. 2–Door vehicles represented a
significant portion of the light duty fleet
and should not be ignored.
2. Directional control and therefore
crash avoidance improves with a
reduction in curb weight.
3. The occupants of the impacted
vehicle, or ‘‘collision partner’’ benefit
from being impacted by a lighter
vehicle.
4. Rollover fatalities are reduced by a
reduction in curb weight due to lower
centers of gravity and lower loads on the
roof structures.
228 ‘‘Supplemental Results on the Independent
Effects of Curb Weight, Wheelbase and Track on
Fatality Risk’’, Dynamic Research, Inc., DRI–TR–
05–01, May 2005.
229 ‘‘An Assessment of the Effects of Vehicle
Weight and Size on Fatality Risk in 1985 to 1998
Model Year Passenger Cars and 1985 to 1997 Model
Year’’, M. Van Auken and J. Zellner, Dynamic
Research Inc., Society of Automotive Engineers
Technical Paper 2005–01–1354.
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
The data used for the DRI analysis
was similar to NHTSA’s 2003 Kahane
study, using Fatality Analysis Reporting
System (FARS) data for vehicle model
years 1985 through 1998 for cars, and
1985 through 1997 trucks. This data
overlaps Kahane’s FARS data on model
year 1991 to 1999 vehicles. However,
DRI included 2-door passenger cars,
whereas the Kahane study excluded all
2-door vehicles. The 2003 Kahane study
excluded 2-door passenger cars because
it found that for MY 1991–1999
vehicles, sports and muscle cars
constituted a significant proportion of
those vehicles. These vehicles have
relatively high weight relative to their
wheelbase, and are also
disproportionately involved in crashes.
Thus, Kahane concluded that including
these vehicles in the analysis
excessively skewed the regression
results. However, as of July 1, 1999, 2door passenger cars represented 29% of
the registered cars in the United States.
DRI’s position was that this is a
significant portion of the light duty
fleet, too large to be ignored, and
conclusions regarding the effects of
weight and safety should be based on
data for all cars, not just 4-doors. DRI
did state in their conclusions that the
results are sensitive to removing data for
2-doors and wagons, and that the results
for 4-door cars with respect to the
effects of wheelbase and track width
were no longer statistically significant
when 2-door cars were removed. EPA
and NHTSA recognize that it is
important to properly account for 2-door
cars in a regression analysis evaluating
the impacts of vehicle weight on safety.
Thus, the agencies seek comment on
how to ensure that any analysis
supporting the final rule accounts as
fully as possible for the range of safety
impacts due to weight reduction on the
variety of vehicles regulated under these
proposed standards.
The DRI and Kahane studies also
differ with respect to the impact of
vehicle weight on rollover fatalities. The
Kahane study treated curb weight as a
surrogate for size and weight and
analyzed them as a single variable.
Using this method, the 2003 Kahane
analysis indicates that curb weight
reductions would increase fatalities due
to rollovers. The DRI study differed by
analyzing curb weight, wheelbase, and
track as multiple variables and
concluded that curb weight reduction
would decrease rollover fatalities, and
wheelbase and track reduction would
increase rollover fatalities. DRI offers
two potential root causes for higher curb
weight resulting in higher rollover
fatalities. The first is that a taller vehicle
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
tends to be heavier than a shorter
vehicle; therefore heavier vehicles may
be more likely to rollover because the
vehicle height and weight are correlated
with vehicle center of gravity height.
The second is that FMVSS 216 for roof
crush strength requirements for
passenger cars of model years 1995
through 1999 were proportional to the
unloaded vehicle weight if the weight is
less than 3,333 lbs, however they were
a constant if the weight is greater than
3,333 lbs. Therefore heavier vehicles
may have had relatively less rollover
crashworthiness.
NHTSA has rejected the DRI analysis,
and has not relied on it for its
evaluation of safety impact changes in
CAFE standards. See Section IV.G.6 of
this Notice, as well as NHTSA’s March
2009 Final Rulemaking for MY2011
CAFE standards (see 74 FR at 14402–
05).
The DRI and Kahane analyses of the
FARS data appear similar in one respect
because the results are reproducible
between the two studies when using
aggregated vehicle attributes for 4-door
cars.230 231 232 However, when DRI and
NHTSA separately analyzed individual
vehicle attributes of mass, wheelbase
and track width, DRI and NHTSA
obtained different results for passenger
cars. NHTSA has raised this as a
concern with the DRI study. When 2door vehicles are removed from the data
set EPA is concerned that the results
may no longer be statistically significant
with respect to independent vehicle
attributes due to the small remaining
data set, as DRI stated in the 2005 study.
The DRI analysis concluded that there
would be a small reduction in fatalities
for cars and for trucks for a 100 pound
reduction in curb weight without
accompanied vehicle footprint or size
changes. EPA notes that if DRI’s results
were to be applied using the curb
weight reductions predicted by the
OMEGA model, an overall reduction in
fatalities would be predicted. EPA
invites comment on all aspects of the
issue of the impact of this kind of
weight reduction on safety, including
the usefulness of the DRI study in
evaluating this issue.
The agencies are committed to
continuing to analyze vehicle safety
issues so a more informed evaluation
230 ‘‘Supplemental Results on the Independent
Effects of Curb Weight, Wheelbase and Track on
Fatality Risk’’, Dynamic Research, Inc., DRI–TR–
05–01, May 2005.
231 ‘‘An Assessment of the Effects of Vehicle
Weight and Size on Fatality Risk in 1985 to 1998
Model Year Passenger Cars and 1985 to 1997 Model
Year’’, M. Van Auken and J. Zellner, Dynamic
Research Inc., Society of Automotive Engineers
Technical Paper 2005–01–1354.
232 FR Vol. 74, No. 59, beginning on pg. 14402.
PO 00000
Frm 00139
Fmt 4701
Sfmt 4702
49591
can be made. We request comment on
this issue. These comments should
include not only further discussion and
analysis of the relevant studies but data
and analysis which can allow the
agencies to more accurately quantify
any potential safety issues with the
proposed standards.
G. How Would the Proposal Impact
Non-GHG Emissions and Their
Associated Effects?
In addition to reducing the emissions
of greenhouse gases, this proposal
would influence the emissions of
‘‘criteria’’ air pollutants and air toxics
(i.e., hazardous air pollutants). The
criteria air pollutants include carbon
monoxide (CO), fine particulate matter
(PM2.5), sulfur dioxide (SOX) and the
ozone precursors hydrocarbons (VOC)
and oxides of nitrogen (NOX); the air
toxics include benzene, 1,3-butadiene,
formaldehyde, acetaldehyde, and
acrolein. Our estimates of these nonGHG emission impacts from the
proposed program are shown by
pollutant in Table III.G–1 and Table
III.G–2 in total, and broken down by the
two drivers of these changes: (a)
‘‘Upstream’’ emission reductions due to
decreased extraction, production and
distribution of motor gasoline; and (b)
‘‘downstream’’ emission increases,
reflecting the effects of VMT rebound
(discussed in Sections III.F and III.H).
Total program impacts on criteria and
toxics emissions are discussed below,
followed by individual discussions of
the upstream and downstream impacts.
Those are followed by discussions of the
effects on air quality, health, and other
environmental concerns.
As discussed in Chapter 5 of the
DRIA, the impacts presented here are
only from petroleum (i.e., EPA assumes
that total volumes of ethanol and other
renewable fuels will remain unchanged
due to this program). Ethanol use was
modeled at the volumes projected in
AEO2007 for the reference and control
case; thus no changes are projected in
upstream emissions related to ethanol
production and distribution. However,
due to the decreased gasoline volume
associated with this proposal, a greater
market share of E10 is expected relative
to E0, which would be expected to have
some effect on fleetwide average nonGHG emission rates. This effect, which
is likely small relative to the other
effects considered here, has not been
accounted for in the downstream
emission modeling conducted for this
proposal, but EPA does plan to address
it in the final rule air quality analysis,
for which localized impacts could be
more significant. A more comprehensive
analysis of the impacts of different
E:\FR\FM\28SEP2.SGM
28SEP2
49592
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
ethanol and gasoline volume scenarios
is being prepared as part of EPA’s RFS2
rulemaking package.233
As shown in Table III.G–1, EPA
estimates that this program would result
in reductions of NOX, VOC, PM and
SOX, but would increase CO emissions.
For NOX, VOC, PM and SOX, we
estimate net reductions in criteria
pollutant emissions because the
emissions reductions from upstream
sources are larger than the emission
increases due to additional driving (i.e.,
the ‘‘rebound effect’’). In the case of CO,
we estimate slight emission increases,
because there are relatively small
reductions in upstream emissions, and
thus the projected emission increases
due to additional driving are greater
than the projected emission decreases
due to reduced fuel production. EPA
estimates that the proposed program
would result in small changes for toxic
emissions compared to total U.S.
inventories across all sectors. For all
pollutants the overall impact of the
program would be relatively small
mstockstill on DSKH9S0YB1PROD with PROPOSALS
233 74 FR 24904. See also Docket EPA–HQ–OAR–
2005–0161.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
compared to total U.S. inventories
across all sectors. In 2030 EPA estimates
the proposed program would reduce
these total NOX, PM and SOX
inventories by 0.2 to 0.3 percent and
reduce the VOC inventory by 1.2
percent, while increasing the total
national CO inventory by 0.4 percent.
As shown in Table III.G–2, EPA
estimates that the proposed program
would result in small changes for toxic
emissions compared to total U.S.
inventories across all sectors. In 2030
EPA estimates the program would
reduce total benzene and formaldehyde
by 0.04 percent. Total acrolein,
acetaldehyde, and 1,3-butadiene would
increase by 0.03 to 0.2 percent.
Other factors which may impact nonGHG emissions, but are not estimated in
this analysis, include:
• Vehicle technologies used to reduce
tailpipe CO2 emissions; because the
regulatory standards for non-GHG
emissions are the primary driver for
these emissions, EPA expects the impact
of this program to be negligible on nonGHG emission rates per mile.
• The potential for increased market
penetration of diesel vehicles; because
PO 00000
Frm 00140
Fmt 4701
Sfmt 4702
these vehicles would be held to the
same certification and in-use standards
for criteria pollutants as their gasoline
counterparts, EPA expects their impact
to be negligible on criteria pollutants
and other non-GHG emissions.
• Early introduction of electric
vehicles and plug-in hybrid electric
vehicles, which would reduce criteria
emissions in cases where they are able
to certify to lower certification
standards. It would also likely reduce
gaseous air toxics.
• Reduced refueling emissions due to
less frequent refueling events and
reduced annual refueling volumes
resulting from the GHG standards.
• Increased hot soak evaporative
emissions due to the likely increase in
number of trips associated with VMT
rebound modeled in this proposal.
• Increased market share of E10
relative to E0 due to the decreased
overall gasoline consumption of this
proposal combined with an unchanged
fuel ethanol volume.
EPA invites comments on the possible
contribution of these factors to non-GHG
emissions.
BILLING CODE 4910–59–P
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
1. Upstream Impacts of Program
Reducing tailpipe CO2 emissions from
light-duty cars and trucks through
tailpipe standards and improved A/C
efficiency will result in reduced fuel
demand and reductions in the emissions
associated with all of the processes
involved in getting petroleum to the
pump. These upstream emission
impacts on criteria pollutants are
summarized in Table III.G–1. The
upstream reductions grow over time as
the fleet turns over to cleaner CO2
vehicles, so that by 2030 VOC would
decrease by 148,000 tons, NOX by
43,000 tons, and PM2.5 by 6,000 tons.
Table III.G–2 shows the corresponding
impacts on upstream air toxic emissions
in 2030. Formaldehyde decreases by 112
tons, benzene by 320 tons, acetaldehyde
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
by 15 tons, acrolein by 2 tons, and 1,3butadiene by 3 tons.
To determine these impacts, EPA
estimated the impact of reduced
petroleum volumes on the extraction
and transportation of crude oil as well
as the production and distribution of
finished gasoline. For the purpose of
assessing domestic-only emission
reductions it was necessary to estimate
the fraction of fuel savings attributable
to domestic finished gasoline, and of
this gasoline what fraction is produced
from domestic crude. For this analysis
EPA estimated that 50 percent of fuel
savings is attributable to domestic
finished gasoline and that 90 percent of
this gasoline originated from imported
crude. Emission factors for most
upstream emission sources are based on
the GREET1.8 model, developed by
PO 00000
Frm 00141
Fmt 4701
Sfmt 4702
DOE’s Argonne National Laboratory,234
but in some cases the GREET values
were modified or updated by EPA to be
consistent with the National Emission
Inventory (NEI).235 The primary updates
for this analysis were to incorporate
newer information on gasoline
distribution emissions for VOC from the
NEI, which were significantly higher
than GREET estimates; and the
incorporation of upstream emission
factors for the air toxics estimated in
this analysis: benzene, 1,3-butadiene,
acetaldehyde, acrolein, and
234 Greenhouse Gas, Regulated Emissions, and
Energy Use in Transportation model (GREET), U.S.
Department of Energy, Argonne National
Laboratory, https://www.transportation.anl.gov/
modeling_simulation/GREET/.
235 EPA. 2002 National Emissions Inventory (NEI)
Data and Documentation, https://www.epa.gov/ttn/
chief/net/2002inventory.html.
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.022</GPH>
BILLING CODE 4910–59–C
49593
49594
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
formaldehyde. The development of
these emission factors is detailed in
DRIA Chapter 5.
3. Health Effects of Non-GHG Pollutants
a. Particulate Matter
i. Background
mstockstill on DSKH9S0YB1PROD with PROPOSALS
2. Downstream Impacts of Program
As discussed in more detail in Section
III.H, the effect of fuel cost on VMT
(‘‘rebound’’) was accounted for in our
assessment of economic and
environmental impacts of this proposed
rule. A 10 percent rebound case was
used for this analysis, meaning that
VMT for affected model years is
modeled as increasing by 10 percent as
much as the increase in fuel economy;
i.e., a 10 percent increase in fuel
economy would yield a 1.0 percent
increase in VMT.
Downstream emission impacts of the
rebound effect are summarized in Table
III.G–1 for criteria pollutants and
precursors and Table III.G–2 for air
toxics. The emission increases from the
rebound effect grow over time as the
fleet turns over to cleaner CO2 vehicles,
so that by 2030 VOC would increase by
5,500 tons, NOX by 16,000 tons, and
PM2.5 by 570 tons. Table III.G–2 shows
the corresponding impacts on air toxic
emissions. The most noteworthy of
these impacts in 2030 are 40 additional
tons of 1,3-butadiene, 75 tons of
acetaldehyde, 240 tons of benzene, 96
tons of formaldehyde, and 4 tons of
acrolein.
For this analysis the reference case
non-GHG emissions for light duty
vehicles and trucks were derived using
EPA’s MOtor Vehicle Emission
Simulator (MOVES) model for VOC, CO,
NOX, PM and air toxics. PM2.5 emission
estimates include additional
adjustments for low temperatures,
discussed in detail in the DRIA. Because
this modeling was based on calendar
year estimates, estimating the rebound
effect required a fleet-weighted rebound
factor to be calculated for calendar years
2020 and 2030; these factors are
presented in DRIA Chapter 5.
As discussed in Section III.H, EPA
will be taking comment on the
appropriate level of rebound rate for this
analysis. The sensitivity of the
downstream emission increases shown
in Tables III.G–1 and III.G–2 to the level
of rebound would be in direct
proportion to the rebound rate itself;
since zero rebound would result in zero
emission increase, the downstream
results presented in Table III.G–1 and
Table III.G–2 can be directly scaled to
estimate the effect of lower rebound
rates.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
Particulate matter is a generic term for
a broad class of chemically and
physically diverse substances. It can be
principally characterized as discrete
particles that exist in the condensed
(liquid or solid) phase spanning several
orders of magnitude in size. Since 1987,
EPA has delineated that subset of
inhalable particles small enough to
penetrate to the thoracic region
(including the tracheobronchial and
alveolar regions) of the respiratory tract
(referred to as thoracic particles).
Current NAAQS use PM2.5 as the
indicator for fine particles (with PM2.5
referring to particles with a nominal
mean aerodynamic diameter less than or
equal to 2.5 μm), and use PM10 as the
indicator for purposes of regulating the
coarse fraction of PM10 (referred to as
thoracic coarse particles or coarsefraction particles; generally including
particles with a nominal mean
aerodynamic diameter greater than 2.5
μm and less than or equal to 10 μm, or
PM10–2.5). Ultrafine particles are a subset
of fine particles, generally less than 100
nanometers (0.1 μm) in aerodynamic
diameter.
Fine particles are produced primarily
by combustion processes and by
transformations of gaseous emissions
(e.g., SOX, NOX and VOC) in the
atmosphere. The chemical and physical
properties of PM2.5 may vary greatly
with time, region, meteorology, and
source category. Thus, PM2.5 may
include a complex mixture of different
pollutants including sulfates, nitrates,
organic compounds, elemental carbon
and metal compounds. These particles
can remain in the atmosphere for days
to weeks and travel hundreds to
thousands of kilometers.
ii. Health Effects of PM
Scientific studies show ambient PM is
associated with a series of adverse
health effects. These health effects are
discussed in detail in EPA’s 2004
Particulate Matter Air Quality Criteria
Document (PM AQCD) and the 2005 PM
Staff Paper. 236 237 238 Further discussion
236 U.S. EPA (2004). Air Quality Criteria for
Particulate Matter. Volume I EPA600/P–99/002aF
and Volume II EPA600/P–99/002bF. Retrieved on
March 19, 2009 from Docket EPA–HQ–OAR–2003–
0190 at https://www.regulations.gov/.
237 U.S. EPA. (2005). Review of the National
Ambient Air Quality Standard for Particulate
Matter: Policy Assessment of Scientific and
Technical Information, OAQPS Staff Paper. EPA–
452/R–05–005a. Retrieved March 19, 2009 from
https://www.epa.gov/ttn/naaqs/standards/pm/data/
pmstaffpaper_20051221.pdf.
PO 00000
Frm 00142
Fmt 4701
Sfmt 4702
of health effects associated with PM can
also be found in the DRIA for this rule.
Health effects associated with shortterm exposures (hours to days) to
ambient PM include premature
mortality, aggravation of cardiovascular
and lung disease (as indicated by
increased hospital admissions and
emergency department visits), increased
respiratory symptoms including cough
and difficulty breathing, decrements in
lung function, altered heart rate rhythm,
and other more subtle changes in blood
markers related to cardiovascular
health.239 Long-term exposure to PM2.5
and sulfates has also been associated
with mortality from cardiopulmonary
disease and lung cancer, and effects on
the respiratory system such as reduced
lung function growth or development of
respiratory disease. A new analysis
shows an association between long-term
PM2.5 exposure and a measure of
atherosclerosis development.240 241
Studies examining populations
exposed over the long term (one or more
years) to different levels of air pollution,
including the Harvard Six Cities Study
238 The PM NAAQS is currently under review and
the EPA is considering all available science on PM
health effects, including information which has
been published since 2004, in the development of
the upcoming PM Integrated Science Assessment
Document (ISA). A second draft of the PM ISA was
completed in July 2009 and was submitted for
review by the Clean Air Scientific Advisory
Committee (CASAC) of EPA’s Science Advisory
Board. Comments from the general public have also
been requested. For more information, see https://
cfpub.epa.gov/ncea/cfm/
recordisplay.cfm?deid=210586.
239 U.S. EPA. (2006). National Ambient Air
Quality Standards for Particulate Matter; Proposed
Rule. 71 FR 2620, January 17, 2006.
240 Kunzli, N., Jerrett, M., Mack, W.J., et al.
¨
(2004). Ambient air pollution and atherosclerosis in
Los Angeles. Environ Health Perspect., 113, 201–
206.
241 This study is included in the 2006 Provisional
Assessment of Recent Studies on Health Effects of
Particulate Matter Exposure. The provisional
assessment did not and could not (given a very
short timeframe) undergo the extensive critical
review by CASAC and the public, as did the PM
AQCD. The provisional assessment found that the
‘‘new’’ studies expand the scientific information
and provide important insights on the relationship
between PM exposure and health effects of PM. The
provisional assessment also found that ‘‘new’’
studies generally strengthen the evidence that acute
and chronic exposure to fine particles and acute
exposure to thoracic coarse particles are associated
with health effects. Further, the provisional science
assessment found that the results reported in the
studies did not dramatically diverge from previous
findings, and taken in context with the findings of
the AQCD, the new information and findings did
not materially change any of the broad scientific
conclusions regarding the health effects of PM
exposure made in the AQCD. However, it is
important to note that this assessment was limited
to screening, surveying, and preparing a provisional
assessment of these studies. For reasons outlined in
Section I.C of the preamble for the final PM NAAQS
rulemaking in 2006 (see 71 FR 61148–49, October
17, 2006), EPA based its NAAQS decision on the
science presented in the 2004 AQCD.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
and the American Cancer Society Study,
show associations between long-term
exposure to ambient PM2.5 and both
total and cardiopulmonary premature
mortality.242 243 244 In addition, an
extension of the American Cancer
Society Study shows an association
between PM2.5 and sulfate
concentrations and lung cancer
mortality.245
b. Ozone
i. Background
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Ground-level ozone pollution is
typically formed by the reaction of VOC
and NOX in the lower atmosphere in the
presence of heat and sunlight. These
pollutants, often referred to as ozone
precursors, are emitted by many types of
pollution sources, such as highway and
nonroad motor vehicles and engines,
power plants, chemical plants,
refineries, makers of consumer and
commercial products, industrial
facilities, and smaller area sources.
The science of ozone formation,
transport, and accumulation is
complex.246 Ground-level ozone is
produced and destroyed in a cyclical set
of chemical reactions, many of which
are sensitive to temperature and
sunlight. When ambient temperatures
and sunlight levels remain high for
several days and the air is relatively
stagnant, ozone and its precursors can
build up and result in more ozone than
typically occurs on a single hightemperature day. Ozone can be
transported hundreds of miles
downwind of precursor emissions,
resulting in elevated ozone levels even
242 Dockery, D.W., Pope, C.A. III, Xu, X, et al.
(1993). An association between air pollution and
mortality in six U.S. cities. N Engl J Med, 329,
1753–1759. Retrieved on March 19, 2009 from
https://content.nejm.org/cgi/content/full/329/24/
1753.
243 Pope, C.A., III, Thun, M.J., Namboodiri, M.M.,
Dockery, D.W., Evans, J.S., Speizer, F.E., and Heath,
C.W., Jr. (1995). Particulate air pollution as a
predictor of mortality in a prospective study of U.S.
adults. Am. J. Respir. Crit. Care Med, 151, 669–674.
244 Krewski, D., Burnett, R.T., Goldberg, M.S., et
al. (2000). Reanalysis of the Harvard Six Cities
study and the American Cancer Society study of
particulate air pollution and mortality. A special
report of the Institute’s Particle Epidemiology
Reanalysis Project. Cambridge, MA: Health Effects
Institute. Retrieved on March 19, 2009 from
https://es.epa.gov/ncer/science/pm/hei/ReanExecSumm.pdf.
245 Pope, C.A., III, Burnett, R.T., Thun, M. J.,
Calle, E.E., Krewski, D., Ito, K., Thurston, G.D.,
(2002). Lung cancer, cardiopulmonary mortality,
and long-term exposure to fine particulate air
pollution. J. Am. Med. Assoc., 287, 1132–1141.
246 U.S. EPA. (2006). Air Quality Criteria for
Ozone and Related Photochemical Oxidants (Final).
EPA/600/R–05/004aF-cF. Washington, DC: U.S.
EPA. Retrieved on March 19, 2009 from Docket
EPA–HQ–OAR–2003–0190 at https://
www.regulations.gov/.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
in areas with low local VOC or NOX
emissions.
ii. Health Effects of Ozone
The health and welfare effects of
ozone are well documented and are
assessed in EPA’s 2006 Air Quality
Criteria Document (ozone AQCD) and
2007 Staff Paper.247 248 Ozone can
irritate the respiratory system, causing
coughing, throat irritation, and/or
uncomfortable sensation in the chest.
Ozone can reduce lung function and
make it more difficult to breathe deeply;
breathing may also become more rapid
and shallow than normal, thereby
limiting a person’s activity. Ozone can
also aggravate asthma, leading to more
asthma attacks that require medical
attention and/or the use of additional
medication. In addition, there is
suggestive evidence of a contribution of
ozone to cardiovascular-related
morbidity and highly suggestive
evidence that short-term ozone exposure
directly or indirectly contributes to nonaccidental and cardiopulmonary-related
mortality, but additional research is
needed to clarify the underlying
mechanisms causing these effects. In a
recent report on the estimation of ozonerelated premature mortality published
by the National Research Council (NRC),
a panel of experts and reviewers
concluded that short-term exposure to
ambient ozone is likely to contribute to
premature deaths and that ozone-related
mortality should be included in
estimates of the health benefits of
reducing ozone exposure.249 Animal
toxicological evidence indicates that
with repeated exposure, ozone can
inflame and damage the lining of the
lungs, which may lead to permanent
changes in lung tissue and irreversible
reductions in lung function. People who
are more susceptible to effects
associated with exposure to ozone can
include children, the elderly, and
individuals with respiratory disease
such as asthma. Those with greater
exposures to ozone, for instance due to
time spent outdoors (e.g., children and
247 U.S. EPA. (2006). Air Quality Criteria for
Ozone and Related Photochemical Oxidants (Final).
EPA/600/R–05/004aF–cF. Washington, DC: U.S.
EPA. Retrieved on March 19, 2009 from Docket
EPA–HQ–OAR–2003–0190 at https://
www.regulations.gov/.
248 U.S. EPA. (2007). Review of the National
Ambient Air Quality Standards for Ozone: Policy
Assessment of Scientific and Technical
Information, OAQPS Staff Paper. EPA–452/R–07–
003. Washington, DC. U.S. EPA. Retrieved on
March 19, 2009 from Docket EPA–HQ–OAR–2003–
0190 at https://www.regulations.gov/.
249 National Research Council (NRC), 2008.
Estimating Mortality Risk Reduction and Economic
Benefits from Controlling Ozone Air Pollution. The
National Academies Press: Washington, DC.
PO 00000
Frm 00143
Fmt 4701
Sfmt 4702
49595
outdoor workers), are of particular
concern.
The 2006 ozone AQCD also examined
relevant new scientific information that
has emerged in the past decade,
including the impact of ozone exposure
on such health effects as changes in
lung structure and biochemistry,
inflammation of the lungs, exacerbation
and causation of asthma, respiratory
illness-related school absence, hospital
admissions and premature mortality.
Animal toxicological studies have
suggested potential interactions between
ozone and PM with increased responses
observed to mixtures of the two
pollutants compared to either ozone or
PM alone. The respiratory morbidity
observed in animal studies along with
the evidence from epidemiologic studies
supports a causal relationship between
acute ambient ozone exposures and
increased respiratory-related emergency
room visits and hospitalizations in the
warm season. In addition, there is
suggestive evidence of a contribution of
ozone to cardiovascular-related
morbidity and non-accidental and
cardiopulmonary mortality.
c. NOX and SOX
i. Background
Nitrogen dioxide (NO2) is a member of
the NOX family of gases. Most NO2 is
formed in the air through the oxidation
of nitric oxide (NO) emitted when fuel
is burned at a high temperature. SO2, a
member of the sulfur oxide (SOX) family
of gases, is formed from burning fuels
containing sulfur (e.g., coal or oil
derived), extracting gasoline from oil, or
extracting metals from ore.
SO2 and NO2 can dissolve in water
vapor and further oxidize to form
sulfuric and nitric acid which react with
ammonia to form sulfates and nitrates,
both of which are important
components of ambient PM. The health
effects of ambient PM are discussed in
Section III.G.3.a of this preamble. NOX
along with non-methane hydrocarbon
(NMHC) are the two major precursors of
ozone. The health effects of ozone are
covered in Section III.G.3.b.
ii. Health Effects of NO2
Information on the health effects of
NO2 can be found in the U.S.
Environmental Protection Agency
Integrated Science Assessment (ISA) for
Nitrogen Oxides.250 The U.S. EPA has
concluded that the findings of
epidemiologic, controlled human
250 U.S. EPA (2008). Integrated Science
Assessment for Oxides of Nitrogen—Health Criteria
(Final Report). EPA/600/R–08/071. Washington,
DC: U.S. EPA. Retrieved on March 19, 2009 from
https://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?
deid=194645.
E:\FR\FM\28SEP2.SGM
28SEP2
49596
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
exposure, and animal toxicological
studies provide evidence that is
sufficient to infer a likely causal
relationship between respiratory effects
and short-term NO2 exposure. The ISA
concludes that the strongest evidence
for such a relationship comes from
epidemiologic studies of respiratory
effects including symptoms, emergency
department visits, and hospital
admissions. The ISA also draws two
broad conclusions regarding airway
responsiveness following NO2 exposure.
First, the ISA concludes that NO2
exposure may enhance the sensitivity to
allergen-induced decrements in lung
function and increase the allergeninduced airway inflammatory response
at exposures as low as 0.26 ppm NO2 for
30 minutes. Second, exposure to NO2
has been found to enhance the inherent
responsiveness of the airway to
subsequent nonspecific challenges in
controlled human exposure studies of
asthmatic subjects. Enhanced airway
responsiveness could have important
clinical implications for asthmatics
since transient increases in airway
responsiveness following NO2 exposure
have the potential to increase symptoms
and worsen asthma control. Together,
the epidemiologic and experimental
data sets form a plausible, consistent,
and coherent description of a
relationship between NO2 exposures
and an array of adverse health effects
that range from the onset of respiratory
symptoms to hospital admission.
Although the weight of evidence
supporting a causal relationship is
somewhat less certain than that
associated with respiratory morbidity,
NO2 has also been linked to other health
endpoints. These include all-cause
(nonaccidental) mortality, hospital
admissions or emergency department
visits for cardiovascular disease, and
decrements in lung function growth
associated with chronic exposure.
iii. Health Effects of SO2
Information on the health effects of
SO2 can be found in the U.S.
Environmental Protection Agency
Integrated Science Assessment for
Sulfur Oxides.251 SO2 has long been
known to cause adverse respiratory
health effects, particularly among
individuals with asthma. Other
potentially sensitive groups include
children and the elderly. During periods
of elevated ventilation, asthmatics may
251 U.S. EPA. (2008). Integrated Science
Assessment (ISA) for Sulfur Oxides—Health
Criteria (Final Report). EPA/600/R–08/047F.
Washington, DC: U.S. Environmental Protection
Agency. Retrieved on March 18, 2009 from https://
cfpub.epa.gov/ncea/cfm/recordisplay.
cfm?deid=198843.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
experience symptomatic
bronchoconstriction within minutes of
exposure. Following an extensive
evaluation of health evidence from
epidemiologic and laboratory studies,
the EPA has concluded that there is a
causal relationship between respiratory
health effects and short-term exposure
to SO2. Separately, based on an
evaluation of the epidemiologic
evidence of associations between shortterm exposure to SO2 and mortality, the
EPA has concluded that the overall
evidence is suggestive of a causal
relationship between short-term
exposure to SO2 and mortality.
d. Carbon Monoxide
Carbon monoxide (CO) forms as a
result of incomplete fuel combustion.
CO enters the bloodstream through the
lungs, forming carboxyhemoglobin and
reducing the delivery of oxygen to the
body’s organs and tissues. The health
threat from CO is most serious for those
who suffer from cardiovascular disease,
particularly those with angina or
peripheral vascular disease. Healthy
individuals also are affected, but only at
higher CO levels. Exposure to elevated
CO levels is associated with impairment
of visual perception, work capacity,
manual dexterity, learning ability and
performance of complex tasks. Carbon
monoxide also contributes to ozone
nonattainment since carbon monoxide
reacts photochemically in the
atmosphere to form ozone.252
Additional information on CO related
health effects can be found in the
Carbon Monoxide Air Quality Criteria
Document (CO AQCD).253 254
exposure to air toxics. 255 These
compounds include, but are not limited
to, benzene, 1,3-butadiene,
formaldehyde, acetaldehyde, acrolein,
polycyclic organic matter (POM), and
naphthalene. These compounds, except
acetaldehyde, were identified as
national or regional risk drivers in the
2002 National-scale Air Toxics
Assessment (NATA) and have
significant inventory contributions from
mobile sources.256 Emissions and
ambient concentrations of compounds
are discussed in the DRIA chapter on
emission inventories and air quality
(Chapters 5 and 7, respectively).
i. Benzene
The EPA’s IRIS database lists benzene
as a known human carcinogen (causing
leukemia) by all routes of exposure, and
concludes that exposure is associated
with additional health effects, including
genetic changes in both humans and
animals and increased proliferation of
bone marrow cells in mice.257 258 259 EPA
states in its IRIS database that data
indicate a causal relationship between
benzene exposure and acute
lymphocytic leukemia and suggest a
relationship between benzene exposure
and chronic non-lymphocytic leukemia
and chronic lymphocytic leukemia. The
International Agency for Research on
Carcinogens (IARC) has determined that
benzene is a human carcinogen and the
U.S. Department of Health and Human
Services (DHHS) has characterized
benzene as a known human
carcinogen.260 261
A number of adverse noncancer
health effects including blood disorders,
such as preleukemia and aplastic
anemia, have also been associated with
e. Air Toxics
Motor vehicle emissions contribute to
ambient levels of air toxics known or
suspected as human or animal
carcinogens, or that have noncancer
health effects. The population
experiences an elevated risk of cancer
and other noncancer health effects from
252 U.S. EPA (2000). Air Quality Criteria for
Carbon Monoxide, EPA/600/P–99/001F. This
document is available in Docket EPA–HQ–OAR–
2004–0008.
253 U.S. EPA (2000). Air Quality Criteria for
Carbon Monoxide, EPA/600/P–99/001F. This
document is available in Docket EPA–HQ–OAR–
2004–0008.
254 The CO NAAQS is currently under review and
the EPA is considering all available science on CO
health effects, including information which has
been published since 2000, in the development of
the upcoming CO Integrated Science Assessment
Document (ISA). A first draft of the CO ISA was
completed in March 2009 and was submitted for
review by the Clean Air Scientific Advisory
Committee (CASAC) of EPA’s Science Advisory
Board. For more information, see https://
cfpub.epa.gov/ncea/cfm/
recordisplay.cfm?deid=203935.
PO 00000
Frm 00144
Fmt 4701
Sfmt 4702
255 U. S. EPA. 2002 National-Scale Air Toxics
Assessment. https://www.epa.gov/ttn/atw/
nata12002/risksum.html.
256 U.S. EPA. 2009. National-Scale Air Toxics
Assessment for 2002. https://www.epa.gov/ttn/atw/
nata2002/.
257 U.S. EPA. 2000. Integrated Risk Information
System File for Benzene. This material is available
electronically at https://www.epa.gov/iris/subst/
0276.htm.
258 International Agency for Research on Cancer
(IARC). 1982. Monographs on the evaluation of
carcinogenic risk of chemicals to humans, Volume
29. Some industrial chemicals and dyestuffs, World
Health Organization, Lyon, France, p. 345–389.
259 Irons, R.D.; Stillman, W.S.; Colagiovanni, D.B.;
Henry, V.A. 1992. Synergistic action of the benzene
metabolite hydroquinone on myelopoietic
stimulating activity of granulocyte/macrophage
colony-stimulating factor in vitro, Proc. Natl. Acad.
Sci. 89:3691–3695.
260 International Agency for Research on Cancer
(IARC). 1987. Monographs on the evaluation of
carcinogenic risk of chemicals to humans, Volume
29. Supplement 7, Some industrial chemicals and
dyestuffs, World Health Organization, Lyon, France.
261 U.S. Department of Health and Human
Services National Toxicology Program 11th Report
on Carcinogens available at https://
www.ntp.niehs.nih.gov/go/16183.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
long-term exposure to benzene.262 263
The most sensitive noncancer effect
observed in humans, based on current
data, is the depression of the absolute
lymphocyte count in blood.264 265 In
addition, recent work, including studies
sponsored by the Health Effects Institute
(HEI), provides evidence that
biochemical responses are occurring at
lower levels of benzene exposure than
previously know 266 267 268 269 EPA’s IRIS
program has not yet evaluated these
new data.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
ii. 1,3-Butadiene
EPA has characterized 1,3-butadiene
as carcinogenic to humans by
inhalation.270 271 The IARC has
determined that 1,3-butadiene is a
human carcinogen and the U.S. DHHS
has characterized 1,3-butadiene as a
known human carcinogen.272 273 There
262 Aksoy, M. (1989). Hematotoxicity and
carcinogenicity of benzene. Environ. Health
Perspect. 82: 193–197.
263 Goldstein, B.D. (1988). Benzene toxicity.
Occupational medicine. State of the Art Reviews. 3:
541–554.
264 Rothman, N., G.L. Li, M. Dosemeci, W.E.
Bechtold, G.E. Marti, Y.Z. Wang, M. Linet, L.Q. Xi,
W. Lu, M.T. Smith, N. Titenko-Holland, L.P. Zhang,
W. Blot, S.N. Yin, and R.B. Hayes (1996)
Hematotoxicity among Chinese workers heavily
exposed to benzene. Am. J. Ind. Med. 29: 236–246.
265 U.S. EPA (2002) Toxicological Review of
Benzene (Noncancer Effects). Environmental
Protection Agency, Integrated Risk Information
System (IRIS), Research and Development, National
Center for Environmental Assessment, Washington
DC. This material is available electronically at
https://www.epa.gov/iris/subst/0276.htm.
266 Qu, O.; Shore, R.; Li, G.; Jin, X.; Chen, C.L.;
Cohen, B.; Melikian, A.; Eastmond, D.; Rappaport,
S.; Li, H.; Rupa, D.; Suramaya, R.; Songnian, W.;
Huifant, Y.; Meng, M.; Winnik, M.; Kwok, E.; Li, Y.;
Mu, R.; Xu, B.; Zhang, X.; Li, K. (2003) HEI Report
115, Validation & Evaluation of Biomarkers in
Workers Exposed to Benzene in China.
267 Qu, Q., R. Shore, G. Li, X. Jin, L.C. Chen, B.
Cohen, et al. (2002) Hematological changes among
Chinese workers with a broad range of benzene
exposures. Am. J. Industr. Med. 42: 275–285.
268 Lan, Qing, Zhang, L., Li, G., Vermeulen, R., et
al. (2004) Hematotoxically in Workers Exposed to
Low Levels of Benzene. Science 306: 1774–1776.
269 Turtletaub, K.W. and Mani, C. (2003) Benzene
metabolism in rodents at doses relevant to human
exposure from Urban Air. Research Reports Health
Effect Inst. Report No.113.
270 U.S. EPA (2002) Health Assessment of 1,3–
Butadiene. Office of Research and Development,
National Center for Environmental Assessment,
Washington Office, Washington, DC. Report No.
EPA600–P–98–001F. This document is available
electronically at https://www.epa.gov/iris/supdocs/
buta-sup.pdf.
271 U.S. EPA (2002) Full IRIS Summary for 1,3butadiene (CASRN 106–99–0). Environmental
Protection Agency, Integrated Risk Information
System (IRIS), Research and Development, National
Center for Environmental Assessment, Washington,
DC https://www.epa.gov/iris/subst/0139.htm.
272 International Agency for Research on Cancer
(IARC) (1999) Monographs on the evaluation of
carcinogenic risk of chemicals to humans, Volume
71, Re-evaluation of some organic chemicals,
hydrazine and hydrogen peroxide and Volume 97
(in preparation), World Health Organization, Lyon,
France.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
are numerous studies consistently
demonstrating that 1,3-butadiene is
metabolized into genotoxic metabolites
by experimental animals and humans.
The specific mechanisms of 1,3butadiene-induced carcinogenesis are
unknown; however, the scientific
evidence strongly suggests that the
carcinogenic effects are mediated by
genotoxic metabolites. Animal data
suggest that females may be more
sensitive than males for cancer effects
associated with 1,3-butadiene exposure;
there are insufficient data in humans
from which to draw conclusions about
sensitive subpopulations. 1,3-butadiene
also causes a variety of reproductive and
developmental effects in mice; no
human data on these effects are
available. The most sensitive effect was
ovarian atrophy observed in a lifetime
bioassay of female mice.274
iii. Formaldehyde
Since 1987, EPA has classified
formaldehyde as a probable human
carcinogen based on evidence in
humans and in rats, mice, hamsters, and
monkeys.275 EPA is currently reviewing
recently published epidemiological
data. For instance, research conducted
by the National Cancer Institute (NCI)
found an increased risk of
nasopharyngeal cancer and
lymphohematopoietic malignancies
such as leukemia among workers
exposed to formaldehyde.276 277 In an
analysis of the lymphohematopoietic
cancer mortality from an extended
follow-up of these workers, NCI
confirmed an association between
lymphohematopoietic cancer risk and
peak exposures.278 A recent National
Institute of Occupational Safety and
273 U.S. Department of Health and Human
Services (2005) National Toxicology Program 11th
Report on Carcinogens available at:
ntp.niehs.nih.gov/index.cfm?objectid=32BA9724F1F6-975E-7FCE50709CB4C932.
274 Bevan, C.; Stadler, J.C.; Elliot, G.S.; et al.
(1996) Subchronic toxicity of 4-vinylcyclohexene in
rats and mice by inhalation. Fundam. Appl.
Toxicol. 32:1–10.
275 U.S. EPA (1987) Assessment of Health Risks
to Garment Workers and Certain Home Residents
from Exposure to Formaldehyde, Office of
Pesticides and Toxic Substances, April 1987.
276 Hauptmann, M.; Lubin, J. H.; Stewart, P. A.;
Hayes, R. B.; Blair, A. 2003. Mortality from
lymphohematopeotic malignancies among workers
in formaldehyde industries. Journal of the National
Cancer Institute 95: 1615–1623.
277 Hauptmann, M.; Lubin, J. H.; Stewart, P. A.;
Hayes, R. B.; Blair, A. 2004. Mortality from solid
cancers among workers in formaldehyde industries.
American Journal of Epidemiology 159: 1117–1130.
278 Beane Freeman, L. E.; Blair, A.; Lubin, J. H.;
Stewart, P. A.; Hayes, R. B.; Hoover, R. N.;
Hauptmann, M. 2009. Mortality from
lymphohematopoietic malignancies among workers
in formaldehyde industries: The National Cancer
Institute cohort. J. National Cancer Inst. 101: 751–
761.
PO 00000
Frm 00145
Fmt 4701
Sfmt 4702
49597
Health (NIOSH) study of garment
workers also found increased risk of
death due to leukemia among workers
exposed to formaldehyde.279 Extended
follow-up of a cohort of British chemical
workers did not find evidence of an
increase in nasopharyngeal or
lymphohematopoietic cancers, but a
continuing statistically significant
excess in lung cancers was reported.280
Recently, the IARC re-classified
formaldehyde as a human carcinogen
(Group 1).281
Formaldehyde exposure also causes a
range of noncancer health effects,
including irritation of the eyes (burning
and watering of the eyes), nose and
throat. Effects from repeated exposure in
humans include respiratory tract
irritation, chronic bronchitis and nasal
epithelial lesions such as metaplasia
and loss of cilia. Animal studies suggest
that formaldehyde may also cause
airway inflammation—including
eosinophil infiltration into the airways.
There are several studies that suggest
that formaldehyde may increase the risk
of asthma—particularly in the
young.282 283
iv. Acetaldehyde
Acetaldehyde is classified in EPA’s
IRIS database as a probable human
carcinogen, based on nasal tumors in
rats, and is considered toxic by the
inhalation, oral, and intravenous
routes.284 Acetaldehyde is reasonably
anticipated to be a human carcinogen by
the U.S. DHHS in the 11th Report on
Carcinogens and is classified as possibly
carcinogenic to humans (Group 2B) by
279 Pinkerton, L. E. 2004. Mortality among a
cohort of garment workers exposed to
formaldehyde: an update. Occup. Environ. Med. 61:
193–200.
280 Coggon, D, EC Harris, J Poole, KT Palmer.
2003. Extended follow-up of a cohort of British
chemical workers exposed to formaldehyde. J
National Cancer Inst. 95:1608–1615.
281 International Agency for Research on Cancer
(IARC). 2006. Formaldehyde, 2–Butoxyethanol and
1-tert-Butoxypropan-2-ol. Volume 88. (in
preparation), World Health Organization, Lyon,
France.
282 Agency for Toxic Substances and Disease
Registry (ATSDR). 1999. Toxicological profile for
Formaldehyde. Atlanta, GA: U.S. Department of
Health and Human Services, Public Health Service.
https://www.atsdr.cdc.gov/toxprofiles/tp111.html.
283 WHO (2002) Concise International Chemical
Assessment Document 40: Formaldehyde.
Published under the joint sponsorship of the United
Nations Environment Programme, the International
Labour Organization, and the World Health
Organization, and produced within the framework
of the Inter-Organization Programme for the Sound
Management of Chemicals. Geneva.
284 U.S. EPA. 1991. Integrated Risk Information
System File of Acetaldehyde. Research and
Development, National Center for Environmental
Assessment, Washington, DC. This material is
available electronically at https://www.epa.gov/iris/
subst/0290.htm.
E:\FR\FM\28SEP2.SGM
28SEP2
49598
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
the IARC.285 286 EPA is currently
conducting a reassessment of cancer risk
from inhalation exposure to
acetaldehyde. The primary noncancer
effects of exposure to acetaldehyde
vapors include irritation of the eyes,
skin, and respiratory tract.287 In shortterm (4 week) rat studies, degeneration
of olfactory epithelium was observed at
various concentration levels of
acetaldehyde exposure.288 289 Data from
these studies were used by EPA to
develop an inhalation reference
concentration. Some asthmatics have
been shown to be a sensitive
subpopulation to decrements in
functional expiratory volume (FEV1
test) and bronchoconstriction upon
acetaldehyde inhalation.290 The agency
is currently conducting a reassessment
of the health hazards from inhalation
exposure to acetaldehyde.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
v. Acrolein
Acrolein is extremely acrid and
irritating to humans when inhaled, with
acute exposure resulting in upper
respiratory tract irritation, mucus
hypersecretion and congestion. Levels
considerably lower than 1 ppm (2.3 mg/
m3) elicit subjective complaints of eye
and nasal irritation and a decrease in
the respiratory rate.291 292 Lesions to the
lungs and upper respiratory tract of rats,
rabbits, and hamsters have been
observed after subchronic exposure to
acrolein. Based on animal data,
individuals with compromised
respiratory function (e.g., emphysema,
285 U.S. Department of Health and Human
Services National Toxicology Program 11th Report
on Carcinogens available at: ntp.niehs.nih.gov/
index.cfm?objectid=32BA9724-F1F6-975E7FCE50709CB4C932.
286 International Agency for Research on Cancer
(IARC). 1999. Re-evaluation of some organic
chemicals, hydrazine, and hydrogen peroxide. IARC
Monographs on the Evaluation of Carcinogenic Risk
of Chemical to Humans, Vol. 71. Lyon, France.
287 U.S. EPA. 1991. Integrated Risk Information
System File of Acetaldehyde. This material is
available electronically at https://www.epa.gov/iris/
subst/0290.htm.
288 Appleman, L. M., R. A. Woutersen, V. J. Feron,
R. N. Hooftman, and W. R. F. Notten. 1986. Effects
of the variable versus fixed exposure levels on the
toxicity of acetaldehyde in rats. J. Appl. Toxicol. 6:
331–336.
289 Appleman, L.M., R.A. Woutersen, and V.J.
Feron. 1982. Inhalation toxicity of acetaldehyde in
rats. I. Acute and subacute studies. Toxicology. 23:
293–297.
290 Myou, S.; Fujimura, M.; Nishi K.; Ohka, T.;
and Matsuda, T. 1993. Aerosolized acetaldehyde
induces histamine-mediated bronchoconstriction in
asthmatics. Am. Rev. Respir. Dis.148(4 Pt 1): 940–
3.
291 Weber-Tschopp, A; Fischer, T; Gierer, R; et al.
(1977) Experimentelle reizwirkungen von Acrolein
auf den Menschen. Int Arch Occup Environ Hlth
40(2):117–130. In German
292 Sim, VM; Pattle, RE. (1957) Effect of possible
smog irritants on human subjects. J Am Med Assoc
165(15):1908–1913.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
asthma) are expected to be at increased
risk of developing adverse responses to
strong respiratory irritants such as
acrolein. This was demonstrated in mice
with allergic airway-disease by
comparison to non-diseased mice in a
study of the acute respiratory irritant
effects of acrolein.293 The intense
irritancy of this carbonyl has been
demonstrated during controlled tests in
human subjects, who suffer intolerable
eye and nasal mucosal sensory reactions
within minutes of exposure.294
EPA determined in 2003 that the
human carcinogenic potential of
acrolein could not be determined
because the available data were
inadequate. No information was
available on the carcinogenic effects of
acrolein in humans and the animal data
provided inadequate evidence of
carcinogenicity.295 The IARC
determined in 1995 that acrolein was
not classifiable as to its carcinogenicity
in humans.296
vi. Polycyclic Organic Matter (POM)
POM is generally defined as a large
class of organic compounds which have
multiple benzene rings and a boiling
point greater than 100 degrees Celsius.
Many of the compounds included in the
class of compounds known as POM are
classified by EPA as probable human
carcinogens based on animal data. One
of these compounds, naphthalene, is
discussed separately below. Polycyclic
aromatic hydrocarbons (PAHs) are a
subset of POM that contain only
hydrogen and carbon atoms. A number
of PAHs are known or suspected
carcinogens. Recent studies have found
that maternal exposures to PAHs (a
subclass of POM) in a population of
pregnant women were associated with
several adverse birth outcomes,
including low birth weight and reduced
length at birth, as well as impaired
cognitive development at age
293 Morris JB, Symanowicz PT, Olsen JE, et al.
2003. Immediate sensory nerve-mediated
respiratory responses to irritants in healthy and
allergic airway-diseased mice. J Appl Physiol
94(4):1563–1571.
294 Sim VM, Pattle RE. Effect of possible smog
irritants on human subjects JAMA165: 1980–2010,
1957.
295 U.S. EPA. 2003. Integrated Risk Information
System File of Acrolein. Research and
Development, National Center for Environmental
Assessment, Washington, DC. This material is
available at https://www.epa.gov/iris/subst/
0364.htm.
296 International Agency for Research on Cancer
(IARC). 1995. Monographs on the evaluation of
carcinogenic risk of chemicals to humans, Volume
63, Dry cleaning, some chlorinated solvents and
other industrial chemicals, World Health
Organization, Lyon, France.
PO 00000
Frm 00146
Fmt 4701
Sfmt 4702
three.297 298 EPA has not yet evaluated
these recent studies.
vii. Naphthalene
Naphthalene is found in small
quantities in gasoline and diesel fuels.
Naphthalene emissions have been
measured in larger quantities in both
gasoline and diesel exhaust compared
with evaporative emissions from mobile
sources, indicating it is primarily a
product of combustion. EPA released an
external review draft of a reassessment
of the inhalation carcinogenicity of
naphthalene based on a number of
recent animal carcinogenicity
studies.299 The draft reassessment
completed external peer review.300
Based on external peer review
comments received, additional analyses
are being undertaken. This external
review draft does not represent official
agency opinion and was released solely
for the purposes of external peer review
and public comment. Once EPA
evaluates public and peer reviewer
comments, the document will be
revised. The National Toxicology
Program listed naphthalene as
‘‘reasonably anticipated to be a human
carcinogen’’ in 2004 on the basis of
bioassays reporting clear evidence of
carcinogenicity in rats and some
evidence of carcinogenicity in mice.301
California EPA has released a new risk
assessment for naphthalene, and the
IARC has reevaluated naphthalene and
re-classified it as Group 2B: possibly
carcinogenic to humans.302 Naphthalene
also causes a number of chronic noncancer effects in animals, including
297 Perera, F.P.; Rauh, V.; Tsai, W–Y.; et al. (2002)
Effect of transplacental exposure to environmental
pollutants on birth outcomes in a multiethnic
population. Environ Health Perspect. 111: 201–205.
298 Perera, F.P.; Rauh, V.; Whyatt, R.M.; Tsai,
W.Y.; Tang, D.; Diaz, D.; Hoepner, L.; Barr, D.; Tu,
Y.H.; Camann, D.; Kinney, P. (2006) Effect of
prenatal exposure to airborne polycyclic aromatic
hydrocarbons on neurodevelopment in the first 3
years of life among inner-city children. Environ
Health Perspect 114: 1287–1292.
299 U. S. EPA. 2004. Toxicological Review of
Naphthalene (Reassessment of the Inhalation
Cancer Risk), Environmental Protection Agency,
Integrated Risk Information System, Research and
Development, National Center for Environmental
Assessment, Washington, DC. This material is
available electronically at https://www.epa.gov/iris/
subst/0436.htm.
300 Oak Ridge Institute for Science and Education.
(2004). External Peer Review for the IRIS
Reassessment of the Inhalation Carcinogenicity of
Naphthalene. August 2004. https://cfpub.epa.gov/
ncea/cfm/recordisplay.cfm?deid=84403.
301 National Toxicology Program (NTP). (2004).
11th Report on Carcinogens. Public Health Service,
U.S. Department of Health and Human Services,
Research Triangle Park, NC. Available from:
https://ntp-server.niehs.nih.gov.
302 International Agency for Research on Cancer
(IARC). (2002). Monographs on the Evaluation of
the Carcinogenic Risk of Chemicals for Humans.
Vol. 82. Lyon, France.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
abnormal cell changes and growth in
respiratory and nasal tissues.303
4. Environmental Effects of Non-GHG
Pollutants
various locations, depending on PM
concentrations and factors such as
chemical composition and average
relative humidity. Second, section 169
of the Clean Air Act provides additional
authority to address existing visibility
impairment and prevent future visibility
impairment in the 156 national parks,
forests and wilderness areas categorized
as mandatory class I Federal areas (62
FR 38680–81, July 18, 1997).307 In July
1999, the regional haze rule (64 FR
35714) was put in place to protect the
visibility in mandatory class I Federal
areas. Visibility can be said to be
impaired in both PM2.5 nonattainment
areas and mandatory class I Federal
areas.
a. Visibility
b. Plant and Ecosystem Effects of Ozone
Visibility can be defined as the degree
to which the atmosphere is transparent
to visible light. Airborne particles
degrade visibility by scattering and
absorbing light. Visibility is important
because it has direct significance to
people’s enjoyment of daily activities in
all parts of the country. Individuals
value good visibility for the well-being
it provides them directly, where they
live and work and in places where they
enjoy recreational opportunities.
Visibility is also highly valued in
significant natural areas such as
national parks and wilderness areas and
special emphasis is given to protecting
visibility in these areas. For more
information on visibility, see the final
2004 PM AQCD as well as the 2005 PM
Staff Paper.305 306
EPA is pursuing a two-part strategy to
address visibility. First, to address the
welfare effects of PM on visibility, EPA
has set secondary PM2.5 standards
which act in conjunction with the
establishment of a regional haze
program. In setting this secondary
standard, EPA has concluded that PM2.5
causes adverse effects on visibility in
Elevated ozone levels contribute to
environmental effects, with impacts to
plants and ecosystems being of most
concern. Ozone can produce both acute
and chronic injury in sensitive species
depending on the concentration level
and the duration of the exposure. Ozone
effects also tend to accumulate over the
growing season of the plant, so that even
low concentrations experienced for a
longer duration have the potential to
create chronic stress on vegetation.
Ozone damage to plants includes visible
injury to leaves and impaired
photosynthesis, both of which can lead
to reduced plant growth and
reproduction, resulting in reduced crop
yields, forestry production, and use of
sensitive ornamentals in landscaping. In
addition, the impairment of
photosynthesis, the process by which
the plant makes carbohydrates (its
source of energy and food), can lead to
a subsequent reduction in root growth
and carbohydrate storage below ground,
resulting in other, more subtle plant and
ecosystems impacts.
These latter impacts include
increased susceptibility of plants to
insect attack, disease, harsh weather,
interspecies competition and overall
decreased plant vigor. The adverse
effects of ozone on forest and other
natural vegetation can potentially lead
to species shifts and loss from the
affected ecosystems, resulting in a loss
or reduction in associated ecosystem
goods and services. Lastly, visible ozone
injury to leaves can result in a loss of
aesthetic value in areas of special scenic
significance like national parks and
wilderness areas. The final 2006 ozone
AQCD presents more detailed
viii. Other Air Toxics
mstockstill on DSKH9S0YB1PROD with PROPOSALS
In addition to the compounds
described above, other compounds in
gaseous hydrocarbon and PM emissions
from vehicles will be affected by this
proposed action. Mobile source air toxic
compounds that would potentially be
impacted include ethylbenzene,
polycyclic organic matter,
propionaldehyde, toluene, and xylene.
Information regarding the health effects
of these compounds can be found in
EPA’s IRIS database.304
303 U. S. EPA. 1998. Toxicological Review of
Naphthalene, Environmental Protection Agency,
Integrated Risk Information System, Research and
Development, National Center for Environmental
Assessment, Washington, DC. This material is
available electronically at https://www.epa.gov/iris/
subst/0436.htm.
304 U.S. EPA Integrated Risk Information System
(IRIS) database is available at: www.epa.gov/iris.
305 U.S. EPA. (2004). Air Quality Criteria for
Particulate Matter (AQCD). Volume I Document No.
EPA600/P–99/002aF and Volume II Document No.
EPA600/P–99/002bF. Washington, DC: U.S.
Environmental Protection Agency. Retrieved on
March 18, 2009 from https://cfpub.epa.gov/ncea/
cfm/recordisplay.cfm?deid=87903.
306 U.S. EPA. (2005). Review of the National
Ambient Air Quality Standard for Particulate
Matter: Policy Assessment of Scientific and
Technical Information, OAQPS Staff Paper. EPA–
452/R–05–005. Washington, DC: U.S.
Environmental Protection Agency.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
307 These areas are defined in section 162 of the
Act as those national parks exceeding 6,000 acres,
wilderness areas and memorial parks exceeding
5,000 acres, and all international parks which were
in existence on August 7, 1977.
PO 00000
Frm 00147
Fmt 4701
Sfmt 4702
49599
information on ozone effects on
vegetation and ecosystems.
c. Atmospheric Deposition
Wet and dry deposition of ambient
particulate matter delivers a complex
mixture of metals (e.g., mercury, zinc,
lead, nickel, aluminum, cadmium),
organic compounds (e.g., POM, dioxins,
furans) and inorganic compounds (e.g.,
nitrate, sulfate) to terrestrial and aquatic
ecosystems. The chemical form of the
compounds deposited depends on a
variety of factors including ambient
conditions (e.g., temperature, humidity,
oxidant levels) and the sources of the
material. Chemical and physical
transformations of the compounds occur
in the atmosphere as well as the media
onto which they deposit. These
transformations in turn influence the
fate, bioavailability and potential
toxicity of these compounds.
Atmospheric deposition has been
identified as a key component of the
environmental and human health
hazard posed by several pollutants
including mercury, dioxin and PCBs.308
Adverse impacts on water quality can
occur when atmospheric contaminants
deposit to the water surface or when
material deposited on the land enters a
water body through runoff. Potential
impacts of atmospheric deposition to
water bodies include those related to
both nutrient and toxic inputs. Adverse
effects to human health and welfare can
occur from the addition of excess
nitrogen via atmospheric deposition.
The nitrogen-nutrient enrichment
contributes to toxic algae blooms and
zones of depleted oxygen, which can
lead to fish kills, frequently in coastal
waters. Deposition of heavy metals or
other toxins may lead to the human
ingestion of contaminated fish, human
ingestion of contaminated water,
damage to the marine ecology, and
limits to recreational uses. Several
studies have been conducted in U.S.
coastal waters and in the Great Lakes
Region in which the role of ambient PM
deposition and runoff is
investigated.309 310 311 312 313
308 U.S. EPA (2000) Deposition of Air Pollutants
to the Great Waters: Third Report to Congress.
Office of Air Quality Planning and Standards. EPA–
453/R–00–0005. This document is available in
Docket EPA–HQ–OAR–2003–0190.
309 U.S. EPA (2004) National Coastal Condition
Report II. Office of Research and Development/
Office of Water. EPA–620/R–03/002. This document
is available in Docket EPA–HQ–OAR–2003–0190.
310 Gao, Y., E.D. Nelson, M.P. Field, et al. 2002.
Characterization of atmospheric trace elements on
PM2.5 particulate matter over the New York-New
Jersey harbor estuary. Atmos. Environ. 36: 1077–
1086.
311 Kim, G., N. Hussain, J.R. Scudlark, and T.M.
Church. 2000. Factors influencing the atmospheric
E:\FR\FM\28SEP2.SGM
Continued
28SEP2
49600
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Atmospheric deposition of nitrogen
and sulfur contributes to acidification,
altering biogeochemistry and affecting
animal and plant life in terrestrial and
aquatic ecosystems across the U.S. The
sensitivity of terrestrial and aquatic
ecosystems to acidification from
nitrogen and sulfur deposition is
predominantly governed by geology.
Prolonged exposure to excess nitrogen
and sulfur deposition in sensitive areas
acidifies lakes, rivers and soils.
Increased acidity in surface waters
creates inhospitable conditions for biota
and affects the abundance and
nutritional value of preferred prey
species, threatening biodiversity and
ecosystem function. Over time,
acidifying deposition also removes
essential nutrients from forest soils,
depleting the capacity of soils to
neutralize future acid loadings and
negatively affecting forest sustainability.
Major effects include a decline in
sensitive forest tree species, such as red
spruce (Picea rubens) and sugar maple
(Acer saccharum), and a loss of
biodiversity of fishes, zooplankton, and
macro invertebrates.
In addition to the role nitrogen
deposition plays in acidification,
nitrogen deposition also causes
ecosystem nutrient enrichment leading
to eutrophication that alters
biogeochemical cycles. Excess nitrogen
also leads to the loss of nitrogen
sensitive lichen species as they are
outcompeted by invasive grasses as well
as altering the biodiversity of terrestrial
ecosystems, such as grasslands and
meadows. For a broader explanation of
the topics treated here, refer to the
description in Chapter 7 of the DRIA.
Adverse impacts on soil chemistry
and plant life have been observed for
areas heavily influenced by atmospheric
deposition of nutrients, metals and acid
species, resulting in species shifts, loss
of biodiversity, forest decline and
damage to forest productivity. Potential
impacts also include adverse effects to
human health through ingestion of
contaminated vegetation or livestock (as
in the case for dioxin deposition),
reduction in crop yield, and limited use
of land due to contamination.
Atmospheric deposition of pollutants
can reduce the aesthetic appeal of
buildings and culturally important
depositional fluxes of stable Pb, 210Pb, and 7Be
into Chesapeake Bay. J. Atmos. Chem. 36: 65–79.
312 Lu, R., R.P. Turco, K. Stolzenbach, et al. 2003.
Dry deposition of airborne trace metals on the Los
Angeles Basin and adjacent coastal waters. J.
Geophys. Res. 108(D2, 4074): AAC 11–1 to 11–24.
313 Marvin, C.H., M.N. Charlton, E.J. Reiner, et al.
2002. Surficial sediment contamination in Lakes
Erie and Ontario: A comparative analysis. J. Great
Lakes Res. 28(3): 437–450.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
articles through soiling, and can
contribute directly (or in conjunction
with other pollutants) to structural
damage by means of corrosion or
erosion. Atmospheric deposition may
affect materials principally by
promoting and accelerating the
corrosion of metals, by degrading paints,
and by deteriorating building materials
such as concrete and limestone.
Particles contribute to these effects
because of their electrolytic,
hygroscopic, and acidic properties, and
their ability to adsorb corrosive gases
(principally sulfur dioxide). The rate of
metal corrosion depends on a number of
factors, including the deposition rate
and nature of the pollutant; the
influence of the metal protective
corrosion film; the amount of moisture
present; variability in the
electrochemical reactions; the presence
and concentration of other surface
electrolytes; and the orientation of the
metal surface.
d. Environmental Effects of Air Toxics
Fuel combustion emissions contribute
to ambient levels of pollutants that
contribute to adverse effects on
vegetation. Volatile organic compounds
(VOCs), some of which are considered
air toxics, have long been suspected to
play a role in vegetation damage.314 In
laboratory experiments, a wide range of
tolerance to VOCs has been observed.315
Decreases in harvested seed pod weight
have been reported for the more
sensitive plants, and some studies have
reported effects on seed germination,
flowering and fruit ripening. Effects of
individual VOCs or their role in
conjunction with other stressors (e.g.,
acidification, drought, temperature
extremes) have not been well studied. In
a recent study of a mixture of VOCs
including ethanol and toluene on
herbaceous plants, significant effects on
seed production, leaf water content and
photosynthetic efficiency were reported
for some plant species.316
Research suggests an adverse impact
of vehicle exhaust on plants, which has
in some cases been attributed to
aromatic compounds and in other cases
314 U.S. EPA. 1991. Effects of organic chemicals
in the atmosphere on terrestrial plants. EPA/600/3–
91/001.
315 Cape JN, ID Leith, J Binnie, J Content, M
Donkin, M Skewes, DN Price AR Brown, AD
Sharpe. 2003. Effects of VOCs on herbaceous plants
in an open-top chamber experiment. Environ.
Pollut. 124:341–343.
316 Cape JN, ID Leith, J Binnie, J Content, M
Donkin, M Skewes, DN Price AR Brown, AD
Sharpe. 2003. Effects of VOCs on herbaceous plants
in an open-top chamber experiment. Environ.
Pollut. 124:341–343.
PO 00000
Frm 00148
Fmt 4701
Sfmt 4702
to nitrogen oxides.317 318 319 The impacts
of VOCs on plant reproduction may
have long-term implications for
biodiversity and survival of native
species near major roadways. Most of
the studies of the impacts of VOCs on
vegetation have focused on short-term
exposure and few studies have focused
on long-term effects of VOCs on
vegetation and the potential for
metabolites of these compounds to
affect herbivores or insects.
5. Air Quality Impacts of Non-GHG
Pollutants
a. Current Levels of PM2.5, Ozone, CO
and Air Toxics
This proposal may have impacts on
levels of PM2.5, ozone, CO and air toxics.
Nationally, levels of PM2.5, ozone, CO
and air toxics are declining.320 321
However, in 2005 EPA designated 39
nonattainment areas for the 1997 PM2.5
National Ambient Air Quality Standard
(NAAQS) (70 FR 943, January 5, 2005).
These areas are composed of 208 full or
partial counties with a total population
exceeding 88 million. The 1997 PM2.5
NAAQS was recently revised and the
2006 24-hour PM2.5 NAAQS became
effective on December 18, 2006. The
numbers above likely underestimate the
number of counties that are not meeting
the PM2.5 NAAQS because the
nonattainment areas associated with the
more stringent 2006 24-hour PM2.5
NAAQS have not yet been designated.
Area designations for the 2006 24-hour
PM2.5 NAAQS are expected to be
promulgated in 2009 and become
effective 90 days after publication in the
Federal Register.
In addition, the U.S. EPA has recently
amended the ozone NAAQS (73 FR
16436, March 27, 2008). That final 2008
ozone NAAQS rule set forth revisions to
the previous 1997 NAAQS for ozone to
provide increased protection of public
health and welfare. As of June 5, 2009,
there are 55 areas designated as
317 Viskari E-L. 2000. Epicuticular wax of Norway
spruce needles as indicator of traffic pollutant
deposition. Water, Air, and Soil Pollut. 121:327–
337.
318 Ugrekhelidze D, F Korte, G Kvesitadze. 1997.
Uptake and transformation of benzene and toluene
by plant leaves. Ecotox. Environ. Safety 37:24–29.
319 Kammerbauer H, H Selinger, R Rommelt, A
Ziegler-Jons, D Knoppik, B Hock. 1987. Toxic
components of motor vehicle emissions for the
spruce Pciea abies. Environ. Pollut. 48:235–243.
320 U.S. EPA (2008) National Air Quality Status
and Trends through 2007. Office of Air Quality
Planning and Standards, Research Triangle Park,
NC. Publication No. EPA 454/R–08–006. https://
epa.gov/airtrends/2008/.
321 U.S. EPA (2007) Final Regulatory Impact
Analysis: Control of Hazardous Air Pollutants from
Mobile Sources, Office of Transportation and Air
Quality, Ann Arbor, MI, Publication No. EPA420–
R–07–002. https://www.epa.gov/otaq/toxics.htm.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
nonattainment for the 1997 8-hour
ozone NAAQS, comprising 290 full or
partial counties with a total population
of approximately 132 million people.
These numbers do not include the
people living in areas where there is a
future risk of failing to maintain or
attain the 1997 8-hour ozone NAAQS.
The numbers above likely
underestimate the number of counties
that are not meeting the ozone NAAQS
because the nonattainment areas
associated with the more stringent 2008
8-hour ozone NAAQS have not yet been
designated.
The proposed vehicle standards may
also impact levels of ambient CO, a
criteria pollutant (see Table III.G–1
above for co-pollutant emission
impacts). As of June 5, 2009 there are
approximately 479,000 people living in
a portion of Clark Co., NV which is
currently the only area in the country
that is designated as nonattainment for
CO.322
Further, the majority of Americans
continue to be exposed to ambient
concentrations of air toxics at levels
which have the potential to cause
adverse health effects.323 The levels of
air toxics to which people are exposed
vary depending on where people live
and work and the kinds of activities in
which they engage, as discussed in
detail in U.S. EPA’s recent mobile
source air toxics rule.324
b. Impacts of Proposed Standards on
Future Ambient PM2.5, Ozone, CO and
Air Toxics
Full-scale photochemical air quality
modeling is necessary to accurately
project levels of PM2.5, ozone, CO and
air toxics. For the final rule, a nationalscale air quality modeling analysis will
be performed to analyze the impacts of
the vehicle standards on PM2.5, ozone,
and selected air toxics (i.e., benzene,
formaldehyde, acetaldehyde, acrolein
and 1,3-butadiene). The length of time
needed to prepare the necessary
emissions inventories, in addition to the
processing time associated with the
modeling itself, has precluded us from
performing air quality modeling for this
proposal.
Section III.G.1 of the preamble
presents projections of the changes in
criteria pollutant and air toxics
emissions due to the proposed vehicle
322 Carbon Monoxide Nonattainment Area
Summary: https://www.epa.gov/air/oaqps/greenbk/
cnsum.html.
323 U.S. Environmental Protection Agency (2007).
Control of Hazardous Air Pollutants from Mobile
Sources; Final Rule. 72 FR 8434, February 26, 2007.
324 U.S. Environmental Protection Agency (2007).
Control of Hazardous Air Pollutants from Mobile
Sources; Final Rule. 72 FR 8434, February 26, 2007.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
standards; the basis for those estimates
is set out in Chapter 5 of the DRIA. The
atmospheric chemistry related to
ambient concentrations of PM2.5, ozone
and air toxics is very complex, and
making predictions based solely on
emissions changes is extremely difficult.
However, based on the magnitude of the
emissions changes predicted to result
from the proposed vehicle standards,
EPA expects that there will be an
improvement in ambient air quality,
pending a more comprehensive analysis
for the final rule.
For the final rule, EPA intends to use
a 2005-based Community Multi-scale
Air Quality (CMAQ) modeling platform
as the tool for the air quality modeling.
The CMAQ modeling system is a
comprehensive three-dimensional gridbased Eulerian air quality model
designed to estimate the formation and
fate of oxidant precursors, primary and
secondary PM concentrations and
deposition, and air toxics, over regional
and urban spatial scales (e.g. over the
contiguous U.S.).325 326 327 The CMAQ
model is a well-known and wellestablished tool and is commonly used
by EPA for regulatory analyses, for
instance the recent ozone NAAQS
proposal, and by States in developing
attainment demonstrations for their
State Implementation Plans.328 The
CMAQ model (version 4.6) was peerreviewed in February of 2007 for EPA as
reported in ‘‘Third Peer Review of
CMAQ Model,’’ and the EPA Office of
Research and Development (ORD) peer
review report which includes version
4.7 is currently being finalized.329
CMAQ includes many science
modules that simulate the emission,
production, decay, deposition and
transport of organic and inorganic gasphase and particle-phase pollutants in
the atmosphere. EPA intends to use the
most recent CMAQ version (version
325 U.S. Environmental Protection Agency, Byun,
D.W., and Ching, J.K.S., Eds, 1999. Science
algorithms of EPA Models-3 Community Multiscale
Air Quality (CMAQ modeling system, EPA/600/R–
99/030, Office of Research and Development).
326 Byun, D.W., and Schere, K.L., 2006. Review of
the Governing Equations, Computational
Algorithms, and Other Components of the Models3 Community Multiscale Air Quality (CMAQ)
Modeling System, J. Applied Mechanics Reviews,
59 (2), 51–77.
327 Dennis, R.L., Byun, D.W., Novak, J.H.,
Galluppi, K.J., Coats, C.J., and Vouk, M.A., 1996.
The next generation of integrated air quality
modeling: EPA’s Models-3, Atmospheric
Environment, 30, 1925–1938.
328 U.S. EPA (2007). Regulatory Impact Analysis
of the Proposed Revisions to the National Ambient
Air Quality Standards for Ground-Level Ozone.
EPA document number 442/R–07–008, July 2007.
329 Aiyyer, A., Cohan, D., Russell, A., Stockwell,
W., Tanrikulu, S., Vizuete, W., Wilczak, J., 2007.
Final Report: Third Peer Review of the CMAQ
Model. p. 23.
PO 00000
Frm 00149
Fmt 4701
Sfmt 4702
49601
4.7), which was officially released by
EPA’s Office of Research and
Development (ORD) in December 2008
and reflects updates to earlier versions
in a number of areas to improve the
underlying science. These include (1)
enhanced secondary organic aerosol
(SOA) mechanism to include chemistry
of isoprene, sesquiterpene, and aged incloud biogenic SOA in addition to
terpene; (2) improved vertical
convective mixing; (3) improved
heterogeneous reaction involving nitrate
formation; and (4) an updated gas-phase
chemistry mechanism, Carbon Bond 05
(CB05), with extensions to model
explicit concentrations of air toxic
species as well as chlorine and mercury.
This mechanism, CB05-toxics, also
computes concentrations of species that
are involved in aqueous chemistry and
that are precursors to aerosols.
H. What Are the Estimated Cost,
Economic, and Other Impacts of the
Proposal?
In this section, EPA presents the costs
and impacts of EPA’s proposed GHG
program. It is important to note that
NHTSA’s CAFE standards and EPA’s
GHG standards will both be in effect,
and each will lead to increases in
average fuel economy and CO2
emissions reductions. The two agencies’
standards comprise the National
Program, and this discussion of costs
and benefits of EPA’s GHG standard
does not change the fact that both the
CAFE and GHG standards, jointly, are
the source of the benefits and costs of
the National Program.
This section outlines the basis for
assessing the benefits and costs of these
standards and provides estimates of
these costs and benefits. Some of these
effects are private, meaning that they
affect consumers and producers directly
in their sales, purchases, and use of
vehicles. These private effects include
the costs of the technology, fuel savings,
and the benefits of additional driving
and reduced refueling. Other costs and
benefits affect people outside the
markets for vehicles and their use; these
effects are termed external costs,
because they affect people external to
the market. The external effects include
the climate impacts, the effects on nonGHG pollutants, and the effects on
traffic, accidents, and noise due to
additional driving. The sum of the
private and external benefits and costs
is the net social benefits of the program.
There is some debate about the role of
private benefits in assessing the benefits
and costs of the program: If consumers
have full information and perfect
foresight in their vehicle purchase
decisions, it is possible that they have
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49602
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
vehicle fuel economy as a result of the
proposal. Section III.H.1 discusses the
underlying distinctions and
implications of the role of consumer
response in economic impacts.
Further information on these and
other aspects of the economic impacts of
our proposed rule are summarized in
the following sections and are presented
in more detail in the DRIA for this
rulemaking. EPA requests comment on
all aspects of the cost, savings, and
benefits analysis presented here and in
the DRIA. EPA also requests comment
on the inputs used in these analyses as
described in the Draft Joint TSD.
already considered these benefits in
their vehicle purchase decisions. If so,
then the inclusion of private benefits in
the net benefits calculation may be
inappropriate. If these conditions do not
hold, then the private benefits may be
a part of the net benefits. Section III.H.1
discusses this issue more fully.
EPA’s proposed program costs consist
of the vehicle program costs (costs of
complying with the vehicle CO2
standards, taking into account FFV
credits through 2015, the temporary
lead-time alternative allowance
standard program (TLAASP), full car/
truck trading, and the A/C credit
program), along with the fuel savings
associated with reduced fuel usage
resulting from the proposed program.
These proposed program costs also
include external costs associated with
noise, congestion, accidents, time spent
refueling vehicles, and energy security
impacts. EPA also presents the costeffectiveness of the proposed standards
and our analysis of the expected
economy-wide impacts. The projected
monetized benefits of reducing GHG
emissions and co-pollutant health and
environmental impacts are also
presented. EPA also presents our
estimates of the impact on vehicle miles
traveled and the impacts associated
with those miles as well as other
societal impacts of the proposed
program, including energy security
impacts.
The total monetized benefits
(excluding fuel savings) under the
proposed program are projected to be
$21 to $54 billion in 2030, assuming a
3 percent discount rate and depending
on the value used for the social cost of
carbon. The costs of the proposed
program in 2030 are estimated to be
approximately $18 billion for new
vehicle technology less $90 billion in
savings realized by consumers through
fewer fuel expenditures (calculated
using pre-tax fuel prices).
EPA has undertaken an analysis of the
economy-wide impacts of the proposed
GHG tailpipe standards as an
exploratory exercise that EPA believes
could provide additional insights into
the potential impacts of the proposal.330
These results were not a factor regarding
the appropriateness of the proposed
GHG tailpipe standards. It is important
to note that the results of this modeling
exercise are dependent on the
assumptions associated with how
consumers will respond to increases in
higher vehicle costs and improved
For this proposed rule, EPA projects
significant private gains to consumers in
three major areas: (1) Reductions in
spending on fuel, (2) time saved due to
less refueling, and (3) welfare gains from
additional driving that results from the
rebound effect. In combination, these
private savings, mostly from fuel
savings, appear to outweigh by a large
margin the costs of the program, even
without accounting for externalities.
Admittedly, these findings pose a
conundrum. On the one hand,
consumers are expected to gain
significantly from the proposed rules, as
the increased cost of fuel efficient cars
appears to be far smaller than the fuel
savings (assuming modest discount
rates). Yet fuel efficient cars are
currently offered for sale, and
consumers’ purchasing decisions may
suggest a preference for lower fuel
economy than the proposed rule
mandates. Assuming full information
and perfect foresight, standard
economic theory suggests that the
private gains to consumers, large as they
are, must therefore be accompanied by
a consumer welfare loss. This
calculation assumes that consumers
accurately predict all the benefits they
will get from a new vehicle, even if they
underestimated fuel savings at the time
of purchase. Even if there is some such
loss, EPA believes that under realistic
assumptions, the private gains from the
proposed rule, together with the social
gains (in the form of reduction of
externalities), significantly outweigh the
costs. But EPA seeks comments on the
underlying issue.
The central conundrum has been
referred to as the Energy Paradox in this
setting (and in several others).331 In
short, the problem is that consumers
330 See Memorandum to Docket, ‘‘Economy-Wide
Impacts of Proposed Greenhouse Gas Tailpipe
Standards,’’ September 14, 2009 (Docket EPA–HQ–
OAR–2009–0472).
331 Jaffe, A.B., & Stavins, R.N. (1994). The Energy
Paradox and the Diffusion of Conservation
Technology. Resource and Energy Economics, 16(2),
91–122.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
1. Conceptual Framework for Evaluating
Consumer Impacts
PO 00000
Frm 00150
Fmt 4701
Sfmt 4702
appear not to purchase products that are
in their economic self-interest. There are
strong theoretical reasons why this
might be so.332 Consumers might be
myopic and hence undervalue the longterm; they might lack information or a
full appreciation of information even
when it is presented; they might be
especially averse to the short-term
losses associated with energy efficient
products (the behavioral phenomenon
of ‘‘loss aversion’’); even if consumers
have relevant knowledge, the benefits of
energy efficient vehicles might not be
sufficiently salient to them at the time
of purchase. A great deal of work in
behavioral economics identifies factors
of this sort, which help account for the
Energy Paradox.333 This point holds in
the context of fuel savings (the main
focus here), but it applies equally to the
other private benefits, including
reductions in refueling time and
additional driving.334
Considerable research suggests that
the Energy Paradox is real and
significant due to consumers’ inability
to value future fuel savings
appropriately. For example, Sanstad and
Howarth (1994) argue that consumers
optimize behavior without full
information by resorting to imprecise
but convenient rules of thumb. Larrick
and Soll (2008) find evidence that
consumers do not understand how to
translate changes in miles-per-gallon
into fuel savings (a concern that EPA is
continuing to attempt to address).335 If
these arguments are valid, then there
will be significant gains to consumers of
the government mandating additional
fuel economy.
The evidence from consumer vehicle
choice models indicates a huge range of
estimates for consumers’ willingness to
pay for additional fuel economy.
Because consumer surplus estimates
from consumer vehicle choice models
depend critically on this value, EPA
would consider any consumer surplus
estimates of the effect of our rule from
such models to be unreliable. In
addition, the predictive ability of
consumer vehicle choice models may be
limited. While vehicle choice models
332 For
an overview, see id.
Thaler, Richard. Quasi-Rational
Economics. New York: Russell Sage, 1993.
334 For example, it might be maintained that at
the time of purchase, consumers take full account
of the time potentially saved by fuel-efficient cars,
but it might also be questioned whether they have
adequate information to do so, or whether that
factor is sufficiently salient to play the proper role
in purchasing decisions.
335 Sanstad, A., and R. Howarth (1994). ‘‘ ‘Normal’
Markets, Market Imperfections, and Energy
Efficiency.’’ Energy Policy 22(10): 811–818; Larrick,
R.P., and J.B. Soll (2008). ‘‘The MPG illusion.’’
Science 320: 1593–1594.
333 Id.;
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
are based on sales of existing vehicles,
vehicle models are likely to change,
both independently and in response to
this proposed rule; the models may not
predict well in response to these
changes. Instead, EPA compares the
value of the fuel savings associated with
this rule with the increase in technology
costs. EPA will continue its efforts to
review the literature, but, given the
known difficulties, EPA has not
conducted an analysis using these
models for this proposal.
Consumer vehicle choice models
(referred to as ‘‘market shift’’ models by
NHTSA in Section IV.C.4.c) are a tool
that attempts to estimate how
consumers decide what vehicles they
buy. The models typically take into
consideration both household
characteristics (such as income, family
size, and age) and vehicle characteristics
(including a vehicle’s power, price, and
fuel economy). These models are often
used to examine how a consumer’s
vehicle purchase decision is affected by
a change in vehicle or personal
characteristics. Although these models
focus on the consumer, some have also
linked consumer choice models with
information on vehicle technologies and
costs, to estimate an integrated system
of consumer and auto maker response.
The outputs from consumer vehicle
choice models typically include the
market shares of each category of
vehicle in the model. In addition,
consumer vehicle choice models are
often used to estimate the effect of
market or regulatory changes on
consumer surplus. Consumer surplus is
the benefit that a consumer gets over
and above the market price paid for the
good. For instance, if a consumer is
willing to pay up to $30,000 for a car
but is able to negotiate a price of
$25,000, the $5,000 difference is
consumer surplus. Information on
consumer surplus can be used in
benefit-cost analysis to measure whether
consumers are likely to consider
themselves better or worse off due to the
changes.
Consumer vehicle choice modeling
has not previously been applied in
Federal regulatory analysis of fuel
economy, and EPA has not used a
consumer vehicle choice model in its
analysis of the effects of this proposed
rule. EPA has not done so, to this point,
due to concern over the wide variation
in the methods and results of existing
models, as well as some of the
limitations of existing applications of
consumer choice modeling. Our
preliminary review of the literature
indicates that these models vary in a
number of dimensions, including data
sources used, modeling methods,
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
vehicle characteristics included in the
analysis, and the research questions for
which they were designed. These
dimensions are likely to affect the
models’ results and their interpretation.
In addition, their ability to incorporate
major changes in the vehicle fleet
appears unproven.
One problem for this rule is the
variation in the value that consumers
place on fuel economy in their vehicle
purchase decisions. A number of
consumer vehicle choice models make
the assumption that auto producers
provide as much fuel economy in their
vehicles as consumers are willing to
purchase, and consumers are satisfied
with the current combinations of
vehicle fuel economy and price in the
marketplace.336 If this assumption is
true, then consumers will not benefit
from required improvements in fuel
economy, even if the fuel savings that
they receive exceed the additional costs
from the fuel-saving technology. Other
vehicle choice models, in contrast, find
that consumers are willing to pay more
for additional fuel economy than the
costs to auto producers of installing that
technology.337 If this result is true, then
both consumers and producers would
benefit from increased fuel economy.
This result leaves open the question
why auto producers do not follow the
market incentive to provide more fuel
economy, and why consumers do not
seek out more fuel-efficient vehicles.
Whether consumers and producers
will benefit from improved fuel
336 E.g., Kleit, Andrew N. (2004). ‘‘Impacts of
Long-Range Increases in the Fuel Economy (CAFE)
Standard.’’ Economic Inquiry 42(2): 279–294
(Docket EPA–HQ–OAR–2009–0472); Austin, David,
and Terry Dinan (2005). ‘‘Clearing the Air: The
Costs and Consequences of Higher CAFE Standards
and Increased Gasoline Taxes.’’ Journal of
Environmental Economics and Management 50:
562–582 (Docket EPA–HQ–OAR–2009–0472); Klier,
Thomas, and Joshua Linn (2008). ‘‘New Vehicle
Characteristics and the Cost of the Corporate
Average Fuel Economy Standard,’’ working paper.
https://www.chicagofed.org/publications/
workingpapers/wp2008_13.pdf (Docket EPA–HQ–
OAR–2009–0472); Jacobsen, Mark. ‘‘Evaluating U.S.
Fuel Economy Standards In a Model with Producer
and Household Heterogeneity,’’ https://
www.econ.ucsd.edu/∼m3jacobs/Jacobsen_
CAFE.pdf, accessed 5/11/09 (Docket EPA–HQ–
OAR–2009–0472).
337 E.g., Gramlich, Jacob (2008). ‘‘Gas Prices and
Endogenous Product Selection in the U.S.
Automobile Industry,’’ https://www.econ.yale.edu/
seminars/apmicro/am08/gramlich-081216.pdf,
accessed 5/11/09 (Docket EPA–HQ–OAR–2009–
0472); McManus, Walter M. (2007). ‘‘The Impact of
Attribute-Based Corporate Average Fuel Economy
(CAFE) Standards: Preliminary Findings.’’
University of Michigan Transportation Research
Institute paper UMTRI–2007–31 (Docket EPA–HQ–
OAR–2009–0472); McManus, W. and R. Kleinbaum
(2009). ‘‘Fixing Detroit: How Far, How Fast, How
Fuel Efficient.’’ Working Paper, Transportation
Research Institute, University of Michigan (Docket
EPA–HQ–OAR–2009–0472).
PO 00000
Frm 00151
Fmt 4701
Sfmt 4702
49603
economy depends on the value of
improved fuel economy to consumers.
There may be a difference between the
fuel savings that consumers would
receive from improved fuel economy,
and the amount that consumers would
be willing to spend on a vehicle to get
improved fuel economy. A 1988 review
of consumers’ willingness to pay for
improved fuel economy found estimates
that varied by more than an order of
magnitude: for a $1 per year reduction
in vehicle operating costs, consumers
would be willing to spend between
$0.74 and $25.97 in increased vehicle
price.338 For comparison, the present
value of saving $1 per year on fuel for
15 years at a 3% discount rate is $11.94,
while a 7% discount rate produces a
present value of $8.78. Thus, this study
finds that consumers may be willing to
pay either far too much or far too little
for the fuel savings they will receive.
Although EPA has not found an
updated survey of these values, a few
examples suggest that the existing
consumer vehicle choice models still
demonstrate wide variation in estimates
of how much people are willing to pay
for fuel savings. For instance, Espey and
Nair (2005) and McManus (2006) find
that consumers are willing to pay
around $600 for one additional mile per
gallon.339 In contrast, Gramlich (2008)
finds that consumers’ willingness to pay
for an increase from 25 mpg to 30 mpg
varies between $4,100 (for luxury cars
when gasoline costs $2/gallon) to
$20,560 (for SUVs when gasoline costs
$3.50/gallon).340
As noted, lack of information is one
possible reason for the variation.
Consumers face difficulty in predicting
the fuel savings that they are likely to
get from a vehicle, for a number of
reasons. For instance, the calculation of
fuel savings is complex, and consumers
338 Greene, David L., and Jin-Tan Liu (1988).
‘‘Automotive Fuel Economy Improvements and
Consumers’ Surplus.’’ Transportation Research Part
A 22A(3): 203–218 (Docket EPA–HQ–OAR–2009–
0472). The study actually calculated the willingness
to pay for reduced vehicle operating costs, of which
vehicle fuel economy is a major component.
339 Espey, Molly, and Santosh Nair (2005).
‘‘Automobile Fuel Economy: What is it Worth?’’
Contemporary Economic Policy 23(3): 317–323
(Docket EPA–HQ–OAR–2009–0472); McManus,
Walter M. (2006). ‘‘Can Proactive Fuel Economy
Strategies Help Automakers Mitigate Fuel-Price
Risks?’’ University of Michigan Transportation
Research Institute (Docket EPA–HQ–OAR–2009–
0472).
340 Gramlich, Jacob (2008). ‘‘Gas Prices and
Endogenous Product Selection in the U.S.
Automobile Industry,’’ https://www.econ.yale.edu/
seminars/apmicro/am08/gramlich-081216.pdf,
accessed 5/11/09 (Docket EPA–HQ–OAR–2009–
0472).
E:\FR\FM\28SEP2.SGM
28SEP2
49604
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
may not make it correctly.341 In
addition, future fuel price (a major
component of fuel savings) is highly
uncertain. Consumer fuel savings also
vary across individuals, who travel
different amounts and have different
driving styles. Studies regularly show
that fuel economy plays a role in
consumers’ vehicle purchases, but
modeling that role may still be in
development.342
If there is a difference between fuel
savings and consumers’ willingness to
pay for fuel savings, the next question
is, which is the appropriate measure of
consumer benefit? Fuel savings measure
the actual monetary value that
consumers will receive after purchasing
a vehicle; the willingness to pay for fuel
economy measures the value that, before
a purchase, consumers place on
additional fuel economy. As noted,
there are a number of reasons that
consumers may incorrectly estimate the
benefits that they get from improved
fuel economy, including risk or loss
aversion, poor ability to estimate
savings, and a lack of salience of fuel
economy savings.
Considerable evidence suggests that
consumers discount future benefits
more than the government when
evaluating energy efficiency gains. The
Energy Information Agency (1996) has
used discount rates as high as 111
percent for water heaters and 120
percent for electric clothes dryers.343 In
the transportation sector, evidence also
points to high private discount rates:
Kubik (2006) conducts a representative
survey that finds consumers are
impatient or myopic (e.g., use a high
discount rate) with regard to vehicle
fuel savings.344 On average, consumers
indicated that fuel savings would have
to pay back the additional cost in only
2.9 years to persuade them to buy a
higher fuel-economy vehicle. EPA also
incorporate a relatively short ‘‘payback
341 Turrentine, T. and K. Kurani (2007). ‘‘Car
Buyers and Fuel Economy?’’ Energy Policy 35:
1213–1223 (Docket EPA–HQ–OAR–2009–0472);
Larrick, R.P., and J.B. Soll (2008). ‘‘The MPG
illusion.’’ Science 320: 1593–1594 (Docket EPA–
HQ–OAR–2009–0472).
342 Busse, Meghan R., Christopher R. Knittel, and
Florian Zettelmeyer (2009). ‘‘Pain at the Pump: How
Gasoline Prices Affect Automobile Purchasing in
New and Used Markets,’’ Working paper (accessed
6/30/09), available at https://www.econ.ucdavis.edu/
faculty/knittel/papers/gaspaper_latest.pdf (Docket
EPA–HQ–OAR–2009–0472).
343 Energy Information Administration, U.S.
Department of Energy (1996). Issues in Midterm
Analysis and Forecasting 1996, DOE/EIA–0607(96),
Washington, DC., https://www.osti.gov/bridge/
purl.cover.jsp?purl=/366567-BvCFp0/webviewable/,
accessed 7/7/09.
344 Kubik, M. (2006). Consumer Views on
Transportation and Energy. Second Edition.
Technical Report: National Renewable Energy
Laboratory.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
period’’ into OMEGA to evaluate and
order technologies that can be used to
increase fuel economy, assuming that
buyers value the resulting fuel savings
over the first five years of a new
vehicle’s lifetime. This assumption is
based on the current average term of
consumer loans to finance the purchase
of new vehicles. That said, there is no
consensus in the literature on what the
private discount rate is or should be in
this context.
One possibility is that the discounting
framework may not be a good model for
consumer decision-making and for
determining consumer welfare regarding
fuel economy. Buying a vehicle involves
trading off among dozens of vehicle
characteristics, including price, vehicle
class, safety, performance, and even
audio systems and cupholders. Fuel
economy is only one of these attributes,
and its role in consumer vehicle
purchase decisions is not well
understood (see DRIA Section 8.1.2 for
further discussion). As noted above, if
consumers do not fully consider fuel
economy at the time of vehicle
purchase, then the fuel savings from this
rule provide a realized benefit to
consumers after purchase. There are two
distinct ideas at work here: one is that
efficiency improvements change the
nature of the cost of the car, requiring
higher up-front vehicle costs while
enabling lower long-run fuel costs; the
other is that while consumers may
benefit from the lower long-run fuel
costs, they may also experience some
loss in welfare on account of the
possible change in vehicle mix.
A second problem with use of
consumer vehicle choice models, as
they now stand, is that they are even
less reliable in the face of significant
changes otherwise occurring in fleet
composition. One attempt to analyze the
effect of the oil shock of 1973 on
consumer vehicle choice found that,
after two years, the particular model did
not predict well due to changes in the
vehicle fleet.345 It is likely that, in the
next few years, many of the vehicles
that will be offered for sale will change.
In coming years, new vehicles will be
developed, and existing vehicles will be
redesigned. For instance, over the next
few years, new vehicles that have both
high fuel economy and high safety
factors, in combinations that consumers
have not previously been offered, are
likely to appear in the market. Models
based on the existing vehicle fleet may
not do well in predicting consumers’
345 Berry, Steven, James Levinsohn, and Ariel
Pakes (July 1995). ‘‘Automobile Prices in Market
Equilibrium,’’ Econometrica 63(4): 841–940 (Docket
EPA–HQ–OAR–2009–0472).
PO 00000
Frm 00152
Fmt 4701
Sfmt 4702
choices among the new vehicles offered.
Given that consumer vehicle choice
models appear to be less effective in
predicting vehicle choices when the
vehicles are likely to change, EPA is
reluctant to use the models for this
proposed rulemaking.
In sum, the estimates of consumer
surplus from consumer vehicle choice
models depend heavily on the value to
consumers of improved fuel economy, a
value for which estimates are highly
varied. In addition, the predictive
ability of consumer vehicle choice
models may be limited as consumers
face new vehicle choices that they
previously did not have.
Nonetheless, because there are
potential advantages to using consumer
vehicle choice models if these
difficulties can be addressed, EPA plans
to continue our investigation and
evaluation of consumer vehicle choice
models. This effort includes further
review of existing consumer vehicle
choice models and the estimates of
consumers’ willingness to pay for
increased fuel economy. In addition,
EPA is developing capacity to examine
the factors that may affect the results of
consumer vehicle choice models, and to
explore their impact on analysis of
regulatory scenarios.
A detailed discussion of the state of
the art of consumer choice modeling is
provided in the DRIA. For this
rulemaking, EPA is not able to estimate
the consumer welfare loss which may
accompany the actual fuel savings from
the proposal, and so any such loss must
remain unquantified. EPA seeks
comments on how to assess these
difficult questions in the future.
2. Costs Associated With the Vehicle
Program
In this section EPA presents our
estimate of the costs associated with the
proposed vehicle program. The
presentation here summarizes the costs
associated with the new vehicle
technology expected to be added to
meet the proposed GHG standards,
including hardware costs to comply
with the proposed A/C credit program.
The analysis summarized here provides
our estimate of incremental costs on a
per vehicle basis and on an annual total
basis.
The presentation here summarizes the
outputs of the OMEGA model that was
discussed in some detail in Section III.D
of this preamble. For details behind the
analysis such as the OMEGA model
inputs and the estimates of costs
associated with individual technologies,
the reader is directed to Chapters 1 and
2 of the DRIA, and Chapter 3 of the Draft
Joint TSD. For more detail on the
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
outputs of the OMEGA model and the
overall vehicle program costs
summarized here, the reader is directed
to Chapters 4 and 7 of the DRIA.
With respect to the cost estimates for
vehicle technologies, EPA notes that,
because these estimates relate to
technologies which are in most cases
already available, these cost estimates
are technically robust. EPA notes further
that, in all instances, its estimates are
within the range of estimates in the
most widely-utilized sources and
studies. In that way, EPA believes that
we have been conservative in estimating
the vehicle hardware costs associated
with this proposal.
With respect to the aggregate cost
estimations presented in Section
III.H.2.b, EPA notes that there are a
number of areas where the results of our
analysis may be conservative and, in
general, EPA believes we have
directionally overestimated the costs of
compliance with these proposed
standards, especially in not accounting
for the full range of credit opportunities
available to manufacturers. For
example, some cost saving programs are
considered in our analysis, such as full
car/truck trading, while others are not,
such as cross-manufacturer trading and
advanced technology credits.
a. Vehicle Compliance Costs Associated
With the Proposed CO2 Standards
For the technology and vehicle
package costs associated with adding
new CO2-reducing technology to
vehicles, EPA began with EPA’s 2008
Staff Report and NHTSA’s 2011 CAFE
FRM both of which presented costs
generated using existing literature,
meetings with manufacturers and parts
suppliers, and meetings with other
experts in the field of automotive cost
estimation.346 EPA has updated some of
those technology costs with new
information from our contract with FEV,
through further discussion with
NHTSA, and by converting from 2006
dollars to 2007 dollars using the GDP
price deflator. The estimated costs
presented here represent the
incremental costs associated with this
proposal relative to what the future
vehicle fleet would be expected to look
like absent this proposed rule. A more
detailed description of the factors
considered in our reference case is
presented in Section III.D.
The estimates of vehicle compliance
costs cover the years of implementation
346 ‘‘EPA Staff Technical Report: Cost and
Effectiveness Estimates of Technologies Used to
Reduce Light-duty Vehicle Carbon Dioxide
Emissions,’’ EPA 420–R–08–008; NHTSA 2011
CAFE FRM is at 74 FR 14196; both documents are
contained in Docket EPA–HQ–OAR–2009–0472.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
of the program—2012 through 2016.
EPA has also estimated compliance
costs for the years following
implementation so that we can shed
light on the long term—2022 and later—
cost impacts of the proposal.347 EPA
used the year 2022 here because our
short-term and long-term markup factors
described shortly below are applied in
five year increments with the 2012
through 2016 implementation span and
the 2017 through 2021 span both
representing the short-term. Some of the
individual technology cost estimates are
presented in brief in Section III.D, and
account for both the direct and indirect
costs incurred in the automobile
manufacturing and dealer industries (for
a complete presentation of technology
costs, please refer to Chapter 3 of the
Draft Joint TSD). To account for the
indirect costs, EPA has applied an
indirect cost markup (ICM) factor to all
of our direct costs to arrive at the
estimated technology cost.348 The ICM
factors used range from 1.11 to 1.64 in
the short-term (2012 through 2021),
depending on the complexity of the
given technology, to account for
differences in the levels of R&D, tooling,
and other indirect costs that would be
incurred. Once the program has been
fully implemented, some of the indirect
costs would no longer be attributable to
these proposed standards and, as such,
a lower ICM factor is applied to direct
costs in years following full
implementation. The ICM factors used
range from 1.07 to 1.39 in the long-term
(2022 and later) depending on the
complexity of the given technology.349
Note that the short-term ICMs are used
in the 2012 through 2016 years of
implementation and continue through
2021. EPA does this since the proposed
standards are still being implemented
during the 2012 through 2016 model
years. Therefore, EPA considers the five
year period following full
implementation also to be short-term.
347 Note that the assumption made here is that the
standards proposed would continue to apply for
years beyond 2016 so that new vehicles sold in
model years 2017 and later would continue to incur
costs as a result of this rule. Those costs are
estimated to get lower in 2022 because some of the
indirect costs attributable to this proposal in the
years prior to 2022 would be eliminated in 2022
and later.
348 Alex Rogozhin et al., Automobile Industry
Retail Price Equivalent and Indirect Cost
Multipliers. Prepared for EPA by RTI International
and Transportation Research Institute, University of
Michigan. EPA–420–R–09–003, February 2009
(Docket EPA–HQ–OAR–2009–0472).
349 Gloria Helfand and Todd Sherwood,
‘‘Documentation of the Development of Indirect
Cost Multipliers for Three Automotive
Technologies,’’ Office of Transportation and Air
Quality, USEPA, August 2009 (Docket EPA–HQ–
OAR–2009–0472).
PO 00000
Frm 00153
Fmt 4701
Sfmt 4702
49605
The argument has been made that the
ICM approach may be more appropriate
for regulatory cost estimation than the
more traditional retail price equivalent,
or RPE, markup. The RPE is based on
the historical relationship between
direct costs and consumer prices; it is
intended to reflect the average markup
over time required to sustain the
industry as a viable operation. Unlike
the RPE approach, the ICM focuses more
narrowly on the changes that are
required in direct response to
regulation-induced vehicle design
changes which may not directly
influence all of the indirect costs that
are incurred in the normal course of
business. For example, an RPE markup
captures all indirect costs including
costs such as the retirement benefits of
retired employees. However, the
retirement benefits for retired
employees are not expected to change as
a result of a new GHG regulation and,
therefore, those indirect costs should
not increase in relation to newly added
hardware in response to a regulation.
So, under the ICM approach, if a newly
added piece of technology has an
incremental direct cost of $1, its direct
plus indirect costs should not be $1
multiplied by an RPE markup of say 1.5,
or $1.50, but rather something less since
the manufacturer is not paying more for
retired-employee retirement benefits as
a direct result of adding the new piece
of technology. Further, as noted above,
the indirect cost multiplier can be
adjusted for different levels of
technological complexity. For example,
a move to low rolling resistance tires is
less complex than converting a gasoline
vehicle to a plug-in hybrid. Therefore,
the incremental indirect costs for the
tires should be lower in magnitude than
those for the plug-in hybrid. For the
analysis underlying these proposed
standards, the agencies have based our
estimates on the ICM approach, but EPA
notes that discussion continues about
the use of the RPE approach and the
ICM approach for safety and
environmental regulations. We discuss
our ICM factors and the complexity
levels used in our analysis in more
detail in Chapter 3 of the Draft Joint
TSD and EPA requests comment on the
approach described there as well as the
general concepts of both the ICM and
RPE approaches.
EPA has also considered the impacts
of manufacturer learning on the
technology cost estimates. Consistent
with past EPA rulemakings, EPA has
estimated that some costs would decline
by 20 percent with each of the first two
doublings of production beginning with
the first year of implementation. These
E:\FR\FM\28SEP2.SGM
28SEP2
49606
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
volume-based cost declines—which
EPA calls ‘‘volume’’ based learning—
take place after manufacturers have had
the opportunity to find ways to improve
upon their manufacturing processes or
otherwise manufacture these
technologies in a more efficient way.
After two 20 percent cost reduction
steps, the cost reduction learning curve
flattens out considerably as only minor
improvements in manufacturing
techniques and efficiencies remain to be
had. By then, costs decline roughly
three percent per year as manufacturers
and suppliers continually strive to
reduce costs. These time-based cost
declines—which EPA calls ‘‘time’’
based learning—take place at a rate of
three percent per year. EPA has
considered learning impacts on most
but not all of the technologies expected
to be used because some of the expected
technologies are already used rather
widely in the industry and, presumably,
learning impacts have already occurred.
EPA has considered volume-based
learning for only a handful of
technologies that EPA considers to be
new or emerging technologies such as
the hybrids and electric vehicles. For
most technologies, EPA has considered
them to be more established given their
current use in the fleet and, hence, we
have applied the lower time based
learning. We have more discussion of
our learning approach and the
technologies to which we have applied
which type of learning in the Draft Joint
TSD.
The technology cost estimates
discussed in Section III.D and detailed
in Chapter 3 of the Draft Joint TSD are
used to build up package cost estimates
which are then used as inputs to the
OMEGA model. EPA discusses our
packages and package costs in Chapter
1 of the DRIA. The model determines
what level of CO2 improvement is
required considering the reference case
for each manufacturer’s fleet. The
vehicle compliance costs are the outputs
of the model and take into account FFV
credits through 2015, TLAASP, full car/
truck trading, and the A/C credit
program. Table III.H.2–1 presents the
fleet average incremental vehicle
compliance costs for this proposal. As
the table indicates, 2012–2016 costs
increase every year as the standards
become more stringent. Costs per car
and per truck then remain stable
through 2021 while cost per vehicle
(car/truck combined) decline slightly as
the fleet mix trends slowly to increasing
car sales. In 2022, costs per car and per
truck decline as the long-term ICM kicks
in because some indirect costs are no
longer considered attributable to the
proposed program. Costs per car and per
truck remain constant thereafter while
the cost per vehicle declines slightly as
the fleet continues to trend toward cars.
By 2030, projections of fleet mix
changes become static and the cost per
vehicle remains constant. EPA has a
more detailed presentation of vehicle
compliance costs on a manufacturer by
manufacturer basis in the DRIA.
TABLE III.H.2–1—INDUSTRY AVERAGE VEHICLE COMPLIANCE COSTS ASSOCIATED WITH THE PROPOSED TAILPIPE CO2
STANDARDS
[$/vehicle in 2007 dollars]
Calendar year
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2030
2040
2050
.............................................................................................................................................
.............................................................................................................................................
.............................................................................................................................................
.............................................................................................................................................
.............................................................................................................................................
.............................................................................................................................................
.............................................................................................................................................
.............................................................................................................................................
.............................................................................................................................................
.............................................................................................................................................
.............................................................................................................................................
.............................................................................................................................................
.............................................................................................................................................
.............................................................................................................................................
b. Annual Costs of the Proposed Vehicle
Program
mstockstill on DSKH9S0YB1PROD with PROPOSALS
$/car
The costs presented here represent the
incremental costs for newly added
technology to comply with the proposed
program. Together with the projected
increases in car and light-truck sales,
the increases in per-vehicle average
costs shown in Table III.H.2–1 above
result in the total annual costs reported
in Table III.H.2–2 below. Note that the
costs presented in Table III.H.2–2 do not
include the savings that would occur as
a result of the improvements to fuel
consumption. Those impacts are
presented in Section III.H.4.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
$/truck
374
531
663
813
968
968
968
968
968
968
890
890
890
890
$/vehicle
(car & truck
combined)
358
539
682
886
1,213
1,213
1,213
1,213
1,213
1,213
1,116
1,116
1,116
1,116
368
534
670
838
1,050
1,047
1,044
1,042
1,040
1,039
955
953
953
953
TABLE III.H.2–2—QUANTIFIED ANNUAL 3. Cost per Ton of Emissions Reduced
COSTS ASSOCIATED WITH THE PROEPA has calculated the cost per ton of
POSED VEHICLE PROGRAM
GHG (CO -equivalent, or CO e)
2
[$Millions of 2007 dollars]
Quantified
annual costs
Year
2012 ......................................
2013 ......................................
2014 ......................................
2015 ......................................
2016 ......................................
2020 ......................................
2030 ......................................
2040 ......................................
2050 ......................................
NPV, 3% ...............................
NPV, 7% ...............................
PO 00000
Frm 00154
Fmt 4701
Sfmt 4702
$5,400
$8,400
$10,900
$13,900
$17,500
$18,000
$17,900
$19,300
$20,900
$390,000
$216,600
2
reductions associated with this proposal
using the above costs and the emissions
reductions described in Section III.F.
More detail on the costs, emission
reductions, and the cost per ton can be
found in the DRIA and Draft Joint TSD.
EPA has calculated the cost per metric
ton of GHG emissions reductions in the
years 2020, 2030, 2040, and 2050 using
the annual vehicle compliance costs and
emission reductions for each of those
years. The value in 2050 represents the
long-term cost per ton of the emissions
reduced. Note that EPA has not
included the savings associated with
E:\FR\FM\28SEP2.SGM
28SEP2
49607
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
reduced fuel consumption, nor any of
the other benefits of this proposal in the
cost per ton calculations. If EPA were to
include fuel savings in the cost
estimates, the cost per ton would be less
than $0, since the estimated value of
fuel savings outweighs these costs. With
regard to the proposed CH4 and N2O
standards, since these standards would
be emissions caps designed to ensure
manufacturers do not backslide from
current levels, EPA has not estimated
costs associated with the standards
(since the standards would not require
any change from current practices nor
does EPA estimate they would result in
emissions reductions).
The results for CO2e costs per ton
under the proposed vehicle program are
shown in Table III.H.3–1.
TABLE III.H.3–1—ANNUAL COST PER METRIC TON OF CO2e REDUCED, IN $2007 DOLLARS
2020
2030
2040
2050
CO2e
Reduced
(million metric
tons)
Cost a
($millions)
Year
.............................................................................................................................................
.............................................................................................................................................
.............................................................................................................................................
.............................................................................................................................................
$18,000
17,900
19,300
20,900
Cost per ton
170
320
420
520
$110
60
50
40
a Costs here include vehicle compliance costs and do not include any fuel savings (discussed in Section III.H.4) or other benefits of this proposal (discussed in Sections III.H.6 through III.H 10).
4. Reduction in Fuel Consumption and
Its Impacts
a. What Are the Projected Changes in
Fuel Consumption?
mstockstill on DSKH9S0YB1PROD with PROPOSALS
The proposed CO2 standards would
result in significant improvements in
the fuel efficiency of affected vehicles.
Drivers of those vehicles would see
corresponding savings associated with
reduced fuel expenditures. EPA has
estimated the impacts on fuel
consumption for both the proposed
tailpipe CO2 standards and the proposed
A/C credit program. To do this, fuel
consumption is calculated using both
current CO2 emission levels and the
proposed CO2 standards. The difference
between these estimates represents the
net savings from the proposed CO2
standards. Note that the total number of
miles that vehicles are driven each year
is different under each of the control
case scenarios than in the reference case
due to the ‘‘rebound effect,’’ which is
discussed in Section III.H.4.c.
The expected impacts on fuel
consumption are shown in Table
III.H.4–1. The gallons shown in the
tables reflect impacts from the proposed
CO2 standards, including the proposed
A/C credit program, and include
increased consumption resulting from
the rebound effect.
TABLE III.H.4–1—FUEL CONSUMPTION
IMPACTS OF THE PROPOSED VEHICLE STANDARDS AND A/C CREDIT
PROGRAMS—Continued
[Million gallons]
Year
2016
2020
2030
2040
2050
Total
..............................................
..............................................
..............................................
..............................................
..............................................
5,930
13,350
26,180
33,930
42,570
b. What Are the Fuel Savings to the
Consumer?
Using the fuel consumption estimates
presented in Section III.H.4.a, EPA can
calculate the monetized fuel savings
associated with the proposed CO2
standards. To do this, we multiply
reduced fuel consumption in each year
by the corresponding estimated average
fuel price in that year, using the
reference case taken from the AEO
2009.350 AEO is the government
consensus estimate used by NHTSA and
many other government agencies to
estimate the projected price of fuel. EPA
has included all fuel taxes in these
estimates since these are the prices paid
by consumers. As such, the savings
shown reflect savings to the consumer.
These results are shown in Table
III.H.4–2. Note that EPA presents the
TABLE III.H.4–1—FUEL CONSUMPTION monetized fuel savings using pre-tax
IMPACTS OF THE PROPOSED VEHI- fuel prices in Section III.H.10. The fuel
CLE STANDARDS AND A/C CREDIT savings based on pre-tax fuel prices
reflect the societal savings in contrast to
PROGRAMS
the consumer savings presented in
[Million gallons]
Table III.H.4–2. Also in Section III.H.10,
Year
2012
2013
2014
2015
Total
..............................................
..............................................
..............................................
..............................................
VerDate Nov<24>2008
23:31 Sep 25, 2009
530
1,320
2,410
3,910
Jkt 217001
350 Energy Information Administration,
Supplemental tables to the Annual Energy Outlook
2009, Updated Reference Case with American
Recovery and Reinvestment Act. Available https://
www.eia.doe.gov/oiaf/aeo/supplement/stimulus/
regionalarra.html. April 2009.
PO 00000
Frm 00155
Fmt 4701
Sfmt 4702
EPA presents the benefit-cost of the
proposal and, for that reason, present
the fuel impacts as negative costs of the
program while here EPA presents them
as positive savings.
TABLE III.H.4–2—ESTIMATED FUEL
CONSUMPTION SAVINGS TO THE
CONSUMER a
[Millions of 2007 dollars]
Calendar year
2012 ......................................
2013 ......................................
2014 ......................................
2015 ......................................
2016 ......................................
2020 ......................................
2030 ......................................
2040 ......................................
2050 ......................................
NPV, 3% ...............................
NPV, 7% ...............................
Total
$1,400
3,800
7,200
12,400
19,400
48,400
100,000
136,800
181,000
1,850,200
826,900
a Fuel consumption savings calculated using
taxed fuel prices. Fuel consumption impacts
using pre-tax fuel prices are presented in Section III.H.10 as negative costs of the vehicle
program
As shown in Table III.H.4–2, EPA is
projecting that consumers would realize
very large fuel savings as a result of the
standards contained in this proposal.
There are several ways to view this
value. Some, as demonstrated below in
Section III.H.5, view these fuel savings
as a reduction in the cost of owning a
vehicle, whose full benefits consumers
realize. This approach assumes that,
regardless how consumers in fact make
their decisions on how much fuel
economy to purchase, they will gain
these fuel savings. Another view says
that consumers do not necessarily value
fuel savings as equal to the results of
this calculation. Instead, consumers
may either undervalue or overvalue fuel
economy relative to these savings, based
E:\FR\FM\28SEP2.SGM
28SEP2
49608
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
on their personal preferences. This issue
is discussed further in Section III.H.5
and in Chapter 8 of the DRIA.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
c. VMT Rebound Effect
The fuel economy rebound effect
refers to the fraction of fuel savings
expected to result from an increase in
vehicle fuel economy—particularly one
required by higher fuel efficiency
standards—that is offset by additional
vehicle use. The increase in vehicle use
occurs because higher fuel economy
reduces the fuel cost of driving, which
is typically the largest single component
of the monetary cost of operating a
vehicle, and vehicle owners respond to
this reduction in operating costs by
driving slightly more.
For this proposal, EPA is using an
estimate of 10% for the rebound effect.
This value is based on the most recent
time period analyzed in the Small and
Van Dender 2007 paper,351 and falls
within the range of the larger body of
historical work on the rebound effect.352
Recent work by David Greene on the
rebound effect for light-duty vehicles in
the U.S. further supports the hypothesis
that the rebound effect is decreasing
over time.353 If we were to use a
dynamic estimate of the future rebound
effect, our analysis shows that the
rebound effect could be in the range of
5% or lower.354 The rebound effect is
also discussed in Section II.F of the
preamble; the TSD, Section 4.2.5,
reviews the relevant literature and
discusses in more depth the reasoning
for the rebound values used here.
EPA also invites comments on other
alternatives for estimating the rebound
effect. As one illustration, variation in
the price per gallon of gasoline directly
affects the per-mile cost of driving, and
drivers may respond just as they would
to a change in the cost of driving
resulting from a change in fuel
economy, by varying the number of
miles they drive. Because vehicles’ fuel
351 Small, K. and K. Van Dender, 2007a. ‘‘Fuel
Efficiency and Motor Vehicle Travel: The Declining
Rebound Effect’’, The Energy Journal, vol. 28, no.
1, pp. 25–51 (Docket EPA–HQ–OAR–2009–0472).
352 Sorrell, S. and J. Dimitropoulos, 2007.
‘‘UKERC Review of Evidence for the Rebound
Effect, Technical Report 2: Econometric Studies’’,
UKERC/WP/TPA/2007/010, UK Energy Research
Centre, London, October (Docket EPA–HQ–OAR–
2009–0472).
353 Report by Kenneth A. Small of University of
California at Irvine to EPA, ‘‘The Rebound Effect
from Fuel Efficiency Standards: Measurement and
Projection to 2030’’, June 12, 2009 (Docket EPA–
HQ–OAR–2009–0472).
354 Report by David Greene of Oak Ridge National
Laboratory to EPA, ‘‘Rebound 2007: Analysis of
National Light-Duty Vehicle Travel Statistics,’’
March 24, 2009 (Docket EPA–HQ–OAR–2009–
0472). Note, this report has been submitted for peer
review. Completion of the peer review process is
expected prior to the final rule.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
economy is fixed in the short run,
variation in the number of miles driven
in response to changes in fuel prices
will be reflected in changes in gasoline
consumption. Under the assumption
that drivers respond similarly to
changes in the cost of driving whether
they are caused by variation in fuel
prices or fuel economy, the short-run
price elasticity of demand for gasoline—
which measures the sensitivity of
gasoline consumption to changes in its
price per gallon—may provide some
indication about the magnitude of the
rebound effect itself. EPA invites
comment on the extent to which the
short run elasticity of demand for
gasoline with respect to its price can
provide useful information about the
size of the rebound effect. Specifically,
we seek comment on whether it would
be appropriate to use the price elasticity
of demand for gasoline, or other
alternative approaches, to guide the
choice of a value for the rebound effect.
5. Impacts on U.S. Vehicle Sales and
Payback Period
a. Vehicle Sales Impacts
The methodology EPA used for
estimating the impact on vehicle sales is
relatively straightforward, but makes a
number of simplifying assumptions.
According to the literature, the price
elasticity of demand for vehicles is
commonly estimated to be ¥1.0.355 In
other words, a one percent increase in
the price of a vehicle would be expected
to decrease sales by one percent,
holding all other factors constant. For
our estimates, EPA calculated the effect
of an increase in vehicle costs due to the
proposed standards and assume that
consumers will face the full increase in
costs, not an actual (estimated) change
in vehicle price. (The estimated
increases in vehicle cost due to the rule
are discussed in Section III.H.2) This is
a conservative methodology, since an
increase in cost may not pass fully into
an increase in market price in an
oligopolistic industry such as the
automotive sector.356 EPA also notes
355 Kleit A.N., 1990. ‘‘The Effect of Annual
Changes in Automobile Fuel Economy Standards.’’
Journal of Regulatory Economics 2: 151–172
(Docket EPA–HQ–OAR–2009–0472); McCarthy,
Patrick S., 1996. ‘‘Market Price and Income
Elasticities of New Vehicle Demands.’’ Review of
Economics and Statistics 78: 543–547 (Docket EPA–
HQ–OAR–2009–0472); Goldberg, Pinelopi K., 1998.
‘‘The Effects of the Corporate Average Fuel
Efficiency Standards in the U.S.,’’ Journal of
Industrial Economics 46(1): 1–33 (Docket EPA–HQ–
OAR–2009–0472).
356 See, for instance, Gron, Ann, and Deborah
Swenson, 2000. ‘‘Cost Pass-Through in the U.S.
Automobile Market,’’ Review of Economics and
Statistics 82: 316–324 (Docket EPA–HQ–OAR–
2009–0472).
PO 00000
Frm 00156
Fmt 4701
Sfmt 4702
that we have not used these estimated
sales impacts in the OMEGA Model.
Although EPA uses the one percent
price elasticity of demand for vehicles
as the basis for our vehicle sales impact
estimates, we assumed that the
consumer would take into account both
the higher vehicle purchasing costs as
well as some of the fuel savings benefits
when deciding whether to purchase a
new vehicle. Therefore, the incremental
cost increase of a new vehicle would be
offset by reduced fuel expenditures over
a certain period of time (i.e., the
‘‘payback period’’). For the purposes of
this rulemaking, EPA used a five-year
payback period, which is consistent
with the length of a typical new lightduty vehicle loan.357 This approach may
not accurately reflect the role of fuel
savings in consumers’ purchase
decisions, as the discussion in Section
III.H.1 suggests. If consumers consider
fuel savings in a different fashion than
modeled here, then this approach will
not accurately reflect the impact of this
rule on vehicle sales.
This increase in costs has other effects
on consumers as well: If vehicle prices
increase, consumers will face higher
insurance costs and sales tax, and
additional finance costs if the vehicle is
bought on credit. In addition, the resale
value of the vehicles will increase. EPA
estimates that, with corrections for these
factors, the effect on consumer
expenditures of the cost of the new
technology should be 0.932 times the
cost of the technology at a 3% discount
rate, and 0.892 times the cost of the
technology at a 7% discount rate. The
details of this calculation are in the
DRIA, Chapter 8.l.
Once the cost estimates are adjusted
for these additional factors, the fuel cost
savings associated with the rule,
discussed in Section III.H.4, are
subtracted to get the net effect on
consumer expenditures for a new
vehicle. With the assumed elasticity of
demand of ¥1, the percent change in
this ‘‘effective price,’’ estimated as the
adjusted increase in cost, is equal to the
negative of the percent change in
vehicle purchases. The net effect of this
calculation is in Table III.H.5–1 and
Table III.H.5–2.
357 There is not a consensus in the literature on
how consumers consider fuel economy in their
vehicle purchases. Results are inconsistent,
possibly due to fuel economy not being a major
focus of many of the studies. Espey, Molly, and
Santosh Nair (1995, ‘‘Automobile Fuel Economy:
What Is It Worth?’’ Contemporary Economic Policy
23: 317–323, (Docket EPA–HQ–OAR–2009–0472)
find that their results are consistent with consumers
using the lifetime of the vehicle, not just the first
five years, in their fuel economy purchase
decisions. This result suggests that the five-year
time horizon used here may be an underestimate.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
The estimates provided in Table
III.H.5–1 and Table III.H.5–2 are meant
to be illustrative rather than a definitive
prediction. When viewed at the
industry-wide level, they give a general
indication of the potential impact on
vehicle sales. As shown below, the
overall impact is positive and growing
over time for both cars and trucks,
because the estimated value of fuel
savings exceeds the costs of meeting the
higher standards. If, however,
49609
consumers do not take fuel savings and
other costs into account as modeled
here when they purchase vehicles, the
results presented here may not reflect
actual impacts on vehicle sales.
TABLE III.H.5–1—VEHICLE SALES IMPACTS USING A 3% DISCOUNT RATE
Change in car
sales
2012
2013
2014
2015
2016
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
Table III.H.5–1 shows the impacts on
new vehicle sales using a 3% discount
rate. The fuel savings are always higher
than the technology costs. Although
both cars and trucks show very small
Percent change
66,600
93,300
134,400
236,300
375,400
Change in truck
sales
0.7
0.9
1.3
2.2
3.4
effects initially, over time vehicle sales
become increasingly positive, as
increased fuel prices make improved
fuel economy more desirable. The
increases in sales for trucks are larger
27,300
161,300
254,400
368,400
519,000
Percent change
0.5
2.8
4.4
6.5
9.4
than the increases for trucks (except in
2012) in both absolute numbers and
percentage terms.
TABLE III.H.5–2—NEW VEHICLE SALES IMPACTS USING A 7% DISCOUNT RATE
Change in car
sales
mstockstill on DSKH9S0YB1PROD with PROPOSALS
2012
2013
2014
2015
2016
.............................................................................................
.............................................................................................
.............................................................................................
.............................................................................................
.............................................................................................
Table III.H.5–2 shows the impacts on
new vehicle sales using a 7% interest
rate. While a 7% interest rate shows
slightly lower impacts than using a 3%
discount rate, the results are
qualitatively similar to those using a 3%
discount rate. Sales increase for every
year. For both cars and trucks, sales
become increasingly positive over time,
as higher fuel prices make improved
fuel economy more valuable. The car
market grows more than the truck
market in absolute numbers, but less on
a percentage basis.
The effect of this rule on the use and
scrappage of older vehicles will be
related to its effects on new vehicle
prices, the fuel efficiency of new vehicle
models, and the total sales of new
vehicles. If the value of fuel savings
resulting from improved fuel efficiency
to the typical potential buyer of a new
vehicle outweighs the average increase
in new models’ prices, sales of new
vehicles will rise, while scrappage rates
of used vehicles will increase slightly.
This will cause the ‘‘turnover’’ of the
vehicle fleet—that is, the retirement of
used vehicles and their replacement by
new models—to accelerate slightly, thus
accentuating the anticipated effect of the
rule on fleet-wide fuel consumption and
CO2 emissions. However, if potential
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
Percent change
61,900
86,600
125,200
221,400
353,100
0.7
0.9
1.2
2
3.2
buyers value future fuel savings
resulting from the increased fuel
efficiency of new models at less than the
increase in their average selling price,
sales of new vehicles will decline, as
will the rate at which used vehicles are
retired from service. This effect will
slow the replacement of used vehicles
by new models, and thus partly offset
the anticipated effects of the proposed
rules on fuel use and emissions.
Because the agencies are uncertain
about how the value of projected fuel
savings from the proposed rules to
potential buyers will compare to their
estimates of increases in new vehicle
prices, we have not attempted to
estimate explicitly the effects of the rule
on scrappage of older vehicles and the
turnover of the vehicle fleet. We seek
comment on the methods that might be
used to estimate the effect of the
proposed rule on the scrappage and use
of older vehicles as part of the analysis
to be conducted for the final rule.
A detailed discussion of the vehicle
sales impacts methodology is provided
in the DRIA. EPA invites comments on
this approach to estimating the vehicle
sales impacts of this proposal.
PO 00000
Frm 00157
Fmt 4701
Sfmt 4702
Change in truck
sales
25,300
60,000
122,900
198,100
291,500
Percent change
0.5
1
2.1
3.5
5.3
b. Consumer Payback Period and
Lifetime Savings on New Vehicle
Purchases
Another factor of interest is the
payback period on the purchase of a
new vehicle that complies with the
proposed standards. In other words,
how long would it take for the expected
fuel savings to outweigh the increased
cost of a new vehicle? For example, a
new 2016 MY vehicle is estimated to
cost $1,050 more (on average, and
relative to the reference case vehicle)
due to the addition of new GHG
reducing technology (see Section III.D.6
for details on this cost estimate). This
new technology will result in lower fuel
consumption and, therefore, savings in
fuel expenditures (see Section III.F.1 for
details on fuel savings). But how many
months or years would pass before the
fuel savings exceed the upfront cost of
$1,050?
Table III.H.5–3 provides the answer to
this question for a vehicle purchaser
who pays for the new vehicle upfront in
cash (we discuss later in this section the
payback period for consumers who
finance the new vehicle purchase with
a loan). The table uses annual miles
driven (vehicle miles traveled, or VMT)
and survival rates consistent with the
emission and benefits analyses
E:\FR\FM\28SEP2.SGM
28SEP2
49610
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
presented in Chapter 4 of the draft joint
TSD. The control case includes rebound
VMT but the reference case does not,
consistent with other parts of the
analysis. Also included are fuel savings
associated with A/C controls (in the
control case only), but the expected
A/C-related maintenance savings are not
included. The likely A/C-related
maintenance savings are discussed in
Chapter 2 of EPA’s draft RIA. Further,
this analysis does not include other
societal impacts such as the value of
increased driving, or noise, congestion
and accidents since the focus is meant
to be on those factors consumers
consider most while in the showroom
considering a new car purchase. Car/
truck fleet weighting is handled as
described in Chapter 1 of the draft joint
TSD. As can be seen in the table, it will
take under 3 years (2 years and 8
months at a 3% discount rate, 2 years
and 10 months at a 7% discount rate)
for the cumulative discounted fuel
savings to exceed the upfront increase
in vehicle cost. More detail on this
analysis can be found in Chapter 8 of
EPA’s draft RIA.
TABLE III.H.5–3—PAYBACK PERIOD ON A 2016 MY NEW VEHICLE PURCHASE VIA CASH
[2007 dollars]
Increased vehicle
cost a
Year of ownership
1
2
3
4
.......................................................................................................
.......................................................................................................
.......................................................................................................
.......................................................................................................
Annual fuel
savings b
$1,128
............................
............................
............................
Cumulative
discounted fuel
savings at 3%
$443
444
443
434
Cumulative
discounted fuel
savings at 7%
$436
860
1,272
1,663
$428
829
1,203
1,546
a Increased cost of the proposed rule is $1,050; the value here includes nationwide average sales tax of 5.3% and increased insurance premiums of 1.98%; both of these percentages are discussed in Section 8.1.1 of EPA’s draft RIA.
b Calculated using AEO 2009 reference case fuel price including taxes.
However, most people purchase a
new vehicle using credit rather than
paying cash up front. The typical car
loan today is a five year, 60 month loan.
As of August 24, 2009, the national
average interest rate for a 5 year new car
loan was 7.41 percent. If the increased
vehicle cost is spread out over 5 years
at 7.41 percent, the analysis would look
like that shown in Table III.H.5–4. As
can be seen in this table, the fuel
savings immediately outweigh the
increased payments on the car loan,
amounting to $162 in discounted net
savings (3% discount rate) saved in the
first year and similar savings for the
next two years before reduced VMT
starts to cause the fuel savings to fall.
Results are similar using a 7% discount
rate. This means that for every month
that the average owner is making a
payment for the financing of the average
new vehicle their monthly fuel savings
would be greater than the increase in
the loan payments. This amounts to a
savings on the order of $9 to $14 per
month throughout the duration of the 5
year loan. Note that in year six when the
car loan is paid off, the net savings
equal the fuel savings (as would be the
case for the remaining years of
ownership).
TABLE III.H.5–4—PAYBACK PERIOD ON A 2016 MY NEW VEHICLE PURCHASE VIA CREDIT
[2007 dollars]
Increased vehicle
cost a
Year of ownership
1
2
3
4
5
6
.......................................................................................................
.......................................................................................................
.......................................................................................................
.......................................................................................................
.......................................................................................................
.......................................................................................................
a This
Annual fuel
savings b
$278
278
278
278
278
0
Annual
discounted net
savings at 3%
$443
444
443
434
423
403
Annual
discounted net
savings at 7%
$162
158
153
141
127
343
$159
150
139
123
107
278
uses the same increased cost as Table III.H.4–3 but spreads it out over 5 years assuming a 5 year car loan at 7.41 percent.
using AEO 2009 reference case fuel price including taxes.
b Calculated
mstockstill on DSKH9S0YB1PROD with PROPOSALS
The lifetime fuel savings and net
savings can also be calculated for those
who purchase the vehicle using cash
and for those who purchase the vehicle
with credit. This calculation applies to
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
the vehicle owner who retains the
vehicle for its entire life and drives the
vehicle each year at the rate equal to the
national projected average. The results
are shown in Table III.H.5–5. In either
PO 00000
Frm 00158
Fmt 4701
Sfmt 4702
case, the present value of the lifetime
net savings is greater than $3,200 at a
3% discount rate, or $2,400 at a 7%
discount rate.
E:\FR\FM\28SEP2.SGM
28SEP2
49611
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
TABLE III.H.5–5—LIFETIME DISCOUNTED NET SAVINGS ON A 2016 MY NEW VEHICLE PURCHASE
[2007 dollars]
Increased
discounted
vehicle cost
Purchase option
Lifetime
discounted fuel
savings b
Lifetime
discounted net
savings
3% discount rate
Cash .................................................................................................................................
Credit a .............................................................................................................................
$1,128
1,293
$4,558
4,558
$3,446
3,265
1,128
1,180
3,586
3,586
2,495
2,406
7% discount rate
Cash .................................................................................................................................
Credit a .............................................................................................................................
a Assumes
b Fuel
a 5 year loan at 7.41 percent.
savings here were calculated using AEO 2009 reference case fuel price including taxes.
Note that throughout this consumer
payback discussion, the average number
of vehicle miles traveled per year has
been used. Drivers who drive more
miles than the average would incur fuel
related savings more quickly and,
therefore, the payback would come
sooner. Drivers who drive fewer miles
than the average would incur fuel
related savings more slowly and,
therefore, the payback would come
later.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
6. Benefits of Reducing GHG Emissions
a. Introduction
This proposal is designed to reduce
greenhouse gas (GHG) emissions from
light-duty vehicles. This section
provides monetized estimates of some of
the economic benefits of this proposal’s
projected GHG emissions reductions.358
The total benefit estimates were
calculated by multiplying a marginal
dollar value (i.e., cost per ton) of carbon
emissions, also referred to as ‘‘social
cost of carbon’’ (SCC), by the anticipated
level of emissions reductions in tons.
We request comment on the approach
used to estimate the set of SCC values
used for this coordinated proposal as
well as the other options considered.
The estimates presented here are
interim values. EPA and other agencies
will continue to explore the underlying
assumptions and issues.
As discussed below, the interim
dollar estimates of the SCC represent a
partial accounting of climate change
impacts. The quantitative account
presented here is accompanied by a
qualitative appraisal of climate-related
impacts presented elsewhere in this
proposal. For example, Section III.F.2 of
358 The marginal and total benefit estimates
presented in this section are limited to the impacts
that can be monetized. Section III.F.2 of this
preamble discusses the physical impacts of climate
change, some of which are not monetized and are
therefore omitted from the monetized benefits
discussed here.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
the preamble presents a summary of the
impacts and risks of climate change
projected in the absence of actions to
mitigate GHG emissions. Section III.F.2
is based on EPA documents that
synthesize major findings from the best
available scientific assessments of the
scientific literature that have gone
through rigorous and transparent peer
review, including the major assessment
reports of both the Intergovernmental
Panel on Climate Change (IPCC) and the
U.S. Climate Change Science
Program.359
The rest of this preamble section will
provide the basis for the interim SCC
values, and the estimates of the total
climate-related benefits of the proposed
rule that follow from these interim
values.
b. Derivation of Interim Social Cost of
Carbon Values
The ‘‘social cost of carbon’’ (SCC) is
intended to be a monetary measure of
the incremental damage resulting from
carbon dioxide (CO2) emissions,
including (but not limited to) net
agricultural productivity loss, human
health effects, property damages from
sea level rise, and changes in ecosystem
services. Any effort to quantify and to
monetize the consequences associated
with climate change will raise serious
questions of science, economics, and
ethics. But with full regard for the limits
of both quantification and monetization,
the SCC can be used to provide an
estimate of the social benefits of
reductions in GHG emissions.
For at least three reasons, any
particular figure will be contestable.
First, scientific and economic
359 U.S. Environmental Protection Agency,
‘‘Advance Notice of Proposed Rulemaking for
Greenhouse Gases Under the Clean Air Act,
Technical Support Document on Benefits of
Reducing GHG Emissions,’’ June 2008. See
www.regulations.gov and search for ID ‘‘EPA–HQ–
OAR–2008–0138–0078.’’
PO 00000
Frm 00159
Fmt 4701
Sfmt 4702
knowledge about the impacts of climate
change continues to grow. With new
and better information about relevant
questions, including the cost, burdens,
and possibility of adaptation, current
estimates will inevitably change over
time. Second, some of the likely and
potential damages from climate
change—for example, the loss of
endangered species—are generally not
included in current SCC estimates.
These omissions may turn out to be
significant, in the sense that they may
mean that the best current estimates are
too low. As noted by the IPCC Fourth
Assessment Report, ‘‘It is very likely that
globally aggregated figures
underestimate the damage costs because
they cannot include many nonquantifiable impacts.’’ 360 Third, when
economic efficiency criteria, under
specific assumptions, are juxtaposed
with ethical considerations, the
outcome may be controversial.361 These
ethical considerations, including those
involving the treatment of future
generations, should and will also play a
role in judgments about the SCC (see in
particular the discussion of the discount
rate, below).
To date, SCC estimates presented in
recent regulatory documents have
varied within and among agencies,
including DOT, DOE, and EPA. For
example, a regulation proposed by DOT
in 2008 assumed a value of $7 per
metric ton CO2 (2006$) for 2011
emission reductions (with a range of
$0–14 for sensitivity analysis; see EPA
Docket, EPA–HQ–OAR–2009–0472).362
360 IPCC WGII. 2007. Climate Change 2007—
Impacts, Adaptation and Vulnerability Contribution
of Working Group II to the Fourth Assessment
Report of the IPCC. See EPA Docket, EPA–HQ–
OAR–2009–0472.
361 See, e.g., Discounting and Intergenerational
Equity (Paul Portney and John P. Weyant eds.
1999).
362 For the purposes of this discussion, we
present all values of the SCC as the cost per metric
E:\FR\FM\28SEP2.SGM
Continued
28SEP2
49612
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
A regulation proposed by DOE in 2009
used a range of $0–$20 (2007$). Both of
these ranges were designed to reflect the
value of damages to the United States
resulting from carbon emissions, or the
‘‘domestic’’ SCC. In the final MY2011
CAFE EIS, DOT used both a domestic
SCC value of $2/tCO2 and a global SCC
value of $33/tCO2 (with sensitivity
analysis at $80/tCO2) (in 2006 dollars
for 2007 emissions), increasing at 2.4%
per year thereafter. The final MY2011
CAFE rule also presented a range from
$2 to $80/tCO2 (see EPA Docket, EPA–
HQ–OAR–2009–0472, for the MY2011
EIS and final rule). EPA’s Advance
Notice of Proposed Rulemaking for
Greenhouse Gases discussed the
benefits of reducing GHG emissions and
identified what it described as ‘‘very
preliminary’’ SCC estimates ‘‘subject to
revision’’ that spanned three orders of
magnitude. EPA’s global mean values
were $68 and $40/tCO2 for discount
rates of 2% and 3% respectively (in
2006 real dollars for 2007 emissions).363
The current Administration has
worked to develop a transparent
methodology for selecting a set of
interim SCC estimates to use in
regulatory analyses until a more
comprehensive characterization of the
SCC is developed. This discussion
proposes a set of values for the interim
social cost of carbon resulting from this
methodology. It should be emphasized
that the analysis here is preliminary.
This proposed joint rulemaking presents
SCC estimates that reflect the
Administration’s current understanding
of the relevant literature and will be
used for the short-term while an
interagency group develops a more
comprehensive characterization of the
distribution of SCC values for future
economic and regulatory analyses. The
interim values should not be viewed as
an expectation about the results of the
longer-term process. The
Administration is seeking comment in
this proposed rule on all of the
scientific, economic, and ethical issues
before establishing improved estimates
for use in future rulemakings.
The outcomes of the Administration’s
process to develop interim values are
ton of CO2 emissions. Some discussions of the SCC
in the literature use an alternative presentation of
a dollar per metric ton of carbon. The standard
adjustment factor is 3.67, which means, for
example, that a SCC of $10 per ton of CO2 would
be equivalent to a cost of $36.70 for a ton of carbon
emitted. Unless otherwise indicated, a ‘‘ton’’ refers
to a metric ton.
363 73 FR 44416 (July 30, 2008). EPA, ‘‘Advance
Notice of Proposed Rulemaking for Greenhouse
Gases Under the Clean Air Act, Technical Support
Document on Benefits of Reducing GHG
Emissions,’’ June 2008. www.regulations.gov.
Search for ID ‘‘EPA–HQ–OAR–2008–0318–0078.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
judgments in favor of (a) global rather
than domestic values, (b) an annual
growth rate of 3%, and (c) interim global
SCC estimates for 2007 (in 2007 dollars)
of $56, $34, $20, $10, and $5 per ton of
CO2. The proposed figures are based on
the following judgments.
i. Global and Domestic Measures
Because of the distinctive nature of
the climate change problem, we present
both a global SCC and a fraction of that
value that represents impacts that may
occur within the borders of the U.S.
alone, or a ‘‘domestic’’ SCC, but fix our
attention on the global measure. This
approach represents a departure from
past practices, which relied, for the
most part, on domestic measures. As a
matter of law, both global and domestic
values are permissible; the relevant
statutory provisions are ambiguous and
allow selection of either measure.364
It is true that under OMB guidance,
analysis from the domestic perspective
is required, while analysis from the
international perspective is optional.
The domestic decisions of one nation
are not typically based on a judgment
about the effects of those decisions on
other nations. But the climate change
problem is highly unusual in the sense
that it involves (a) a global public good
in which (b) the emissions of one nation
may inflict significant damages on other
nations and (c) the United States is
actively engaged in promoting an
international agreement to reduce
worldwide emissions.
In these circumstances, we believe
that the global measure is preferred. Use
of a global measure reflects the reality
of the problem and is consistent with
the continuing efforts of the United
States to ensure that emissions
reductions occur in many nations.
Domestic SCC values are also
presented. The development of a
domestic SCC is greatly complicated by
the relatively few region- or countryspecific estimates of the SCC in the
literature. One potential source of
estimates comes from EPA’s ANPR
Benefits TSD, using the Climate
Framework for Uncertainty, Negotiation
and Distribution (FUND) model.365 The
resulting estimates suggest that the ratio
364 It is true that Federal statutes are presumed
not to have extraterritorial effect, in part to ensure
that the laws of the United States respect the
interests of foreign sovereigns. But use of a global
measure for the SCC does not give extraterritorial
effect to Federal law and hence does not intrude on
such interests.
365 73 FR 44416 (July 30, 2008). EPA, ‘‘Advance
Notice of Proposed Rulemaking for Greenhouse
Gases Under the Clean Air Act, Technical Support
Document on Benefits of Reducing GHG
Emissions,’’ June 2008. www.regulations.gov.
Search for ID ‘‘EPA–HQ–OAR–2008–0318–0078.
PO 00000
Frm 00160
Fmt 4701
Sfmt 4702
of domestic to global benefits varies
with key parameter assumptions. With a
3% discount rate, for example, the U.S.
benefit is about 6% of the global benefit
of GHG reductions for the ‘‘central’’
(mean) FUND results, while, for the
corresponding ‘‘high’’ estimates
associated with a higher climate
sensitivity and lower global economic
growth, the U.S. benefit is less than 4%
of the global benefit. With a 2%
discount rate, the U.S. share is about
2–5% of the global estimate. Comments
are requested on whether the share of
U.S. SCC is correlated with the discount
rate.
Based on this available evidence, an
interim domestic SCC value equal to 6%
of the global damages is proposed. This
figure is around the middle of the range
of available estimates cited above. It is
recognized that the 6% figure is
approximate and highly speculative.
Alternative approaches will be explored
before establishing improved values for
future rulemakings. However, it should
be noted that it is difficult to apportion
global benefits to different regions. For
example, impacts outside the U.S.
border can have significant welfare
implications for U.S. populations (e.g.
tourism, disaster relief) and if not
included, these omissions will lead to
an underestimation of the ‘‘domestic’’
SCC. We request comment on this issue.
ii. Filtering Existing Analyses
There are numerous SCC estimates in
the existing literature, and it is
reasonable to make use of those
estimates in order to produce a figure
for current use. A starting point is
provided by the meta-analysis in
Richard Tol, 2008.366 With that starting
point, the Administration proposes to
‘‘filter’’ existing SCC estimates by using
those that (1) are derived from peerreviewed studies; (2) do not weight the
monetized damages to one country more
than those in other countries; (3) use a
‘‘business as usual’’ climate scenario;
and (4) are based on the most recent
published version of each of the three
major integrated assessment models
(IAMs): FUND, Policy Analysis for the
Greenhouse Effect (PAGE), and DICE.
Proposal (1) is based on the view that
those studies that have been subject to
peer review are more likely to be
reliable than those that have not.
Proposal (2) avoids treating the citizens
of one nation (or different citizens
within the U.S.) differently on the basis
366 Richard Tol, The Social Cost of Carbon:
Trends, Outliers, and Catastrophes, Economics: The
Open-Access, Open-Assessment E-Journal, Vol. 2,
2008–25. https://www.economics-ejournal.org/
economics/journalarticles/2008-25 (2008). See also
EPA Docket, EPA–HQ–OAR–2009–0472.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
of income considerations, which some
may find controversial and in any event
would significantly complicate that
analysis. In addition, that approach is
consistent with the potential
compensation tests of Kaldor (1939) and
Hicks (1940), which form the
conceptual foundations of benefit-cost
analysis and use unweighted sums of
willingness to pay. Finally, this is the
approach used in rulemakings across a
variety of settings and consequently
keeps USG policy consistent across
contexts.
Proposal (3) stems from the judgment
that as a general rule, the proper way to
assess a policy decision is by comparing
the implementation of the policy against
a counterfactual state where the policy
is not implemented. In addition, our
expectation is that most policies to be
evaluated using these interim SCC
estimates will constitute sufficiently
small changes to the larger economy to
make it safe to assume that the marginal
benefits of emissions reductions will not
change between the baseline and policy
scenarios.
Proposal (4) is based on four
complementary judgments. First, the
FUND, PAGE, and DICE models now
stand as the most comprehensive and
reliable efforts to measure the economic
damages from climate change. Second,
the latest versions of the three IAMs are
likely to reflect the most recent evidence
and learning, and hence they are
presumed to be superior to those that
preceded them.367
Third, any effort to choose among
them, or to reject one in favor of the
others, would be difficult to defend at
the present time. In the absence of a
clear reason to choose among them, it is
reasonable to base the SCC on all of
them. Fourth, in light of the
uncertainties associated with the SCC, a
range of values is more representative
and the additional information offered
by different models should be taken into
account.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
iii. Use a Model-Weighted Average of
the Estimates at Each Discount Rate
We have just noted that at this time,
a strong reason to prefer any of the three
major IAMs (FUND, PAGE, and DICE)
over the others has not been identified.
To address the concern that certain
models not be given unequal weight
367 However, it is acknowledged that the most
recently published results do not necessarily repeat
prior modeling exercises with an updated model, so
valuable information may be lost, for instance,
estimates of the SCC using specific climate
sensitivities or economic scenarios. In addition,
although some older model versions were used to
produce estimates between 1996 and 2001, there
have been no significant modeling paradigm
changes since 1996.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
relative to the others, the estimates are
based on an equal weighting of the
means of the estimates from each of the
models. Among estimates that remain
after applying the filter, we begin by
taking the average of all estimates
within a model. The estimated SCC is
then calculated as the average of the
three model-specific averages. This
approach is used to ensure that models
with a greater number of published
results do not exert unequal weight on
the interim SCC estimates.
It should be noted, however, that the
resulting set of SCC estimates does not
provide information about variability
among or within models except in so far
as they have different discounting
assumptions. Comment is sought on
whether model-weighting averaging of
published estimates is appropriate for
developing interim SCC estimates.
iv. Apply a 3% Annual Growth Rate to
the Chosen SCC Values
SCC is expected to increase over time,
because future emissions are expected
to produce larger incremental damages
as physical and economic systems
become more stressed as the magnitude
of climate change increases. Indeed, an
implied growth rate in the SCC can be
produced by most of the models that
estimate economic damages caused by
increased GHG emissions in future
years. But neither the rate itself nor the
information necessary to derive its
implied value is commonly reported. In
light of the limited amount of debate
thus far about the appropriate growth
rate of the SCC, applying a rate of 3%
per year seems appropriate at this stage.
This value is consistent with the range
recommended by IPCC (2007) and close
to the latest published estimate (Hope
2008) (see EPA Docket, EPA–HQ–OAR–
2009–0472, for both citations).
(1) Discount Rates
For estimation of the benefits
associated with the mitigation of climate
change, one of the most complex issues
involves the appropriate discount rate.
OMB’s current guidance offers a
detailed discussion of the relevant
issues and calls for discount rates of 3%
and 7%. It also permits a sensitivity
analysis with low rates (1–3%) for
intergenerational problems: ‘‘If your rule
will have important intergenerational
benefits or costs you might consider a
further sensitivity analysis using a lower
but positive discount rate in addition to
calculating net benefits using discount
rates of 3 and 7 percent.’’ 368
368 See OMB Circular A–4, pp. 35–36, citing
Portney and Weyant, eds. (1999), Discounting and
Intergenerational Equity, Resources for the Future,
PO 00000
Frm 00161
Fmt 4701
Sfmt 4702
49613
The choice of a discount rate,
especially over long periods of time,
raises highly contested and exceedingly
difficult questions of science,
economics, philosophy, and law. See,
e.g., William Nordhaus, The Challenge
of Global Warming (2008); Nicholas
Stern, The Economics of Climate
Change (2008); Discounting and
Intergenerational Equity (Paul Portney
and John Weyant eds. 1999), in the EPA
Docket, EPA–HQ–OAR–2009–0472.
Under imaginable assumptions,
decisions based on cost-benefit analysis
with high discount rates might harm
future generations—at least if
investments are not made for the benefit
of those generations. See Robert Lind,
Analysis for Intergenerational
Discounting, id. at 173, 176–177 (1999),
in the EPA Docket, EPA–HQ–OAR–
2009–0472. It is not clear that future
generations would be willing to trade
environmental quality for consumption
at the same rate as the current
generations. It is also possible that the
use of low discount rates for particular
projects might itself harm future
generations, by diverting resources from
private or public sector investments
with higher rates of return for future
generations. In the context of climate
change, questions of intergenerational
equity are especially important.
Because of the substantial length of
time in which CO2 and other GHG
emissions reside in the atmosphere,
choosing a high discount rate could
result in irreversible changes in CO2
concentrations, and possibly irreversible
climate changes (unless substantial
reductions in short-lived climate forcing
emissions are achieved). Even if these
changes are reversible, delaying
mitigation efforts could result in
substantially higher costs of stabilizing
CO2 concentrations. On the other hand,
using too low a discount rate in benefitcost analysis may suggest some
potentially economically unwarranted
investments in mitigation. It is also
possible that the use of low discount
rates for particular projects might itself
harm future generations, by ensuring
that resources are not used in a way that
would greatly benefit them. We invite
comment on the methods used to select
discount rates for application in
deriving SCC values, and in particular,
application of the Newell and Pizer
work on uncertainty in discount rates in
developing the SCC used in evaluating
the climate-related benefits of this
proposal. Comments are requested on
the use of the rates discussed in this
preamble and on alternative rates. We
Washington, DC. See EPA Docket, EPA–HQ–OAR–
2009–0472.
E:\FR\FM\28SEP2.SGM
28SEP2
49614
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
also invite comment on how to best
address the ethical and policy concerns
in the context of selecting the
appropriate discount rate.
Reasonable arguments support the use
of a 3% discount rate. First, that rate is
among the two figures suggested by
OMB guidance, and hence it fits with
existing national policy. Second, it is
standard to base the discount rate on the
compensation that people receive for
delaying consumption, and the 3% is
close to the risk-free rate of return,
proxied by the return on long term
inflation-adjusted U.S. Treasury Bonds,
as of this writing. Although these rates
are currently closer to 2.5%, the use of
3% provides an adjustment for the
liquidity premium that is reflected in
these bonds’ returns. However, this
approach does not adjust for the
significantly longer time horizon
associated with climate change impacts.
It could also be argued that the discount
rate should be lower than 3% if the
benefits of climate mitigation policies
tend to be higher than expected in time
periods when the returns to investments
in rest of the economy are lower than
normal.
At the same time, others would argue
that a 5% discount rate can be
supported. The argument relies on
several assumptions. First, this rate can
be justified by reference to the level of
compensation for delaying
consumption, because it fits with
market behavior with respect to
individuals’ willingness to trade-off
consumption across periods as
measured by the estimated post-tax
average real returns to risky private
investments (e.g., the S&P 500). In the
climate setting, the 5% discount rate
may be preferable to the riskless rate
because the benefits to mitigation are
not known with certainty. In principal,
the correct discount rate would reflect
the variance in payoff from climate
mitigation policy and the correlation
between the payoffs of the policy and
the broader economy.369
Second, 5%, and not 3%, is roughly
consistent with estimates implied by
369 Specifically, if the benefits of the policy are
highly correlated with the returns from the broader
economy, then the market rate should be used to
discount the benefits. If the benefits are
uncorrelated with the broader economy the long
term government bond rate should be applied.
Furthermore, if the benefits are negatively
correlated with the broader economy, a rate less
than that on long term government bonds should be
used (Lind, 1982 pp. 89–90).
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
inputs to the theoretically derived
Ramsey equation presented below,
which specifies the optimal time path
for consumption. That equation
specifies the optimal discount rate as
the sum of two components. The first
term (the product of the elasticity of the
marginal utility of consumption and the
growth rate of consumption) reflects the
fact that consumption in the future is
likely to be higher than consumption
today, so diminishing marginal utility
implies that the same monetary damage
will cause a smaller reduction of utility
in the future. Standard estimates of this
term from the economics literature are
in the range of 3%–5%.370 The second
component reflects the possibility that a
lower weight should be placed on utility
in the future, to account for social
impatience or extinction risk, which is
specified by a pure rate of time
preference (PRTP). A common estimate
of the PRTP is 2%, though some
observers believe that a principle of
intergenerational equity suggests that
the PRTP should be close to zero. It
follows that discount rate of 5% is near
the middle of the range of values that
are able to be derived from the Ramsey
equation.371
It is recognized that the arguments
above—for use of market behavior and
370 For example, see: Arrow KJ, Cline WR, Maler
K–G, Munasinghe M, Squitieri R, Stiglitz JE. 1996.
Intertemporal equity, discounting, and economic
efficiency. Chapter 4 in Economic and Social
Dimensions of Climate Change: Contribution of
Working Group III to the Second Assessment
Report, Summary for Policy Makers. Cambridge:
Cambridge University Press; Dasgupta P. 2008.
Discounting climate change. Journal of Risk and
Uncertainty 37:141–169; Hoel M, Sterner T. 2007.
Discounting and relative prices. Climatic Change
84:265–280; Nordhaus WD. 2008. A Question of
Balance: Weighing the Options on Global Warming
Policies. New Haven, CT: Yale University Press;
Stern N. 2008. The economics of climate change.
The American Economic Review 98(2):1–37. See
EPA Docket, EPA–HQ–OAR–2009–0472.
371 Sterner and Persson (2008) note that a
consistent treatment of the marginal utility of
consumption would require that if higher discount
rates are justified by the diminishing marginal
utility of consumption, e.g., a dollar of damages is
worth less to future generations because they have
greater income, then so-called equity weights
should be used to account for the higher value that
countries with lower income would place on a
dollar of damages relative to the U.S. This is a
consistent and logical outcome of application of the
Ramsey framework. Because the distribution of
climate change related damages is expected to be
skewed towards developing nations with lower
incomes, this can have significant implications for
estimates of total global SCC if the Ramsey
framework is used to derive discount rates. See EPA
Docket, EPA–HQ–OAR–2009–0472 for Sterner and
Persson (2008).
PO 00000
Frm 00162
Fmt 4701
Sfmt 4702
the Ramsey equation—face objections in
the context of climate change, and of
course there are alternative approaches.
In light of climate change, it is possible
that consumption in the future will not
be higher than consumption today, and
if so, the Ramsey equation will suggest
a lower figure. The historical evidence
is consistent with rising consumption
over time.372
Some critics contend that using
observed interest rates for intergenerational decisions imposes current
preferences on future generations. For
intergenerational equity, they argue that
the discount rate should be below
market rates to correct for market
distortions and inefficiencies in
intergenerational transfers of wealth
(which are presumed to compensate
future generations for damage), and to
treat generations equitably based on
ethical principles (see Broome 2008 in
the EPA Docket, EPA–HQ–OAR–2009–
0472).373
Additionally, some analyses attempt
to deal with uncertainty with respect to
interest rates over time. We explore
below how this might be done.374
(2) Proposed Interim Estimates
The application of the methodology
outlined above yields interim estimates
of the SCC that are reported in Table
III.H.6–1. These estimates are reported
separately using 3% and 5% discount
rates. The cells are empty in rows 10
and 11, because these studies did not
report estimates of the SCC at a 3%
discount rate. The model-weighted
means are reported in the final or
summary row; they are $34 per tCO2 at
a 3% discount rate and $5 per tCO2 with
a 5% discount rate.
372 However, because climate change impacts may
be outside the bounds of historical evidence,
predictions about future growth in consumption
based on past experience may be inaccurate.
373 For relevant discussion, see Arrow, K.J., W.R.
Cline, K–G Maler, M. Munasinghe, R. Squiteri,
J.E.Stiglitz, 1996. ‘‘Intertemporal equity,
discounting and economic efficiency,’’ in Climate
Change 1995: Economic and Social Dimensions of
Climate Change, Contribution of Working Group III
to the Second Assessment Report of the
Intergovernmental Panel on Climate Change. See
also Weitzman, M.L., 1999, in Portney P.R. and
Weyant J.P. (eds.), Discounting and
Intergenerational Equity, Resources for the Future,
Washington, DC. See EPA Docket, EPA–HQ–OAR–
2009–0472.
374 Richard Newell and William Pizer,
Discounting the distant future: how much do
uncertain rates increase valuations? J. Environ.
Econ. Manage. 46 (2003) 52–71. See EPA Docket,
EPA–HQ–OAR–2009–0472.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
49615
TABLE III.H.6–1—GLOBAL SOCIAL COST OF CARBON (SCC) ESTIMATES ($/tCO2 IN 2007 (2007$)), BASED ON 3% AND
5% DISCOUNT RATES a
Study b
Climate Scenario
3%
.....
.....
.....
.....
.....
.....
.....
.....
Anthoff et al. 2009 ..................................
Anthoff et al. 2009 ..................................
Anthoff et al. 2009 ..................................
Link and Tol 2004 ...................................
Link and Tol 2004 ...................................
Guo et al. 2006 .......................................
Guo et al. 2006 .......................................
Guo et al. 2006 .......................................
PAGE .....
PAGE .....
DICE ......
Wahba & Hope 2006 ..............................
Hope 2006 ..............................................
Nordhaus 2008 .......................................
FUND default ..........................................
SRES A1b ...............................................
SRES A2 .................................................
No THC ...................................................
THC continues ........................................
Constant PRTP .......................................
Gollier discount 1 ....................................
Gollier discount 2 ....................................
FUND Mean ............................................
A2-scen ...................................................
.................................................................
.................................................................
Model-weighted Mean .............................
6
1
9
12
12
5
14
7
8.47
59
....................
....................
34
Model
1
2
3
4
5
6
7
8
........................
........................
........................
........................
........................
........................
........................
........................
9 ........................
10 ......................
11 ......................
Summary ..........
FUND
FUND
FUND
FUND
FUND
FUND
FUND
FUND
5%
¥1
¥1
¥1
3
2
¥1
0
¥1
0
7
7
8
5
a The sample includes all peer reviewed, non-equity-weighted estimates included in Tol (2008), Nordhaus (2008), Hope (2008), and Anthoff et
al. (2009), that are based on the most recent published version of FUND, PAGE, or DICE and use business-as-usual climate scenarios.375 376 All
values are based on the best available information from the underlying studies about the base year and year dollars, rather than the Tol (2008)
assumption that all estimates included in his review are 1995 values in 1995$. All values were updated to 2007 using a 3% annual growth rate in
the SCC, and adjusted for inflation using GDP deflator.
b See EPA Docket, EPA–HQ–OAR–2009–0472, for each study.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
In this proposal, benefits of reducing
GHG emissions have been estimated
using global SCC values of $34 and $5
as these represent the estimates
associated with the 3% and 5%
discount rates, respectively.377 The 3%
and 5% estimates have independent
appeal and at this time a clear
preference for one over the other is not
warranted. Thus, we have also
included—and centered our current
attention on—the average of the
estimates associated with these discount
rates, which is $20. (Based on the $20
global value, the approximate domestic
fraction of these benefits would be $1.20
per ton of CO2 assuming that domestic
benefits are 6% of the global benefits.)
The distinctions between sets of
estimates generated using different
discount rates are due only in part to
discount rate differences, because the
models and parameters used to generate
the estimates in the sets associated with
different discount rates also vary.
It is true that there is uncertainty
about interest rates over long time
horizons. Recognizing that point,
Newell and Pizer (2003) have made a
careful effort to adjust for that
uncertainty (see EPA Docket, EPA–HQ–
OAR–2009–0472). The Newell-Pizer
approach models discount rate
uncertainty as something that evolves
over time.378 This is a different way to
model discount rate uncertainty than
the approach outlined above, which
assumes there is a single discount rate
with equal probability of 3% and 5%.
Since Newell and Pizer (2003) is a
relatively recent contribution to the
literature, estimates based on this
method are included with the aim of
soliciting comment.
Table III.H.6–2 reports on the
application of the Newell-Pizer
adjustments. The precise numbers
depend on the assumptions about the
data generating process that governs
interest rates. Columns (1a) and (1b)
assume that ‘‘random walk’’ model best
describes the data and uses 3% and 5%
discount rates, respectively. Columns
(2a) and (2b) repeat this, except that it
assumes a ‘‘mean-reverting’’ process.
While the empirical evidence does not
rule out a mean-reverting model, Newell
and Pizer find stronger empirical
support for the random walk model.
EPA solicits comment on these and
other models for representing the
variation in interest rates over time.
375 Most of the estimates in Table 1 rely on
climate scenarios developed by the
Intergovernmental Panel on Climate Change (IPCC).
The IPCC published a new set of scenarios in 2000
for use in the Third Assessment Report (Special
Report on Emissions Scenarios—SRES). The SRES
scenarios define four narrative storylines: A1, A2,
B1 and B2, describing the relationships between the
forces driving greenhouse gas and aerosol emissions
and their evolution during the 21st century for large
world regions and globally. Each storyline
represents different demographic, social, economic,
technological, and environmental developments
that diverge in increasingly irreversible ways. The
storylines are summarized in the SRES report
(Nakicenovic et al., 2000; see also https://
sedac.ciesin.columbia.edu/ddc/sres/) (see EPA
Docket, EPA–HQ–OAR–2009–0472). Although they
were intended to represent BAU scenarios, at this
point in time the B1 and B2 storylines are widely
viewed as representing policy cases rather than
business-as-usual projections, estimates derived
from these scenarios to be less appropriate for use
in benefit-cost analysis. They are therefore
excluded.
376 Guo et al. (2006) report estimates based on two
Gollier discounting schemes. The Gollier
discounting assumes complex specifications about
individual utility functions and risk preferences.
After various conditions are satisfied, declining
social discount rates emerge. Gollier Discounting
Scheme 1 employs a certainty-equivalent social rate
of time preference (SRTP) derived by assuming the
regional growth rate is equally likely to be 1%
above or below the original forecast growth rate.
Gollier Discounting Scheme 2 calculates a certaintyequivalent social rate of time preference (SRTP)
using five possible growth rates, and applies the
new SRTP instead of the original. Hope (2008)
conducts Monte Carlo analysis on the PRTP
component of the discount rate. The PRTP is
modeled as a triangular distribution with a min
value of 1%/yr, a most likely value of 2%/yr, and
a max value of 3%/yr. See EPA Docket, EPA–HQ–
OAR–2009–0472 for the studies.
377 It should be noted that reported discount rates
may not be consistently derived across models or
specific applications of models: While the discount
rate may be identical, it may reflect different
assumptions about the individual components of
the Ramsey equation identified earlier.
378 In contrast, an alternative approach based on
Weitzman (2001) would assume that there is a
constant discount rate that is uncertain and
represented by a probability distribution. The
Newell and Pizer, and Weitzman approaches are
relatively recent contributions and we invite
comment on the advantages and disadvantages of
each. See EPA Docket, EPA–HQ–OAR–2009–0472.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00163
Fmt 4701
Sfmt 4702
E:\FR\FM\28SEP2.SGM
28SEP2
49616
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
TABLE III.H.6–2—GLOBAL SOCIAL COST OF CARBON (SCC) ESTIMATES ($ PER METRIC TON CO2 IN 2007 (2007$)) a,
USING NEWELL & PIZER (2003) ADJUSTMENT FOR FUTURE DISCOUNT RATE UNCERTAINTY b
Model
1
2
3
4
5
6
7
8
........................
........................
........................
........................
........................
........................
........................
........................
9 ........................
10 ......................
11 ......................
Summary ...........
FUND
FUND
FUND
FUND
FUND
FUND
FUND
FUND
Random-walk
model
Climate
scenario
Study c
.....
.....
.....
.....
.....
.....
.....
.....
Anthoff et al. 2009 ..........................
Anthoff et al. 2009 ..........................
Anthoff et al. 2009 ..........................
Link and Tol 2004 ...........................
Link and Tol 2004 ...........................
Guo et al. 2006 ...............................
Guo et al. 2006 ...............................
Guo et al. 2006 ...............................
PAGE .....
PAGE .....
DICE ......
Wahba & Hope 2006 ......................
Hope 2006 ......................................
Nordhaus 2008 ...............................
3%
(1a)
FUND default ..................................
SRES A1b .......................................
SRES A2 .........................................
No THC ...........................................
THC continues ................................
Constant PRTP ...............................
Gollier discount 1 ............................
Gollier discount 2 ............................
FUND Mean ....................................
A2-scen ...........................................
.........................................................
.........................................................
Model-weighted Mean ....................
10
2
15
21
21
9
14
7
12
100
............
............
56
5%
(1b)
0
0
0
6
4
0
0
¥1
1
13
13
15
10
Mean-reverting
model
3%
(2a)
7
1
10
13
13
6
14
7
9
65
............
............
37
5%
(2b)
¥1
¥1
¥1
4
2
¥1
0
¥1
0
8
8
9
6
a The sample includes all peer reviewed, non-equity-weighted estimates included in Tol (2008), Nordhaus (2008), Hope (2008), and Anthoff et
al. (2009), that are based on the most recent published version of FUND, PAGE, or DICE and use business-as-usual climate scenarios. All values are based on the best available information from the underlying studies about the base year and year dollars, rather than the Tol (2008) assumption that all estimates included in his review are 1995 values in 1995$. All values were updated to 2007 using a 3% annual growth rate in
the SCC, and adjusted for inflation using GDP deflator. See the Notes to Table III.H.6–1 for further details.
b Assumes a starting discount rate of 3% or 5%. Newell and Pizer (2003) based adjustment factors are not applied to estimates from Guo et al.
(2006) that use a different approach to account for discount rate uncertainty (rows 7–8).
Note that the correction factor from Newell and Pizer is based on the DICE model. The proper adjustment may differ for other integrated assessment models that produce different time schedules of marginal damages. We would expect this difference to be minor.
c See EPA Docket, EPA–HQ–OAR–2009–0472, for each study.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
The resulting estimates of the social
cost of carbon are necessarily greater.
When the adjustments from the random
walk model are applied, the estimates of
the social cost of carbon are $10 and $56
per ton of CO2, with the 5% and 3%
discount rates, respectively. The
application of the mean-reverting
adjustment yields estimates of $6 and
$37. Relying on the random walk model,
analyses are also conducted with the
value of the SCC set at $10 and $56.
(3) Caveats
There are at least four caveats to the
approach outlined above.
First, and as noted, the existing IAMs
do not currently individually account
for and assign value to all of the
important physical and other impacts of
climate change that are recognized in
the climate change literature.379 The
impacts of climate change are expected
to be widespread, diverse, and
heterogeneous. In addition, the exact
magnitude of these impacts is uncertain,
because of the inherent randomness in
the Earth’s atmospheric processes, the
U.S. and global economies, and the
behaviors of current and future
379 Examples of impacts that are difficult to
monetize, and have generally not been included in
SCC estimates, include risks from extreme weather
(death, disease, agricultural damage, and other
economic damage from droughts, floods and
wildfires) and possible long-term catastrophic
events, such as collapse of the West Antarctic ice
sheet or the release of large amounts of methane
from melting permafrost.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
populations. To this extent, as
emphasized by the IPCC, SCC estimates
are ‘‘very likely’’ underestimated.380 In
addition, the SCC approach also likely
underestimates the value of GHG
reductions because the marginal values
apply only to CO2 emissions, which
have different impacts than non-CO2
emissions because of variances in
atmospheric lifetimes and radiative
forcing.381 Although it is likely that our
capability to quantify and monetize
impacts will improve with time, it is
also likely that even in future
applications, a number of potentially
significant benefits categories will
remain unmonetized. In order to capture
the benefits of mitigation these nonmonetized benefits should be discussed
along with monetized benefits based on
the SCC.
Second, in the opposite direction, it is
unlikely that the damage estimates
adequately account for the directed
380 IPCC WGII. 2007. Climate Change 2007—
Impacts, Adaptation and Vulnerability Contribution
of Working Group II to the Fourth Assessment
Report of the IPCC. See EPA Docket, EPA–HQ–
OAR–2009–0472.
381 Radiative forcing is the change in the balance
between solar radiation entering the atmosphere
and the Earth’s radiation going out. On average, a
positive radiative forcing tends to warm the surface
of the Earth while negative forcing tends to cool the
surface. Greenhouse gases have a positive radiative
forcing because they absorb and emit heat. See
https://www.epa.gov/climatechange/science/
recentac.html for more general information about
GHGs and climate science. See EPA Docket, EPA–
HQ–OAR–2009–0472.
PO 00000
Frm 00164
Fmt 4701
Sfmt 4702
technological change that climate
change will cause. In particular, climate
change will increase the return on
investment to develop technologies that
allow individuals to cope with climate
change. For example, it is likely that
scientists will develop crops that are
better able to withstand high
temperatures. In this respect, the current
estimates may overstate the likely
quantified damages, though the costs
associated with the investments in
adaptive technologies must also be
considered (technologies must also be
included in the calculations, as the
benefits should reflect net welfare
changes to society).
Third, there has been considerable
recent discussion of the risk of
catastrophic impacts and of how best to
account for worst-case scenarios. Recent
work by Weitzman (2009) specifies
some conditions under which the
possibility of catastrophe would
undermine the use of IAMs and
conventional cost-benefit analysis.382
This research requires further
exploration before its generality is
known and the proper way to
incorporate it into regulatory reviews is
understood. We also request comments
on approaches for measuring the
premium associated with reductions in
382 Weitzman, Martin, 2009. On Modeling and
Interpreting the Economics of Catastrophic Climate
Change. Review of Economics and Statistics 9(1):
1–19. See EPA Docket, EPA–HQ–OAR–2009–0472.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
climate-related risks such as
catastrophic events.
Fourth, it is also worth noting that the
SCC estimates are only relevant for
incremental policies relative to the
projected baselines, which capture
business-as-usual scenarios. To evaluate
non-marginal changes, such as might
occur if the U.S. acts in tandem with
other nations, it might be necessary to
go beyond the simple expedient of using
the SCC along the BAU path. This
approach would require explicitly
calculating the total benefits in a move
from the BAU scenario to the policy
scenario, without imposing the
restriction that the marginal benefit
remains constant over this range.
(4) Other options
The Administration considered other
interim SCC options in addition to the
approach described above; we request
comment on each of them. One
alternative option was to bring in SCC
estimates in studies published after
1995, rather than limiting the estimates
to those in studies relying on the most
recent published version of each of the
three major integrated assessment
models: PAGE, FUND, and DICE.
Although some older model versions
(and old versions of other models) were
used to produce estimates between 1996
and 2001, it appears that there have
been no significant modeling paradigm
changes since 1996.
Another option was to select a range
of SCC values for separate discount
rates. For example, sensitivity analysis
could be conducted at the lowest and
highest SCC values reported in the
filtered set of estimates for each
discount rate considered. If considering
SCC estimates from studies published
after 1995 and a discount rate of 2
percent, this option would result in a
range of SCC values of $5/t-CO2 to $260/
t-CO2 (2007 emissions in 2007 dollars);
at a 3 percent discount rate, the range
would be $0 to $58/t-CO2.
Finally, we considered the possibility
that different assumptions under the
Ramsey framework, such as placing
approximately equal weight on the
welfare of current and future
generations, would imply a lower
discount rate, such as 2%. The Newell
and Pizer (2003) method applied to
recent long-term risk free rates would
likewise be approximately consistent
with a certainty equivalent rate of
2%.383
(5) Ongoing SCC Development
As noted, this is an emphatically
interim SCC value. The judgments
described here will be subject to further
scrutiny and exploration.
c. Application of Interim SCC Estimates
to GHG Emissions Reductions From
This Proposed Rule
The strategy underlying these joint
proposals—to coordinate Federal efforts
to reduce GHGs—warrants
consideration when assessing the
benefits. To be sure, while no single rule
or action can independently achieve the
deep worldwide emissions reductions
necessary to halt and reverse the growth
of GHGs. But the combined effects of
multiple strategies to reduce GHG
emissions domestically and abroad
49617
could make a major difference in the
climate change impacts experienced by
future generations.384
The projected net GHG emissions
reductions associated with the proposal
reflect an incremental change to
projected total global emissions.
Therefore, as shown in Section III.F.3,
the projected global climate signal will
be small but discernible—an
incrementally lower projected
distribution of global mean surface
temperatures.
Given that the climate response is
projected to be a marginal change
relative to the baseline climate, we
estimate the marginal value of changes
in climate change impacts over time and
use this value to measure the monetized
marginal benefits of the GHG emissions
reductions projected for this proposal.
Accordingly, EPA and NHTSA have
used the set of interim, global SCC
values described above to estimate the
benefits of these coordinated proposals.
The interim SCC values, which reflect
the Administration’s interim
interpretation of the current literature,
are $5 (based on a 5% discount rate),
$10 (5% using Newell-Pizer
adjustment), $20 (average SCC value
from the average SCC estimates based
on 5% and 3%), $34 (3%), and $56 (3%
using Newell-Pizer adjustment), in 2007
dollars, and are based on a CO2
emissions change of 1 metric ton in
2007. Table III.H.6–3 presents the
interim SCC values in other years in
2007 dollars. These values are presented
as one of many considerations that will
inform the Administration’s action on
this proposed rule.
TABLE III.H.6–3—INTERIM SCC SCHEDULE
Interim SCC schedule (2007$) a
Discount rate
assumption
2007
5% ............................................................
5% (Newell-Pizer) b ..................................
Average SCC Values from 3% and 5% ..
3% ............................................................
3% (Newell-Pizer) b ..................................
2015
$5
10
20
34
56
2020
$7
13
25
43
72
2030
$8
15
29
50
83
2040
$10
20
39
67
110
2050
$14
27
52
90
150
$18
37
70
120
200
mstockstill on DSKH9S0YB1PROD with PROPOSALS
a The SCC values are dollar-year and emissions-year specific. These values are presented in 2007$, for individual year of emissions. To determine values for years not presented in the table, use a 3% growth rate. SCC values represent only a partial accounting for climate impacts.
b SCC values are adjusted based on Newell and Pizer (2003) to account to future uncertainty in discount rates. See EPA Docket, EPA–HQ–
OAR–2009–0472.
Tables III.H.6–4 to III.H.6–6 provide
the annual benefits for each year
impacted by the proposed rule. As
discussed above, marginal benefits of
GHG reductions are projected to grow
over time. The tables below summarize
the total benefits for the lifetime of the
rule, which are calculated by using the
five interim SCC values.
Total monetized benefits in each
specific year are calculated by
383 Specifically, Newell and Pizer (2003) found
that modeling of uncertainty in economic growth
causes the effective discount rate to decline over
time. When starting at a 4% discount rate, the
effective discount rate is 2% at 100 years and 1%
at 200 years. See EPA Docket, EPA–HQ–OAR–
2009–0472.
384 The Supreme Court recognized in
Massachusetts v. EPA that a single action will not
on its own achieve all needed GHG reductions,
noting that ‘‘[a]gencies, like legislatures, do not
generally resolve massive problems in one fell
regulatory swoop.’’ See Massachusetts v. EPA, 549
U.S. at 524 (2007). See EPA Docket, EPA–HQ–
OAR–2009–0472.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00165
Fmt 4701
Sfmt 4702
E:\FR\FM\28SEP2.SGM
28SEP2
49618
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
multiplying the marginal benefits
estimates per metric ton of CO2 (the
SCC) from Table III.H.6–3 by the
reductions in CO2 for that year. Table
III.H.6–5 approximates the total
monetized benefits for non-CO2 GHGs
by multiplying the SCC value by the
reductions in non-CO2 GHGs for that
year. Marginal benefit estimates per
metric ton of non-CO2 GHGs are
currently unavailable, but work is ongoing to monetize benefits related to the
mitigation of other non-CO2 GHGs.
Inclusion of these benefits is planned
for the final rule.
TABLE III.H.6–4—MONETIZED GHG BENEFITS OF VEHICLE PROGRAM, CO2 EMISSIONS
[Million 2007$]
Emissions
reduction
(million
metric tons)
Year
2015
2020
2030
2040
2050
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
43.2
146
289
375
470
Discount rate
3%
(Newell-Pizer)
3%
Average
SCC from 3%
and 5%
$3,100
12,000
32,000
56,000
95,000
$1,100
4,200
11,000
19,000
33,000
$1,900
7,300
19,000
34,000
57,000
5%
(Newell-Pizer)
5%
$280
1,100
2,900
5,100
8,600
$560
2,200
5,900
10,000
17,000
TABLE III.H.6–5—MONETIZED GHG BENEFITS OF VEHICLE PROGRAM, NON-CO2 EMISSIONS IN CO2-EQUIVALENTS
[Million 2007$]
Emissions
reduction
(million metric
tons)
Year
2015
2020
2030
2040
2050
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
Discount rate
3%
(Newell-Pizer)
3%
5.86
17.7
35.3
42.7
48.2
Average
SCC from 3%
and 5%
$400
1,500
3,900
6,400
9,700
$150
510
1,400
2,200
3,400
$250
880
2,400
3,800
5,800
5%
(Newell-Pizer)
5%
$38
130
360
580
880
$76
270
700
1,200
1,800
TABLE III.H.6–6—MONETIZED GHG BENEFITS OF VEHICLE PROGRAM, TOTAL CO2 AND NON-CO2 EMISSIONS IN CO2EQUIVALENTS
[Million 2007$] a
Emissions
reduction
(million metric
tons)
Year
2015
2020
2030
2040
2050
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
a Numbers
49.1
165
325
417
518
mstockstill on DSKH9S0YB1PROD with PROPOSALS
3%
(Newell-Pizer)
3%
Average
SCC from 3%
and 5%
$3,500
14,000
36,000
63,000
100,000
$1,200
4,700
12,000
22,000
36,000
$2,100
8,200
22,000
38,000
63,000
5%
(Newell-Pizer)
5%
$320
1,200
3,300
5,700
9,500
$640
2,500
6,600
11,000
19,000
may not add exactly from Tables III.H.6–4 and III.H.6–5 due to rounding.
7. Non-Greenhouse Gas Health and
Environmental Impacts
This section presents EPA’s analysis
of the non-GHG health and
environmental impacts that can be
expected to occur as a result of the
proposed light-duty vehicle GHG rule.
GHG emissions are predominantly the
byproduct of fossil fuel combustion
processes that also produce criteria and
hazardous air pollutants. The vehicles
that are subject to the proposed
standards are also significant sources of
mobile source air pollution such as
direct PM, NOX, VOCs and air toxics.
The proposed standards would affect
VerDate Nov<24>2008
Discount rate
23:31 Sep 25, 2009
Jkt 217001
exhaust emissions of these pollutants
from vehicles. They would also affect
emissions from upstream sources
related to changes in fuel consumption.
Changes in ambient ozone, PM2.5, and
air toxics that would result from the
proposed standards are expected to
affect human health in the form of
premature deaths and other serious
human health effects, as well as other
important public health and welfare
effects.
It is important to quantify the health
and environmental impacts associated
with the proposed standard because a
failure to adequately consider these
ancillary co-pollutant impacts could
PO 00000
Frm 00166
Fmt 4701
Sfmt 4702
lead to an incorrect assessment of their
net costs and benefits. Moreover, copollutant impacts tend to accrue in the
near term, while any effects from
reduced climate change mostly accrue
over a time frame of several decades or
longer.
EPA typically quantifies and
monetizes the health and environmental
impacts related to both PM and ozone
in its regulatory impact analyses (RIAs),
when possible. However, EPA was
unable to do so in time for this proposal.
EPA attempts to make emissions and air
quality modeling decisions early in the
analytical process so that we can
complete the photochemical air quality
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
modeling and use that data to inform
the health and environmental impacts
analysis. Resource and time constraints
precluded the Agency from completing
this work in time for the proposal.
Instead, EPA is using PM-related
benefits-per-ton values as an interim
approach to estimating the PM-related
benefits of the proposal. EPA also
provides a complete characterization of
the health and environmental impacts
that will be quantified and monetized
for the final rulemaking.
This section is split into two subsections: the first presents the PMrelated benefits-per-ton values used to
monetize the PM-related co-benefits
associated with the proposal; the second
explains what PM- and ozone-related
health and environmental impacts EPA
will quantify and monetize in the
analysis for the final rule. EPA bases its
analyses on peer-reviewed studies of air
quality and health and welfare effects
and peer-reviewed studies of the
monetary values of public health and
welfare improvements, and is generally
consistent with benefits analyses
performed for the analysis of the final
Ozone National Ambient Air Quality
Standard (NAAQS) and the final PM
NAAQS analysis, as well as the recent
Portland Cement National Emissions
Standards for Hazardous Air Pollutants
(NESHAP) RIA (U.S. EPA, 2009a), and
NO2 NAAQS (U.S.≤ EPA,
2009b).385 386 387 388
Though EPA is characterizing the
changes in emissions associated with
toxic pollutants, we will not be able to
quantify or monetize the human health
effects associated with air toxic
pollutants for either the proposal or the
final rule analyses. Please refer to
Section III.G for more information about
the air toxics emissions impacts
associated with the proposed standards.
a. Economic Value of Reductions in
Criteria Pollutants
As described in Section III.G, the
proposed standards would reduce
emissions of several criteria and toxic
pollutants and precursors. In this
analysis, EPA estimates the economic
value of the human health benefits
associated with reducing PM2.5
exposure. Due to analytical limitations,
this analysis does not estimate benefits
49619
related to other criteria pollutants (such
as ozone, NO2 or SO2) or toxics
pollutants, nor does it monetize all of
the potential health and welfare effects
associated with PM2.5.
This analysis uses a ‘‘benefit-per-ton’’
method to estimate a selected suite of
PM2.5-related health benefits described
below. These PM2.5 benefit-per-ton
estimates provide the total monetized
human health benefits (the sum of
premature mortality and premature
morbidity) of reducing one ton of
directly emitted PM2.5, or its precursors
(such as NOX, SOX, and VOCs), from a
specified source. Ideally, the human
health benefits would be estimated
based on changes in ambient PM2.5 as
determined by full-scale air quality
modeling. However, this modeling was
not possible in the timeframe for this
proposal.
The dollar-per-ton estimates used in
this analysis are provided in Table
III.H.7–1. In the summary of costs and
benefits, Section III.H.10 of this
preamble, EPA presents the monetized
value of PM-related improvements
associated with the proposal.
TABLE III.H.7–1—BENEFITS-PER-TON VALUES (2007$) DERIVED USING THE ACS COHORT STUDY FOR PM-RELATED
PREMATURE MORTALITY (POPE ET AL., 2002) a AND A 3% DISCOUNT RATE b
All sources d
Stationary (non-EGU)
sources
Year c
SOX
2015
2020
2030
2040
.................................................................................
.................................................................................
.................................................................................
.................................................................................
$28,000
31,000
36,000
43,000
VOC
NOX
$1,200
1,300
1,500
1,800
Direct PM2.5
$4,700
5,100
6,100
7,200
$220,000
240,000
280,000
330,000
Mobile sources
NOX
$4,900
5,300
6,400
7,600
Direct PM2.5
$270,000
290,000
350,000
420,000
a The benefit-per-ton estimates presented in this table are based on an estimate of premature mortality derived from the ACS study (Pope et
al., 2002). If the benefit-per-ton estimates were based on the Six Cities study (Laden et al., 2006), the values would be approximately 145%
(nearly two-and-a-half times) larger.
b The benefit-per-ton estimates presented in this table assume a 3% discount rate in the valuation of premature mortality to account for a twenty-year segmented cessation lag. If a 7% discount rate had been used, the values would be approximately 9% lower.
c Benefit-per-ton values were estimated for the years 2015, 2020, and 2030. For 2040, EPA and NHTSA extrapolated exponentially based on
the growth between 2020 and 2030.
d Note that the benefit-per-ton value for SO is based on the value for Stationary (Non-EGU) sources; no SO value was estimated for mobile
X
X
sources. The benefit-per-ton value for VOCs was estimated across all sources.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
The benefit per-ton technique has
been used in previous analyses,
including EPA’s recent Ozone National
Ambient Air Quality Standards
(NAAQS) RIA (U.S. EPA, 2008a),389
Portland Cement National Emissions
Standards for Hazardous Air Pollutants
(NESHAP) RIA (U.S. EPA, 2009a),390
and NO2 NAAQS (U.S. EPA, 2009b).391
385 U.S. Environmental Protection Agency. (2008).
Final Ozone NAAQS Regulatory Impact Analysis.
Prepared by: Office of Air and Radiation, Office of
Air Quality Planning and Standards. March.
386 U.S. Environmental Protection Agency.
October 2006. Final Regulatory Impact Analysis
(RIA) for the Proposed National Ambient Air
Quality Standards for Particulate Matter. Prepared
by: Office of Air and Radiation.
387 U.S. Environmental Protection Agency (U.S.
EPA). 2009a. Regulatory Impact Analysis: National
Emission Standards for Hazardous Air Pollutants
from the Portland Cement Manufacturing Industry.
Office of Air Quality Planning and Standards,
Research Triangle Park, NC. April. Available on the
Internet at https://www.epa.gov/ttn/ecas/regdata/
RIAs/portlandcementria_4-20-09.pdf.
388 U.S. Environmental Protection Agency (U.S.
EPA). 2009b. Proposed NO2 NAAQS Regulatory
Impact Analysis (RIA). Office of Air Quality
Planning and Standards, Research Triangle Park,
NC. April. Available on the Internet at https://
www.epa.gov/ttn/ecas/regdata/RIAs/
proposedno2ria.pdf.
389 U.S. Environmental Protection Agency (U.S.
EPA). 2008a. Regulatory Impact Analysis, 2008
National Ambient Air Quality Standards for
Ground-level Ozone, Chapter 6. Office of Air
Quality Planning and Standards, Research Triangle
Park, NC. March. Available at https://www.epa.gov/
ttn/ecas/regdata/RIAs/6-ozoneriachapter6.pdf.
390 U.S. Environmental Protection Agency (U.S.
EPA). 2009a. Regulatory Impact Analysis: National
Emission Standards for Hazardous Air Pollutants
from the Portland Cement Manufacturing Industry.
Office of Air Quality Planning and Standards,
Research Triangle Park, NC. April. Available on the
Internet at https://www.epa.gov/ttn/ecas/regdata/
RIAs/portlandcementria_4-20-09.pdf.
391 U.S. Environmental Protection Agency (U.S.
EPA). 2009b. Proposed NO2 NAAQS Regulatory
Impact Analysis (RIA). Office of Air Quality
Planning and Standards, Research Triangle Park,
NC. April. Available on the Internet at https://
www.epa.gov/ttn/ecas/regdata/RIAs/
proposedno2ria.pdf.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00167
Fmt 4701
Sfmt 4702
E:\FR\FM\28SEP2.SGM
28SEP2
49620
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
Table III.H.7–2 shows the quantified
and unquantified PM2.5-related co-
benefits captured in those benefit-perton estimates.
TABLE III.H.7–2—HUMAN HEALTH AND WELFARE EFFECTS OF PM2.5
Pollutant/
effect
PM2.5 .............
Quantified and monetized in primary estimates
Adult premature mortality
Bronchitis: chronic and acute
Hospital admissions: respiratory and cardiovascular
Emergency room visits for asthma
Nonfatal heart attacks (myocardial infarction)
Lower and upper respiratory illness
Minor restricted-activity days
Work loss days
Asthma exacerbations (asthmatic population)
Infant mortality
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Consistent with the NO2 NAAQS,392
the benefits estimates utilize the
concentration-response functions as
reported in the epidemiology literature.
To calculate the total monetized impacts
associated with quantified health
impacts, EPA applies values derived
from a number of sources. For
premature mortality, EPA applies a
value of a statistical life (VSL) derived
from the mortality valuation literature.
For certain health impacts, such as
chronic bronchitis and a number of
respiratory-related ailments, EPA
applies willingness-to-pay estimates
derived from the valuation literature.
For the remaining health impacts, EPA
applies values derived from current
cost-of-illness and/or wage estimates.
Readers interested in reviewing the
complete methodology for creating the
benefit-per-ton estimates used in this
analysis can consult the Technical
Support Document (TSD) 393
accompanying the recent final ozone
NAAQS RIA (U.S. EPA, 2008a). Readers
can also refer to Fann et al. (2009) 394 for
a detailed description of the benefit-perton methodology.395 A more detailed
392 Although we summarize the main issues in
this chapter, we encourage interested readers to see
benefits chapter of the NO2 NAAQS for a more
detailed description of recent changes to the PM
benefits presentation and preference for the nothreshold model.
393 U.S. Environmental Protection Agency (U.S.
EPA). 2008b. Technical Support Document:
Calculating Benefit Per-Ton estimates, Ozone
NAAQS Docket #EPA–HQ–OAR–2007–0225–0284.
Office of Air Quality Planning and Standards,
Research Triangle Park, NC. March. Available on
the Internet at https://www.regulations.gov.
394 Fann, N. et al. (2009). The influence of
location, source, and emission type in estimates of
the human health benefits of reducing a ton of air
pollution. Air Qual Atmos Health. Published
online: 09 June, 2009.
395 The values included in this report are different
from those presented in the article cited above.
Benefits methods change to reflect new information
and evaluation of the science. Since publication of
the June 2009 article, EPA has made two significant
changes to its benefits methods: (1) We no longer
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
Unquantified effects changes in
Subchronic bronchitis cases
Low birth weight
Pulmonary function
Chronic respiratory diseases other than chronic bronchitis
Non-asthma respiratory emergency room visits
Visibility
Household soiling
description of the benefit-per-ton
estimates is also provided in the Draft
Joint TSD that accompanies this
rulemaking.
As described in the documentation for
the benefit per-ton estimates cited
above, national per-ton estimates were
developed for selected pollutant/source
category combinations. The per-ton
values calculated therefore apply only
to tons reduced from those specific
pollutant/source combinations (e.g.,
NO2 emitted from mobile sources; direct
PM emitted from stationary sources).
Our estimate of PM2.5 benefits is
therefore based on the total direct PM2.5
and PM-related precursor emissions
controlled by sector and multiplied by
each per-ton value.
The benefit-per-ton estimates are
subject to a number of assumptions and
uncertainties.
• They do not reflect local variability
in population density, meteorology,
exposure, baseline health incidence
rates, or other local factors that might
lead to an overestimate or underestimate
of the actual benefits of controlling fine
particulates. EPA will conduct full-scale
air quality modeling for the final
rulemaking in an effort to capture this
variability.
• This analysis assumes that all fine
particles, regardless of their chemical
composition, are equally potent in
causing premature mortality. This is an
important assumption, because PM2.5
produced via transported precursors
emitted from stationary sources may
differ significantly from direct PM2.5
released from diesel engines and other
industrial sources, but no clear
assume that a threshold exists in PM-related models
of health impacts; and (2) We have revised the
Value of a Statistical Life to equal $6.3 million (year
2000$), up from an estimate of $5.5 million (year
2000$) used in the June 2009 report. Please refer to
the following Web site for updates to the dollar-perton estimates: https://www.epa.gov/air/benmap/
bpt.html.
PO 00000
Frm 00168
Fmt 4701
Sfmt 4702
scientific grounds exist for supporting
differential effects estimates by particle
type.
• This analysis assumes that the
health impact function for fine particles
is linear within the range of ambient
concentrations under consideration.
Thus, the estimates include health
benefits from reducing fine particles in
areas with varied concentrations of
PM2.5, including both regions that are in
attainment with fine particle standard
and those that do not meet the standard
down to the lowest modeled
concentrations.
• There are several health benefits
categories that EPA was unable to
quantify due to limitations associated
with using benefits-per-ton estimates,
several of which could be substantial.
Because the NOX and VOC emission
reductions associated with this proposal
are also precursors to ozone, reductions
in NOX and VOC would also reduce
ozone formation and the health effects
associated with ozone exposure.
Unfortunately, benefits-per-ton
estimates do not exist due to issues
associated with the complexity of the
atmospheric air chemistry and
nonlinearities associated with ozone
formation. The PM-related benefits-perton estimates also do not include any
human welfare or ecological benefits.
Please refer to Chapter 7.3 of the RIA
that accompanies this proposal for a
description of the quantification and
monetization of health impact for the
FRM and a description of the
unquantified co-pollutant benefits
associated with this rulemaking.
• There are many uncertainties
associated with the health impact
functions used in this modeling effort.
These include: Within-study variability
(the precision with which a given study
estimates the relationship between air
quality changes and health effects);
across-study variation (different
published studies of the same pollutant/
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
health effect relationship typically do
not report identical findings and in
some instances the differences are
substantial); the application of
concentration-response functions
nationwide (does not account for any
relationship between region and health
effect, to the extent that such a
relationship exists); extrapolation of
impact functions across population (we
assumed that certain health impact
functions applied to age ranges broader
than that considered in the original
epidemiological study); and various
uncertainties in the concentrationresponse function, including causality
and thresholds. These uncertainties may
under- or over-estimate benefits.
• EPA has investigated methods to
characterize uncertainty in the
relationship between PM2.5 exposure
and premature mortality. EPA’s final
PM2.5 NAAQS analysis provides a more
complete picture about the overall
uncertainty in PM2.5 benefits estimates.
For more information, please consult
the PM2.5 NAAQS RIA (Table 5.5).
• The benefit-per-ton estimates used
in this analysis incorporate projections
of key variables, including atmospheric
conditions, source level emissions,
population, health baselines and
incomes, technology. These projections
introduce some uncertainties to the
benefit per ton estimates.
• As described above, using the
benefit-per-ton value derived from the
ACS study (Pope et al., 2002) alone
provides an incomplete characterization
of PM2.5 benefits. When placed in the
context of the Expert Elicitation results,
this estimate falls toward the lower end
of the distribution. By contrast, the
estimated PM2.5 benefits using the
coefficient reported by Laden in that
author’s reanalysis of the Harvard Six
Cities cohort fall toward the upper end
of the Expert Elicitation distribution
results.
As mentioned above, emissions
changes and benefits-per-ton estimates
alone are not a good indication of local
or regional air quality and health
impacts, as there may be localized
impacts associated with the proposed
rulemaking. Additionally, the
atmospheric chemistry related to
ambient concentrations of PM2.5, ozone
and air toxics is very complex. Fullscale photochemical modeling is
therefore necessary to provide the
needed spatial and temporal detail to
more completely and accurately
estimate the changes in ambient levels
of these pollutants and their associated
health and welfare impacts. As
discussed above, timing and resource
constraints precluded from conducting a
full-scale photochemical air quality
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
modeling analysis in time for the
NPRM. For the final rule, however, a
national-scale air quality modeling
analysis will be performed to analyze
the impacts of the standards on PM2.5,
ozone, and selected air toxics. The
benefits analysis plan for the final
rulemaking is discussed in the next
section.
b. Human Health and Environmental
Benefits for the Final Rule
i. Human Health and Environmental
Impacts
To model the ozone and PM air
quality benefits of the final rule, EPA
will use the Community Multiscale Air
Quality (CMAQ) model (see Section
III.G.5.b for a description of the CMAQ
model). The modeled ambient air
quality data will serve as an input to the
Environmental Benefits Mapping and
Analysis Program (BenMAP).396
BenMAP is a computer program
developed by EPA that integrates a
number of the modeling elements used
in previous RIAs (e.g., interpolation
functions, population projections,
health impact functions, valuation
functions, analysis and pooling
methods) to translate modeled air
concentration estimates into health
effects incidence estimates and
monetized benefits estimates.
Chapter 7.3 in the DRIA that
accompanies this proposal lists the copollutant health effect exposureresponse functions EPA will use to
quantify the co-pollutant incidence
impacts associated with the final lightduty vehicles standard. These include
PM- and ozone-related premature
mortality, chronic bronchitis, nonfatal
heart attacks, hospital admissions
(respiratory and cardiovascular),
emergency room visits, acute bronchitis,
minor restricted activity days, and days
of work and school lost.
ii. Monetized Impacts
To calculate the total monetized
impacts associated with quantified
health impacts, EPA applies values
derived from a number of sources. For
premature mortality, EPA applies a
value of a statistical life (VSL) derived
from the mortality valuation literature.
For certain health impacts, such as
chronic bronchitis and a number of
respiratory-related ailments, EPA
applies willingness-to-pay estimates
derived from the valuation literature.
For the remaining health impacts, EPA
applies values derived from current
cost-of-illness and/or wage estimates.
396 Information on BenMAP, including
downloads of the software, can be found at
https://www.epa.gov/ttn/ecas/benmodels.html.
PO 00000
Frm 00169
Fmt 4701
Sfmt 4702
49621
Chapter 7.3 in the DRIA that
accompanies this proposal presents the
monetary values EPA will apply to
changes in the incidence of health and
welfare effects associated with
reductions in non-GHG pollutants that
will occur when these GHG control
strategies are finalized.
iii. Other Unquantified Health and
Environmental Impacts
In addition to the co-pollutant health
and environmental impacts EPA will
quantify for the analysis of the final
standard, there are a number of other
health and human welfare endpoints
that EPA will not be able to quantify or
monetize because of current limitations
in the methods or available data. These
impacts are associated with emissions of
air toxics (including benzene, 1,3butadiene, formaldehyde, acetaldehyde,
acrolein, and ethanol), ambient ozone,
and ambient PM2.5 exposures. Chapter
7.3 of the DRIA lists these unquantified
health and environmental impacts.
While there will be impacts
associated with air toxic pollutant
emission changes that result from the
final standard, EPA will not attempt to
monetize those impacts. This is
primarily because currently available
tools and methods to assess air toxics
risk from mobile sources at the national
scale are not adequate for extrapolation
to incidence estimations or benefits
assessment. The best suite of tools and
methods currently available for
assessment at the national scale are
those used in the National-Scale Air
Toxics Assessment (NATA). The EPA
Science Advisory Board specifically
commented in their review of the 1996
NATA that these tools were not yet
ready for use in a national-scale benefits
analysis, because they did not consider
the full distribution of exposure and
risk, or address sub-chronic health
effects.397 While EPA has since
improved the tools, there remain critical
limitations for estimating incidence and
assessing benefits of reducing mobile
source air toxics. EPA continues to work
to address these limitations; however,
EPA does not anticipate having methods
and tools available for national-scale
application in time for the analysis of
the final rules.398
397 Science Advisory Board. 2001. NATA—
Evaluating the National-Scale Air Toxics
Assessment for 1996—an SAB Advisory. https://
www.epa.gov/ttn/atw/sab/sabrev.html.
398 In April, 2009, EPA hosted a workshop on
estimating the benefits of reducing hazardous air
pollutants. This workshop built upon the work
accomplished in the June 2000 Science Advisory
Board/EPA Workshop on the Benefits of Reductions
in Exposure to Hazardous Air Pollutants, which
generated thoughtful discussion on approaches to
E:\FR\FM\28SEP2.SGM
Continued
28SEP2
49622
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
8. Energy Security Impacts
This proposal to reduce GHG
emissions in light-duty vehicles results
in improved fuel efficiency which, in
turn, helps to reduce U.S. petroleum
imports. A reduction of U.S. petroleum
imports reduces both financial and
strategic risks associated with a
potential disruption in supply or a spike
in cost of a particular energy source.
This reduction in risk is a measure of
improved U.S. energy security. This
section summarizes our estimate of the
monetary value of the energy security
benefits of the proposed GHG vehicle
standards against the reference case by
estimating the impact of the expanded
use of lower-GHG vehicle technologies
on U.S. oil imports and avoided U.S. oil
import expenditures. Additional
discussion of this issue can be found in
Chapter 5.1 of EPA’s RIA and Section
4.2.8 of the TSD.
a. Implications of Reduced Petroleum
Use on U.S. Imports
In 2008, U.S. petroleum import
expenditures represented 21% of total
U.S. imports of all goods and
services.399 In 2008, the U.S. imported
66% of the petroleum it consumed, and
the transportation sector accounted for
70% of total U.S. petroleum
consumption. This compares to
approximately 37% of petroleum from
imports and 55% consumption of
petroleum in the transportation sector in
1975.400 It is clear that petroleum
imports have a significant impact on the
U.S. economy. Requiring lower-GHG
vehicle technology in the U.S. is
expected to lower U.S. petroleum
imports.
b. Energy Security Implications
In order to understand the energy
security implications of reducing U.S.
petroleum imports, EPA has worked
with Oak Ridge National Laboratory
(ORNL), which has developed
approaches for evaluating the economic
costs and energy security implications
of oil use. The energy security estimates
provide below are based upon a
methodology developed in a peerreviewed study entitled, ‘‘The Energy
Security Benefits of Reduced Oil Use,
2006–2015,’’ completed in March 2008.
This recent study is included as part of
the docket for this rulemaking.401 402
When conducting this recent analysis,
ORNL considered the economic cost of
importing petroleum into the U.S. The
economic cost of importing petroleum
into the U.S. is defined to include two
components in addition to the purchase
price of petroleum itself. These are: (1)
The higher costs for oil imports
resulting from the effect of increasing
U.S. import demand on the world oil
price and on OPEC market power (i.e.,
the ‘‘demand’’ or ‘‘monopsony’’ costs);
and (2) the risk of reductions in U.S.
economic output and disruption of the
U.S. economy caused by sudden
disruptions in the supply of imported
petroleum to the U.S. (i.e.,
macroeconomic disruption/adjustment
costs). Maintaining a U.S. military
presence to help secure stable oil supply
from potentially vulnerable regions of
the world was not included in this
analysis because its attribution to
particular missions or activities is
difficult.
For this proposal, ORNL further
updated the energy security premium by
incorporating the most recent oil price
forecast in the in the Energy Information
Administration’s 2009 Annual Energy
Outlook into its model. In order for the
energy security premium estimated to
be used in EPA’s OMEGA model, ORNL
developed energy security estimates for
a number of different years; please refer
to Table III.H.8–1 for this information
for years 2015, 2020, 2030 and 2040,403
as well as a breakdown of the
components of the energy security
premium for each of these years. The
components of the energy security
premium and their values are discussed
in detail in the TSD, Chapter 4.2.8.
TABLE III.H.8–1—ENERGY SECURITY PREMIUM IN 2015, 2020, 2030 AND 2040 (2007$/BARREL)
Year
(range)
2015
2020
2030
2040
Macroeconomic disruption/
adjustment costs
Monopsony
...............................................................
...............................................................
...............................................................
...............................................................
$11.79
$12.31
$10.57
$10.57
($4.26–$21.37)
($4.46–$22.53)
($3.84–$18.94)
($3.84–$18.94)
$6.70
$7.62
$8.12
$8.12
($3.11–$10.67)
($3.77–$12.46)
($3.90–$13.04)
($3.90–$13.04)
Total mid-point
$18.49 ($9.80–$28.08)
$19.94 ($10.58–$30.47)
$18.69 ($10.52–$27.89)
$18.69 ($10.52–$27.89)
mstockstill on DSKH9S0YB1PROD with PROPOSALS
The literature on the energy security
for the last two decades has routinely
combined the monopsony and the
macroeconomic disruption components
when calculating the total value of the
energy security premium. However, in
the context of using a global value for
the Social Cost of Carbon (SCC) the
question arises: How should the energy
security premium be used when some
benefits from the proposed rule, such as
the benefits of reducing greenhouse gas
emissions, are calculated at a global
level? Monopsony benefits represent
avoided payments by the U.S. to oil
producers in foreign countries that
result from a decrease in the world oil
price as the U.S. decreases its
consumption of imported oil. Although
there is clearly a benefit to the U.S.
when considered from the domestic
perspective, the decrease in price due to
decreased demand in the U.S. also
represents a loss of income to oil-
producing countries. Given the
redistributive nature of this effect, do
the negative effects on other countries
‘‘net out’’ the positive impacts to the
U.S.? If this is the case, then, the
monopsony portion of the energy
security premium should be excluded
from the net benefits calculation for the
rule.
Based on this reasoning, EPA’s
estimates of net benefits for this
proposal exclude the portion of energy
estimating human health benefits from reductions
in air toxics exposure, but no consensus was
reached on methods that could be implemented in
the near term for a broad selection of air toxics.
Please visit https://epa.gov/air/toxicair/
2009workshop.html for more information about the
workshop and its associated materials.
399 Source: U.S. Bureau of Economic Analysis,
U.S. International Transactions Accounts Data, as
shown on June 24, 2009.
400 Source: U.S. Department of Energy, Annual
Energy Review 2008, Report No. DOE/EIA–
0384(2008), Tables 5.1 and 5.13c, June 26, 2009.
401 Leiby, Paul N. ‘‘Estimating the Energy Security
Benefits of Reduced U.S. Oil Imports,’’ Oak Ridge
National Laboratory, ORNL/TM–2007/028, Final
Report, 2008. (Docket EPA–HQ–OAR–2009–0472)
402 The ORNL study ‘‘The Energy Security
Benefits of Reduced Oil Use, 2006–2015,’’
completed in March 2008, is an update version of
the approach used for estimating the energy
security benefits of U.S. oil import reductions
developed in an ORNL 1997 Report by Leiby, Paul
N., Donald W. Jones, T. Randall Curlee, and Russell
Lee, entitled ‘‘Oil Imports: An Assessment of
Benefits and Costs.’’ (Docket EPA–HQ–OAR–2009–
0472).
403 AEO 2009 forecasts energy market trends and
values only to 2030. The energy security premium
estimates post-2030 were assumed to be the 2030
estimate.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00170
Fmt 4701
Sfmt 4702
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
security benefits stemming from the
U.S. exercising its monopsony power in
oil markets. Thus, EPA only includes
the macroeconomic disruption/
adjustment cost portion of the energy
security premium.
EPA invites comments on whether,
when the global value for greenhouse
gas reduction benefits is used, it may
still be appropriate to include the
monopsony benefits in net benefits
calculation for the proposed rule. From
one perspective, the global SCC is used
in these calculations, not because the
global net benefits of the rule are being
computed (they are not), but rather
because in the context of a global public
good, the global marginal benefit is the
correct domestic benefit against which
domestic costs are to be compared.
Similarly, energy security is inherently
a domestic benefit. Thus, should the
two benefits, if they are both viewed
from this domestic perspective, be
counted in the net benefits estimates for
this rulemaking and more generally
what are the overall implications of this
approach to justifying regulation? If the
monopsony benefits were included in
this case, they could be significant.
Total annual energy security benefits
are derived from the estimated
reductions in U.S. imports of finished
petroleum products and crude oil using
only the macroeconomic disruption/
adjustment portion of the energy
security premium. These values are
shown in Table III.H.8–2.404 The
reduced oil estimates were derived from
the OMEGA model, as explained in
Section VI of this preamble. EPA used
the same assumption that NHTSA used
in its Corporate Average Fuel Economy
and CAFE Reform for MY 2008–2011
Light Trucks proposal, which assumed
each gallon of fuel saved reduces total
U.S. imports of crude oil or refined
products by 0.95 gallons.405
TABLE III.H.8–2—TOTAL ANNUAL ENERGY SECURITY BENEFITS USING
ONLY THE MACROECONOMIC DISRUPTION/ADJUSTMENT COMPONENT
OF THE ENERGY SECURITY PREMIUM
IN 2015, 2020, 2030 AND 2040
[Billions of 2007$]
Year
2015
2020
2030
2040
Benefits
......................................
......................................
......................................
......................................
49623
consumption that vary with miles
driven. Lower fuel consumption would,
presumably, result in fewer trips to the
filling station to refuel and, thus, time
saved. The rebound effect, discussed in
detail in Section III.H.4.c, produces
additional benefits to vehicle owners in
the form of consumer surplus from the
increase in vehicle-miles driven, but
may also increase the societal costs
associated with traffic congestion, motor
vehicle crashes, and noise. These effects
are likely to be relatively small in
comparison to the value of fuel saved as
a result of the proposed standards, but
they are nevertheless important to
include. Table III.H.9–1 summarizes the
other economic impacts. Please refer to
Preamble Section II.F and the Draft Joint
TSD that accompanies this proposal for
more information about these impacts
and how EPA and NHTSA use them in
their analyses.
$0.59
2.30
4.81
6.23
9. Other Impacts
There are other impacts associated
with the proposed CO2 emissions
standards and associated reduced fuel
TABLE III.H.9–1—ESTIMATED ECONOMIC EXTERNALITIES ASSOCIATED WITH THE PROPOSED LIGHT-DUTY VEHICLE GHG
PROGRAM
[Millions of 2007 dollars]
Economic externalities
2020
2030
2040
2050
NPV, 3%
NPV, 7%
Value of Less Frequent Refueling ...................................
Value of Increased Driving a ............................................
Accidents, Noise, Congestion ..........................................
$2,500
4,900
¥2,400
$4,900
10,000
¥4,900
$6,400
13,600
¥6,300
$8,000
18,000
¥7,900
$89,600
184,700
¥88,200
$41,000
82,700
¥40,200
Annual Quantified Benefits .......................................
5,000
10,000
13,700
18,100
186,100
83,500
a Calculated
using post-tax fuel prices.
In this section EPA presents a
summary of costs, benefits, and net
benefits of the proposal. EPA presents
fuel consumption impacts as negative
costs of the vehicle program.
Table III.H.10–1 shows the estimated
annual societal costs of the vehicle
program for the indicated calendar
years. The table also shows the net
present values of those costs for the
calendar years 2012–2050 using both a
3 percent and a seven percent discount
rate. In this table, fuel savings are
calculated using pre-tax fuel prices and
are presented as negative costs
associated with the vehicle program
(rather than positive savings).
Consumers are expected to receive the
fuel savings presented here. The cost
estimates for the fuel-saving technology
are based on the assumptions that, to
comply with the rule, no vehicle
attributes will change except fuel
economy and technology cost; that
consumers will consider reduced fuel
costs as a substitute for increased
purchase price; and that consumers will
not change the vehicles that they
purchase. Instead, automakers are likely
to redesign vehicles as part of their
compliance strategies. If so, the
redesigns may make the vehicles either
less or more attractive to consumers. In
404 Estimated reductions in U.S. imports of
finished petroleum products and crude oil are 95%
of 88 million barrels (MMB) in 2015, 302 MMB in
2020, 592 MMB in 2030, and 767 MMB in 2040.
405 Preliminary Regulatory Impacts Analysis,
April 2008. Based on a detailed analysis of
differences in fuel consumption, petroleum
imports, and imports of refined petroleum products
among the Reference Case, High Economic Growth,
and Low Economic Growth Scenarios presented in
the Energy Information Administration’s Annual
Energy Outlook 2007, NHTSA estimated that
approximately 50 percent of the reduction in fuel
consumption is likely to be reflected in reduced
U.S. imports of refined fuel, while the remaining 50
percent would be expected to be reflected in
reduced domestic fuel refining. Of this latter figure,
90 percent is anticipated to reduce U.S. imports of
crude petroleum for use as a refinery feedstock,
while the remaining 10 percent is expected to
reduce U.S. domestic production of crude
petroleum. Thus on balance, each gallon of fuel
saved is anticipated to reduce total U.S. imports of
crude petroleum or refined fuel by 0.95 gallons.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
10. Summary of Costs and Benefits
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00171
Fmt 4701
Sfmt 4702
E:\FR\FM\28SEP2.SGM
28SEP2
49624
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
addition, consumers may choose to
purchase different vehicles than they
would in the absence of this rule. These
changes may affect the satisfaction that
consumers receive from their vehicles.
Because of the unsettled state of the
modeling of consumer choices
(discussed in Section III.H.1 and in
DRIA Section 8.1.2), this analysis does
not measure these effects. To the extent
that consumer satisfaction with vehicles
may decline due to changes in vehicles
other than fuel economy, or that
consumers may take some of these fuel
savings into account when they
purchase their vehicles, the fuel savings
may overstate the benefits of improved
fuel economy to consumers.
TABLE III.H.10–1—ESTIMATED SOCIETAL COSTS OF THE LIGHT-DUTY VEHICLE GHG PROGRAM
[Millions of 2007 dollars]
Social costs
2020
2030
Vehicle Compliance Costs ...............................................
Fuel Savings a ..................................................................
$18,000
¥43,100
$17,900
¥90,400
$19,300
¥125,000
$20,900
¥167,000
$390,000
¥1,677,600
$216,600
¥746,100
Quantified Annual Costs ...........................................
¥25,100
¥72,500
¥105,700
¥146,100
¥1,287,600
¥529,500
a Calculated
2040
2050
NPV, 3%
NPV, 7%
using pre-tax fuel prices.
Table III.H.10–2 presents estimated
annual societal benefits for the
indicated calendar years. The table also
shows the net present values of those
benefits for the calendar years 2012–
2050 using both a 3 percent and a 7
percent discount rate. The table shows
the benefits of reduced GHG
emissions—and consequently the
annual quantified benefits (i.e., total
benefits)—for each of five interim SCC
values considered by EPA. As discussed
in Section III.H.6, there is a very high
probability (very likely according to the
IPCC) that the benefit estimates from
GHG reductions are underestimates.
One of the primary reasons is that
models used to calculate SCC values do
not include information about impacts
that have not been quantified.
In addition, the total GHG reduction
benefits presented below likely
underestimate the value of GHG
reductions because they were calculated
using the marginal values for CO2
emissions. The impacts of non-CO2
emissions vary from those of CO2
emissions because of differences in
atmospheric lifetimes and radiative
forcing.406 As a result, the marginal
benefit values of non-CO2 GHG
reductions and their growth rates over
time will not be the same as the
marginal benefits measured on a CO2equivalent scale.407 Marginal benefit
estimates per metric ton of non-CO2
GHGs are currently unavailable, but
work is on-going to monetize benefits
related to the mitigation of other nonCO2 GHGs.
TABLE III.H.10–2—ESTIMATED SOCIETAL BENEFITS ASSOCIATED WITH THE PROPOSED LIGHT-DUTY VEHICLE GHG
PROGRAM
[Millions of 2007 dollars]
Benefits
2020
2030
2040
2050
NPV, 3%
NPV, 7%
Reduced GHG Emissions at each assumed SCC value
SCC 5% ........................................................
SCC 5% Newell-Pizer ...................................
SCC from 3% and 5% ..................................
SCC 3% ........................................................
SCC 3% Newell-Pizer ...................................
PM2.5 Related Benefits a b c ...................................
Energy Security Impacts (price shock) ................
Reduced Refueling ..............................................
Value of Increased Driving d ................................
Accidents, Noise, Congestion ..............................
$1,200
2,500
4,700
8,200
14,000
1,400
2,300
2,500
4,900
¥2,400
$3,300
6,600
12,000
22,000
36,000
3,000
4,800
4,900
10,000
¥4,900
$5,700
11,000
22,000
38,000
63,000
4,600
6,200
6,400
13,600
¥6,300
$9,500
19,000
36,000
63,000
100,000
6,700
7,800
8,000
18,000
¥7,900
$69,200
138,400
263,000
456,900
761,400
59,800
85,800
89,600
184,700
¥88,200
$28,600
57,100
108,500
188,500
314,200
26,300
38,800
41,000
82,700
¥40,200
$9,900
11,200
13,400
16,900
22,700
$21,100
24,400
29,800
39,800
53,800
$30,200
35,500
46,500
62,500
87,500
$42,100
51,600
68,600
95,600
132,600
$400,900
470,100
594,700
788,600
1,093,100
$177,200
205,700
257,100
337,100
462,800
Quantified Annual Benefits at each assumed SCC value
mstockstill on DSKH9S0YB1PROD with PROPOSALS
SCC
SCC
SCC
SCC
SCC
5% ........................................................
5% Newell-Pizer ...................................
from 3% and 5% ..................................
3% ........................................................
3% Newell-Pizer ...................................
a Note that the co-pollutant impacts associated with the standards presented here do not include the full complement of endpoints that, if quantified and monetized, would change the total monetized estimate of rule-related impacts. Instead, the co-pollutant benefits are based on benefitper-ton values that reflect only human health impacts associated with reductions in PM2.5 exposure. Ideally, human health and environmental
benefits would be based on changes in ambient PM2.5 and ozone as determined by full-scale air quality modeling. However, EPA was unable to
conduct a full-scale air quality modeling analysis in time for the proposal. We intend to more fully capture the co-pollutant benefits for the analysis of the final standards.
406 Radiative forcing is the change in the balance
between solar radiation entering the atmosphere
and the Earth’s radiation going out. On average, a
positive radiative forcing tends to warm the surface
of the Earth while negative forcing tends to cool the
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
surface. Greenhouse gases have a positive radiative
forcing because they absorb and emit heat. See
https://www.epa.gov/climatechange/science/
recentac.html for more general information about
GHGs and climate science.
PO 00000
Frm 00172
Fmt 4701
Sfmt 4702
407 See IPCC WGII, 2007 for discussion about
implications of different marginal impacts among
the GHGs.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
49625
b The PM -related benefits (derived from benefit-per-ton values) presented in this table are based on an estimate of premature mortality de2.5
rived from the ACS study (Pope et al., 2002). If the benefit-per-ton estimates were based on the Six Cities study (Laden et al., 2006), the values
would be approximately 145% (nearly two-and-a-half times) larger.
c The PM -related benefits (derived from benefit-per-ton values) presented in this table assume a 3% discount rate in the valuation of pre2.5
mature mortality to account for a twenty-year segmented cessation lag. If a 7% discount rate had been used, the values would be approximately
9% lower.
d Calculated using pre-tax fuel prices.
Table III.H.10–3 presents estimated
annual net benefits for the indicated
calendar years. The table also shows the
net present values of those net benefits
for the calendar years 2012–2050 using
both a 3 percent and a 7 percent
discount rate. The table includes the
benefits of reduced GHG emissions—
and consequently the annual net
benefits—for each of five interim SCC
values considered by EPA. As noted
above, there is a very high probability
(very likely according to the IPCC) that
the benefit estimates from GHG
reductions are underestimates because,
in part, models used to calculate SCC
values do not include information about
impacts that have not been quantified.
TABLE III.H.10–3—QUANTIFIED NET BENEFITS ASSOCIATED WITH THE PROPOSED LIGHT-DUTY VEHICLE GHG
PROGRAM a b
[Millions of 2007 dollars]
2020
2030
¥$25,100
2040
2050
NPV, 3%
NPV, 7%
¥$72,500
¥$105,700
¥$146,100
¥$1,287,600
¥$529,500
$9,900
11,200
13,400
16,900
22,700
$21,100
24,400
29,800
39,800
53,800
$30,200
35,500
46,500
62,500
87,500
$42,100
51,600
68,600
95,600
132,600
$400,900
470,100
594,700
788,600
1,093,100
$177,200
205,700
257,100
337,100
462,800
$35,000
36,300
38,500
42,000
47,800
Quantified Annual Costs ......................................
$93,600
96,900
102,300
112,300
126,300
$135,900
141,200
152,200
168,200
193,200
$188,200
197,700
214,700
241,700
278,700
$1,688,500
1,757,700
1,882,300
2,076,200
2,380,700
$706,700
735,200
786,600
866,600
992,300
Quantified Annual Benefits at each assumed SCC value
SCC
SCC
SCC
SCC
SCC
5% ........................................................
5% Newell-Pizer ...................................
from 3% and 5% ..................................
3% ........................................................
3% Newell-Pizer ...................................
Quantified Net Benefits at each assumed SCC value
SCC
SCC
SCC
SCC
SCC
5% ........................................................
5% Newell-Pizer ...................................
from 3% and 5% ..................................
3% ........................................................
3% Newell-Pizer ...................................
a Note that the co-pollutant impacts associated with the standards presented here do not include the full complement of endpoints that, if quantified and monetized, would change the total monetized estimate of rule-related impacts. Instead, the co-pollutant benefits are based on benefitper-ton values that reflect only human health impacts associated with reductions in PM2.5 exposure. Ideally, human health and environmental
benefits would be based on changes in ambient PM2.5 and ozone as determined by full-scale air quality modeling. However, EPA was unable to
conduct a full-scale air quality modeling analysis in time for the proposal. We intend to more fully capture the co-pollutant benefits for the analysis of the final standards.
b Fuel impacts were calculated using pre-tax fuel prices.
EPA also conducted a separate
analysis of the total benefits over the
model year lifetimes of the 2012 through
2016 model year vehicles. In contrast to
the calendar year analysis, the model
year lifetime analysis shows the lifetime
impacts of the program on each of these
MY fleets over the course of its lifetime.
Full details of the inputs to this analysis
can be found in DRIA Chapter 5. The
societal benefits of the full life of each
of the five model years from 2012
through 2016 are shown in Tables
III.H.10–4 and III.H.10–5 at both a 3
percent and a 7 percent discount rate,
respectively. The net benefits are shown
in Tables III.H.10–6 and III.H.10–7 for
both a 3 percent and a 7 percent
discount rate. Note that the quantified
annual benefits shown in Table
III.H.10–4 and Table III.H.10–5 include
fuel savings as a positive benefit. As
such, the quantified annual costs as
shown in Table III.H.10–6 and Table
III.H.10–7 do not include fuel savings
since those are included as benefits.
Also note that each of the Tables
III.H.10–4 through Table III.H.10–7
include the benefits of reduced CO2
emissions—and consequently the total
benefits—for each of five interim SCC
values considered by EPA. As noted
above, there is a very high probability
(very likely according to the IPCC) that
the benefit estimates from GHG
reductions are underestimates because,
in part, models used to calculate SCC
values do not include information about
impacts that have not been quantified.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
TABLE III.H.10–4—ESTIMATED SOCIETAL BENEFITS ASSOCIATED WITH THE PROPOSED LIGHT-DUTY VEHICLE GHG
PROGRAM, MODEL YEAR ANALYSIS
[Millions of 2007 dollars; 3% discount rate]
Monetized values (millions)
2012MY
Cost of Noise, Accident, Congestion ($) .........................
Pretax Fuel Savings ($) ...................................................
Energy Security (price shock) ($) ....................................
Change in no. of Refuelings (#) ......................................
Change in Refueling Time (hours) ..................................
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00173
¥$900
$15,600
$400
500
0
Fmt 4701
2013MY
2014MY
¥$1,400
$24,400
$600
700
100
Sfmt 4702
¥$1,900
$34,800
$900
1,000
100
E:\FR\FM\28SEP2.SGM
2015MY
¥$2,800
$49,800
$1,200
1,300
100
28SEP2
2016MY
¥$3,900
$68,500
$1,600
1,800
200
Sum
¥$11,000
$193,300
$4,700
5,300
400
49626
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
TABLE III.H.10–4—ESTIMATED SOCIETAL BENEFITS ASSOCIATED WITH THE PROPOSED LIGHT-DUTY VEHICLE GHG
PROGRAM, MODEL YEAR ANALYSIS—Continued
[Millions of 2007 dollars; 3% discount rate]
Monetized values (millions)
2012MY
Value of Reduced Refueling Time ($) .............................
Value of Additional Driving ($) .........................................
Value of PM2.5-related Health Impacts ($) a b c .................
2013MY
2014MY
2015MY
2016MY
Sum
$900
$2,000
$600
$1,400
$3,000
$900
$1,900
$4,100
$1,200
$2,700
$5,700
$1,700
$3,700
$7,900
$2,200
$10,500
$22,700
$6,600
$500
1,000
1,800
3,200
5,300
$700
1,500
2,800
4,800
8,100
$1,000
2,000
3,900
6,700
11,000
$1,400
2,900
5,400
9,400
16,000
$1,900
3,800
7,200
13,000
21,000
$5,600
11,000
21,000
37,000
61,000
$19,100
19,600
20,400
21,800
23,900
$29,600
30,400
31,700
33,700
37,000
$42,000
43,000
44,900
47,700
52,000
$59,700
61,200
63,700
67,700
74,300
$81,900
83,800
87,200
93,000
101,000
$232,400
237,800
247,800
263,800
287,800
Social Cost of Carbon (SCC) at each assumed SCC value
SCC
SCC
SCC
SCC
SCC
5% ....................................................................
5% Newell-Pizer ...............................................
from 3% and 5% ..............................................
3% ....................................................................
3% Newell-Pizer ...............................................
Total Benefits at each assumed SCC value
SCC
SCC
SCC
SCC
SCC
5% ....................................................................
5% Newell-Pizer ...............................................
from 3% and 5% ..............................................
3% ....................................................................
3% Newell-Pizer ...............................................
a Note that the co-pollutant impacts associated with the standards presented here do not include the full complement of endpoints that, if quantified and monetized, would change the total monetized estimate of rule-related impacts. Instead, the co-pollutant benefits are based on benefitper-ton values that reflect only human health impacts associated with reductions in PM2.5 exposure. Ideally, human health and environmental
benefits would be based on changes in ambient PM2.5 and ozone as determined by full-scale air quality modeling. However, EPA was unable to
conduct a full-scale air quality modeling analysis in time for the proposal. We intend to more fully capture the co-pollutant benefits for the analysis of the final standards.
b The PM -related benefits (derived from benefit-per-ton values) presented in this table are based on an estimate of premature mortality de2.5
rived from the ACS study (Pope et al., 2002). If the benefit-per-ton estimates were based on the Six Cities study (Laden et al., 2006), the values
would be approximately 145% (nearly two-and-a-half times) larger.
c The PM -related benefits (derived from benefit-per-ton values) presented in this table assume a 3% discount rate in the valuation of pre2.5
mature mortality to account for a twenty-year segmented cessation lag. If a 7% discount rate had been used, the values would be approximately
9% lower.
TABLE III.H.10–5—ESTIMATED SOCIETAL BENEFITS ASSOCIATED WITH THE PROPOSED LIGHT-DUTY VEHICLE GHG
PROGRAM, MODEL YEAR ANALYSIS
[Millions of 2007 dollars; 7% discount rate]
Monetized values (millions)
2012MY
Cost of Noise, Accident, Congestion ($) .........................
Pretax Fuel Savings ($) ...................................................
Energy Security (price shock) ($) ....................................
Change in no. of Refuelings (#) ......................................
Change in Refueling Time (hours) ..................................
Value of Reduced Refueling Time ($) .............................
Value of Additional Driving ($) .........................................
Value of PM2.5-related Health Impacts ($)a b c .................
2013MY
2014MY
2015MY
2016MY
Sum
¥$700
$12,100
$300
400
0
$700
$1,500
$500
¥$1,100
$19,000
$500
500
0
$1,100
$2,400
$700
¥$1,500
$27,200
$700
800
100
$1,500
$3,200
$1,000
¥$2,200
$39,000
$900
1,100
100
$2,100
$4,500
$1,300
¥$3,100
$53,700
$1,300
1,500
100
$2,900
$6,300
$1,800
¥$8,700
$150,900
$3,700
4,200
300
$8,300
$18,000
$5,300
$400
700
1,400
2,400
4,000
$500
1,100
2,100
3,600
6,000
$700
1,500
2,800
4,800
8,000
$1,000
2,000
3,700
6,500
11,000
$1,300
2,500
4,800
8,300
14,000
$3,900
7,700
15,000
26,000
43,000
$14,800
15,100
15,800
16,800
18,400
$23,100
23,700
24,700
26,200
28,600
$32,800
33,600
34,900
36,900
40,100
$46,600
47,600
49,300
52,100
56,600
$64,200
65,400
67,700
71,200
76,900
$181,400
185,200
192,500
203,500
220,500
Social Cost of Carbon (SCC) at each assumed SCC value
SCC
SCC
SCC
SCC
SCC
5% ....................................................................
5% Newell-Pizer ...............................................
from 3% and 5% ..............................................
3% ....................................................................
3% Newell-Pizer ...............................................
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Total Benefits at each assumed SCC value
SCC
SCC
SCC
SCC
SCC
5% ....................................................................
5% Newell-Pizer ...............................................
from 3% and 5% ..............................................
3% ....................................................................
3% Newell-Pizer ...............................................
a Note that the co-pollutant impacts associated with the standards presented here do not include the full complement of endpoints that, if quantified and monetized, would change the total monetized estimate of rule-related impacts. Instead, the co-pollutant benefits are based on benefitper-ton values that reflect only human health impacts associated with reductions in PM2.5 exposure. Ideally, human health and environmental
benefits would be based on changes in ambient PM2.5 and ozone as determined by full-scale air quality modeling. However, EPA was unable to
conduct a full-scale air quality modeling analysis in time for the proposal. We intend to more fully capture the co-pollutant benefits for the analysis of the final standards.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00174
Fmt 4701
Sfmt 4702
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
49627
b The PM -related benefits (derived from benefit-per-ton values) presented in this table are based on an estimate of premature mortality de2.5
rived from the ACS study (Pope et al., 2002). If the benefit-per-ton estimates were based on the Six Cities study (Laden et al., 2006), the values
would be approximately 145% (nearly two-and-a-half times) larger.
c The PM -related benefits (derived from benefit-per-ton values) presented in this table assume a 3% discount rate in the valuation of pre2.5
mature mortality to account for a twenty-year segmented cessation lag. If a 7% discount rate had been used, the values would be approximately
9% lower.
TABLE III.H.10–6—QUANTIFIED NET BENEFITS ASSOCIATED WITH THE PROPOSED LIGHT-DUTY VEHICLE GHG PROGRAM,
MODEL YEAR ANALYSIS a
[millions of 2007 dollars; 3% discount rate]
Monetized values (millions)
2012MY
Quantified Annual Costs (excluding fuel savings) b .........
2013MY
2014MY
2015MY
2016MY
Sum
$5,400
$8,400
$10,900
$13,900
$17,500
$56,100
$19,100
19,600
20,400
21,800
23,900
$29,600
30,400
31,700
33,700
37,000
$42,000
43,000
44,900
47,700
52,000
$59,700
61,200
63,700
67,700
74,300
$81,900
83,800
87,200
93,000
101,000
$232,400
237,800
247,800
263,800
287,800
$13,700
14,200
15,000
16,400
18,500
$21,200
22,000
23,300
25,300
28,600
$31,100
32,100
34,000
36,800
41,100
$45,800
47,300
49,800
53,800
60,400
$64,400
66,300
69,700
75,500
83,500
$176,300
181,700
191,700
207,700
231,700
Quantified Annual Benefits at each assumed SCC value
SCC
SCC
SCC
SCC
SCC
5% ....................................................................
5% Newell-Pizer ...............................................
from 3% and 5% ..............................................
3% ....................................................................
3% Newell-Pizer ...............................................
Quantified Net Benefits at each assumed SCC value
SCC
SCC
SCC
SCC
SCC
5% ....................................................................
5% Newell-Pizer ...............................................
from 3% and 5% ..............................................
3% ....................................................................
3% Newell-Pizer ...............................................
a Note that the co-pollutant impacts associated with the standards presented here do not include the full complement of endpoints that, if quantified and monetized, would change the total monetized estimate of rule-related impacts. Instead, the co-pollutant benefits are based on benefitper-ton values that reflect only human health impacts associated with reductions in PM2.5 exposure. Ideally, human health and environmental
benefits would be based on changes in ambient PM2.5 and ozone as determined by full-scale air quality modeling. However, EPA was unable to
conduct a full-scale air quality modeling analysis in time for the proposal. We intend to more fully capture the co-pollutant benefits for the analysis of the final standards.
b Quantified annual costs as shown here are the increased costs for new vehicles in each given model year. Since those costs are assumed to
occur in the given model year (i.e., not over a several year time span), the discount rate does not affect the costs.
TABLE III.H.10–7—QUANTIFIED NET BENEFITS ASSOCIATED WITH THE PROPOSED LIGHT-DUTY VEHICLE GHG PROGRAM,
MODEL YEAR ANALYSIS a
[millions of 2007 dollars; 7% Discount Rate]
Monetized values (millions)
2012MY
Quantified Annual Costs (excluding fuel savings) b .........
2013MY
2014MY
2015MY
2016MY
Sum
$5,400
$8,400
$10,900
$13,900
$17,500
$56,100
$14,800
15,100
15,800
16,800
18,400
$23,100
23,700
24,700
26,200
28,600
$32,800
33,600
34,900
36,900
40,100
$46,600
47,600
49,300
52,100
56,600
$64,200
65,400
67,700
71,200
76,900
$181,400
185,200
192,500
203,500
220,500
$9,400
9,700
10,400
11,400
13,000
$14,700
15,300
16,300
17,800
20,200
$21,900
22,700
24,000
26,000
29,200
$32,700
33,700
35,400
38,200
42,700
$46,700
47,900
50,200
53,700
59,400
$125,300
129,100
136,400
147,400
164,400
Quantified Annual Benefits at each assumed SCC value
SCC
SCC
SCC
SCC
SCC
5% ....................................................................
5% Newell-Pizer ...............................................
from 3% and 5% ..............................................
3% ....................................................................
3% Newell-Pizer ...............................................
Quantified Net Benefits at each assumed SCC value
mstockstill on DSKH9S0YB1PROD with PROPOSALS
SCC
SCC
SCC
SCC
SCC
5% ....................................................................
5% Newell-Pizer ...............................................
from 3% and 5% ..............................................
3% ....................................................................
3% Newell-Pizer ...............................................
a Note that the co-pollutant impacts associated with the standards presented here do not include the full complement of endpoints that, if quantified and monetized, would change the total monetized estimate of rule-related impacts. Instead, the co-pollutant benefits are based on benefitper-ton values that reflect only human health impacts associated with reductions in PM2.5 exposure. Ideally, human health and environmental
benefits would be based on changes in ambient PM2.5 and ozone as determined by full-scale air quality modeling. However, EPA was unable to
conduct a full-scale air quality modeling analysis in time for the proposal. We intend to more fully capture the co-pollutant benefits for the analysis of the final standards.
b Quantified annual costs as shown here are the increased costs for new vehicles in each given model year. Since those costs are assumed to
occur in the given model year (i.e., not over a several year time span), the discount rate does not affect the costs.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00175
Fmt 4701
Sfmt 4702
E:\FR\FM\28SEP2.SGM
28SEP2
49628
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
I. Statutory and Executive Order
Reviews
1. Executive Order 12866: Regulatory
Planning and Review
Under section 3(f)(1) of Executive
Order (EO) 12866 (58 FR 51735, October
4, 1993), this action is an ‘‘economically
significant regulatory action’’ because it
is likely to have an annual effect on the
economy of $100 million or more.
Accordingly, EPA submitted this action
to the Office of Management and Budget
(OMB) for review under EO 12866 and
any changes made in response to OMB
recommendations have been
documented in the docket for this
action.
In addition, EPA prepared an analysis
of the potential costs and benefits
associated with this action. This
analysis is contained in the Draft
Regulatory Impact Analysis, which is
available in the docket for this
rulemaking and at the docket Internet
address listed under ADDRESSES above.
2. Paperwork Reduction Act
The information collection
requirements in this proposed rule have
been submitted for approval to the
Office of Management and Budget
(OMB) under the Paperwork Reduction
Act, 44 U.S.C. 3501 et seq. The
Information Collection Request (ICR)
document prepared by EPA has been
assigned EPA ICR number 0783.56.
The Agency proposes to collect
information to ensure compliance with
the provisions in this rule. This
includes a variety of requirements for
vehicle manufacturers. Section 208(a) of
the Clean Air Act requires that vehicle
manufacturers provide information the
Administrator may reasonably require to
determine compliance with the
regulations; submission of the
information is therefore mandatory. We
will consider confidential all
information meeting the requirements of
section 208(c) of the Clean Air Act.
As shown in Table III.J.2–1, the total
annual burden associated with this
proposal is about 39,900 hours and $5
million, based on a projection of 33
respondents. The estimated burden for
vehicle manufacturers is a total estimate
for both new and existing reporting
requirements. Burden means the total
time, effort, or financial resources
expended by persons to generate,
maintain, retain, or disclose or provide
information to or for a Federal agency.
This includes the time needed to review
instructions; develop, acquire, install,
and utilize technology and systems for
the purposes of collecting, validating,
and verifying information, processing
and maintaining information, and
disclosing and providing information;
adjust the existing ways to comply with
any previously applicable instructions
and requirements; train personnel to be
able to respond to a collection of
information; search data sources;
complete and review the collection of
information; and transmit or otherwise
disclose the information.
TABLE III.J.2–1 ESTIMATED BURDEN FOR REPORTING AND RECORDKEEPING REQUIREMENTS
Annual burden
hours
Number of respondents
33 .............................................................................................................................................................................
An agency may not conduct or
sponsor, and a person is not required to
respond to a collection of information
unless it displays a currently valid OMB
control number. The OMB control
numbers for EPA’s regulations in 40
CFR are listed in 40 CFR part 9.
To comment on the Agency’s need for
this information, the accuracy of the
provided burden estimates, and any
suggested methods for minimizing
respondent burden, including the use of
automated collection techniques, EPA
has established a public docket for this
rule, which includes this ICR, under
Docket ID number EPA–HQ–OAR–
2007–0491. Submit any comments
related to the ICR for this proposed rule
to EPA and OMB. See ADDRESSES
section at the beginning of this notice
for where to submit comments to EPA.
Send comments to OMB at the Office of
Information and Regulatory Affairs,
Office of Management and Budget, 725
17th Street, NW., Washington, DC
20503, Attention: Desk Office for EPA.
Since OMB is required to make a
decision concerning the ICR between 30
and 60 days after September 28, 2009,
a comment to OMB is best assured of
having its full effect if OMB receives it
by October 28, 2009. The final rule will
respond to any OMB or public
comments on the information collection
requirements contained in this proposal.
3. Regulatory Flexibility Act
a. Overview
The Regulatory Flexibility Act (RFA)
generally requires an agency to prepare
a regulatory flexibility analysis of any
rule subject to notice and comment
rulemaking requirements under the
Administrative Procedure Act or any
other statute unless the agency certifies
that the rule will not have a significant
Annual costs
39,940
$5,001,000
economic impact on a substantial
number of small entities. Small entities
include small businesses, small
organizations, and small governmental
jurisdictions.
For purposes of assessing the impacts
of this rule on small entities, small
entity is defined as: (1) A small business
as defined by the Small Business
Administration’s (SBA) regulations at 13
CFR 121.201 (see table below); (2) a
small governmental jurisdiction that is a
government of a city, county, town,
school district or special district with a
population of less than 50,000; and (3)
a small organization that is any not-forprofit enterprise which is independently
owned and operated and is not
dominant in its field.
Table III.J.3–1 provides an overview
of the primary SBA small business
categories included in the light-duty
vehicle sector:
mstockstill on DSKH9S0YB1PROD with PROPOSALS
TABLE III.J.3—1 PRIMARY SBA SMALL BUSINESS CATEGORIES IN THE LIGHT-DUTY VEHICLE SECTOR
Industry a
Defined as small entity by SBA if less than or equal to:
Light-duty vehicles:
—Vehicle manufacturers (including small volume manufacturers).
1,000 employees .........................................................................
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00176
Fmt 4701
Sfmt 4702
E:\FR\FM\28SEP2.SGM
28SEP2
NAICS
codes b
336111
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
49629
TABLE III.J.3—1 PRIMARY SBA SMALL BUSINESS CATEGORIES IN THE LIGHT-DUTY VEHICLE SECTOR—Continued
Industry a
Defined as small entity by SBA if less than or equal to:
—Independent commercial importers ...................................
$7 million annual sales ................................................................
$23 million annual sales ..............................................................
100 employees ............................................................................
—Alternative fuel vehicle converters ....................................
750 employees ............................................................................
1,000 employees .........................................................................
$7 million annual sales ................................................................
NAICS
codes b
811111,
811112,
811198
441120
423110,
424990
336312,
336322,
336399
335312
454312,
485310,
811198
Notes:
a Light-duty vehicle entities that qualify as small businesses would not be subject to this proposed rule. We are deferring action on small vehicle entities, and we intend to address these entities in a future rule.
b North American Industrial Classification System.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
b. Summary of Potentially Affected
Small Entities
EPA has not conducted a Regulatory
Flexibility Analysis or a SBREFA SBAR
Panel for the proposed rule because we
are proposing to certify that the rule
would not have a significant economic
impact on a substantial number of small
entities. EPA is proposing to defer
standards for manufacturers meeting
SBA’s definition of small business as
described in 13 CFR 121.201 due to the
short lead time to develop this proposed
rule, the extremely small emissions
contribution of these entities, and the
potential need to develop a program that
would be structured differently for them
(which would require more time). EPA
would instead consider appropriate
GHG standards for these entities as part
of a future regulatory action. This
includes small entities in three distinct
categories of businesses for light-duty
vehicles: Small volume manufacturers
(SVMs), independent commercial
importers (ICIs), and alternative fuel
vehicle converters. Based on
preliminary assessment, EPA has
identified a total of about 47 vehicle
businesses, about 13 entities (or 28
percent) that fit the Small Business
Administration (SBA) criterion of a
small business. There are about 2 SVMs,
8 ICIs, and 3 alternative fuel vehicle
converters in the light-duty vehicle
market which are small businesses (no
major vehicle manufacturers meet the
small-entity criteria as defined by SBA).
EPA estimates that these small entities
comprise about 0.03 percent of the total
light-duty vehicle sales in the U.S. for
the year 2007, and therefore the
proposed deferment will have a
negligible impact on the GHG emissions
reductions from the proposed standards.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
To ensure that EPA is aware of which
companies would be deferred, EPA is
proposing that such entities submit a
declaration to EPA containing a detailed
written description of how that
manufacturer qualifies as a small entity
under the provisions of 13 CFR 121.201.
Small entities are currently covered by
a number of EPA motor vehicle
emission regulations, and they routinely
submit information and data on an
annual basis as part of their compliance
responsibilities. Because such entities
are not automatically exempted from
other EPA regulations for light-duty
vehicles and light-duty trucks, absent
such a declaration, EPA would assume
that the entity was subject to the
greenhouse gas control requirements in
this GHG proposal. The declaration
would need to be submitted at time of
vehicle emissions certification under
the EPA Tier 2 program. EPA expects
that the additional paperwork burden
associated with completing and
submitting a small entity declaration to
gain deferral from the proposed GHG
standards would be negligible and
easily done in the context of other
routine submittals to EPA. However,
EPA has accounted for this cost with a
nominal estimate included in the
Information Collection Request
completed under the Paperwork
Reduction Act. Additional information
can be found in the Paperwork
Reduction Act discussion in Section
III.I.2. Based on this, EPA is proposing
to certify that the rule would not have
a significant economic impact on a
substantial number of small entities.
c. Conclusions
I therefore certify that this proposed
rule will not have a significant
economic impact on a substantial
PO 00000
Frm 00177
Fmt 4701
Sfmt 4702
number of small entities. However, EPA
recognizes that some small entities
continue to be concerned about the
potential impacts of the statutory
imposition of PSD requirements that
may occur given the various EPA
rulemakings currently under
consideration concerning greenhouse
gas emissions. As explained in the
preamble for the proposed PSD tailoring
rule, EPA is using the discretion
afforded to it under section 609(c) of the
RFA to consult with OMB and SBA,
with input from outreach to small
entities, regarding the potential impacts
of PSD regulatory requirements as that
might occur as EPA considers
regulations of GHGs. Concerns about the
potential impacts of statutorily imposed
PSD requirements on small entities will
be the subject of deliberations in that
consultation and outreach. Concerned
small entities should direct any
comments relating to potential adverse
economic impacts on small entities from
PSD requirements for GHG emissions to
the docket for the PSD tailoring rule.
EPA continues to be interested in the
potential impacts of the proposed rule
on small entities and welcomes
comments on issues related to such
impacts.
4. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates
Reform Act of 1995 (UMRA), Public
Law 104–4, establishes requirements for
Federal agencies to assess the effects of
their regulatory actions on State, local,
and tribal governments and the private
sector. Under section 202 of the UMRA,
EPA generally must prepare a written
statement, including a cost-benefit
analysis, for proposed and final rules
with ‘‘Federal mandates’’ that may
result in expenditures to State, local,
E:\FR\FM\28SEP2.SGM
28SEP2
49630
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
and tribal governments, in the aggregate,
or to the private sector, of $100 million
or more in any one year. Before
promulgating an EPA rule for which a
written statement is needed, section 205
of the UMRA generally requires EPA to
identify and consider a reasonable
number of regulatory alternatives and
adopt the least costly, most costeffective or least burdensome alternative
that achieves the objectives of the rule.
The provisions of section 205 do not
apply when they are inconsistent with
applicable law. Moreover, section 205
allows EPA to adopt an alternative other
than the least costly, most cost-effective
or least burdensome alternative if the
Administrator publishes with the final
rule an explanation why that alternative
was not adopted.
Before EPA establishes any regulatory
requirements that may significantly or
uniquely affect small governments,
including tribal governments, it must
have developed under section 203 of the
UMRA a small government agency plan.
The plan must provide for notifying
potentially affected small governments,
enabling officials of affected small
governments to have meaningful and
timely input in the development of EPA
regulatory proposals with significant
Federal intergovernmental mandates,
and informing, educating, and advising
small governments on compliance with
the regulatory requirements.
This proposal contains no Federal
mandates (under the regulatory
provisions of Title II of the UMRA) for
State, local, or tribal governments. The
rule imposes no enforceable duty on any
State, local or tribal governments. EPA
has determined that this rule contains
no regulatory requirements that might
significantly or uniquely affect small
governments. EPA has determined that
this proposal contains a Federal
mandate that may result in expenditures
of $100 million or more for the private
sector in any one year. EPA believes that
the proposal represents the least costly,
most cost-effective approach to achieve
the statutory requirements of the rule.
The costs and benefits associated with
the proposal are discussed above and in
the Draft Regulatory Impact Analysis, as
required by the UMRA.
5. Executive Order 13132 (Federalism)
This action does not have federalism
implications. It will not have substantial
direct effects on the States, on the
relationship between the national
government and the States, or on the
distribution of power and
responsibilities among the various
levels of government, as specified in
Executive Order 13132. This rulemaking
would apply to manufacturers of motor
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
vehicles and not to State or local
governments. Thus, Executive Order
13132 does not apply to this action.
Although section 6 of Executive Order
13132 does not apply to this action, EPA
did consult with representatives of State
governments in developing this action.
In the spirit of Executive Order 13132,
and consistent with EPA policy to
promote communications between EPA
and State and local governments, EPA
specifically solicits comment on this
proposed action from State and local
officials.
6. Executive Order 13175 (Consultation
and Coordination With Indian Tribal
Governments)
This proposed rule does not have
tribal implications, as specified in
Executive Order 13175 (65 FR 67249,
November 9, 2000). This rule will be
implemented at the Federal level and
impose compliance costs only on
vehicle manufacturers. Tribal
governments would be affected only to
the extent they purchase and use
regulated vehicles. Thus, Executive
Order 13175 does not apply to this rule.
EPA specifically solicits additional
comment on this proposed rule from
tribal officials.
7. Executive Order 13045: ‘‘Protection of
Children From Environmental Health
Risks and Safety Risks’’
This action is subject to EO 13045 (62
FR 19885, April 23, 1997) because it is
an economically significant regulatory
action as defined by EO 12866, and EPA
believes that the environmental health
or safety risk addressed by this action
may have a disproportionate effect on
children. A synthesis of the science and
research regarding how climate change
may affect children and other
vulnerable subpopulations is contained
in the Technical Support Document for
Endangerment or Cause or Contribute
Findings for Greenhouse Gases under
Section 202(a) of the Clean Air Act,
which can be found in the public docket
for this proposed rule.408 A summary of
the analysis is presented below.
With respect to GHG emissions, the
effects of climate change observed to
date and projected to occur in the future
include the increased likelihood of more
frequent and intense heat waves.
Specifically, EPA’s analysis has
determined that severe heat waves are
projected to intensify in magnitude,
408 U.S. EPA. (2009). Technical Support
Document for Endangerment or Cause or Contribute
Findings for Greenhouse Gases under Section
202(a) of the Clean Air Act. Washington, DC: U.S.
EPA. Retrieved on April 21, 2009 from https://
epa.gov/climatechange/endangerment/downloads/
TSD_Endangerment.pdf.
PO 00000
Frm 00178
Fmt 4701
Sfmt 4702
frequency, and duration over the
portions of the U.S. where these events
already occur, with potential increases
in mortality and morbidity, especially
among the young, elderly, and frail. EPA
has estimated reductions in projected
global mean surface temperatures as a
result of reductions in GHG emissions
associated with the standards proposed
in this action (Section III.F). Children
may receive benefits from reductions in
GHG emissions because they are
included in the segment of the
population that is most vulnerable to
hot temperatures.
For non-GHG pollutants, EPA has
determined that climate change is
expected to increase regional ozone
pollution, with associated risks in
respiratory infection, aggravation of
asthma, and premature death. The
directional effect of climate change on
ambient PM levels remains uncertain.
However, disturbances such as wildfires
are increasing in the U.S. and are likely
to intensify in a warmer future with
drier soils and longer growing seasons.
PM emissions from forest fires can
contribute to acute and chronic illnesses
of the respiratory system, particularly in
children, including pneumonia, upper
respiratory diseases, asthma and chronic
obstructive pulmonary diseases.
The public is invited to submit
comments or identify peer-reviewed
studies and data that assess effects of
early life exposure to the pollutants
addressed by this proposed rule.
8. Executive Order 13211 (Energy
Effects)
This rule is not a ‘‘significant energy
action’’ as defined in Executive Order
13211, ‘‘Actions Concerning Regulations
That Significantly Affect Energy Supply,
Distribution, or Use’’ (66 FR 28355 (May
22, 2001)) because it is not likely to
have a significant adverse effect on the
supply, distribution, or use of energy. In
fact, this rule has a positive effect on
energy supply and use. Because the
GHG emission standards proposed
today result in significant fuel savings,
this rule encourages more efficient use
of fuels. Therefore, we have concluded
that this rule is not likely to have any
adverse energy effects. Our energy
effects analysis is described above in
Section III.H.
9. National Technology Transfer
Advancement Act
Section 12(d) of the National
Technology Transfer and Advancement
Act of 1995 (‘‘NTTAA’’), Public Law
104–113, 12(d) (15 U.S.C. 272 note)
directs EPA to use voluntary consensus
standards in its regulatory activities
unless to do so would be inconsistent
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
with applicable law or otherwise
impractical. Voluntary consensus
standards are technical standards (e.g.,
materials, specifications, test methods,
sampling procedures, and business
practices) that are developed or adopted
by voluntary consensus standards
bodies. NTTAA directs EPA to provide
Congress, through OMB, explanations
when the Agency decides not to use
available and applicable voluntary
consensus standards.
For CO2, N2O, and CH4 emissions,
EPA is proposing to collect data over the
same tests that are used for the CAFE
program. This will minimize the
amount of testing done by
manufacturers, since manufacturers are
already required to run these tests. For
A/C credits, EPA is proposing to use a
consensus methodology developed by
the Society of Automotive Engineers
(SAE) and also a new A/C idle test. EPA
knows of no consensus standard
available for the A/C idle test.
10. Executive Order 12898: Federal
Actions To Address Environmental
Justice in Minority Populations and
Low-Income Populations
Executive Order (EO) 12898 (59 FR
7629 (Feb. 16, 1994)) establishes Federal
executive policy on environmental
justice. Its main provision directs
Federal agencies, to the greatest extent
practicable and permitted by law, to
make environmental justice part of their
mission by identifying and addressing,
as appropriate, disproportionately high
and adverse human health or
environmental effects of their programs,
policies, and activities on minority
populations and low-income
populations in the United States.
With respect to GHG emissions, EPA
has determined that this proposed rule
will not have disproportionately high
and adverse human health or
environmental effects on minority or
low-income populations because it
increases the level of environmental
protection for all affected populations
without having any disproportionately
high and adverse human health or
environmental effects on any
population, including any minority or
low-income population. The reductions
in CO2 and other GHGs associated with
the proposed standards will affect
climate change projections, and EPA has
estimated reductions in projected global
mean surface temperatures (Section
III.F.3). Within settlements experiencing
climate change, certain parts of the
population may be especially
vulnerable; these include the poor, the
elderly, those already in poor health, the
disabled, those living alone, and/or
indigenous populations dependent on
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
one or a few resources. 409 Therefore,
these populations may receive benefits
from reductions in GHGs.
For non-GHG co-pollutants such as
ozone, PM2.5, and toxics, EPA has
concluded that it is not practicable to
determine whether there would be
disproportionately high and adverse
human health or environmental effects
on minority and/or low income
populations from this proposed rule.
J. Statutory Provisions and Legal
Authority
Statutory authority for the vehicle
controls proposed today is found in
section 202 (a) (which authorizes
standards for emissions of pollutants
from new motor vehicles which
emissions cause or contribute to air
pollution which may reasonably be
anticipated to endanger public health or
welfare), 202 (d), 203–209, 216, and 301
of the Clean Air Act, 42 U.S.C. 7521 (a),
7521 (d), 7522, 7523, 7524, 7525, 7541,
7542, 7543, 7550, and 7601.
IV. NHTSA Proposal for Passenger Car
and Light Truck CAFE Standards for
MYs 2012–2016
A. Executive Overview of NHTSA
Proposal
1. Introduction
The National Highway Traffic Safety
Administration (NHTSA) is proposing
to establish corporate average fuel
economy standards for passenger
automobiles (passenger cars) and
nonpassenger automobiles (light trucks)
for model years (MY) 2012–2016.
Improving vehicle fuel economy has
been long and widely recognized as one
of the key ways of achieving energy
independence, energy security, and a
low carbon economy.410 NHTSA’s
409 U.S. EPA. (2009). Technical Support
Document for Endangerment or Cause or Contribute
Findings for Greenhouse Gases under Section
202(a) of the Clean Air Act. Washington, DC: U.S.
EPA. Retrieved on April 21, 2009 from https://
epa.gov/climatechange/endangerment/downloads/
TSD_Endangerment.pdf.
410 Among the reports and studies noting this
point are the following:
John Podesta, Todd Stern and Kim Batten,
‘‘Capturing the Energy Opportunity; Creating a
Low-Carbon Economy,’’ Center for American
Progress (November 2007), pp. 2, 6, 8, and 24–29,
available at: https://www.americanprogress.org/
issues/2007/11/pdf/energy_chapter.pdf (last
accessed August 9, 2009).
Sarah Ladislaw, Kathryn Zyla, Jonathan Pershing,
Frank Verrastro, Jenna Goodward, David Pumphrey,
and Britt Staley, ‘‘A Roadmap for a Secure, LowCarbon Energy Economy; Balancing Energy Security
and Climate Change,’’ World Resources Institute
and Center for Strategic and International Studies
(January 2009), pp. 21–22; available at: https://
pdf.wri.org/secure_low_carbon_energy_
economy_roadmap.pdf (last accessed August 9,
2009).
PO 00000
Frm 00179
Fmt 4701
Sfmt 4702
49631
proposed standards will require
passenger cars and light trucks to meet
an estimated combined average of 34.1
mpg in MY 2016. This represents an
average annual increase of 4.3 percent
from the 27.3 mpg combined fuel
economy level in MY 2011. NHTSA’s
proposal projects total fuel savings of
approximately 61.6 billion gallons over
the lifetimes of the vehicles sold in
model years 2012–2016, with
corresponding net societal benefits of
approximately $201.7 billion.
The significance accorded improving
fuel economy reflects several factors.
Conserving energy, especially reducing
the nation’s dependence on petroleum,
benefits the U.S. in several ways.
Improving energy efficiency has benefits
for economic growth and the
environment, as well as other benefits,
such as reducing pollution and
improving security of energy supply.
More specifically, reducing total
petroleum use decreases our economy’s
vulnerability to oil price shocks.
Reducing dependence on oil imports
from regions with uncertain conditions
enhances our energy security.
Additionally, the emission of CO2 from
the tailpipes of cars and light trucks is
one of the largest sources of U.S. CO2
emissions.411 Using vehicle technology
to improve fuel economy, and thereby
reducing tailpipe emissions of CO2, is
one of the three main measures of
reducing those tailpipe emissions of
CO2.412 The two other measures for
Alliance to Save Energy et al., ‘‘Reducing the Cost
of Addressing Climate Change Through Energy
Efficiency (2009), available at: https://Aceee.org/
energy/climate/leg.htm (last accessed August 9,
2009).
John DeCicco and Freda Fung, ‘‘Global Warming
on the Road; The Climate Impact of America’s
Automobiles,’’ Environmental Defense (2006) pp.
iv-vii; available at: https://www.edf.org/documents/
5301_Globalwarmingontheroad.pdf (last accessed
August 9, 2009).
‘‘Why is Fuel Economy Important?,’’ a Web page
maintained by the Department of Energy and
Environmental Protection Agency, available at
https://www.fueleconomy.gov/feg/why.shtml (last
accessed August 9, 2009);
Robert Socolow, Roberta Hotinski, Jeffery B.
Greenblatt, and Stephen Pacala, ‘‘Solving the
Climate Problem: Technologies Available to Curb
CO2 Emissions,’’ Environment, volume 46, no. 10,
2004. Pages 8–19, available at: https://
www.princeton.edu/∼cmi/resources/
CMI_Resources_new_files/Environ_08-21a.pdf (last
accessed August 9, 2009).
411 EPA Inventory of U.S. Greenhouse Gas
Emissions and Sinks: 1990—2006 (April 2008), pp.
ES–4, ES–8, and 2–24. Available at https://
www.epa.gov/climatechange/emissions/usgginv_
archive.html (last accessed August 9, 2009).
412 Podesta et al., p. 25; Ladislaw et al. p. 21;
DeCicco et al. p. vii; ‘‘Reduce Climate Change,’’ a
Web page maintained by the Department of Energy
and Environmental Protection Agency at https://
www.fueleconomy.gov/feg/climate.shtml (last
accessed August 9, 2009).
E:\FR\FM\28SEP2.SGM
28SEP2
49632
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
reducing the tailpipe emissions of CO2
are switching to vehicle fuels with
lower carbon content and changing
driver behavior, i.e., inducing people to
drive less.
While NHTSA has been setting fuel
economy standards since the 1970s,
today’s action represents the first-ever
joint proposal by NHTSA with another
agency, the Environmental Protection
Agency. As discussed in Section I,
NHTSA’s proposed MYs 2012–2016
CAFE standards are part of a joint
National Program, such that a large
majority of the projected benefits are
achieved jointly with EPA’s GHG rule,
described in detail above in Section III
of this preamble. These proposed CAFE
standards are consistent with the
President’s National Fuel Efficiency
Policy announcement of May 19, 2009,
which calls for harmonized rules for all
automakers, instead of three
overlapping and potentially inconsistent
requirements from DOT, EPA, and the
California Air Resources Board. And
finally, the proposed CAFE standards
and the analysis supporting them also
respond to President’s Obama’s January
26 memorandum regarding the setting of
CAFE standards for model years 2011
and beyond.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
2. Role of Fuel Economy Improvements
in Promoting Energy Independence,
Energy Security, and a Low Carbon
Economy
The need to reduce energy
consumption is more crucial today than
it was when EPCA was enacted in the
mid-1970s. U.S. energy consumption
has been outstripping U.S. energy
production at an increasing rate. Net
petroleum imports now account for
approximately 57 percent of U.S.
domestic petroleum consumption, and
the share of U.S. oil consumption for
transportation is approximately 71
percent.413 Moreover, world crude oil
production continues to be highly
concentrated, exacerbating the risks of
supply disruptions and their negative
effects on both the U.S. and global
economies.
Gasoline consumption in the U.S. has
historically been relatively insensitive
to fluctuations in both price and
consumer income, and people in most
parts of the country tend to view
gasoline consumption as a nondiscretionary expense. Thus, when
gasoline’s share in consumer
expenditures rises, the public
experiences fiscal distress. This fiscal
413 Energy Information Administration, Petroleum
Basic Statistics, updated July 2009. Available at
https://www.eia.doe.gov/basics/quickoil.html (last
accessed August 9, 2009).
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
distress can, in some cases, have
macroeconomic consequences for the
economy at large. Additionally, since
U.S. oil production is only affected by
fluctuations in prices over a period of
years, any changes in petroleum
consumption (as through increased fuel
economy) largely flow into changes in
the quantity of imports. Although
petroleum imports only account for
about 2 percent of GDP, they are large
enough to create a discernible fiscal
drag. As a consequence, however,
measures that reduce petroleum
consumption, such as fuel economy
standards, will flow directly into the
balance-of-payments account, and
strengthen the domestic economy to
some degree. And finally, U.S. foreign
policy has been affected for decades by
rising U.S. and world dependency of
crude oil as the basis for modern
transportation systems, although fuel
economy standards have only an
indirect and general impact on U.S.
foreign policy.
The benefits of a low carbon economy
are manifold. The U.S. transportation
sector is a significant contributor to total
U.S. and global anthropogenic
emissions of greenhouse gases. Motor
vehicles are the second largest
greenhouse gas-emitting sector in the
U.S., after electricity generation, and
accounted for 24 percent of total U.S.
greenhouse gas emissions in 2006.
Concentrations of greenhouse gases are
at unprecedented levels compared to the
recent and distant past, which means
that fuel economy improvements to
reduce those emissions are a crucial
step toward addressing the risks of
global climate change. These risks are
well documented in section III of this
notice.
3. The National Program
NHTSA and EPA are each announcing
proposed rules that have the effect of
addressing the urgent and closely
intertwined challenges of energy
independence and security and global
warming. These proposed rules call for
a strong and coordinated Federal
greenhouse gas and fuel economy
program for passenger cars, light-dutytrucks, and medium-duty passenger
vehicles (hereafter light-duty vehicles),
referred to as the National Program. The
proposed rules represent a coordinated
program that can achieve substantial
reductions of greenhouse gas (GHG)
emissions and improvements in fuel
economy from the light-duty vehicle
part of the transportation sector, based
on technology that will be commercially
available and that can be incorporated at
a reasonable cost. The agencies’
proposals will also provide regulatory
PO 00000
Frm 00180
Fmt 4701
Sfmt 4702
certainty and consistency for the
automobile industry by setting
harmonized national standards. They
were developed and are designed in
ways that recognize and accommodate
the serious current economic situation
faced by this industry.
This joint notice is consistent with the
President’s announcement on May 19,
2009 of a National Fuel Efficiency
Policy that will reduce greenhouse gas
emissions and improve fuel economy
for all new cars and light-duty trucks
sold in the United States,414 and with
the Notice of Upcoming Joint
Rulemaking signed by DOT and EPA on
that date.415 This joint notice also
responds to the President’s January 26,
2009 memorandum on CAFE standards
for model years 2011 and beyond, the
details of which can be found in Section
IV of this joint notice.
a. Building Blocks of the National
Program
The National Program is both needed
and possible because the relationship
between improving fuel economy and
reducing CO2 tailpipe emissions is a
very direct and close one. CO2 is the
natural by-product of the combustion of
fuel in motor vehicle engines. The more
fuel efficient a vehicle is, the less fuel
it burns to travel a given distance. The
less fuel it burns, the less CO2 it emits
in traveling that distance.416 Since the
amount of CO2 emissions is essentially
constant per gallon combusted of a
given type of fuel, the amount of fuel
consumption per mile is directly related
to the amount of CO2 emissions per
mile. In the real world, there is a single
pool of technologies for reducing fuel
consumption and CO2 emissions. Using
those technologies in the way that
minimizes fuel consumption also
minimizes CO2 emissions. While there
are emission control technologies that
can capture or destroy the pollutants
(e.g., carbon monoxide) that are
produced by imperfect combustion of
fuel, there is at present no such
technology for CO2. In fact, the only way
at present to reduce tailpipe emissions
of CO2 is by reducing fuel consumption.
The National Program thus has dual
benefits: It conserves energy by
improving fuel economy, as required of
NHTSA by EPCA and EISA; in the
process, it necessarily reduces tailpipe
414 President Obama Announces National Fuel
Efficiency Policy, The White House, May 19, 2009.
415 74 FR 24007 (May 22, 2009).
416 Panel on Policy Implications of Greenhouse
Warming, National Academy of Sciences, National
Academy of Engineering, Institute of Medicine,
‘‘Policy Implications of Greenhouse Warming:
Mitigation, Adaptation, and the Science Base,’’
National Academies Press, 1992, at 287.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
CO2 emissions consonant with EPA’s
purposes and responsibilities under the
Clean Air Act.
i. DOT’s CAFE Program
In 1975, Congress enacted the Energy
Policy and Conservation Act (EPCA),
mandating a regulatory program for
motor vehicle fuel economy to meet the
various facets of the need to conserve
energy, including ones having energy
independence and security,
environmental and foreign policy
implications. EPCA allocates the
responsibility for implementing the
program between NHTSA and EPA as
follows:
• NHTSA sets Corporate Average
Fuel Economy (CAFE) standards for
passenger cars and light trucks.
• Because fuel economy performance
is measured during emissions regulation
testing, EPA establishes the procedures
for testing, tests vehicles, collects and
analyzes manufacturers’ test data, and
calculates the average fuel economy of
each manufacturer’s passenger cars and
light trucks. EPA determines fuel
economy by the simple expedient of
measuring the amount of CO2 emitted
from the tailpipe, not by attempting to
measure directly the amount of fuel
consumed during a vehicle test, a
difficult task to accomplish with
precision. EPA then uses the carbon
content of the test fuel417 to calculate
the amount of fuel that had to be
consumed per mile in order to produce
that amount of CO2. Finally, EPA
converts that fuel consumption figure
into a miles-per-gallon figure.
• Based on EPA’s calculation,
NHTSA enforces the CAFE standards.
The CAFE standards and compliance
testing cannot capture all of the real
world CO2 emissions, because EPCA
requires EPA to use the 1975 passenger
car test procedures under which vehicle
air conditioners are not turned on
during fuel economy testing.418 CAFE
standards also do not address the 5–8
percent of GHG emissions that are not
CO2, i.e., nitrous oxide (N2O), and
methane (CH4) as well as emissions of
CO2 and hydrofluorocarbons (HFCs)
related to operation of the air
conditioning system.
NHTSA has been setting CAFE
standards pursuant to EPCA since the
enactment of the statute. Fuel economy
gains since 1975, due both to the
standards and market factors, have
resulted in saving billions of barrels of
oil and avoiding billions of metric tons
of CO2 emissions. In December 2007,
417 This is the method that EPA uses to determine
compliance with NHTSA’s CAFE standards.
418 See 49 U.S.C. 32904(c).
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
Congress enacted the Energy
Independence and Securities Act
(EISA), amending EPCA to require,
among other things, attribute-based
standards for passenger cars and light
trucks. The most recent CAFE
rulemaking action was the issuance of
standards governing model years 2011
cars and trucks.
ii. EPA’s Greenhouse Gas Program
On April 2, 2007, the U.S. Supreme
Court issued its opinion in
Massachusetts v. EPA,419 a case
involving a 2003 order of the
Environmental Protection Agency (EPA)
denying a petition for rulemaking to
regulate greenhouse gas emissions from
motor vehicles under the Clean Air
Act.420 The Court ruled that greenhouse
gases are ‘‘pollutants’’ under the CAA
and that the Act therefore authorizes
EPA to regulate greenhouse gas
emissions from motor vehicles if that
agency makes the necessary findings
and determinations under section 202 of
the Act. The Court considered EPCA
only briefly, stating that the two
obligations may overlap, but there is no
reason to think the two agencies cannot
both administer their obligations and
yet avoid inconsistency.
EPA has been working on appropriate
responses that are consistent with the
decision of the Supreme Court in
Massachusetts v. EPA.421 As part of
those responses, in July 2008, EPA
issued an Advance Notice of Proposed
Rulemaking seeking comments on the
impact of greenhouse gases on the
environment and on ways to reduce
greenhouse gas emissions from motor
vehicles. EPA recently also proposed to
find that emissions of GHGs from new
motor vehicles and motor vehicle
engines cause or contribute to air
pollution that may reasonably be
anticipated to endanger public health
and welfare.422
iii. California Air Resources Board’s
Greenhouse Gas Program
In 2004, the California Air Resources
Board approved standards for new lightduty vehicles, which regulate the
emission of not only CO2, but also other
GHGs. Since then, thirteen States and
the District of Columbia, comprising
419 127
S.Ct. 1438 (2007).
FR 52922 (Sept. 8, 2003).
421 549 U.S. 497 (2007). For further information
on Massachusetts v. EPA see the July 30, 2008
Advance Notice of Proposed Rulemaking,
‘‘Regulating Greenhouse Gas Emissions under the
Clean Air Act’’, 73 FR 44354 at 44397. There is a
comprehensive discussion of the litigation’s history,
the Supreme Court’s findings, and subsequent
actions undertaken by the EPA from 2007–2008 in
response to the Supreme Court remand.
422 74 FR 18886 (Apr. 24, 2009).
420 68
PO 00000
Frm 00181
Fmt 4701
Sfmt 4702
49633
approximately 40 percent of the lightduty vehicle market, have adopted
California’s standards. These standards
apply to model years 2009 through 2016
and require reductions in CO2
emissions for passenger cars and some
light trucks of 323 g/mil in 2009 up to
205 g/mi in 2016, and 439 g/mi for light
trucks in 2009 up to 332 g/mi in 2016.
In 2008, EPA denied a request by
California for a waiver of preemption
under the CAA for its GHG emissions
standards. However, consistent with
another Presidential Memorandum of
January 26, 2009, EPA reconsidered the
prior denial of California’s request.423
EPA withdrew the prior denial and
granted California’s request for a waiver
on June 30, 2009.424 The granting of the
waiver permits California’s emission
standards to come into effect
notwithstanding the general preemption
of State emission standards for new
motor vehicles that otherwise applies
under the Clean Air Act.
b. The President’s Announcement of
National Fuel Efficiency Policy (May
2009)
The issue of three separate regulatory
frameworks and overlapping
requirements for reducing fuel
consumption and CO2 emissions has
been a subject of much controversy and
legal disputes. On May 19, 2009
President Obama announced a National
Fuel Efficiency Policy aimed at both
increasing fuel economy and reducing
greenhouse gas pollution for all new
cars and trucks sold in the United
States, while also providing a
predictable regulatory framework for the
automotive industry. The policy seeks
to set harmonized Federal standards to
regulate both fuel economy and
greenhouse gas emissions while
preserving the legal authorities of the
Department of Transportation, the
Environmental Protection Agency and
the State of California. The program
covers model year 2012 to model year
2016 and ultimately requires the
equivalent of an average fuel economy
of 35.5 mpg in 2016, if all CO2 reduction
were achieved through fuel economy
improvements. Building on the MY
2011 standard that was set in March
2009, this represents an average of 5
percent increase in average fuel
economy each year between 2012 and
2016.
In conjunction with the President’s
announcement, the Department of
Transportation and the Environmental
Protection Agency issued on May 19,
2009, a Notice of Upcoming Joint
423 74
424 74
E:\FR\FM\28SEP2.SGM
FR 7040 (Feb. 12, 2009).
FR 32744 (July 8, 2009).
28SEP2
49634
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Rulemaking to propose a strong and
coordinated fuel economy and
greenhouse gas National Program for
Model Year (MY) 2012–2016 light duty
vehicles. Consistent, harmonized, and
streamlined requirements under that
program hold out the promise of
delivering environmental and energy
benefits, cost savings, and
administrative efficiencies on a
nationwide basis that might not be
available under a less coordinated
approach. The proposed National
Program makes it possible for the
standards of two different Federal
agencies and the standards of California
and other States to act in a unified
fashion in providing these benefits.
Establishing a harmonized approach to
regulating light-duty vehicle greenhouse
gas (GHG) emissions and fuel economy
is critically important given the
interdependent goals of addressing
climate change and ensuring energy
independence and security.
Additionally, establishing a harmonized
approach may help to mitigate the cost
to manufacturers of having to comply
with multiple sets of Federal and State
standards
4. Review of CAFE Standard Setting
Methodology per the President’s January
26, 2009 Memorandum on CAFE
Standards for MYs 2011 and Beyond
On May 2, 2008, NHTSA published a
Notice of Proposed Rulemaking entitled
Average Fuel Economy Standards,
Passenger Cars and Light Trucks; Model
Years 2011–2015, 73 Fed. Reg. 24352. In
mid-October, the agency completed and
released a final environmental impact
statement in anticipation of issuing
standards for those years. Based on its
consideration of the public comments
and other available information,
including information on the financial
condition of the automotive industry,
the agency adjusted its analysis and the
standards and prepared a final rule for
MYs 2011–2015. On November 14, the
Office of Information and Regulatory
Affairs (OIRA) of the Office of
Management and Budget concluded
review of the rule as consistent with the
Order.425 However, issuance of the final
rule was held in abeyance. On January
7, 2009, the Department of
Transportation announced that the final
rule would not be issued, saying:
The Bush Administration will not
finalize its rulemaking on Corporate
425 Record of OIRA’s action can be found at
https://www.reginfo.gov/public/do/
eoHistReviewSearch (last accessed August 9, 2009).
To find the report on the clearance of the draft final
rule, select ‘‘Department of Transportation’’ under
‘‘Economically Significant Reviews Completed’’
and select ‘‘2008’’ under ‘‘Select Calendar Year.’’
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
Fuel Economy Standards. The recent
financial difficulties of the automobile
industry will require the next
administration to conduct a thorough
review of matters affecting the industry,
including how to effectively implement
the Energy Independence and Security
Act of 2007 (EISA). The National
Highway Traffic Safety Administration
has done significant work that will
position the next Transportation
Secretary to finalize a rule before the
April 1, 2009 deadline.426
a. Requests in the President’s
Memorandum
In light of the requirement to
prescribe standards for MY 2011 by
March 30, 2009 and in order to provide
additional time to consider issues
concerning the analysis used to
determine the appropriate level of
standards for MYs 2012 and beyond, the
President issued a memorandum on
January 26, 2009, requesting the
Secretary of Transportation and
Administrator427 of the National
Highway Traffic Safety Administration
NHTSA to divide the rulemaking into
two parts: (1) MY 2011 standards, and
(2) standards for MY 2012 and beyond.
i. CAFE Standards for Model Year 2011
The request that the final rule
establishing CAFE standards for MY
2011 passenger cars and light trucks be
prescribed by March 30, 2009 was based
on several factors. One was the
requirement that the final rule regarding
fuel economy standards for a given
model year must be adopted at least 18
months before the beginning of that
model year (49 U.S.C. 32902(g)(2)). The
other was that the beginning of MY 2011
is considered for the purposes of CAFE
standard setting to be October 1, 2010.
ii. CAFE Standards for Model Years
2012 and Beyond
The President requested that, before
promulgating a final rule concerning the
model years after model year 2011,
NHTSA
[C]onsider the appropriate legal factors
under the EISA, the comments filed in
response to the Notice of Proposed
Rulemaking, the relevant technological and
scientific considerations, and to the extent
feasible, the forthcoming report by the
National Academy of Sciences mandated
under section 107 of EISA.
426 The statement can be found at https://
www.dot.gov/affairs/dot0109.htm (last accessed
August 9, 2009).
427 Currently, the National Highway Traffic Safety
Administration does not have an Administrator.
Ronald L. Medford is the Acting Deputy
Administrator.
PO 00000
Frm 00182
Fmt 4701
Sfmt 4702
In addition, the President requested
that NHTSA consider whether any
provisions regarding preemption are
appropriate under applicable law and
policy.
b. Implementing the President’s
Memorandum
In keeping with the President’s
remarks on January 26 for new national
policies to address the closely
intertwined issues of energy
independence, energy security and
climate change, and for the initiation of
serious and sustained domestic and
international action to address them,
NHTSA has developed CAFE standards
for MY 2012 and beyond after collecting
new information, conducting a careful
review of technical and economic
inputs and assumptions, and standard
setting methodology, and completing
new analyses.
The goal of the review and reevaluation was to ensure that the
approach used for MY 2012 and
thereafter would produce standards that
contribute, to the maximum extent
possible under EPCA/EISA, to meeting
the energy and environmental
challenges and goals outlined by the
President. We have sought to craft our
program with the goal of creating the
maximum incentives for innovation,
providing flexibility to the regulated
parties, and meeting the goal of making
substantial and continuing reductions in
the consumption of fuel. To that end,
we have made every effort to ensure that
the CAFE program for MYs 2012–2016
is based on the best scientific, technical,
and economic information available,
and that such information was
developed in close coordination with
other Federal agencies and our
stakeholders, including the States and
the vehicle manufacturers.
We have also re-examined EPCA, as
amended by EISA, to consider whether
additional opportunities exist to
improve the effectiveness of the CAFE
program. For example, EPCA authorizes
increasing the amount of civil penalties
for violating the CAFE standards.428
Further, if the test procedures used for
light trucks were revised to provide for
the operation of air conditioning during
fuel economy testing, vehicle
manufacturers would have a regulatory
incentive to increase the efficiency and
reduce the weight of air conditioning
systems, thereby reducing both fuel
428 Under 49 U.S.C. 32904(c), EPA must use the
same procedures for passenger automobiles that the
Administrator used for model year 1975 (weighted
55 percent urban cycle and 45 percent highway
cycle), or procedures that give comparable results.
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
consumption and tailpipe emissions of
CO2.
With respect to the President’s request
that NHTSA consider the issue of
preemption, NHTSA is deferring further
consideration of the preemption issue.
The agency believes that it is
unnecessary to address the issue further
at this time because of the consistent
and coordinated Federal standards that
would apply nationally under the
proposed National Program.
The following paragraphs provide a
summary addressing how NHTSA has
complied with the President’s requests
in the January 26 memorandum.
NHTSA has reviewed comments
received on the MY 2011 rulemaking
and revisited its assumptions and
methodologies for purposes of
developing the proposed MY 2012–2016
standards. For any given assumption or
aspect of NHTSA’s analysis, comments
rarely converged on a single position—
and for many issues, NHTSA received
diametrically-opposed comments from
different parties—which makes it
challenging to resolve the concerns of
all parties in a single stroke. However,
NHTSA has taken a fresh look at all the
issues as part of its joint process with
EPA, changing some assumptions and
methodologies and validating others.
The agency is confident that the
assumptions and analysis used to
develop these proposed standards
represent the best possible approach
that is consistent with NHTSA’s
statutory requirements for setting the
required fuel economy standards.
The paragraphs below describe
generally how the agency has reviewed
comments on different issues related to
the setting of the standards, and how the
agency has either revised or validated
its approach for the MY 2012–2016
standards. Much more detail on how the
agency addresses all of these issues is
found below in the rest of NHTSA’s
section of this preamble, in the joint
TSD, and in NHTSA’s PRIA.
How stringent should the standards
be? How quickly should they increase?
EPCA requires that NHTSA set its
standards for each model year at the
‘‘maximum feasible average fuel
economy level that the Secretary
decides the manufacturers can achieve
in that model year’’ considering four
factors: technological feasibility,
economic practicability, the effect of
other standards of the Government on
fuel economy, and the need of the
nation to conserve energy. None of these
factors is further defined in the statute,
and ‘‘maximum feasible average fuel
economy level’’ is itself defined, if at all,
only by reference to those four factors
and the Secretary’s consideration of
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
them.429 In addition, the agency has the
authority to and traditionally does
consider other relevant factors, such as
the effect of the CAFE standards on
motor vehicle safety.
In the previous CAFE rulemaking,
NHTSA proposed to set standards at the
point at which societal net benefits were
maximized, which drew a number of
comments from both manufacturers and
environmental and public interest
groups. Manufacturers generally
commented that standards should be
lower than the ‘‘maximizing net
benefits’’ alternative, due to lead time
concerns and manufacturers’ difficulties
in raising capital. Environmental and
consumer groups, as well as a number
of State Attorneys General, commented
that NHTSA should set standards above
that point, with some arguing in favor
of standards as high as those at the point
at which total costs equaled total
benefits. Commenters also emphasized
that NHTSA should ensure that
standards increased ratably, as required
by EISA.
For this NPRM, NHTSA has analyzed
the costs and benefits of the
‘‘maximizing net benefits’’ alternative
and other alternatives, using inputs that
diverge substantially from those used in
the analyses in the previous
rulemakings to establish attribute-based
standards. But the agency has not
sought to use ‘‘maximizing net benefits’’
as a governing principle to select the
applicable fuel economy standard in
this NPRM. NHTSA’s balancing of the
statutory factors in these difficult
financial times leads it to make a
different conclusion this time: NHTSA
is proposing to set standards at 34.1
mpg in MY 2016, below the point at
which net benefits are maximized, due
to economic practicability concerns.
The results of the alternatives analysis
for the ‘‘maximizing net benefits’’
alternative and the ‘‘total costs = total
benefits’’ alternative may be found in
the DEIS and in the PRIA.
Additionally, because today’s
proposed standards cover five model
years, as opposed to the single model
year covered by the March final rule,
NHTSA is better able in this rulemaking
to confirm that the standards do, in fact,
increase ratably, as required by EISA.
What attribute should NHTSA use to
set the standards?
In the previous rulemaking, most
commenters agreed with NHTSA’s use
of footprint as the vehicle attribute for
setting CAFE standards. Some
manufacturers commented that NHTSA
should consider multiple attributes—for
example, sports car manufacturers
429 49
PO 00000
U.S.C. 32902(a).
Frm 00183
Fmt 4701
Sfmt 4702
49635
suggested a mix of footprint and
horsepower, while truck manufacturers
suggested a mix of footprint and towing,
hauling, or off-road capability. Several
members of Congress also supported the
latter comment.
For this NPRM, NHTSA and EPA
together reconsidered the appropriate
attribute for setting CAFE and CO2
standards, and conclude that footprint
best provides the ability address safety
concerns without creating undue risk
that program benefits will be lost to
induced mix shifting. More information
about this decision may be found in
Section IV.C.5 below, in the draft joint
TSD, and in NHTSA’s PRIA.
What data should NHTSA use to
develop the baseline market forecast?
In the previous rulemaking, the
proposed standards were based on data
from only the seven largest
manufacturers. Several small and
limited-line manufacturers commented
that either the passenger car standards
should be based on the plans of all
manufacturers subject to the standards,
or some alternative form of standard
should be set for them. Ultimately,
NHTSA set the MY 2011 standards
based on the plans of all manufacturers
subject to the standards.
However, a number of commenters
also called for NHTSA to cease using
manufacturer’s confidential product
plans in any way for developing the
standards. Because manufacturers
request confidentiality when they
submit their product plans to the agency
out of competitive concerns, NHTSA is
prohibited by regulation from releasing
that information to the public. Thus,
when NHTSA developed a baseline
market forecast using information from
the manufacturer’s product plans,
NHTSA could not release that forecast
intact for public review.
For this NPRM, in response to these
concerns, NHTSA and EPA are using a
baseline market file developed almost
entirely from publicly-available data.
Relying on adjusted MY 2008 CAFE
compliance data enables the agency to
make the baseline public and helps to
address transparency concerns.
However, by virtue of not being based
on product plans, some manufacturers’
concerns that the baseline does not
represent their particular intentions for
MYs 2012–2016 may not be addressed.
These issues are explained in more
detail in Section IV.C.1 below, in the
draft joint TSD, and in NHTSA’s PRIA.
Did commenters agree with NHTSA’s
technology assumptions?
In the previous rulemaking,
manufacturers generally commented
that NHTSA had underestimated the
costs of technologies and overestimated
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49636
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
their effectiveness, and that the rate of
diesel and hybrid application required
by the standards was too high, too
quickly. Environmental and consumer
groups, and the States Attorneys
General who commented, largely argued
the opposite. Environmental and
consumer groups and the States
Attorneys General also commented that
NHTSA should include downweighting
in its analysis for vehicles under 5,000
lbs GVWR, while the Insurance Institute
for Highway Safety (IIHS) argued that
NHTSA’s approach to restricting
downweighting to only those vehicles
was correct.
For this NPRM, NHTSA, with EPA,
has revisited every one of its cost and
effectiveness estimates for individual
technologies. Many of the estimates
used in the MY 2011 final rule have
been validated, while some have
changed, notably the estimates for
turbocharging and downsizing, diesels,
and hybrids. Overall, the individual
technology costs are lower for purposes
of this NPRM than in the MY 2011 final
rule due to the Indirect Cost Markup
methodology developed by EPA for this
rulemaking, which results in a lower
markup than the 1.5 Retail Price
Equivalent (RPE) markup previously
used. The considerable majority of
estimates for individual technology
effectiveness were validated; changes
largely resulted from the redefinition of
certain electrification-related
technologies and mild hybrids.
Additionally, NHTSA is now
applying downweighting/material
substitution to vehicles below 5,000 lbs
GVWR, albeit in a way that, we believe,
mitigates the safety concerns to some
extent. These issues are explained in
more detail in Section IV.C.2 below, in
the draft joint TSD, and in NHTSA’s
PRIA.
With regard to the President’s request
that NHTSA consider, ‘‘to the extent
feasible, the forthcoming report by the
National Academy of Sciences
mandated under section 107 of EISA,’’
we note that it was not feasible to
consider this report for purposes of this
NPRM because it is not scheduled to be
completed until Fall 2009. However,
NHTSA intends to make it available in
the rulemaking docket as soon as the
agency receives it, and will consider it
for the final rule.
Did commenters agree with NHTSA’s
economic assumptions?
In the previous rulemaking, NHTSA
primarily received comments regarding
four particular economic assumptions.
Regarding fuel prices, many
commenters supported NHTSA’s use of
the AEO 2008 Reference Case, while
many commenters also argued, given
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
high pump prices in summer 2008, that
NHTSA should use at least the AEO
High Price Case or possibly a higher
estimate. Regarding the discount rate,
some commenters supported NHTSA’s
use of 7 percent, while others argued
that NHTSA should use no higher than
3 percent. Regarding the magnitude of
the rebound effect, some commenters
supported NHTSA’s use of a 15 percent
rebound effect, while some called for a
higher number and some called for
numbers as low as zero percent. And
finally, for the social cost of carbon,
some commenters supported NHTSA’s
use of a domestic value and stated that
the value should be $7/ton or lower,
while other commenters argued that
NHTSA should use a global value much
higher than $7/ton, although there was
little consensus as to what precise
number.
For this NPRM, NHTSA, with EPA,
has revisited every one of its economic
assumptions. Many of the assumptions
used in the MY 2011 final rule have
been validated, while some have
changed. For fuel prices, NHTSA used
the AEO High Price Case in the MY
2011 final rule, but stated that its
decision was based on its expectation
that the Reference Case would soon be
revised to reflect higher estimates of
future fuel prices. EIA did, in fact,
revise the Reference Case upward in
AEO 2009 to levels higher than the 2008
High Price Case, and NHTSA has
therefore elected to use the Reference
Case for this NPRM. For the discount
rate, NHTSA is continuing to conduct
and present the results of analyses using
both a 3 percent and a 7 percent rate,
as is EPA in its analysis. For the
rebound effect, NHTSA took a fresh look
at the recent literature and developed
new estimates for the rebound effect,
and has used a value of 10 percent in
its analysis. And for the social cost of
carbon, based on the results of an
interagency effort to develop an estimate
that can be used by all government
agencies in rulemakings that affect
climate change, NHTSA has conducted
analyses for this NPRM using a range of
values from $5 to $56/ton, representing
global SCC values. These issues are
explained in Section II above, in more
detail in Section IV.C.3 below, in the
joint TSD, and in NHTSA’s PRIA.
Did commenters agree with NHTSA’s
analytical tools?
In the previous rulemaking, although
some commenters generally supported
NHTSA’s use of the CAFE modeling
system developed by DOT’s Volpe
National Transportation Systems Center
(Volpe Center), other commenters
expressed concerns regarding the
modeling system, the ways in which the
PO 00000
Frm 00184
Fmt 4701
Sfmt 4702
system was applied, and accessibility of
the system and its inputs and outputs.
Technical concerns regarding the
model itself centered on the fact that it
does not apply a direct and explicit
representation of the physical processes
connecting the engineering
characteristics of a given vehicle to that
vehicle’s fuel economy. As NHTSA
explained in its March 2009 Federal
Register notice establishing final MY
2011 CAFE standards, full vehicle
simulation could useful in developing
model inputs, but not, at least in the
foreseeable future, in performing
forward-looking analysis of the future
fleet.430 Having again reconsidered this
issue, NHTSA again concludes that with
proper care in developing model inputs,
the Volpe model is as ‘‘physics-based’’
as is practical or necessary for CAFE
analysis.
Some commenters also questioned the
model’s structural assumptions about
manufacturers’ compliance strategies.
NHTSA has reconsidered this question
with respect to the potential for
systematic underestimation or
overestimation of compliance costs. As
a result, the Volpe model has been
modified to account for manufacturers’
ability to engage in ‘‘multi-year
planning,’’ adding more technology than
necessary for compliance in an early
model year when a vehicle model is
being redesigned in order to carry that
technology forward and facilitate
compliance in later model years. This
major change to the Volpe model tends
to produce greater costs (and benefits) in
earlier model years in order to reduce
costs in later model years.
Some commenters also questioned the
model’s use of externally-specified
‘‘phase-in caps’’ to constrain the speed
at which technologies can practicably be
adopted. NHTSA has reconsidered these
inputs in light of the fact that the model
also assumes that most technologies can
only be practicably applied during a
vehicle redesign or (in some cases)
freshening, and tentatively concludes
that these inputs can be significantly
relaxed. The analysis supporting today’s
proposal therefore relies almost
exclusively on the redesign- and refreshrelated constraints to produce
practicable estimates of potential
technology adoption rates. We are
seeking comment on this change to the
model’s inputs, and note that further
changes to these inputs would impact
our analysis.
Commenters had many other concerns
regarding inputs to the model, such as
economic inputs and technology-related
estimates. Commenters often (and
430 74
E:\FR\FM\28SEP2.SGM
FR 14371–72 (Mar. 30, 2009).
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
particularly in relation to the agency’s
estimate of the social value of avoided
CO2 emissions) mistakenly attributed
these concerns to the model itself. In
again reviewing commenters’ concerns
regarding NHTSA’s analysis, the agency
has carefully differentiated between (1)
the model, (2) inputs to the model, and
(3) ways in which the model is applied.
We encourage commenters to do the
same in reviewing the analysis
supporting today’s proposal.
Finally, some commenters expressed
concern regarding the model’s
transparency. However, as NHTSA
explained in in the MY 2011 final rule,
these concerns appeared to have been
mistakenly applied to the model itself,
as the actual lack of transparency
related only to the agency’s use of
manufacturers’ product plans, which
formed the basis for inputs to the
model.431 The agency had previously
made publicly available the model,
source code (i.e., computer
programming instructions), model
documentation, and sample input files.
To make the model more easily
accessible to the public, the agency
began (in March 2009) placing all of this
information on NHTSA’s Web site.432 In
connection with today’s proposal, the
agency is placing the updated model,
code, and documentation on the Web
site, along with inputs and outputs for
agency’s current analysis. Among those
inputs are those defining the agency’s
baseline estimates of the MYs 2012–
2016 U.S. market for passenger cars and
light trucks, as these inputs do not, for
today’s proposal, make use of
manufacturers’ confidential product
plans.
How should NHTSA develop and fit
the target curves?
431 74
FR 14372 (Mar. 30, 2009).
https://www.nhtsa.dot.gov (click on ‘‘Fuel
Economy,’’ then ‘‘Related Links—CAFE Compliance
and Effects Modeling System (Volpe Model)’’)
mstockstill on DSKH9S0YB1PROD with PROPOSALS
432 See
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
In the previous rulemaking, many
commenters expressed concern about
the steepness of the proposed curves for
passenger cars, which occurred because
of the way in which NHTSA fit the
curves to the data. The more steep a
curve is, the more rapidly mpg targets
decrease as footprint increases.
For this NPRM, NHTSA reconsidered
how to address this concern and
decided to propose curves that are based
on a constrained linear function rather
than a constrained logistic function, that
are considerably less steep than the
curves proposed in the previous
rulemaking. This issue is discussed in
greater detail in Section IV.C.5 below, in
the joint TSD, and in NHTSA’s PRIA.
Should NHTSA set additional
‘‘backstop’’ standards besides the one
established by Congress?
In the previous rulemaking, several
commenters argued that NHTSA must
establish absolute backstop standards
for imported passenger cars and light
trucks, in addition to the one for
domestically-manufactured passenger
cars required by EISA. NHTSA
examined its statutory authority and
concluded that only a backstop for
domestic passenger cars was
permissible under the statute.
For this NPRM, NHTSA has reexamined its authority, and while the
agency still tentatively concludes that
Congress’ intent is clear from the text of
the statute, we recognize commenters’
concerns that attribute-based standards
may not absolutely guarantee the level
of fuel savings currently anticipated if
market forces cause manufacturers to
build larger vehicles in MYs 2012–2016.
Thus, we seek comment on this issue,
which is discussed in greater detail
below in Section IV.C.5.
Should NHTSA classify more vehicles
as passenger cars rather than as light
trucks?
PO 00000
Frm 00185
Fmt 4701
Sfmt 4702
49637
In the previous rulemaking, many
commenters agreed with NHTSA’s
decision to move many 2WD SUVs from
the light truck to the passenger car fleet,
but some commenters argued that
NHTSA should go further and reclassify
more light trucks as passenger cars.
For this NPRM, NHTSA has
reconsidered its vehicle classification
system and has not included in the
proposed regulatory text any changes to
that system. However, NHTSA seeks
comment on whether any changes
should be adopted for that time period
or whether changes, if any, should be
deferred to MY 2017 and beyond.
Classification issues are addressed in
greater detail in Section IV.H below.
5. Summary of the Proposed MY 2012–
2016 CAFE Standards
NHTSA is proposing CAFE standards
that are, like the standards NHTSA
promulgated in March 2009 for MY
2011, expressed as mathematical
functions depending on vehicle
footprint. Footprint is one measure of
vehicle size, and is determined by
multiplying the vehicle’s wheelbase by
the vehicle’s average track width.433
Under the proposed CAFE standards,
each light vehicle model produced for
sale in the United States would have a
fuel economy target. The CAFE levels
that must be met by the fleet of each
manufacturer would be determined by
computing the sales-weighted harmonic
average of the targets applicable to each
of the manufacturer’s passenger cars and
light trucks. These targets, the
mathematical form and coefficients of
which are presented later in today’s
notice, appear as follows when the
values of the targets are plotted versus
vehicle footprint:
433 See 49 CFR 523.2 for the exact definition of
‘‘footprint.’’
E:\FR\FM\28SEP2.SGM
28SEP2
VerDate Nov<24>2008
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00186
Fmt 4701
Sfmt 4725
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.023</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49638
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
Under these proposed footprint-based
CAFE standards, the CAFE levels
required of individual manufacturers
depend, as noted above, on the mix of
vehicles sold. It is important to note that
NHTSA’s CAFE standards and EPA’s
GHG standards will both be in effect,
and each will lead to increases in
average fuel economy and CO2
emissions reductions. The two agencies’
standards together comprise the
National Program, and this discussion of
costs and benefits of NHTSA’s CAFE
standards does not change the fact that
both the CAFE and GHG standards,
49639
jointly, are the source of the benefits
and costs of the National Program.
Based on the forecast developed for
this NPRM of the MYs 2012–2016
vehicle fleet, NHTSA estimates that the
targets shown above would result in the
following average required CAFE levels:
TABLE IV.A.5–1—AVERAGE REQUIRED FUEL ECONOMY (MPG) UNDER PROPOSED STANDARDS
2012
2013
2014
2015
2016
Passenger Cars .......................................................................................
Light Trucks .............................................................................................
33.6
25.0
34.4
25.6
35.2
26.2
36.4
27.1
38.0
28.3
Combined ..........................................................................................
29.8
30.6
31.4
32.6
34.1
For the reader’s reference, these miles
per gallon would be equivalent to the
following gallons per 100 miles for
passenger cars and light trucks:
Passenger Cars .......................................................................................
Light Trucks .............................................................................................
NHTSA estimates that average
achieved fuel economy levels will
correspondingly increase through MY
2016, but that manufacturers will, on
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
2013
2.9762
4.0
2014
2.907
3.9063
2.8409
3.8168
2015
2.7473
3.8168
2016
2.6316
3.5336
average, undercomply 434 in some model
434 In
NHTSA’s analysis, ‘‘undercompliance’’ is
mitigated either through use of FFV credits, use of
existing or ‘‘banked’’ credits, or through fine
PO 00000
Frm 00187
Fmt 4701
Sfmt 4702
payment. Because NHTSA cannot consider
availability of credits in setting standards, the
estimated achieved CAFE levels presented here do
not account for their use. In contrast, because
E:\FR\FM\28SEP2.SGM
Continued
28SEP2
EP28SE09.024</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
2012
49640
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
years and overcomply 435 in others,
reaching a combined average fuel
economy of 33.7 mpg in MY 2016.436
Table IV.A.5–1 is the estimated required
fuel economy for the proposed CAFE
standards while Table IV.A.5–2
includes the effects of some
manufacturers’ payment of CAFE fines.
In addition, Section IV.G.4 below
contains an analysis of the achieved
levels (and projected fuel savings, costs,
and benefits) when the use of FFV
credits is also assumed.
TABLE IV.A.5–2—AVERAGE ACHIEVED FUEL ECONOMY (MPG) UNDER PROPOSED STANDARDS
2012
2013
2014
2015
2016
Passenger Cars .......................................................................................
Light Trucks .............................................................................................
32.9
24.9
34.2
25.7
35.2
26.5
36.5
27.4
37.6
28.1
Combined ..........................................................................................
29.3
30.5
31.5
32.7
33.7
For the reader’s reference, these miles
per gallon would be equivalent to the
following gallons per 100 miles for
passenger cars and light trucks:
2012
Passenger Cars .......................................................................................
Light Trucks .............................................................................................
NHTSA estimates that these fuel
economy increases will lead to fuel
savings totaling 61.6 billion gallons
2013
3.0438
4.0241
2014
2.9267
3.8952
2015
2.8398
3.7713
2016
2.7434
3.6495
2.6623
3.5604
during the useful lives of vehicles sold
in MYs 2012–2016:
TABLE IV.A.5–3—FUEL SAVED (BILLION GALLONS) UNDER PROPOSED STANDARDS
2012
2013
2014
2015
2016
Total
Passenger Cars ...............................................................
Light Trucks .....................................................................
2.5
1.8
5.3
3.7
7.5
5.4
9.4
6.8
11.4
7.8
36.0
25.6
Combined ..................................................................
4.3
9.1
12.9
16.1
19.2
61.6
The agency also estimates that these
new CAFE standards will lead to
corresponding reductions of CO2
emissions totaling 656 million metric
tons (mmt) during the useful lives of
vehicles sold in MYs 2012–2016:
TABLE IV.A.5–4—AVOIDED CARBON DIOXIDE EMISSIONS (MMT) UNDER PROPOSED STANDARDS
2012
2013
2014
2015
2016
Total
Passenger Cars ...............................................................
Light Trucks .....................................................................
25
19
56
40
79
58
99
73
121
85
381
275
Combined ..................................................................
44
96
137
173
206
656
The agency estimates that these fuel
economy increases would produce other
benefits (e.g., reduced time spent
refueling), as well as some disbenefits
(e.g., increase traffic congestion) caused
by drivers’ tendency to increase travel
significant benefits to society. NHTSA
estimates that, in present value terms,
these benefits would total $200 billion
over the useful lives of vehicles sold
during MYs 2012–2016:
when the cost of driving declines (as it
does when fuel economy increases). The
agency has estimated the total monetary
value to society of these benefits and
disbenefits, and estimates that the
proposed standards will produce
mstockstill on DSKH9S0YB1PROD with PROPOSALS
TABLE IV.A.5–5—PRESENT VALUE OF BENEFITS ($BILLION) UNDER PROPOSED CAFE STANDARDS
2012
Passenger Cars ...............................................................
NHTSA is not prohibited from considering fine
payment, the estimated achieved CAFE levels
presented here include the assumption that BMW,
Daimler (i.e., Mercedes), Porsche, and, Tata (i.e.,
Jaguar and Rover) will only apply technology up to
the point that it would be less expensive to pay
civil penalties.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
2013
7.6
2014
17.0
435 In NHTSA’s analysis, ‘‘overcompliance’’
occurs through multi-year planning: manufacturers
apply some ‘‘extra’’ technology in early model years
(e.g., MY 2014) in order to carry that technology
forward and thereby facilitate compliance in later
model years (e.g., MY 2016)
PO 00000
Frm 00188
Fmt 4701
Sfmt 4702
2015
24.4
31.2
2016
38.7
Total
119.1
436 Consistent with EPCA, NHTSA has not
accounted for manufacturers’ ability to earn CAFE
credits for selling FFVs, carry credits forward and
back between model years, and transfer credits
between the passenger car and light truck fleets.
E:\FR\FM\28SEP2.SGM
28SEP2
49641
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
TABLE IV.A.5–5—PRESENT VALUE OF BENEFITS ($BILLION) UNDER PROPOSED CAFE STANDARDS—Continued
2012
2013
2014
2015
2016
Total
Light Trucks .....................................................................
5.5
11.6
17.3
22.2
26.0
82.6
Combined ..................................................................
13.1
28.7
41.8
53.4
64.7
201.7
NHTSA attributes most of these
benefits—about $157 billion, as noted
above—to reductions in fuel
consumption, valuing fuel (for societal
purposes) at future pretax prices in the
Energy Information Administration’s
(EIA’s) reference case forecast from
Annual Energy Outlook (AEO) 2009.
The Preliminary Regulatory Impact
Analysis (PRIA) accompanying today’s
proposed rule presents a detailed
analysis of specific benefits of the
proposed rule.
Amount
Fuel savings ...........................................................................
CO2 emissions reductions ......................................................
NHTSA estimates that the necessary
increases in technology application will
involve considerable monetary outlays,
$ Value
61.6 billion gallons ................................................................
656 million metric tons (mmt) ...............................................
totaling $62.5 billion in incremental
outlays (i.e., beyond those attributable
to the MY 2011 standards) by new
$158.0 billion.
$16.4 billion.
vehicle purchasers during MYs 2012–
2016:
TABLE IV.A.5–6—INCREMENTAL TECHNOLOGY OUTLAYS ($B) UNDER PROPOSED CAFE STANDARDS
2012
2013
2014
2015
2016
Total
Passenger Cars ...............................................................
Light Trucks .....................................................................
4.1
1.5
6.5
2.8
8.4
4.0
9.9
5.2
11.8
5.9
40.8
19.4
Combined ..................................................................
5.7
9.3
12.5
15.1
17.6
60.2
Corresponding to these outlays and, to
a much lesser extent, civil penalties that
some companies are expected to pay for
noncompliance, the agency estimates
that the proposed standards would lead
to increases in average new vehicle
prices, ranging from $476 per vehicle in
MY 2012 to $1,091 per vehicle in MY
2016:
TABLE IV.A.5–7—INCREMENTAL INCREASES IN AVERAGE NEW VEHICLE PRICES ($) UNDER PROPOSED CAFE STANDARDS
2012
2013
2014
2015
2016
Passenger Cars .......................................................................................
Light Trucks .............................................................................................
591
283
735
460
877
678
979
882
1,127
1,020
Combined ..........................................................................................
476
635
806
945
1,091
Tables IV.A.5–8 and IV.A.5–9 below
present itemized costs and benefits for
a 3 percent and a 7 percent discount
rate, respectively, for the combined fleet
(passenger cars and light trucks) in each
model year and for all model years
combined. Numbers in parentheses
represent negative values.
TABLE IV.A.5–8—ITEMIZED COST AND BENEFIT ESTIMATES FOR THE COMBINED VEHICLE FLEET, 3% DISCOUNT RATE
mstockstill on DSKH9S0YB1PROD with PROPOSALS
2012
Costs:
Technology Costs .........................................
Benefits:
Lifetime Fuel Expenditures ...........................
Consumer Surplus from Additional Driving ..
Refueling Time Value ...................................
Petroleum Market Externalities .....................
Congestion Costs .........................................
Noise Costs ..................................................
Crash Costs ..................................................
CO2 ...............................................................
CO .................................................................
VOC ..............................................................
NOX ...............................................................
PM .................................................................
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
2013
2014
2015
2016
Total
$5,695
$9,295
$12,454
$15,080
$17,633
$60,157
$10,197
$751
$776
$559
($460)
($7)
($217)
$1,028
$0
$41
$82
$220
$22,396
$1,643
$1,551
$1,194
($934)
($14)
($437)
$2,287
$0
$80
$132
$438
$32,715
$2,389
$2,198
$1,700
($1,332)
($21)
($625)
$3,382
$0
$108
$155
$621
$41,880
$3,029
$2,749
$2,129
($1,657)
($26)
($776)
$4,376
$0
$131
$174
$771
$50,823
$3,639
$3,277
$2,538
($1,991)
($31)
($930)
$5,372
$0
$156
$200
$904
$158,012
$11,451
$10,550
$8,121
($6,376)
($99)
($2,985)
$16,446
$0
$518
$744
$2,956
Frm 00189
Fmt 4701
Sfmt 4702
E:\FR\FM\28SEP2.SGM
28SEP2
49642
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
TABLE IV.A.5–8—ITEMIZED COST AND BENEFIT ESTIMATES FOR THE COMBINED VEHICLE FLEET, 3% DISCOUNT RATE—
Continued
2012
2013
2014
2015
2016
Total
SOX ...............................................................
$161
$345
$490
$613
$731
$2,341
Total .......................................................
$13,132
$28,680
$41,781
$53,394
$64,687
$201,676
Net Benefits ....................................
$7,044
$18,759
$27,090
$34,710
$41,386
$128,992
TABLE IV.A.5–9—ITEMIZED COST AND BENEFIT ESTIMATES FOR THE COMBINED VEHICLE FLEET, 7% DISCOUNT RATE
2012
Costs:
Technology Costs .........................................
Benefits:
Lifetime Fuel Expenditures ...........................
Consumer Surplus from Additional Driving ..
Refueling Time Value ...................................
Petroleum Market Externalities .....................
Congestion Costs .........................................
Noise Costs ..................................................
Crash Costs ..................................................
CO2 ...............................................................
CO .................................................................
VOC ..............................................................
NOX ...............................................................
PM .................................................................
SOX ...............................................................
2013
2014
2015
2016
Total
$5,695
$9,295
$12,454
$15,080
$17,633
$60,157
$7,991
$590
$624
$448
($371)
($6)
($173)
$797
$0
$33
$60
$170
$129
$17,671
$1,301
$1,249
$960
($753)
($12)
($352)
$1,781
$0
$65
$99
$344
$278
$25,900
$1,896
$1,770
$1,367
($1,074)
($16)
($503)
$2,634
$0
$87
$120
$492
$394
$33,264
$2,412
$2,215
$1,712
($1,335)
($21)
($626)
$3,410
$0
$106
$135
$613
$493
$40,478
$2,904
$2,642
$2,043
($1,606)
($24)
($749)
$4,189
$0
$125
$156
$721
$588
$125,305
$9,102
$8,500
$6,531
($5,138)
($80)
($2,403)
$12,813
$0
$416
$570
$2,339
$1,882
Total .......................................................
$10,292
$22,631
$33,066
$42,380
$51,468
$159,837
Net Benefits ....................................
$4,281
$12,832
$18,818
$24,414
$29,293
$89,638
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Neither EPCA nor EISA requires that
NHTSA conduct a cost-benefit analysis
in determining average fuel economy
standards, but too, neither precludes its
use.437 EPCA does require that NHTSA
consider economic practicability among
other factors, and NHTSA has
concluded, as discussed elsewhere
herein, that the standards it proposes
today are economically practicable.
Further validating and supporting its
conclusion that the standards it
proposes today are reasonable, a
comparison of the standards’ costs and
benefits shows that the standards’
estimated benefits far outweigh its
estimated costs. Based on the figures
reported above, NHTSA estimates that
the total benefits of today’s proposed
standards would be more three times
the magnitude of the corresponding
costs, such that the proposed standards
would produce net benefits of nearly
437 Center
for Biological Diversity v. NHTSA, 508
F.3d 508 (9th Cir. 2007) (rejecting argument that
EPCA precludes the use of a marginal cost-benefit
analysis that attempted to weigh all of the social
benefits (i.e., externalities as well as direct benefits
to consumers) of improved fuel savings in
determining the stringency of the CAFE standards).
See also Entergy Corp. v. Riverkeeper, Inc., 129
S.Ct. 1498, 1508 (2009) (‘‘[U]nder Chevron, that an
agency is not required to [conduct a cost-benefit
analysis] does not mean that an agency is not
permitted to do so.’’)
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
$138 billion over the useful lives of
vehicles sold during MYs 2012–2016.
B. Background
1. Chronology of Events Since the
National Academy of Sciences Called
for Reforming and Increasing CAFE
Standards
a. National Academy of Sciences Issues
Report on Future of CAFE Program
(February 2002)
i. Significantly Increasing CAFE
Standards Without Making Them
Attribute-Based Would Adversely Affect
Safety
In the 2002 congressionally-mandated
report entitled ‘‘Effectiveness and
Impact of Corporate Average Fuel
Economy (CAFE) Standards,’’ 438 a
committee of the National Academy of
Sciences (NAS) (‘‘2002 NAS Report’’)
438 National Research Council, ‘‘Effectiveness and
Impact of Corporate Average Fuel Economy (CAFE)
Standards,’’ National Academy Press, Washington,
DC (2002). Available at https://www.nap.edu/
openbook.php?isbn=0309076013 (last accessed
August 9, 2009). The conference committee report
for the Department of Transportation and Related
Agencies Appropriations Act for FY 2001 (Pub. L.
106–346) directed NHTSA to fund a study by NAS
to evaluate the effectiveness and impacts of CAFE
standards (H. Rep. No. 106–940, p. 117–118). In
response to the direction from Congress, NAS
published this lengthy report.
PO 00000
Frm 00190
Fmt 4701
Sfmt 4702
concluded that the then-existing form of
passenger car and light truck CAFE
standards permitted vehicle
manufacturers to comply in part by
downweighting and even downsizing
their vehicles and that these actions had
led to additional fatalities. The
committee explained that this safety
problem arose because, at that time, the
CAFE standards were not attributedbased and thus subjected all passenger
cars to the same fuel economy target and
all light trucks to the same target,
regardless of their weight, size, or loadcarrying capacity.439 The committee
said that this experience suggests that
consideration should be given to
developing a new system of fuel
economy targets that reflects differences
in such vehicle attributes. Without a
thoughtful restructuring of the program,
there would be the trade-offs that must
be made if CAFE standards were
increased by any significant amount.440
In response to these conclusions,
NHTSA issued attribute-based CAFE
standards for light trucks and sought
legislative authority to issue attributebased CAFE standards for passenger
cars before undertaking to raise the car
439 NHTSA formerly used this approach for CAFE
standards. EISA prohibits its use after MY 2010.
440 NAS, p. 9.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
standards. Congress went a step further
in enacting EISA, not only authorizing
the issuance of attribute-based
standards, but also mandating them.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
ii. Climate Change and Other
Externalities Justify Increasing the CAFE
Standards
The NAS committee said that there
are two compelling concerns that justify
a government-mandated increase in fuel
economy, both relating to externalities.
The first and most important concern, it
argued, is the accumulation in the
atmosphere of greenhouse gases,
principally carbon dioxide.441
A second concern is that petroleum
imports have been steadily rising
because of the nation’s increasing
demand for gasoline without a
corresponding increase in domestic
supply. The high cost of oil imports
poses two risks: Downward pressure on
the strength of the dollar (which drives
up the cost of goods that Americans
import) and an increase in U.S.
vulnerability to macroeconomic shocks
that cost the economy considerable real
output.
To determine how much the fuel
economy standards should be increased,
the committee urged that all social
benefits be considered. That is, it urged
not only that the dollar value of the
saved fuel be considered, but also that
the dollar value to society of the
resulting reductions in greenhouse gas
emissions and in dependence on
imported oil should be calculated and
considered. The committee said that if
it is possible to assign dollar values to
these favorable effects, it becomes
possible to make at least crude
comparisons between the socially
beneficial effects of measures to
improve fuel economy on the one hand,
and the costs (both out-of-pocket and
more subtle) on the other.
iii. Reforming the CAFE Program Could
Address Inequity Arising From the
CAFE Structure
The 2002 NAS report expressed
concerns about increasing the standards
under the CAFE program as currently
structured. While raising CAFE
standards under the existing structure
would reduce fuel consumption, doing
so under alternative structures ‘‘could
accomplish the same end at lower cost,
provide more flexibility to
manufacturers, or address inequities
arising from the present’’ structure.442
To address those structural problems,
the report suggested various possible
reforms. The report found that the
‘‘CAFE program might be improved
significantly by converting it to a system
in which fuel targets depend on vehicle
attributes.’’443 The report noted further
that under an attribute-based approach,
the required CAFE levels could vary
among the manufacturers based on the
distribution of their product mix. NAS
stated that targets could vary among
passenger cars and among trucks, based
on some attribute of these vehicles such
as weight, size, or load-carrying
capacity. The report explained that a
particular manufacturer’s average target
for passenger cars or for trucks would
depend upon the fractions of vehicles it
sold with particular levels of these
attributes.444
2. NHTSA Issues Final Rule
Establishing Attribute-Based CAFE
Standards for MY 2008–2011 Light
Trucks (March 2006)
The 2006 final rule reformed the
structure of the CAFE program for light
trucks by introducing an attribute-based
approach and using that approach to
establish higher CAFE standards for MY
2008–2011 light trucks.445 Reforming
the CAFE program enables it to achieve
larger fuel savings, while enhancing
safety and preventing adverse economic
consequences.
As noted above, under Reformed
CAFE, fuel economy standards were
restructured so that they are based on a
vehicle attribute, a measure of vehicle
size called ‘‘footprint.’’ It is the product
of multiplying a vehicle’s wheelbase by
its track width. A target level of fuel
economy was established for each
increment in footprint (0.1 ft2). Trucks
with smaller footprints have higher fuel
economy targets; conversely, larger ones
have lower targets. A particular
manufacturer’s compliance obligation
for a model year is calculated as the
harmonic average of the fuel economy
targets for the manufacturer’s vehicles,
weighted by the distribution of the
manufacturer’s production volumes
among the footprint increments. Thus,
each manufacturer is required to comply
with a single overall average fuel
economy level for each model year of
production.
Compared to Unreformed (nonattributed-based) CAFE, Reformed CAFE
enhances overall fuel savings while
providing vehicle manufacturers with
the flexibility they need to respond to
changing market conditions. Reformed
CAFE also provides a more equitable
regulatory framework by creating a level
playing field for manufacturers,
443 NAS,
p. 5 (Finding 12).
p. 87.
445 71 FR 17566 (Apr. 6, 2006).
441 NAS,
pp. 2, 13, and 83.
442 NAS, pp. 4–5 (Finding 10).
VerDate Nov<24>2008
23:31 Sep 25, 2009
regardless of whether they are full-line
or limited-line manufacturers. We were
particularly encouraged that Reformed
CAFE will confer no compliance
advantage if vehicle makers choose to
downsize some of their fleet as a CAFE
compliance strategy, thereby reducing
the adverse safety risks associated with
the Unreformed CAFE program.
3. Ninth Circuit Issues Decision re Final
Rule for MY 2008–2011 Light Trucks
(November 2007)
On November 15, 2007, the United
States Court of Appeals for the Ninth
Circuit issued its decision in Center for
Biological Diversity v. NHTSA,446 the
challenge to the MY 2008–11 light truck
CAFE rule. The court held that EPCA
permits, but does not require, the use of
a marginal cost-benefit analysis. The
court specifically emphasized NHTSA’s
discretion to decide how to balance the
statutory factors—as long as that
balancing does not undermine the
fundamental statutory purpose of energy
conservation.
However, the Court found that
NHTSA had been arbitrary and
capricious in the following respects:
• NHTSA’s decision that it could not
monetize the benefit of reducing CO2
emissions for the purpose of conducting
its marginal benefit-cost analysis;
• NHTSA’s lack, in the Court’s view,
of a reasoned explanation for its
decision not to establish a ‘‘backstop’’
(i.e., a fixed minimum CAFE standard
applicable to manufacturers);
• NHTSA’s lack, again in the Court’s
view, of a reasoned explanation for its
decision not to revise the regulatory
definitions for the passenger car and
light truck categories of automobiles so
that some vehicles currently classified
as light trucks are instead classified as
passenger cars;
• NHTSA’s decision not to subject
most medium- and heavy-duty pickups
and most medium- and heavy-duty
cargo vans (i.e., those between 8,500 and
10,000 pounds gross vehicle weight
rating (GVWR,) to the CAFE standards;
• NHTSA’s decision to prepare and
publish an Environmental Assessment
(EA) and making a finding of no
significant impact notwithstanding what
the Court found to be an insufficiently
broad range of alternatives, insufficient
analysis of the climate change effects of
the CO2 emissions, and limited
assessment of cumulative impacts in its
EA under the National Environmental
Policy Act (NEPA).
The Court did not vacate the
standards, but instead said it would
remand the rule to NHTSA to
444 NAS,
Jkt 217001
PO 00000
Frm 00191
Fmt 4701
Sfmt 4702
49643
446 508
E:\FR\FM\28SEP2.SGM
F.3d 508.
28SEP2
49644
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
promulgate new standards consistent
with its opinion ‘‘as expeditiously as
possible and for the earliest model year
practicable.447 Under the decision, the
standards established by the April 2006
final rule would remain in effect unless
and until amended by NHTSA. In
addition, it directed the agency to
prepare an Environmental Impact
Statement.
4. Congress Enacts Energy Security and
Independence Act of 2007 (December
2007)
As noted above in Section I.B., EISA
significantly changed the provisions of
EPCA governing the establishment of
future CAFE standards. These changes
made it necessary for NHTSA to pause
in its efforts so that it could assess the
implications of the amendments made
by EISA and then, as required, revise
some aspects of the proposals it had
been developing (e.g., the model years
covered and credit issues).
5. NHTSA Proposes CAFE Standards for
MYs 2011–2015 (April 2008)
The agency cannot set out the exact
level of CAFE that each manufacturer
would have been required to meet for
each model year under the passenger car
or light truck standards since the levels
would depend on information that
would not be available until the end of
each of the model years, i.e., the final
actual production figures for each of
those years. The agency can, however,
project what the industry-wide level of
average fuel economy would have been
for passenger cars and for light trucks if
each manufacturer produced its
expected mix of automobiles and just
met its obligations under the proposed
‘‘optimized’’ standards for each model
year.
Passenger
cars mpg
mstockstill on DSKH9S0YB1PROD with PROPOSALS
MY
MY
MY
MY
2011
2012
2013
2014
...........
...........
...........
...........
Light trucks
mpg
31.2
32.8
34.0
34.8
25.0
26.4
27.8
28.2
447 The deadline in EPCA for issuing a final rule
establishing, for the first time, a CAFE standard for
a model year is 18 months before the beginning of
that model year. 49 U.S.C. 32902(g)(2). The same
deadline applies to issuing a final rule amending an
existing CAFE standard so as to increase its
stringency. Given that the agency has long regarded
October 1 as the beginning of a model year, the
statutory deadline for increasing the MY 2009
standard was March 30, 2007, and the deadline for
increasing the MY 2010 standard is March 30, 2008.
Thus, the only model year for which there was
sufficient time at the time of the Court’s decision
to gather all of the necessary information, conduct
the necessary analyses and complete a rulemaking
was MY 2011. As noted earlier in this notice,
however, EISA requires that a new standard be
established for that model year.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
In the FEIS, NHTSA compared the
environmental impacts of its preferred
alternative and those of reasonable
MY 2015 ...........
35.7
28.6 alternatives. It considered direct,
indirect, and cumulative impacts and
The combined industry-wide average
describes these impacts to inform the
fuel economy (in miles per gallon, or
decisionmaker and the public of the
mpg) levels for both cars and light
environmental impacts of the various
trucks, if each manufacturer just met its alternatives.
obligations under the proposed
Among other potential impacts,
‘‘optimized’’ standards for each model
NHTSA analyzed the direct and indirect
year, would have been as follows:
impacts related to fuel and energy use,
emissions, including carbon dioxide
Combined
and its effects on temperature and
mpg
climate change, air quality, natural
MY 2011 ...................................
27.8 resources, and the human environment.
MY 2012 ...................................
29.2 Specifically, the FEIS used a climate
MY 2013 ...................................
30.5 model to estimate and report on four
MY 2014 ...................................
31.0 direct and indirect effects of climate
MY 2015 ...................................
31.6 change, driven by alternative scenarios
of GHG emissions, including:
The annual average increase during
1. Changes in CO2 concentrations;
this five year period would have been
2. Changes in global mean surface
approximately 4.5 percent. Due to the
temperature;
uneven distribution of new model
3. Changes in regional temperature
introductions during this period and to
and precipitation; and
the fact that significant technological
4. Changes in sea level.
changes could be most readily made in
NHTSA also considered the
conjunction with those introductions,
cumulative impacts of the proposed
the annual percentage increases were
standards for MY 2011–2015 passenger
greater in the early years in this period.
cars and light trucks, together with
estimated impacts of NHTSA’s
6. Ninth Circuit Revises its Decision re
implementation of the CAFE program
Final Rule for MY 2008–2011 Light
through MY 2010 and NHTSA’s future
Trucks (August 2008)
CAFE rulemaking for MYs 2016–2020.
In response to the Government
8. Department of Transportation Decides
petition for rehearing, the Ninth Circuit
not to Issue MY 2011–2015 Final Rule
modified its decision by replacing its
(January 2009)
direction to prepare an EIS with a
direction to prepare either a new EA or,
On January 7, 2009, the Department of
if necessary, an EIS.448
Transportation announced that the Bush
7. NHTSA Releases Final Environmental Administration would not issue the
final rule, notwithstanding the Office of
Impact Statement (October 2008)
Information and Regulatory Affairs’
On October 17, 2008, EPA published
completion of review of the rule under
a notice announcing the availability of
Executive Order 12866, Regulatory
NHTSA’s final environmental impact
Planning and Review, on November 14,
statement (FEIS) for this rulemaking.449
2008.450
Throughout the FEIS, NHTSA relied
9. The President Requests NHTSA to
extensively on findings of the United
Issue Final Rule for MY 2011 Only
Nations Intergovernmental Panel on
(January 2009)
Climate Change (IPCC) and the U.S.
Climate Change Science Program
As explained above, in his
(USCCSP). In particular, the agency
memorandum of January 26, 2009, the
relied heavily on the most recent,
President requested the agency to issue
thoroughly peer-reviewed, and credible
a final rule adopting CAFE standards for
assessments of global climate change
MY 2011 only. Further, the President
and its impact on the United States: the
requested NHTSA to establish standards
IPCC Fourth Assessment Report
for MY 2012 and later after considering
Working Group I4 and II5 Reports, and
the appropriate legal factors, the
reports by the USCCSP that include
comments filed in response to the May
Scientific Assessments of the Effects of
2008 proposal, the relevant
Global Climate Change on the United
technological and scientific
States and Synthesis and Assessment
considerations, and, to the extent
Products.
feasible, a forthcoming report by the
Passenger
cars mpg
Light trucks
mpg
448 See CBD v. NHTSA, 538 F.3d 1172 (9th Cir.
2008).
449 73 FR 61859 (Oct. 18, 2008).
PO 00000
Frm 00192
Fmt 4701
Sfmt 4702
450 The statement can be found at https://
www.dot.gov/affairs/dot0109.htm (last accessed
August 9, 2009).
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
National Academy of Sciences assessing
automotive technologies that can
practicably be used to improve fuel
economy.
10. NHTSA Issues Final Rule for MY
2011 (March 2009)
mstockstill on DSKH9S0YB1PROD with PROPOSALS
a. Introduction
NHTSA’s review and analysis of
comments on its proposal led the
agency to make many changes to its
methods for analyzing potential MY
2011 CAFE standards, as well as to the
data and other information to which the
agency has applied these methods. The
following are some of the more
prominent changes:
• After receiving, reviewing, and
integrating updated product plans from
vehicle manufacturers, NHTSA revised
its forecast of the future light vehicle
market.
• NHTSA changed the methods and
inputs it used to represent the
applicability, availability, cost, and
effectiveness of future fuel-saving
technologies.
• NHTSA based its fuel price forecast
on the AEO 2008 High Case price
scenario instead of the AEO 2008
Reference Case.
• NHTSA reduced mileage
accumulation estimates (i.e., vehicle
miles traveled) to levels consistent with
this increased fuel price forecast.
• NHTSA applied increased estimates
for the value of oil import externalities.
• NHTSA included all
manufacturers—not just the largest
seven—in the process used to fit the
curve and estimate the stringency at
which societal net benefits are
maximized.
• NHTSA tightened its application of
the definition of ‘‘nonpassenger
automobiles,’’ causing a reassigning of
over one million vehicles from the light
truck fleet to the passenger car fleet, and
lowering the average fuel economy for
cars due to the inclusion of vehicles
previously categorized as trucks, as well
as the average fuel economy for trucks
because the truck category then had a
larger proportion of heavier trucks.
• NHTSA fitted the shape of the
curve based on ‘‘exhaustion’’ of
available technologies instead of on
manufacturer-level optimization of
CAFE levels.
These changes affected both the shape
and stringency of the attribute-based
standards. Taken together, the last three
of the above changes reduced the
steepness of the curves defining fuel
economy targets for passenger cars, and
also less significantly reduced the
steepness of the light truck curves.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
b. Standards
The final rule established footprintbased fuel economy standards for MY
2011 passenger cars and light trucks,
where each vehicle manufacturer’s
required level of CAFE was based on
target levels of average fuel economy set
for vehicles of different sizes and on the
distribution of that manufacturer’s
vehicles among those sizes. The curves
defining the performance target at each
footprint reflect the technological and
economic capabilities of the industry.
The target for each footprint is the same
for all manufacturers, regardless of
differences in their overall fleet mix.
Compliance would be determined by
comparing a manufacturer’s
harmonically averaged fleet fuel
economy levels in a model year with a
required fuel economy level calculated
using the manufacturer’s actual
production levels and the targets for
each footprint of the vehicles that it
produces.
The agency analyzed seven regulatory
alternatives, one of which maximizes
net benefits within the limits of
available information and was known at
the time as the ‘‘optimized standards.’’
The optimized standards were set at
levels, such that, considering all of the
manufacturers together, no other
alternative is estimated to produce
greater net benefits to society. Upon a
considered analysis of all information
available, including all information
submitted to NHTSA in comments, the
agency adopted the ‘‘optimized
standard’’ alternative as the final
standards for MY 2011.451 By limiting
the standards to levels that can be
achieved using technologies each of
which are estimated to provide benefits
that at least equal its costs, the net
benefit maximization approach helped,
at the time, to assure the marketability
of the manufacturers’ vehicles and thus
economic practicability of the
standards. Providing this assurance
assumed increased importance in view
of current and anticipated conditions in
the industry in particular and the
economy in general. As was widely
reported in the public domain
throughout that rulemaking, and as
shown in public comments, the national
and global economies raised serious
concerns. Even before those recent
developments, the automobile
manufacturers were already facing
substantial difficulties. Together, these
problems made NHTSA’s economic
practicability analysis particularly
451 The agency notes, for NEPA purposes, that the
‘‘optimized standard’’ alternative adopted as the
final standards corresponds to the ‘‘Optimized Mid2’’ scenario described in Section 2.2.2 of the FEIS.
PO 00000
Frm 00193
Fmt 4701
Sfmt 4702
49645
important and challenging in that
rulemaking.
The agency could not set out the exact
level of CAFE that each manufacturer
would be required to meet for MY 2011
under the passenger car or light truck
standards because the levels will
depend on information that will not be
available until the end of that model
year, i.e., the final actual production
figures for that year. However, the
following levels were projected for what
the industry-wide level of average fuel
economy will be for passenger cars and
for light trucks if each manufacturer
produced its expected mix of
automobiles and just met its obligations
under the ‘‘optimized’’ standards.
Passenger
cars mpg
MY 2011 ...........
30.2
Light trucks
mpg
24.1
The combined industry-wide average
fuel economy (in miles per gallon, or
mpg) levels for both cars and light
trucks, if each manufacturer just met its
obligations under the ‘‘optimized’’
standards, were projected as follows:
Combined
mpg
MY 2011 ...........
27.3
mpg increase over
prior year
2.0
In addition, per EISA, each
manufacturer’s domestic passenger fleet
is required in MY 2011 to achieve 27.5
mpg or 92 percent of the CAFE of the
industry-wide combined fleet of
domestic and non-domestic passenger
cars 452 for that model year, whichever
is higher. This requirement resulted in
the following projected alternative
minimum standard (not attribute-based)
for domestic passenger cars:
Domestic
passenger
cars mpg
MY 2011 ...................................
27.8
c. Credits
NHTSA also adopted a new Part 536
on use of ‘‘credits’’ earned for exceeding
applicable CAFE standards. Part 536
implements the provisions in EISA
authorizing NHTSA to establish by
regulation a credit trading program and
directing it to establish by regulation a
credit transfer program.453 Since its
452 Those numbers set out several paragraphs
above.
453 Congress required that DOT establish a credit
‘‘transferring’’ regulation, to allow individual
manufacturers to move credits from one of their
E:\FR\FM\28SEP2.SGM
Continued
28SEP2
49646
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
enactment, EPCA has permitted
manufacturers to earn credits for
exceeding the standards and to apply
those credits to compliance obligations
in years other than the model year in
which it was earned. EISA extended the
‘‘carry-forward’’ period to five model
years, and left the ‘‘carry-back’’ period
at three model years. Under Part 536,
credit holders (including, but not
limited to, manufacturers) will have
credit accounts with NHTSA, and will
be able to hold credits, apply them to
compliance with CAFE standards,
transfer them to another ‘‘compliance
category’’ for application to compliance
there, or trade them. A credit may also
be cancelled before its expiry date, if the
credit holder so chooses. Traded and
transferred credits will be subject to an
‘‘adjustment factor’’ to ensure total oil
savings are preserved, as required by
EISA. EISA also prohibits credits earned
before MY 2011 from being transferred,
so NHTSA has developed several
regulatory restrictions on trading and
transferring to facilitate Congress’ intent
in this regard.
11. Energy Policy and Conservation Act,
as Amended by the Energy
Independence and Security Act
NHTSA’s statutory authority and
obligations under the Energy Policy and
Conservation Act of 1975 (EPCA), as
amended by the Energy Independence
and Security Act of 2007 (EISA), is
discussed at length above in Section
I.B.1.
C. Development and Feasibility of the
Proposed Standards
mstockstill on DSKH9S0YB1PROD with PROPOSALS
1. How Was the Baseline Vehicle Fleet
Developed?
a. Why Do the Agencies Establish a
Baseline Vehicle Fleet?
In order to determine what levels of
stringency are feasible in future model
years, the agencies must project what
vehicles will exist in those model years,
and then evaluate what technologies can
feasibly be applied to those vehicles in
order to raise their fuel economy and
lower their CO2 emissions. The agencies
therefore establish a baseline vehicle
fleet representing those vehicles, based
on the best available information. Each
agency then developed a separate
reference fleet, accounting (via their
respective models) for the effect that the
MY 2011 CAFE standards have on the
baseline fleet. This reference fleet is
fleets to another (e.g., using a credit earned for
exceeding the light truck standard for compliance
with the domestic passenger car standard). Congress
allowed DOT to establish a credit ‘‘trading’’
regulation, so that credits may be bought and sold
between manufacturers and other parties.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
then used for comparisons of
technologies’ incremental cost and
effectiveness, as well as the other
relevant comparisons in the rule.
b. What Data Did the Agencies Use To
Construct the Baseline, and How Did
They Do So?
As explained in the Technical
Support Document (TSD) prepared
jointly by NHTSA and EPA, both
agencies used a baseline vehicle fleet
constructed beginning with EPA fuel
economy certification data for the 2008
model year, the most recent for which
final data is currently available from
manufacturers. This data was used as
the source for MY 2008 production
volumes and some vehicle engineering
characteristics, such fuel economy
ratings, engine sizes, numbers of
cylinders, and transmission types.
Some information important for
analyzing new CAFE standards is not
contained in the EPA fuel economy
certification data. EPA staff estimated
vehicle wheelbase and track widths
using data from Motortrend.com and
Edmunds.com. This information is
necessary for estimating vehicle
footprint, which is required for the
analysis of footprint-based standards.
Considerable additional information
regarding vehicle engineering
characteristics is also important for
estimating the potential to add new
technologies in response to new CAFE
standards. In general, such information
helps to avoid ‘‘adding’’ technologies to
vehicles that already have the same or
a more advanced technology. Examples
include valvetrain configuration (e.g.,
OHV, SOHC, DOHC), presence of
cylinder deactivation, and fuel delivery
(e.g., MPFI, SIDI). To the extent that
such engineering characteristics were
not available in certification data, EPA
staff relied on data published by Ward’s
Automotive, supplementing this with
information from Internet sites such as
Motortrend.com and Edmunds.com.
NHTSA staff also added some more
detailed engineering characteristics (e.g,
type of variable valve timing) using data
available from ALLDATA® Online.
Combined with the certification data, all
of this information yielded a MY 2008
baseline vehicle fleet.
After the baseline was created the
next step was to project the sales
volumes for 2011–2016 model years.
EPA used projected car and truck
volumes for this period from Energy
Information Administration’s (EIA’s)
2009 Annual Energy Outlook (AEO).454
454 Available at https://www.eia.doe.gov/oiaf/aeo/
index.html. The agencies have also used fuel price
forecasts from AEO2009. Both agencies regard AEO
PO 00000
Frm 00194
Fmt 4701
Sfmt 4702
However, AEO projects sales only at the
car and truck level, not at the
manufacturer and model-specific level,
which are needed in order to estimate
the effects new standards will have on
individual manufacturers. Therefore,
EPA purchased data from
CSM-Worldwide and used their
projections of the number of vehicles of
each type predicted to be sold by
manufacturers in 2011–2015.455 This
provided the year-by-year percentages of
cars and trucks sold by each
manufacturer as well as the percentages
of each vehicle segment. Although it
was, therefore, necessary to assume the
same manufacturer and segment shares
in 2016 as in 2015, 2016 estimates from
CSM should be available for the final
rule. Using these percentages
normalized to the AEO projected
volumes then provided the
manufacturer-specific market share and
model-specific sales for model years
2011–2016.
The processes for constructing the MY
2008 baseline vehicle fleet and
subsequently adjusting sales volumes to
construct the MY 2011–2016 baseline
vehicle fleet are presented in detail in
Chapter 1 of the draft Joint Technical
Support Document accompanying
today’s notice.
c. How Is This Different From NHTSA’s
Historical Approach and Why is This
Approach Preferable?
As discussed above in Section II.B.3,
NHTSA has historically based its
analysis of potential new CAFE
standards on detailed product plans the
agency has requested from
manufacturers planning to produce light
vehicles for sale in the United States. In
contrast, the current market forecast is
based primarily on information sources
which are all either in the public
domain or available commercially.
There are advantages to this approach,
namely transparency and the potential
to reduce some errors due to
manufacturers’ misunderstanding of
NHTSA’s request for information. There
are also disadvantages, namely that the
current market forecast does not
represent certain changes likely to occur
in the future vehicle fleet as opposed to
the MY 2008 vehicle fleet, such as
vehicles being discontinued and newly
introduced. On balance, however, the
agencies have carefully considered these
a credible source not only of such forecasts, but also
of many underlying forecasts, including forecasts of
the size the future light vehicle market.
455 EPA also considered other sources of similar
information, such as J.D. Powers, and concluded
that CSM was better able to provide forecasts at the
requisite level of detail for most of the model years
of interest.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
d. How Is This Baseline Different
Quantitatively From the Baseline That
NHTSA Used for the MY 2011 (March
2009) Final Rule?
As discussed above, the current
baseline was developed from adjusted
MY 2008 compliance data and covers
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
MYs 2011–2016, while the baseline that
NHTSA used for the MY 2011 CAFE
rule was developed from confidential
manufacturer product plans for MY
2011. This section describes, for the
reader’s comparison, some of the
differences between the current baseline
and the MY 2011 CAFE rule baseline.
Estimated vehicle sales:
The sales forecasts, based on the
Energy Information Administration’s
(EIA’s) Annual Energy Outlook 2009
(AEO 2009), used in the current baseline
indicate that the total number of light
vehicles expected to be sold during MYs
2011–2015 is 77 million, or about 15.4
million vehicles annually. NHTSA’s MY
2011 final rule forecast, based on AEO
2008, of the total number of light
vehicles likely to be sold during MY
2011 through MY 2015 was 83 million,
or about 16.6 million vehicles annually.
Light trucks are expected to make up 40
percent of the MY 2011 baseline market
forecast in the current baseline,
compared to 42 percent of the baseline
market forecast in the MY 2011 final
rule. These changes in both the overall
size of the light vehicle market and the
relative market shares of passenger cars
and light trucks reflect changes in the
economic forecast underlying AEO, and
changes in AEO’s forecast of future fuel
prices.
PO 00000
Frm 00195
Fmt 4701
Sfmt 4725
The figures below attempt to
demonstrate graphically the difference
between the variation of fuel economy
with footprint for passenger cars under
the current baseline and MY 2011 final
rule, and for light trucks under the
current baseline and MY 2011 final rule,
respectively. Figures IV.C.1–1 and 1–2
show the variation of fuel economy with
footprint for passenger car models in the
current baseline and in the MY 2011
final rule, while Figures IV.C.1–3 and 1–
4 show the variation of fuel economy
with footprint for light truck models in
the current baseline and in the MY 2011
final rule. However, it is difficult to
draw meaningful conclusions by
comparing figures from the current
baseline with those of the MY 2011 final
rule. In the current baseline the number
of make/models, and their associated
fuel economy and footprint, are fixed
and do not vary over time—this is why
the number of data points in the current
baseline figures appears smaller as
compared to the number of data points
in the MY 2011 final rule baseline. In
contrast, the baseline fleet used in the
MY 2011 final rule varies over time as
vehicles (with different fuel economy
and footprint characteristics) are added
to and dropped from the product mix.
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.025</GPH>
advantages and disadvantages of using a
market forecast derived from public and
commercial sources rather than from
manufacturers’ product plans, and
conclude that the advantages outweigh
the disadvantages.
Nevertheless, the agencies are hopeful
that manufacturers will, in the future,
agree to make public their plans
regarding model years that are very
near, such as MY 2010 or perhaps MY
2011, so that this information can be
incorporated into an analysis that is
available for public review and
comment. In any event, because NHTSA
and EPA are releasing market inputs
used in the agencies’ respective
analyses, manufacturers, suppliers, and
other automobile industry observers and
participants can submit comments on
how these inputs should be revised, as
can all other reviewers. More
information on the advantages and
disadvantages of the current approach
and the agencies’ decision to follow it
is available in Section II.B.3.
49647
EP28SE09.027</GPH>
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00196
Fmt 4701
Sfmt 4725
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.026</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49648
49649
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
Estimated manufacturer market
shares:
NHTSA’s expectations regarding
manufacturers’ market shares (the basis
for which is discussed below) have also
changed since the MY 2011 final rule.
These changes are reflected below in
Table IV.C.1–1, which shows the
agency’s sales forecasts for passenger
cars and light trucks under the current
baseline and the MY 2011 final rule.456
TABLE IV.C.1–1—SALES FORECASTS
[Production for U.S. sale in MY 2011, thousand units]
Current baseline
Manufacturer
Passenger
Nonpassenger
MY 2011 final rule
Passenger
Nonpassenger
194
1,230
1,156
996
570
302
794
1,474
631
888
403
944
1,314
571
127
98
421
1,059
212
399
707
1,615
1,700
1,250
655
1,216
1,144
1,844
470
221
789
1,405
441
724
479
1,094
191
190
Total ..........................................................................................................................
8,235
5,547
9,286
6,849
Dual-fueled vehicles:
Manufacturers have also, during and
since MY 2008, indicated plans to sell
456 As explained below, although NHTSA
normalized each manufacturer’s overall market
share to produce a realistically-sized fleet, the
product mix for each manufacturer that submitted
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
more dual-fueled or flexible-fuel
vehicles (FFVs) in MY 2011 than
product plans was preserved. The agency has
reviewed manufacturers’ product plans in detail,
and understands that manufacturers do not sell the
same mix of vehicles in every model year.
457 Kia is not listed in the table for the MY 2011
final rule because it was considered as part of
Hyundai for purposes of that analysis (i.e.,
Hyundai-Kia).
PO 00000
Frm 00197
Fmt 4701
Sfmt 4702
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.028</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Chrysler ............................................................................................................................
Ford ..................................................................................................................................
General Motors ................................................................................................................
Honda ..............................................................................................................................
Hyundai ............................................................................................................................
Kia 457 ...............................................................................................................................
Nissan ..............................................................................................................................
Toyota ..............................................................................................................................
Other Asian ......................................................................................................................
European .........................................................................................................................
49650
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
indicated in the current baseline of
adjusted MY 2008 compliance data.
FFVs create a potential market for
alternatives to petroleum-based gasoline
and diesel fuel. For purposes of
determining compliance with CAFE
standards, the fuel economy of a FFV is,
subject to limitations, adjusted upward
to account for this potential.458
However, NHTSA is precluded from
‘‘taking credit’’ for the compliance
flexibility by accounting for
manufacturers’ ability to earn and use
credits in setting the level of the
standards.’’459 Some manufacturers plan
to produce a considerably greater share
of FFVs than can earn full credit under
EPCA. The projected average FFV share
of the market in MY 2011 is 6 percent
for the current baseline, versus 17
percent for the MY 2011 final rule.
Estimated achieved fuel economy
levels:
Because manufacturers’ product plans
also reflect simultaneous changes in
fleet mix and other vehicle
characteristics, the relationship between
increased technology utilization and
increased fuel economy cannot be
isolated with any certainty. To do so
would require an apples-to-apples
‘‘counterfactual’’ fleet of vehicles that
are, except for technology and fuel
economy, identical—for example, in
terms of fleet mix and vehicle
performance and utility. The current
baseline market forecast shows
industry-wide average fuel economy
levels somewhat higher in MY 2011
than shown in the MY 2011 final rule.
Under the current baseline, average fuel
economy for MY 2011 is 26.7 mpg,
versus 26.5 mpg under the baseline in
the MY 2011 final rule.
These differences are shown in greater
detail below in Table IV.C.1–2, which
shows manufacturer-specific CAFE
levels (not counting FFV credits that
some manufacturers expect to earn)
from the current baseline versus the MY
2011 final rule baseline (from
manufacturers’ 2008 product plans) for
passenger cars and light trucks. Table
IV.C.1–3 shows the combined averages
of these planned CAFE levels in the
respective baseline fleets. These tables
demonstrate that, while the difference at
the industry level is not so large, there
are significant differences in CAFE at
the manufacturer level between the
current baseline and the MY 2011 final
rule baseline. For example, while Honda
and Hyundai are essentially the same
under both, Toyota and Nissan show
increased combined CAFE levels under
the current baseline (by 2.4 and 0.8 mpg
respectively), while Chrysler, Ford, and
GM show decreased combined CAFE
levels under the current baseline (by
1.1, 1.8, and 1.0 mpg, respectively)
relative to the MY 2011 final rule
baseline.
TABLE IV.C.1–2—CURRENT BASELINE PLANNED CAFE LEVELS IN MY 2011 VERSUS MY 2011 FINAL RULE PLANNED
CAFE LEVELS
[Passenger and nonpassenger]
Current baseline CAFE
levels
MY 2011 planned CAFE
levels
Manufacturer
Nonpassenger
Passenger
Nonpassenger
BMW ................................................................................................................................
Chrysler ............................................................................................................................
Ford ..................................................................................................................................
Subaru .............................................................................................................................
General Motors ................................................................................................................
Honda ..............................................................................................................................
Hyundai ............................................................................................................................
Tata ..................................................................................................................................
Kia 460 ...............................................................................................................................
Mazda 461 .........................................................................................................................
Daimler .............................................................................................................................
Mitsubishi .........................................................................................................................
Nissan ..............................................................................................................................
Porsche ............................................................................................................................
Ferrari 462 .........................................................................................................................
Maserati 463 ......................................................................................................................
Suzuki ..............................................................................................................................
Toyota ..............................................................................................................................
Volkswagen ......................................................................................................................
27.2
28.4
28.2
29.1
28.5
33.8
31.5
24.6
31.7
31.0
27.3
30.0
31.9
26.2
....................
....................
30.5
35.4
28.6
23.1
21.8
20.5
25.6
20.9
25.3
24.3
19.5
23.7
26.7
21.0
23.8
21.5
20.0
....................
....................
23.3
24.8
20.2
27.0
28.2
29.3
28.6
30.3
32.3
31.7
24.7
....................
....................
25.2
29.3
31.3
27.2
16.2
18.2
28.7
33.2
28.5
23.0
23.1
22.5
28.6
21.4
25.2
26.0
23.9
....................
....................
20.6
26.7
21.4
20.0
....................
....................
24.0
22.7
20.1
Total/Average ...........................................................................................................
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Passenger
30.8
22.3
30.4
22.6
458 See
49 U.S.C. 32905 and 32906.
U.S.C. 32902(h).
460 Again, Kia is not listed in the table for the MY
2011 final rule because it was considered as part of
Hyundai for purposes of that analysis (i.e.,
Hyundai-Kia).
459 49
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
461 Mazda is not listed in the table for the MY
2011 final rule because it was considered as part of
Ford for purposes of that analysis.
462 EPA did not include Ferrari in the current
baseline based on the conclusion that including
them would not impact the results, and therefore
PO 00000
Frm 00198
Fmt 4701
Sfmt 4702
Ferrari is not listed in the table for the current
baseline.
463 EPA did not include Maserati in the current
baseline based on the conclusion that including
them would not impact the results, and therefore
Maserati is not listed in the table for the current
baseline.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
TABLE IV.C.1–3—CURRENT BASELINE
PLANNED CAFE LEVELS IN MY
2011 VERSUS MY 2011 FINAL RULE
PLANNED CAFE LEVELS (COMBINED)
Current
baseline
Manufacturer
BMW .................
Chrysler ............
Ford ..................
Subaru ..............
General Motors
Honda ...............
Hyundai .............
Tata ...................
Kia .....................
Mazda ...............
Daimler .............
Mitsubishi ..........
25.6
23.6
24.2
27.5
23.9
30.1
29.9
21.1
29.3
30.2
24.7
29.1
MY 2011
final rule
baseline
26.0
24.7
26.0
28.6
24.9
30.0
30.0
24.4
....................
....................
23.6
29.1
49651
the current baseline and manufacturers’
product plans submitted to NHTSA in
2008 for the MY 2011 final rule. These
tables present average vehicle footprint,
curb weight, and power-to-weight ratios
for each manufacturer represented in
the current baseline and of the seven
MY 2011
Current
Manufacturer
final rule
largest manufacturers represented in the
baseline
baseline
product plan data, and for the overall
Nissan ...............
27.3
26.6 industry. The tables containing product
Porsche .............
23.2
22.0 plan data do not identify manufacturers
Ferrari ............... ....................
16.2 by name, and do not present them in the
Maserati ............ ....................
18.2 same sequence.
Suzuki ...............
28.6
27.8
Tables IV.C.1–4a and 1–4b show that
Toyota ...............
30.0
27.6
the current baseline reflects a slight
Volkswagen ......
26.2
27.1
decrease in overall average passenger
vehicle size relative to the
Total/Average .........
26.7
26.5 manufacturers’ plans. This is a
reflection of the market segment shifts
underlying the sales forecasts of the
Tables IV.C.1–4 through 1–6
current baseline.
summarize other differences between
TABLE IV.C.1–3—CURRENT BASELINE
PLANNED CAFE LEVELS IN MY
2011 VERSUS MY 2011 FINAL RULE
PLANNED CAFE LEVELS (COMBINED)—Continued
TABLE IV.C.1–4a—CURRENT BASELINE AVERAGE MY 2011 VEHICLE FOOTPRINT
[Square Feet]
Manufacturer
PC
LT
Avg.
BMW ........................................................................................................................................................
Chrysler ....................................................................................................................................................
Ford ..........................................................................................................................................................
Subaru .....................................................................................................................................................
General Motors ........................................................................................................................................
Honda ......................................................................................................................................................
Hyundai ....................................................................................................................................................
Tata ..........................................................................................................................................................
Kia ............................................................................................................................................................
Mazda ......................................................................................................................................................
Daimler .....................................................................................................................................................
Mitsubishi .................................................................................................................................................
Nissan ......................................................................................................................................................
Porsche ....................................................................................................................................................
Suzuki ......................................................................................................................................................
Toyota ......................................................................................................................................................
Volkswagen ..............................................................................................................................................
45.4
46.4
46.2
43.1
46.2
44.3
44.7
50.3
45.2
44.3
46.6
43.8
45.2
38.6
41.0
44.0
43.4
49.7
54.0
57.9
46.3
59.6
49.4
48.8
48.0
51.6
46.9
53.3
46.4
55.4
51.0
47.2
51.1
52.6
46.9
51.5
51.3
44.4
53.4
46.2
45.5
48.8
46.7
44.7
49.0
44.1
48.8
43.6
42.3
47.0
45.4
Industry Average ..............................................................................................................................
45.0
54.4
48.8
TABLE IV.C.1–4b—MY 2011 FINAL RULE AVERAGE PLANNED MY 2011 VEHICLE FOOTPRINT
[Square Feet]
PC
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Manufacturer
Manufacturer
Manufacturer
Manufacturer
Manufacturer
Manufacturer
Manufacturer
1
2
3
4
5
6
7
LT
Avg.
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
46.7
46.0
44.9
45.4
45.2
48.5
45.1
58.5
5.4
52.8
55.8
57.5
54.7
49.9
52.8
47.1
48.4
49.3
50.3
52.4
46.4
Industry Average ..............................................................................................................................
45.6
55.1
49.7
460 Again, Kia is not listed in the table for the MY
2011 final rule because it was considered as part of
Hyundai for purposes of that analysis (i.e.,
Hyundai-Kia).
461 Mazda is not listed in the table for the MY
2011 final rule because it was considered as part of
Ford for purposes of that analysis.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
462 EPA did not include Ferrari in the current
baseline based on the conclusion that including
them would not impact the results, and therefore
Ferrari is not listed in the table for the current
baseline.
463 EPA did not include Maserati in the current
baseline based on the conclusion that including
PO 00000
Frm 00199
Fmt 4701
Sfmt 4702
them would not impact the results, and therefore
Maserati is not listed in the table for the current
baseline.
E:\FR\FM\28SEP2.SGM
28SEP2
49652
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
Tables IV.C.1–5a and 1–5b show that
the current baseline reflects a decrease
in overall average vehicle weight
relative to the manufacturers’ plans. As
above, this is most likely a reflection of
the market segment shifts underlying
the sales forecasts of the current
baseline.
TABLE IV.C.1–5a—CURRENT BASELINE AVERAGE MY 2011 VEHICLE CURB WEIGHT
[Pounds]
Manufacturer
PC
LT
Avg.
BMW ........................................................................................................................................................
Chrysler ....................................................................................................................................................
Ford ..........................................................................................................................................................
Subaru .....................................................................................................................................................
General Motors ........................................................................................................................................
Honda ......................................................................................................................................................
Hyundai ....................................................................................................................................................
Tata ..........................................................................................................................................................
Kia ............................................................................................................................................................
Mazda ......................................................................................................................................................
Daimler .....................................................................................................................................................
Mitsubishi .................................................................................................................................................
Nissan ......................................................................................................................................................
Porsche ....................................................................................................................................................
Suzuki ......................................................................................................................................................
Toyota ......................................................................................................................................................
Volkswagen ..............................................................................................................................................
3,535
3,498
3,516
3,155
3,495
3,021
3,135
3,906
3,034
3,236
3,450
3,238
3,242
3,159
2,870
3,112
3,479
4,612
4,506
4,596
3,801
5,030
4,064
4,080
5,198
4,057
3,744
5,123
3,851
4,535
4,907
3,843
4,186
5,673
3,900
4,178
3,985
3,435
4,311
3,401
3,307
4,717
3,284
3,316
4,045
3,312
3,690
3,874
3,080
3,561
3,959
Industry Average ..............................................................................................................................
3,280
4,538
3,786
TABLE IV.C.1–5b—MY 2011 FINAL RULE AVERAGE PLANNED MY 2011 VEHICLE CURB WEIGHT
[Pounds]
PC
Manufacturer
Manufacturer
Manufacturer
Manufacturer
Manufacturer
Manufacturer
Manufacturer
1
2
3
4
5
6
7
LT
Avg.
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
3,197
3,691
3,293
3,254
3,547
3,314
3,345
4,329
4,754
4,038
4,191
5,188
4,641
4,599
3,692
4,363
3,481
3,510
4,401
3,815
3,865
Industry Average ..............................................................................................................................
3,380
4,687
3,935
Tables IV.C.1–6a and IV.C.1–6b show
that the current baseline reflects a
decrease in average performance relative
to that of the manufacturers’ product
plans. This decreased performance is
most likely a reflection of the market
segment shifts underlying the sales
forecasts of the current baseline, that is,
an assumed shift away from higher
performance vehicles.
TABLE IV.C.1–6a—CURRENT BASELINE AVERAGE MY 2011 VEHICLE POWER-TO-WEIGHT RATIO
[hp/lb]
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Manufacturer
PC
BMW ........................................................................................................................................................
Chrysler ....................................................................................................................................................
Ford ..........................................................................................................................................................
Subaru .....................................................................................................................................................
General Motors ........................................................................................................................................
Honda ......................................................................................................................................................
Hyundai ....................................................................................................................................................
Tata ..........................................................................................................................................................
Kia ............................................................................................................................................................
Mazda ......................................................................................................................................................
Daimler .....................................................................................................................................................
Mitsubishi .................................................................................................................................................
Nissan ......................................................................................................................................................
Porsche ....................................................................................................................................................
Suzuki ......................................................................................................................................................
Toyota ......................................................................................................................................................
Volkswagen ..............................................................................................................................................
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00200
Fmt 4701
Sfmt 4702
E:\FR\FM\28SEP2.SGM
0.072
0.055
0.058
0.062
0.056
0.057
0.051
0.077
0.050
0.051
0.066
0.053
0.058
0.105
0.049
0.052
0.058
28SEP2
LT
0.061
0.052
0.053
0.057
0.056
0.054
0.055
0.057
0.056
0.053
0.056
0.056
0.057
0.073
0.062
0.062
0.052
Avg.
0.068
0.053
0.056
0.059
0.056
0.056
0.052
0.064
0.051
0.052
0.062
0.053
0.058
0.092
0.052
0.056
0.056
49653
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
TABLE IV.C.1–6a—CURRENT BASELINE AVERAGE MY 2011 VEHICLE POWER-TO-WEIGHT RATIO—Continued
[hp/lb]
Manufacturer
PC
Industry Average ..............................................................................................................................
LT
0.056
Avg.
0.056
0.056
TABLE IV.C.1–6b—MY 2011 FINAL RULE AVERAGE PLANNED MY 2011 VEHICLE POWER-TO-WEIGHT RATIO
[hp/lb]
PC
Manufacturer
Manufacturer
Manufacturer
Manufacturer
Manufacturer
Manufacturer
Manufacturer
1
2
3
4
5
6
7
LT
Avg.
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
0.065
0.061
0.053
0.060
0.060
0.063
0.053
0.058
0.065
0.059
0.058
0.057
0.065
0.055
0.060
0.062
0.056
0.059
0.059
0.065
0.053
Industry Average ..............................................................................................................................
0.060
0.059
0.060
As discussed above, the agencies’
market forecast for MY 2012–2016 holds
the performance and other
characteristics of individual vehicle
models constant, adjusting the size and
composition of the fleet from one model
year to the next.
Refresh and redesign schedules (for
application in NHTSA’s modeling):
Expected model years in which each
vehicle model will be redesigned or
freshened constitute another important
aspect of NHTSA’s market forecast. As
discussed in Section IV.C.2.c below,
NHTSA’s analysis supporting the
current rulemaking times the addition of
nearly all technologies to coincide with
either a vehicle redesign or a vehicle
freshening. Product plans submitted to
NHTSA preceding the MY 2011 final
rule contained manufacturers’ estimates
of vehicle redesign and freshening
schedules and NHTSA’s estimates of the
timing of the five-year redesign cycle
and the two- to three-year refresh cycle
were made with reference to those
plans. In the current baseline, in
contrast, estimates of the timing of the
refresh and redesign cycles were based
on historical dates—i.e., counting
forward from known redesigns
occurring in or prior to MY 2008 for
each vehicle in the fleet and assigning
refresh and redesign years accordingly.
After applying these estimates, the
shares of manufacturers’ passenger car
and light truck estimated to be
redesigned in MY 2011 were as
summarized below for the current
baseline and the MY 2011 final rule.
Table IV.C.1–7 below shows the
percentages of each manufacturer’s
fleets expected to be redesigned in MY
2011 for the current baseline. Table
IV.C.1–8 presents corresponding
estimates from the market forecast used
by NHTSA in the analysis supporting
the MY 2011 final rule (again, to protect
confidential information, manufacturers
are not identified by name).
TABLE IV.C.1–7—CURRENT BASELINE, SHARE OF FLEET REDESIGNED IN MY 2011
Manufacturer
PC
LT
Avg.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
BMW ........................................................................................................................................................
Chrysler ....................................................................................................................................................
Ford ..........................................................................................................................................................
Subaru .....................................................................................................................................................
General Motors ........................................................................................................................................
Honda ......................................................................................................................................................
Hyundai ....................................................................................................................................................
Tata ..........................................................................................................................................................
Kia ............................................................................................................................................................
Mazda ......................................................................................................................................................
Daimler .....................................................................................................................................................
Mitsubishi .................................................................................................................................................
Nissan ......................................................................................................................................................
Porsche ....................................................................................................................................................
Suzuki ......................................................................................................................................................
Toyota ......................................................................................................................................................
Volkswagen ..............................................................................................................................................
32%
0%
12%
0%
20%
31%
20%
28%
35%
0%
0%
0%
4%
0%
8%
4%
23%
40%
11%
7%
51%
2%
33%
0%
100%
87%
0%
0%
56%
18%
100%
21%
24%
0%
34%
8%
10%
22%
11%
32%
16%
73%
48%
0%
0%
7%
9%
41%
11%
12%
18%
Industry Average ..............................................................................................................................
15%
17%
15%
TABLE IV.C.1–8—MY 2011 FINAL RULE, SHARE OF FLEET REDESIGNED IN MY 2011
PC
(percent)
Manufacturer 1 .........................................................................................................................................
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00201
Fmt 4701
Sfmt 4702
E:\FR\FM\28SEP2.SGM
19
28SEP2
LT
(percent)
Avg.
(percent)
0
11
49654
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
TABLE IV.C.1–8—MY 2011 FINAL RULE, SHARE OF FLEET REDESIGNED IN MY 2011—Continued
PC
(percent)
Manufacturer
Manufacturer
Manufacturer
Manufacturer
Manufacturer
Manufacturer
2
3
4
5
6
7
LT
(percent)
Avg.
(percent)
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
34
5
7
19
34
27
27
0
0
0
28
28
29
3
5
11
33
28
Overall ..............................................................................................................................................
20
9
15
We continue, therefore, to estimate
that manufacturers’ redesigns will not
be uniformly distributed across model
years. This is in keeping with standard
industry practices, and reflects what
manufacturers actually do—NHTSA has
observed that manufacturers in fact do
redesign more vehicles in some years
than in others. NHTSA staff have
closely examined manufacturers’
planned redesign schedules, contacting
some manufacturers for clarification of
some plans, and confirmed that these
plans remain unevenly distributed over
time. For example, although Table 8
shows that NHTSA expects Company 2
to redesign 34 percent of its passenger
car models in MY 2011, current
information indicates that this company
will then redesign only (a different) 10
percent of its passenger cars in MY
2012. Similarly, although Table 8 shows
that NHTSA expects four of the largest
seven light truck manufacturers to
redesign virtually no light truck models
in MY 2011, current information also
indicates that these four manufacturers
will redesign 21–49 percent of their
light trucks in MY 2012.
e. How Does Manufacturer Product Plan
Data Factor Into the Baseline Used in
This Proposal?
As discussed in Section II.B.4 above,
while the agencies received updated
product plans in Spring 2009 in
response to NHTSA’s request, the
baseline data used in this proposal is
not informed by these product plans,
because they contain confidential
business information the agencies are
legally required to protect from
disclosure, and because the agencies
have concluded that, for purposes of
this NPRM, a transparent baseline is
preferable.
However, as also discussed above,
NHTSA has conducted a separate
analysis that does make use of these
product plans, contained in NHTSA’s
PRIA. NHTSA performed this separate
analysis for purposes of comparison
only. NHTSA used the publicly
available baseline for all analysis related
to the development and evaluation of
the proposed new CAFE standards.
2. How Were the Technology Inputs
Developed?
As discussed above in Section II.E, for
developing the technology inputs for the
MY 2012–2016 CAFE and GHG
standards, the agencies primarily began
with the technology inputs used in the
MY 2011 CAFE final rule and in the July
2008 EPA ANPRM, and then reviewed,
as requested by President Obama in his
January 26 memorandum, the
technology assumptions that NHTSA
used in setting the MY 2011 standards
and the comments that NHTSA received
in response to its May 2008 Notice of
Proposed Rulemaking. In addition, the
agencies supplemented their review
with updated information from more
current literature, new product plans
and from EPA certification testing. More
detail is available regarding how the
agencies developed the technology
inputs for this NPRM above in Section
II.E, in Chapter 3 of the Draft Joint TSD,
and in Section V of NHTSA’s PRIA.
a. What Technologies Does NHTSA
Consider?
Section II.E.1 above describes the
fuel-saving technologies considered by
the agencies that manufacturers could
use to improve the fuel economy of their
vehicles during MYs 2012–2016. The
majority of the technologies described
in this section are readily available, well
known, and could be incorporated into
vehicles once production decisions are
made. As discussed, the technologies
considered fall into five broad
categories: Engine technologies,
transmission technologies, vehicle
technologies, electrification/accessory
technologies, and hybrid technologies.
Table IV.C.2–1 below lists all the
technologies considered and provides
the abbreviations used for them in the
Volpe model,464 as well as their year of
availability, which for purposes of
NHTSA’s analysis means the first model
year in the rulemaking period that the
Volpe model is allowed to apply a
technology to a manufacturer’s fleet.465
Year of availability recognizes that
technologies must achieve a level of
technical viability before they can be
implemented in the Volpe model, and
are thus a means of constraining
technology use until such time as it is
considered to be technologically
feasible. For a more detailed description
of each technology and their costs and
effectiveness, we refer the reader to
Chapter 3 of the joint TSD and Section
V of NHTSA’s PRIA.
TABLE IV.C.2–1—LIST OF TECHNOLOGIES IN NHTSA’S ANALYSIS
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Technology
Model abbreviation
Low Friction Lubricants ................................................................................................
Engine Friction Reduction ............................................................................................
VVT—Coupled Cam Phasing (CCP) on SOHC ...........................................................
Discrete Variable Valve Lift (DVVL) on SOHC ............................................................
Cylinder Deactivation on SOHC ...................................................................................
LUB ...........................................................
EFR ...........................................................
CCPS ........................................................
DVVLS ......................................................
DEACS ......................................................
464 The abbreviations are used in this section both
for brevity and for the reader’s reference if they
wish to refer to the expanded decision trees and the
model input and output sheets, which are available
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
in Docket No. NHTSA–2009–0059 and on NHTSA’s
Web site.
PO 00000
Frm 00202
Fmt 4701
Sfmt 4702
Year available
2011
2011
2011
2011
2011
465 A date of 2011 means the technology can be
applied in all model years, while a date of 2014
means the technology can only be applied in model
years 2014 through 2016.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
49655
TABLE IV.C.2–1—LIST OF TECHNOLOGIES IN NHTSA’S ANALYSIS—Continued
Model abbreviation
VVT—Intake Cam Phasing (ICP) .................................................................................
VVT—Dual Cam Phasing (DCP) .................................................................................
Discrete Variable Valve Lift (DVVL) on DOHC ............................................................
Continuously Variable Valve Lift (CVVL) .....................................................................
Cylinder Deactivation on DOHC ..................................................................................
Cylinder Deactivation on OHV .....................................................................................
VVT—Coupled Cam Phasing (CCP) on OHV .............................................................
Discrete Variable Valve Lift (DVVL) on OHV ...............................................................
Conversion to DOHC with DCP ...................................................................................
Stoichiometric Gasoline Direct Injection (GDI) ............................................................
Combustion Restart ......................................................................................................
Turbocharging and Downsizing ....................................................................................
Exhaust Gas Recirculation (EGR) Boost .....................................................................
Conversion to Diesel following CBRST .......................................................................
Conversion to Diesel following TRBDS .......................................................................
6-Speed Manual/Improved Internals ............................................................................
Improved Auto. Trans. Controls/Externals ...................................................................
Continuously Variable Transmission ............................................................................
6/7/8-Speed Auto. Trans with Improved Internals .......................................................
Dual Clutch or Automated Manual Transmission ........................................................
Electric Power Steering ................................................................................................
Improved Accessories ..................................................................................................
12V Micro-Hybrid ..........................................................................................................
Belt Integrated Starter Generator .................................................................................
Crank Integrated Starter Generator .............................................................................
Power Split Hybrid ........................................................................................................
2-Mode Hybrid ..............................................................................................................
Plug-in Hybrid ...............................................................................................................
Mass Reduction 1 (1.5%) .............................................................................................
Mass Reduction 2 (3.5%–8.5%) ..................................................................................
Low Rolling Resistance Tires .......................................................................................
Low Drag Brakes ..........................................................................................................
Secondary Axle Disconnect 4WD ................................................................................
Aero Drag Reduction ....................................................................................................
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Technology
ICP ............................................................
DCP ..........................................................
DVVLD ......................................................
CVVL .........................................................
DEADD .....................................................
DEACO .....................................................
CCPO ........................................................
DVVLO ......................................................
CDOHC .....................................................
SGDI .........................................................
CBRST ......................................................
TRBDS ......................................................
EGRB ........................................................
DSLC ........................................................
DSLT .........................................................
6MAN ........................................................
IATC ..........................................................
CVT ...........................................................
NAUTO .....................................................
DCTAM .....................................................
EPS ...........................................................
IACC .........................................................
MHEV ........................................................
BISG .........................................................
CISG .........................................................
PSHEV ......................................................
2MHEV ......................................................
PHEV ........................................................
MS1 ...........................................................
MS2 ...........................................................
ROLL .........................................................
LDB ...........................................................
SAX ...........................................................
AERO ........................................................
For purposes of this NPRM and as
discussed in greater detail in the joint
TSD, NHTSA and EPA carefully
reviewed the list of technologies used in
the agency’s analysis for the MY 2011
final rule. Given the relatively short
amount of time, from a technologydevelopment perspective, that has
elapsed since March 2009 and this
NPRM, NHTSA and EPA concluded that
the considerable majority of
technologies were correctly defined and
continued to be appropriate for use in
the analysis supporting the proposed
standards. However, some refinements
were made as discussed below.
Specific to its modeling, NHTSA has
revised eight of the technologies used in
the current analysis from those
considered in the MY 2011 final rule.
Specifically, two technologies which
were previously unavailable in the MY
2011 time frame are now available (in
the extended MY 2012–2016 period);
one technology has been combined with
another; one is newly introduced; three
have revised names and/or definitions;
and one has been deleted entirely.
These changes are discussed further
below, and NHTSA seeks comment on
both these changes and the validation of
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
the unchanged technology assumptions
and estimates.
Availability: In the MY 2011 final
rule, two of the engine technologies—
EGR boost and combustion restart—
were unavailable because they were not
considered technologically feasible until
beyond that rulemaking time frame.
While both were described and
discussed in the MY 2011 final rule,
neither was applied in the modeling
process that supported those
standards.466 In this analysis, EGR boost
becomes available in MY 2013, and
combustion restart in MY 2014, so both
are being applied by the Volpe model,
as needed, in this analysis.
Merging of technologies: In the MY
2011 final rule, higher voltage and
improved alternator (HVIA) was used to
represent changes in the design of the
alternator, effectively optimizing it for
higher efficiency (instead of for low cost
as is typically done). For purposes of
466 As an additional note, since combustion
restart was unavailable in the MY 2011 time frame,
the technology titled diesel following combustion
restart (DSLC), which as the name indicates was
only applied after combustion restart, was also
unavailable. Accordingly, DSLC, which was
described and discussed in the MY 2011 final rule,
is now available in the current analysis.
PO 00000
Frm 00203
Fmt 4701
Sfmt 4702
Year available
2011
2011
2011
2011
2011
2011
2011
2011
2011
2011
2014
2011
2013
2011
2011
2011
2011
2011
2011
2011
2011
2011
2011
2011
2011
2011
2011
2011
2011
2014
2011
2011
2011
2011
this analysis, the HVIA technology is no
longer represented individually, but
instead has been incorporated into a
new-to-this-analysis technology called
belt integrated starter generator, or
BISG, as discussed next.
New technology: In the MY 2011 final
rule, two levels of mild hybrid
technology were defined: A 12 volt
micro-hybrid (MHEV) system, which
utilized a belt-driven starter generator
operating at 12 volts, and the more
capable integrated starter generator
technology (ISG) operating at higher
voltages (100 volts). ISG envisioned
both belt and crank configured starter
generator systems. In the current
proposal, and in an effort to offer a
broader spectrum of more diversified
mild hybrid technologies for the
modeling process to choose from,
NHTSA has added the BISG technology
to the electrification decision tree, and
redefined the ISG technology to be a
crank mounted version of ISG,
accordingly renamed to CISG.
The BISG technology is a belt-coupled
system like the 12-volt MHEV, but it
operates at a higher voltage (e.g., 42
volts) and thus can make use of
regenerative braking, as well as
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49656
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
potentially adding some limited motive
power. Since BISG is a higher voltage
system, optimization of the alternator
occurs as part of the BISG technology
application; hence the HVIA technology
is no longer needed as a separate
technology. Additionally, the CISG
technology is now defined as a crank
mounted system that operates at higher
voltages (100 volts) than BISG, yet at
lower voltage than the strong hybrids
(300 volts) that make greater use of
regenerative braking and provide greater
motive power capability. Thus, three
levels of mild hybrid technology exist in
the current proposal, as opposed to the
two levels offered in the MY 2011 final
rule.
Revisions and Deletions: The Mass
Reduction/Material Substitution
technologies have been revised for the
current proposal. In the MY 2011 final
rule, the Volpe model used three levels
of material substitution technologies,
referred to as MS1, MS2, and MS5,
which were progressively applied to
vehicles with curb weights in excess of
5,000 pounds (2,268 kg) so as to reduce
weight by up to a 5 percent maximum.
In keeping with the agency’s desire to
limit potential negative impacts to
safety performance as a result of vehicle
weight reduction, material substitution
was not applied to vehicles with curb
weights below 5,000 pounds. In
contrast, in the current analysis, and in
keeping with some manufacturers’
stated plans to decrease overall fleet
weights regardless of subclass or curb
weight, NHTSA now defines two Mass
Reduction/Material Substitution
technologies as follows:
The Mass Reduction 1.5 percent
(MS1) represents a 1.5 percent weight
decrease through material substitution
applicable to all vehicle subclasses,
regardless of curb weight, that can be
applied throughout the rulemaking
period (and at refresh or redesign cycle
times). This technology is similar to the
MS1 technology used in the prior
analysis in terms of the scale of the
weight reduction (1 versus 1.5 percent),
the methods and techniques
manufacturers are anticipated to use in
achieving the reductions, and when in
the product cycle the model applies it
(at refresh or redesign).
A second technology, Mass Reduction
3.5–8.5 percent (MS2), has also been
defined. The MS2 technology is
unavailable until MY 2014, and can
only be applied by the Volpe model at
a product redesign cycle. MS2 assumes
a 3.5 to 8.5 percent weight reduction
dependent on subclass (with the
smaller/lighter subclasses receiving the
lowest amounts of reduction, 3.5
percent, and the larger/heavier vehicles
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
the 8.5 percent) via the types of more
intrusive and complex mass reduction
associated with a complete vehicle
redesign.467 MS2 is cumulative to MS1,
as it is only applied after MS1, therefore
the maximum weight reduction that can
occur for smaller subclass vehicles is 5
percent, while large cars, truck, and
SUVs could experience 10 percent
weight reductions. Restricting weight
reduction on smaller vehicle to lower
limits, and vice versa for larger vehicles,
is intended to mitigate or minimize the
potential safety consequences from the
modeled weight reductions. Postponing
the availability of the technology until
MY 2014 recognizes the lead time
required to implement platform
redesigns that would be necessary for
these levels of weight reduction and
mass reduction. NHTSA seeks comment
on the agency’s use of a two-step
process, with the higher applications of
MS in MYs 2014 and beyond, and the
process of applying smaller mass
reductions to lighter vehicles and higher
reductions to heavier vehicles for the
purpose of maintaining safety
neutrality.
The MS5 technology used in the MY
2011 final rule is deleted.
Additionally, for purposes of this
NPRM, NHTSA has revised the
applicability of the diesel technologies
to restrict it to vehicles with engines of
6 cylinders or more. NHTSA seeks
comment on its decision not to apply
diesel technologies to vehicles with 4cylinder engines. NHTSA also seeks
comment on the revised costing
methodology for diesel technologies.
Besides these, all other technologies
considered in this analysis were also
considered in the analysis for the MY
2011 final rule, and although the costs
and effectiveness estimates may have
been revised as discussed further below,
the other technologies remain otherwise
unchanged for the purposes of this
analysis in terms of their definition,
functionality, and configuration. Thus,
with this catalog of technologies as a
starting point, NHTSA could then
review and consider effectiveness and
cost estimates for each technology, and,
through the Volpe model analysis, how
a manufacturer might feasibly apply
these technologies to their MY 2012–
2016 vehicles in order to achieve
compliance with the proposed
standards.
b. How Did NHTSA Determine the Costs
and Effectiveness of Each of These
Technologies for Use in Its Modeling
Analysis?
Building on NHTSA’s estimates
developed for the MY 2011 CAFE final
rule and EPA’s Advanced Notice of
Proposed Rulemaking, which relied on
the 2008 Staff Technical Report,468 the
agencies took a fresh look at technology
cost and effectiveness values for
purposes of the joint proposal under the
National Program. This joint work is
reflected in Chapter 3 of the Draft Joint
TSD and in Section II of this preamble,
which is summarized below. For more
detailed information on the
effectiveness and cost of fuel-saving
technologies, please refer to Chapter 3 of
the joint TSD and Section V of NHTSA’s
PRIA.
Generally speaking, while NHTSA
and EPA found that much of the cost
information used in NHTSA’s MY 2011
final rule and EPA’s 2008 staff report
was consistent to a great extent, the
agencies, in reconsidering information
from many sources, revised several
component costs of several major
technologies: turbocharging/
downsizing, mild and strong hybrids,
diesels, SGDI, and Valve Train Lift
Technologies. These are discussed at
length in the joint TSD and in NHTSA’s
PRIA. Additionally, most effectiveness
estimates used in both the MY 2011
final rule and the 2008 EPA staff report
were determined to be accurate and
were carried forward without significant
change into this rulemaking. When
NHTSA and EPA’s estimates for
effectiveness diverged slightly due to
differences in how agencies apply
technologies to vehicles in their
respective models, we report the ranges
for the effectiveness values used in each
model. For much more information on
the costs and effectiveness of individual
technologies, we refer the reader to
Chapter 3 of the joint TSD and Section
V of NHTSA’s PRIA.
NHTSA notes that, in developing
technology cost and effectiveness
estimates, the agencies have made every
effort to hold constant aspects of vehicle
performance and utility typically valued
by consumers, such as horsepower,
carrying capacity, and towing and
hauling capacity. For example, NHTSA
includes in its analysis technology cost
and effectiveness estimates that are
specific to performance passenger cars
(i.e., sports cars), as compared to nonperformance passenger cars. When
467 Examples of such weight savings associated
with new platform introductions have been
provided in confidential product plan information
provided by some manufacturers.
468 EPA Staff Technical Report: Cost and
Effectiveness Estimates of Technologies Used to
Reduce Light-Duty Vehicle Carbon Dioxide
Emissions. EPA420–R–08–008, March 2008.
PO 00000
Frm 00204
Fmt 4701
Sfmt 4702
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
commenting on the agencies’ technology
cost and effectiveness estimates,
NHTSA urges commenters either to
place any related comments within the
same context, or explain any
assumptions or estimates regarding
increases or decreases in vehicle
performance or utility. Additionally,
NHTSA seeks comment on the extent to
which commenters believe that the
agencies have been successful in
holding constant these elements of
vehicle performance and utility in
developing the technology cost and
effectiveness estimates.
Additionally, NHTSA notes that the
technology costs included in this NPRM
take into account only those associated
with the initial build of the vehicle. The
agencies seek comments on the
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
additional lifetime costs, if any,
associated with the implementation of
advanced technologies, including
warranty, maintenance and replacement
costs, such as the replacement costs for
low rolling resistance tires, low friction
lubricants, and hybrid batteries, and
maintenance costs for diesel
aftertreatment components.
While the agencies believe that the
ideal estimates for the final rule would
be based on tear down studies or BOM
approach and subjected to a transparent
peer-reviewed process, NHTSA and
EPA are confident that the thorough
review conducted, led to the best
available conclusion regarding
technology costs and effectiveness
estimates for the current rulemaking and
resulted in excellent consistency
PO 00000
Frm 00205
Fmt 4701
Sfmt 4702
49657
between the agencies’ respective
analyses for developing the CAFE and
CO2 standards.
NHTSA seeks comment on the
incremental cost and effectiveness
estimates employed by the agency in the
Volpe modeling analysis for this NPRM,
examples of which are provided in table
form below. These example Tables
present effectiveness and cost estimates
which are incremental in nature,
according to the decision trees used in
the Volpe modeling analysis. Thus, the
effectiveness and cost estimates are not
absolute to a single baseline vehicle, but
are incremental to the technology that
precedes it.
BILLING CODE 6560–50–C
E:\FR\FM\28SEP2.SGM
28SEP2
VerDate Nov<24>2008
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00206
Fmt 4701
Sfmt 4725
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.029</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49658
BILLING CODE 6560–50–C
c. How Does NHTSA Use These
Assumptions in Its Modeling Analysis?
NHTSA’s analysis, using the Volpe
model, relies on several inputs and data
files to conduct the compliance
analysis, as discussed further below and
in Section V of the PRIA. For the
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
purposes of applying technologies, the
Volpe model primarily uses three data
files, one that contains data on the
vehicles expected to be manufactured in
the model years covered by the
rulemaking, one that identifies the
appropriate stage within the vehicle’s
life-cycle for the technology to be
applied, and one that contains data/
PO 00000
Frm 00207
Fmt 4701
Sfmt 4702
49659
parameters regarding the available
technologies the model can apply.
These inputs are discussed below.
As discussed above, the Volpe model
begins with an initial state of the
domestic vehicle market, which in this
case is the market for passenger cars and
light trucks to be sold during the period
covered by the proposed standards. The
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.030</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
49660
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
vehicle market is defined on a modelby-model, engine-by-engine, and
transmission-by-transmission basis,
such that each defined vehicle model
refers to a separately defined engine and
a separately defined transmission.
For the current proposal, which
covers MYs 2012–2016, the light vehicle
(passenger car and light truck) market
forecast was developed jointly by
NHTSA and EPA staff using MY 2008
CAFE compliance data. The MY 2008
compliance data includes about 1,100
vehicle models, about 400 specific
engines, and about 200 specific
transmissions, which is a somewhat
lower level of detail in the
representation of the vehicle market
than that used by NHTSA in recent
CAFE analyses.469 However, within the
limitations of information that can be
made available to the public, it provides
the foundation for a realistic analysis of
manufacturer-specific costs and the
analysis of attribute-based CAFE
standards, and is much greater than the
level of detail used by many other
models and analyses relevant to light
vehicle fuel economy.470
In addition to containing data about
each vehicle, engine, and transmission,
this file contains information for each
technology under consideration as it
pertains to the specific vehicle (whether
the vehicle is equipped with it or not),
the model year the vehicle is
undergoing redesign, and information
about the vehicle’s subclass for
purposes of technology application. In
essence, the model considers whether it
is appropriate to apply a technology to
a vehicle.
Is a vehicle already equipped, or can
it not be equipped, with a particular
technology?
The market forecast file provides
NHTSA the ability to identify, on a
technology by technology basis, which
technologies may already be present
(manufactured) on a particular vehicle,
engine, or transmission, or which
technologies are not applicable (due to
technical considerations) to a particular
vehicle, engine, or transmission. These
469 The market file for the MY 2011 final rule,
which included data for MYs 2011–2015, had 5500
records, or rows, about 5 times what we are using
in this analysis of the MY 2008 certification data.
However, both market files had the same number
of fields, or rows.
470 Because CAFE standards apply to the average
performance of each manufacturer’s fleet of cars
and light trucks, the impact of potential standards
on individual manufacturers cannot be credibly
estimated without analysis of fleets manufacturers
can be expected to produce in the future.
Furthermore, because required CAFE levels under
an attribute-based CAFE standard depend on
manufacturers’ fleet composition, the stringency of
an attribute-based standard cannot be predicted
without performing analysis at this level of detail.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
identifications are made on a model-bymodel, engine-by-engine, and
transmission-by-transmission basis. For
example, if the market forecast file
indicates that Manufacturer X’s Vehicle
Y is manufactured with Technology Z,
then for this vehicle Technology Z will
be shown as used. Additionally, NHTSA
has determined that some technologies
are only suitable or unsuitable when
certain vehicle, engine, or transmission
conditions exist. For example,
secondary axle disconnect is only
suitable for 4WD vehicles, and cylinder
deactivation is unsuitable for any engine
with fewer than 6 cylinders, while CVTs
can only be applied to unibody vehicles.
Similarly, comments received to the
2008 NPRM indicated that cylinder
deactivation could not be applied to
vehicles equipped with manual
transmissions, due primarily to
driveability and NVH concerns. The
Volpe model employs ‘‘engineering
constraints’’ to address issues like these,
which are a programmatic method of
controlling technology application that
is independent of other constraints.
Thus, the market forecast file would
indicate that the technology in question
should not be applied to the particular
vehicle/engine/transmission (i.e., is
unavailable). Since multiple vehicle
models may be equipped with an engine
or transmission, this may affect multiple
models. In using this aspect of the
market forecast file, NHTSA ensures the
Volpe model only applies technologies
in an appropriate manner, since before
any application of a technology can
occur, the model checks the market
forecast to see if it is either already
present or unavailable.
NHTSA seeks comment on whether
this approach is reasonable and ensures
that technologies are applied in an
appropriate manner.
Is a vehicle being redesigned or
refreshed?
Manufacturers typically plan vehicle
changes to coincide with certain stages
of a vehicle’s life cycle that are
appropriate for the change, or in this
case the technology being applied. In
the automobile industry there are two
terms that describe when technology
changes to vehicles occur: redesign and
refresh (i.e., freshening). Vehicle
redesign usually refers to significant
changes to a vehicle’s appearance,
shape, dimensions, and powertrain.
Redesign is traditionally associated with
the introduction of ‘‘new’’ vehicles into
the market, often characterized as the
‘‘next generation’’ of a vehicle, or a new
platform. Vehicle refresh usually refers
to less extensive vehicle modifications,
such as minor changes to a vehicle’s
appearance, a moderate upgrade to a
PO 00000
Frm 00208
Fmt 4701
Sfmt 4702
powertrain system, or small changes to
the vehicle’s feature or safety equipment
content. Refresh is traditionally
associated with mid-cycle cosmetic
changes to a vehicle, within its current
generation, to make it appear ‘‘fresh.’’
Vehicle refresh generally occurs no
earlier than two years after a vehicle
redesign, or at least two years before a
scheduled redesign. For the majority of
technologies discussed today,
manufacturers will only be able to apply
them at a refresh or redesign, because
their application would be significant
enough to involve some level of
engineering, testing, and calibration
work.471
Some technologies (e.g., those that
require significant revision) are nearly
always applied only when the vehicle is
expected to be redesigned, like
turbocharging and engine downsizing,
or conversion to diesel or hybridization.
Other technologies, like cylinder
deactivation, electric power steering,
and aerodynamic drag reduction can be
applied either when the vehicle is
expected to be refreshed or when it is
expected to be redesigned, while a few
others, like low friction lubricants, can
be applied at any time, regardless of
whether a refresh or redesign event is
conducted. Accordingly, the model will
only apply a technology at the particular
point deemed suitable. These
constraints are intended to produce
results consistent with manufacturers’
technology application practices. For
each technology under consideration,
NHTSA stipulates whether it can be
applied any time, at refresh/redesign, or
only at redesign. The data forms another
input to the Volpe model. NHTSA
develops redesign and refresh schedules
for each of a manufacturer’s vehicles
included in the analysis, essentially
based on the last known redesign year
for each vehicle and projected forward
in a 5-year redesign and a 2–3 year
refresh cycle, and this data is also stored
in the market forecast file. We note that
this approach is different than NHTSA
has employed previously for
determining redesign and refresh
schedules, where NHTSA included the
redesign and refresh dates in the market
forecast file as provided by
manufacturers in confidential product
plans. The new approach is necessary
471 For example, applying material substitution
through weight reduction, or even something as
simple as low rolling-resistance tires, to a vehicle
will likely require some level of validation and
testing to ensure that the vehicle may continue to
be certified as compliant with NHTSA’s Federal
Motor Vehicle Safety Standards (FMVSS). Weight
reduction might affect a vehicle’s crashworthiness;
low rolling-resistance tires might change vehicle’s
braking characteristics or how it performs in crash
avoidance tests.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
given the nature of the new baseline
which as a single year of data does not
contain its own refresh and redesign
cycle cues for future model years, and
to ensure the complete transparency of
the agency’s analysis. Vehicle redesign/
refresh assumptions are discussed in
more detail in Section V of the PRIA
and in Chapter 3 of the TSD. NHTSA
seeks comment on its application for
this proposal of refresh and redesign
schedules to manufacturers’ vehicles
counting from the last known redesign
in or prior to the baseline fleet, as
compared to its approach in the MY
2011 final rule.
Once the model has concluded that a
technology should be applied to a
vehicle, the model must evaluate which
technology should be applied. This will
depend on the vehicle subclass to which
the vehicle is assigned; what
technologies have already been applied
to the vehicle (i.e., where in the
‘‘decision tree’’ the vehicle is); when the
technology is first available (i.e., year of
availability); whether the technology is
still available (i.e., ‘‘phase-in caps’’); and
the costs and effectiveness of the
technologies being considered.
Technology costs may be reduced, in
turn, by learning effects, while
technology effectiveness may be
increased or reduced by synergistic
effects between technologies. In the
technology input file, NHTSA has
developed a separate set of technology
data variables for each of the twelve
vehicle subclasses. Each set of variables
is referred to as an ‘‘input sheet,’’ so for
example, the subcompact input sheet
holds the technology data that is
appropriate for the subcompact
subclass. Each input sheet contains a
list of technologies available for
members of the particular vehicle
subclass. The following items are
provided for each technology: the name
of the technology, its abbreviation, the
decision tree with which it is
associated, the (first) year in which it is
available, the upper and lower cost and
effectiveness (fuel consumption
reduction) estimates, the learning type
and rate, the cost basis, its applicability,
and the phase-in values.
To which vehicle subclass is the
vehicle assigned?
As part of its consideration of
technological feasibility, the agency
evaluates whether each technology
could be implemented on all types and
sizes of vehicles, and whether some
differentiation is necessary in applying
certain technologies to certain types and
sizes of vehicles, and with respect to the
cost incurred and fuel consumption and
CO2 emissions reduction achieved when
doing so. The 2002 NAS Report
differentiated technology application
using ten vehicle ‘‘classes’’ (4 cars
classes and 6 truck classes),472 but did
not determine how cost and
effectiveness values differ from class to
class. NAS’s purpose in separating
vehicles into these classes was to create
groups of ‘‘like’’ vehicles, i.e., vehicles
similar in size, powertrain
configuration, weight, and consumer
use, and for which similar technologies
are applicable. NHTSA similarly
differentiates vehicles by ‘‘subclass’’ for
the purpose of applying technologies to
vehicles and assessing their incremental
costs and effectiveness. NHTSA assigns
each vehicle manufactured in the
rulemaking period to one of 12
subclasses: for passenger cars,
Subcompact, Subcompact Performance,
Compact, Compact Performance,
Midsize, Midsize Performance, Large,
and Large Performance; and for light
trucks, Small SUV/Pickup/Van, Midsize
49661
SUV/Pickup/Van, Large SUV/Pickup/
Van, and Minivan.
For this NPRM as for the MY 2011
final rule, NHTSA divides the vehicle
fleet into subclasses based on model
inputs, and applies subclass-specific
estimates, also from model inputs, of the
applicability, cost, and effectiveness of
each fuel-saving technology. Therefore,
the model’s estimates of the cost to
improve the fuel economy of each
vehicle model depend upon the
subclass to which the vehicle model is
assigned.
Each vehicle’s subclass is stored in
the market forecast file. When
conducting a compliance analysis, if the
Volpe model seeks to apply technology
to a particular vehicle, it checks the
market forecast to see if the technology
is available and if the refresh/redesign
criteria are met. If these conditions are
satisfied, the model determines the
vehicle’s subclass from the market data
file, which it then uses to reference
another input called the technology
input file. NHTSA reviewed its
methodology for dividing vehicles into
subclasses for purposes of technology
application that it used in the MY 2011
final rule, and concluded that the same
methodology would be appropriate for
this NPRM for MYs 2012–2016, but the
agency invites comments on the method
of assigning vehicles to subclasses for
the purposes of technology application
in the CAFE model, and on the issue of
technology-application subclasses
generally. The subclasses and the
methodology for dividing vehicles
among them are discussed in more
detail in Section V of the PRIA and in
Chapter 3 of the TSD.
For the reader’s reference, the
subclasses and example vehicles from
the market forecast file are provided in
the tables below.
PASSENGER CAR SUBCLASSES EXAMPLE (MY 2008) VEHICLES
Class
Example vehicles
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Subcompact ..............................................................................................
Subcompact Performance ........................................................................
Compact ...................................................................................................
Compact Performance ..............................................................................
Midsize ......................................................................................................
Midsize Performance ................................................................................
Large .........................................................................................................
Large Performance ...................................................................................
Chevy Aveo, Honda Civic.
Mazda Miata, Saturn Sky.
Chevy Cobalt, Nissan Sentra and Altima.
Audi S4 Quattro, Mazda RX8.
Chevy Camaro (V6), Toyota Camry, Honda Accord, Hyundai Azera.
Chevy Corvette, Ford Mustang (V8), Nissan G37 Coupe.
Audi A8, Cadillac CTS and DTS.
Bentley Arnage, Daimler CL600.
LIGHT TRUCK SUBCLASSES EXAMPLE (MY 2008) VEHICLES
Class
Example vehicles
Minivans ....................................................................................................
472 The NAS classes included subcompact cars,
compact cars, midsize cars, large cars, small SUVs,
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
Dodge Caravan, Toyota Sienna.
midsize SUVs, large SUVs, small pickups, large
pickups, and minivans.
PO 00000
Frm 00209
Fmt 4701
Sfmt 4702
E:\FR\FM\28SEP2.SGM
28SEP2
49662
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
LIGHT TRUCK SUBCLASSES EXAMPLE (MY 2008) VEHICLES—Continued
Class
Example vehicles
Small SUV/Pickup/Van .............................................................................
Midsize SUV/Pickup/Van ..........................................................................
Large SUV/Pickup/Van .............................................................................
Ford Escape & Ranger, Nissan Rogue.
Chevy Colorado, Jeep Wrangler 4-door, Volvo XC70, Toyota Tacoma.
Chevy Silverado, Ford Econoline, Toyota Sequoia.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
What technologies have already been
applied to the vehicle (i.e., where in the
‘‘decision trees’’ is it)?
NHTSA’s methodology for technology
application analysis developed out of
the approach taken by NAS in the 2002
Report, and evaluates the application of
individual technologies and their
incremental costs and effectiveness.
Incremental costs and effectiveness of
individual technologies are relative to
the prior technology state, which means
that it is crucial to understand what
technologies are already present on a
vehicle in order to determine correct
incremental cost and effectiveness
values. The benefit of the incremental
approach is transparency in accounting,
insofar as when individual technologies
are added incrementally to individual
vehicles, it is clear and easy to
determine how costs and effectiveness
adds up as technology levels increase.
To keep track of incremental costs
and effectiveness and to know which
technology to apply and in which order,
the Volpe model’s architecture uses a
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
logical sequence, which NHTSA refers
to as ‘‘decision trees,’’ for applying fuel
economy-improving technologies to
individual vehicles. In the MY 2011
final rule, NHTSA worked with Ricardo
to modify previously-employed decision
trees in order to allow for a much more
accurate application of technologies to
vehicles. For purposes of the NPRM,
NHTSA reviewed the technology
sequencing architecture and updated, as
appropriate, the decision trees used in
the analysis reported in the final rule for
MY 2011.
In general, and as described in great
detail in the MY 2011 final rule and in
Section V of the current PRIA, each
technology is assigned to one of the five
following categories based on the
system it affects or impacts: engine,
transmission, electrification/accessory,
hybrid or vehicle. Each of these
categories has its own decision tree that
the Volpe model uses to apply
technologies sequentially during the
compliance analysis. The decision trees
were designed and configured to allow
PO 00000
Frm 00210
Fmt 4701
Sfmt 4702
the Volpe model to apply technologies
in a cost-effective, logical order that also
considers ease of implementation. For
example, software or control logic
changes are implemented before
replacing a component or system with a
completely redesigned one, which is
typically a much more expensive
option. In some cases, and as
appropriate, the model may combine the
sequential technologies shown on a
decision tree and apply them
simultaneously, effectively developing
dynamic technology packages on an asneeded basis. For example, if
compliance demands indicate, the
model may elect to apply LUB, EFR, and
ICP on a dual overhead cam engine, if
they are not already present, in one
single step. An example simplified
decision tree for engine technologies is
provided below; the other simplified
decision trees may be found in Chapter
3 of the joint TSD and in the PRIA.
Expanded decision trees are available in
the docket for this NPRM.
BILLING CODE 6560–50–C
E:\FR\FM\28SEP2.SGM
28SEP2
BILLING CODE 6560–50–C
Each technology within the decision
trees has an incremental cost and an
incremental effectiveness estimate
associated with it, and estimates are
specific to a particular vehicle subclass
(see the tables in Section V of the PRIA).
Each technology’s incremental estimate
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
takes into account its position in the
decision tree path. If a technology is
located further down the decision tree,
the estimates for the costs and
effectiveness values attributed to that
technology are influenced by the
incremental estimates of costs and
effectiveness values for prior technology
PO 00000
Frm 00211
Fmt 4701
Sfmt 4702
49663
applications. In essence, this approach
accounts for ‘‘in-path’’ effectiveness
synergies, as well as cost effects that
occur between the technologies in the
same path. When comparing cost and
effectiveness estimates from various
sources and those provided by
commenters in the previous CAFE
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.032</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49664
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
rulemakings, it is important that the
estimates evaluated are analyzed in the
proper context, especially as concerns
their likely position in the decision trees
and other technologies that may be
present or missing. Not all estimates
available in the public domain or
offered for the agencies’ consideration
during the comment period can be
evaluated in an ‘‘apples-to-apples’’
comparison with those used by the
Volpe model, since in some cases the
order of application, or included
technology content, is inconsistent with
that assumed in the decision tree.
The MY 2011 final rule discussed in
detail the revisions and improvements
made to the Volpe model and decision
trees during that rulemaking process,
including the improved handling and
accuracy of valve train technology
application and the development and
implementation of a method for
accounting path-dependent correction
factors in order to ensure that
technologies are evaluated within the
proper context. The reader should
consult the MY 2011 final rule
documents for further information on
these modeling techniques, all of which
continued to be utilized in developing
this proposal.473 To the extent that the
decision trees have changed for
purposes of this NPRM, it was due not
to revisions in the order of technology
application, but rather to redefinitions
of technologies or addition or
subtraction of technologies. NHTSA
seeks comment on the decision trees
described here and in the PRIA.
Is the next technology available in
this model year?
As discussed above, the majority of
technologies considered are available on
vehicles today, and thus will be
available for application in the
rulemaking time frame. Some
technologies, however, will not become
available for purposes of NHTSA’s
analysis until later in the rulemaking
time frame. When the model is
considering whether to add a
technology to a vehicle, it checks its
year of availability—if the technology is
available, it may be added; if it is not
available, the model will consider
whether to switch to a different decision
tree to look for another technology, or
will skip to the next vehicle in a
manufacturer’s fleet. The year of
availability for each technology is
provided above in Table IV.C.2–1.
Has the technology reached the
phase-in cap for this model year?
473 See, e.g., 74 FR 14238–46 (Mar. 30, 2009) for
a full discussion of the decision trees in NHTSA’s
MY 2011 final rule, and Docket No. NHTSA–2009–
0062–0003.1 for an expanded decision tree used in
that rulemaking.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
Besides the refresh/redesign cycles
used in the Volpe model, which
constrain the rate of technology
application at the vehicle level so as to
ensure a period of stability following
any modeled technology applications,
the other constraint on technology
application employed in NHTSA’s
analysis is ‘‘phase-in caps.’’ Unlike
vehicle-level cycle settings, phase-in
caps constrain technology application at
the vehicle manufacturer level.474 They
are intended to reflect a manufacturer’s
overall resource capacity available for
implementing new technologies (such
as engineering and development
personnel and financial resources),
thereby ensuring that resource capacity
is accounted for in the modeling
process. At a high level, phase-in caps
and refresh/redesign cycles work in
conjunction with one another to avoid
the modeling process out-pacing an
OEM’s limited pool of available
resources during the rulemaking time
frame, especially in years where many
models may be scheduled for refresh or
redesign. This helps to ensure
technological feasibility and economic
practicability in determining the
stringency of the standards.
NHTSA has been developing the
concept of phase-in caps over the course
of the last several CAFE rulemakings, as
discussed in greater detail in the MY
2011 final rule,475 and in Section V of
the PRIA and Chapter 3 of the joint TSD.
The MY 2011 final rule employed nonlinear phase-in caps (that is, caps that
varied from year to year) that were
designed to respond to comments
raising lead-time concerns in reference
to the agency’s proposed MY 2011–2015
standards, but because the final rule
covered only one model year, many
phase-in caps for that model year were
lower than had originally been
proposed. NHTSA emphasized that the
MY 2011 phase-in caps were based on
assumptions for the full five year period
of the proposal (2011–2015), and stated
that it would reconsider the phase-in
474 While phase-in caps are expressed as specific
percentages of a manufacturer’s fleet to which a
technology may be applied in a given model year,
phase-in caps cannot always be applied as precise
limits, and the Volpe model in fact allows
‘‘override’’ of a cap in certain circumstances. When
only a small portion of a phase-in cap limit
remains, or when the cap is set to a very low value,
or when a manufacturer has a very limited product
line, the cap might prevent the technology from
being applied at all since any application would
cause the cap to be exceeded. Therefore, the Volpe
model evaluates and enforces each phase-in cap
constraint after it has been exceeded by the
application of the technology (as opposed to
evaluating it before application), which can result
in the described overriding of the cap.
475 74 FR 14268–14271 (Mar. 30, 2009).
PO 00000
Frm 00212
Fmt 4701
Sfmt 4702
settings for all years beyond 2011 in a
future rulemaking analysis.
For purposes of the current proposal
for MYs 2012–2016, as in the MY 2011
final rule, NHTSA combines phase-in
caps for some groups of similar
technologies, such as valve phasing
technologies that are applicable to
different forms of engine design (SOHC,
DOHC, OHV), since they are very
similar from an engineering and
implementation standpoint. When the
phase-in caps for two technologies are
combined, the maximum total
application of either or both to any
manufacturer’s fleet is limited to the
value of the cap.476 In contrast to the
phase-in caps used in the MY 2011 final
rule, NHTSA has increased the phase-in
caps for most of the technologies, as
discussed below.
In developing phase-in cap values for
purposes of the current proposal,
NHTSA initially considered the fact that
many of the technologies commonly
applied by the model, those placed near
the top of the decision trees, such as low
friction lubes, valve phasing, electric
power steering, improved automatic
transmission controls, and others, have
been commonly available to
manufacturers for several years now.
Many technologies, in fact, precede the
2002 NAS Report, which estimated that
such technologies would take 4 to 8
years to penetrate the fleet. Since the
current proposal would take effect in
MY 2012, nearly 10 years beyond the
NAS report, and extends to MY 2016,
and in the interest of harmonization
with EPA’s proposal, NHTSA
tentatively determined that higher
phase-in caps were likely justified.
Additionally, NHTSA considered the
fact that manufacturers, as part of the
agreements supporting the National
Program, appear to be anticipating
higher technology application rates than
those used in the MY 2011 final rule.
This also supported higher phase-in
caps for purposes of the proposal.
Thus, while phase-in caps for the MY
2011 final rule reached a maximum of
50 percent for a couple of technologies
and generally fell in the range between
0 and 20 percent, phase-in caps for this
NPRM for the majority of technologies
are set to reach 85 or 100 percent by MY
2016, although more advanced
technologies like diesels and strong
hybrids reach only 15 percent by MY
2016.
Theoretically, significantly higher
phase-in caps, such as those used in the
current proposal as compared to those
used in the MY 2011 final rule, should
476 See 74 FR 14270 (Mar 30, 2009) for further
discussion and examples.
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
result in higher levels of technology
penetration in the modeling results.
Reviewing the modeling output does
not, however, indicate unreasonable
levels of technology penetration for the
proposed standards.477 NHTSA believes
that this is due to the interaction of the
various changes in methodology for the
current proposal—changes to phase-in
caps are but one of a number of
revisions to the Volpe model and its
inputs that could potentially impact the
rate at which technologies are applied
in this proposal as compared to prior
rulemakings. Other revisions that could
impact application rates include the use
of transparent CAFE certification data in
baseline fleet formulation and the use of
other data for projecting it forward,478 or
the use of a multi-year planning
programming technique to apply
technology retroactively to earlier-MY
vehicles, both of which may have a
direct impact on the modeling process.
Conversely the model and inputs
remain unchanged in other areas that
also could impact technology
application, such as in the refresh/
redesign cycle settings, estimates used
for the technologies, both of which
remain largely unchanged from the MY
2011 final rule. These changes together
make it difficult to predict how phasein caps should be expected to function
in the new modeling process.
Thus, after reviewing the output files,
NHTSA tentatively concludes that the
higher phase-in caps, and the resulting
technology application rates produced
by the Volpe model, at both the industry
and manufacturer level, are appropriate
for this proposal, achieving a suitable
level of stringency without requiring
unrealistic or unachievable penetration
rates. However, the agency will consider
comments received on this approach in
determining what phase-in caps to
employ in the analysis for the final rule,
and may change the caps in response to
comments and/or further analysis. One
additional question the agency has,
which may be primarily academic at
this point, is what impact lower phasein caps, such as those used in earlier
rulemakings, would have on compliance
costs (and whether they might counterintuitively increase costs by forcing
more expensive technologies). NHTSA
seeks comment on the revised phase-in
caps as compared to the MY 2011 final
rule, and particularly on whether,
477 The modeling output for the analysis
underlying these proposed standards is available on
NHTSA’s Web site.
478 The baseline fleet sets the starting point, from
a technology point of view, for where the model
begins the technology application process, so
changes have a direct impact on the net application
of technology.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
combined with the refresh and redesign
assumptions, they help to ensure
sufficient lead time for manufacturers to
make the technology changes required
by the proposed standards. Readers are
invited to review and assess the phasein caps listed and described more fully
in Section V of the PRIA, along with the
application and penetration rates found
in the Volpe model’s output files, and
after making their own assessment,
provide comment and recommendations
to the agency as appropriate.
Is the technology less expensive due
to learning effects?
Historically, NHTSA did not
explicitly account for the cost
reductions a manufacturer might realize
through learning achieved from
experience in actually applying a
technology. Since working with EPA to
develop the 2008 NPRM for MYs 2011–
2015, and with Ricardo to refine the
concept for the March 2009 MY 2011
final rule, NHTSA has accounted for
these cost reductions through two kinds
of mutually exclusive learning,
‘‘volume-based’’ and ‘‘time-based’’
which it continues to use in this
proposal, as discussed below.
In the 2008 NPRM, NHTSA applied
learning factors to technology costs for
the first time. These learning factors
were developed using the parameters of
learning threshold, learning rate, and
the initial cost, and were based on the
‘‘experience curve’’ concept which
describes reductions in production costs
as a function of accumulated production
volume. The typical curve shows a
relatively steep initial decline in cost
which flattens out to a gentle
downwardly sloping line as the volume
increase to large values. In the NPRM,
NHTSA applied a learning rate discount
of 20 percent for each successive
doubling of production volume (on a
per manufacturer basis), and a learning
threshold of 25,000 units was assumed
(thus a technology was viewed as being
fully learned out at 100,000 units). The
factor was only applied to certain
technologies that were considered
emerging or newly implemented on the
basis that significant cost improvements
would be achieved as economies of
scale were realized (i.e., the
technologies were on the steep part of
the curve).
In the MY 2011 final rule, NHTSA
continued to use this learning factor,
referring to it as volume-based learning
since the cost reductions were
determined by production volume
increases, and again only applied it to
emerging technologies. However, and in
response to comments, NHTSA revised
its assumptions on learning threshold,
basing them instead on an industry-
PO 00000
Frm 00213
Fmt 4701
Sfmt 4702
49665
wide production basis, and increasing
the threshold to 300,000 units annually.
Commenters to the 2008 NPRM also
described another type of learning factor
which NHTSA decided to adopt and
implement in the MY 2011 final rule.
Commenters described a relatively small
negotiated cost decrease that occurred
on an annual basis through contractual
agreements with first tier component
and systems suppliers for readily
available, high volume technologies
commonly in use by multiple OEMs.
Based on the same experience curve
principal, however at production
volumes that were on the flatter part of
the curve (and thus the types of volumes
that represent annual industry
volumes), NHTSA adopted this type
learning and referred to it as time-based
learning. An annual cost reduction of 3
percent in the second and each
subsequent year, which was consistent
with estimates from commenters and
supported by work Ricardo conducted
for NHTSA, was used in the final rule.
In developing this proposal, NHTSA
and EPA have reviewed both types of
learning factors, and the thresholds
(300,000) and reduction rates (20
percent for volume,479 3 percent for
time-based) they rely on, and as
implemented in the MY 2011 final rule,
and agreed that both factors continue to
be accurate and appropriate; each
agency has thus implemented time- and
volume-based learning in their analyses.
Noting that only one type of learning
can be applied to any single technology,
if any learning is applied at all, the
agencies reviewed each to determine
which learning factor was appropriate.
Volume-based learning is applied to the
higher complexity hybrid technologies,
while no learning is applied to
technologies likely to be affected by
commodity costs (LUB, ROLL) or that
have loosely-defined BOMs (EFR, LDB),
as was the case in the MY 2011 final
rule. Chapter 3 of the joint TSD shows
the specific learning factors that NHTSA
has applied in this analysis for each
technology, and discusses learning
factors and each agencies’ use of them
further. NHTSA seeks comment on its
use of learning factors, including the
types, the thresholds, and the reduction
rates proposed, and particularly on the
revisions to the learning (time- and
volume-based) logic as compared to the
MY 2011 final rule.
Is the technology more or less
effective due to synergistic effects?
When two or more technologies are
added to a particular vehicle model to
479 NHTSA will conduct a sensitivity analysis on
the volume-based learning value of 20 percent for
the final rule.
E:\FR\FM\28SEP2.SGM
28SEP2
49666
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
improve its fuel efficiency and reduce
CO2 emissions, the resultant fuel
consumption reduction may sometimes
be higher or lower than the product of
the individual effectiveness values for
those items.480 This may occur because
one or more technologies applied to the
same vehicle partially address the same
source (or sources) of engine, drivetrain
or vehicle losses. Alternately, this effect
may be seen when one technology shifts
the engine operating points, and
therefore increases or reduces the fuel
consumption reduction achieved by
another technology or set of
technologies. The difference between
the observed fuel consumption
reduction associated with a set of
technologies and the product of the
individual effectiveness values in that
set is referred to for purposes of this
rulemaking as a ‘‘synergy.’’ Synergies
may be positive (increased fuel
consumption reduction compared to the
product of the individual effects) or
negative (decreased fuel consumption
reduction). An example of a positive
synergy might be a vehicle technology
that reduces road loads at highway
speeds (e.g., lower aerodynamic drag or
low rolling resistance tires), that could
extend the vehicle operating range over
which cylinder deactivation may be
employed. An example of a negative
synergy might be a variable valvetrain
system technology, which reduces
pumping losses by altering the profile of
the engine speed/load map, and a sixspeed automatic transmission, which
shifts the engine operating points to a
portion of the engine speed/load map
where pumping losses are less
significant. As the complexity of the
technology combinations is increased,
and the number of interacting
technologies grows accordingly, it
becomes increasingly important to
account for these synergies.
NHTSA and EPA determined
synergistic impacts for this rulemaking
using EPA’s ‘‘lumped parameter’’
analysis tool, which EPA described at
length in its March 2008 Staff Technical
Report.481 The lumped parameter tool is
480 More specifically, the products of the
differences between one and the technologyspecific levels of effectiveness in reducing fuel
consumption. For example, not accounting for
interactions, if technologies A and B are estimated
to reduce fuel consumption by 10% (i.e., 0.1) and
20% (i.e., 0.2) respectively, the ‘‘product of the
individual effectiveness values’’ would be 1–0.1
times 1–0.2, or 0.9 times 0.8, which equals 0.72,
corresponding to a combined effectiveness of 28%
rather than the 30% obtained by adding 10% to
20%. The ‘‘synergy factors’’ discussed in this
section further adjust these multiplicatively
combined effectiveness values.
481 EPA Staff Technical Report: Cost and
Effectiveness Estimates of Technologies Used to
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
a spreadsheet model that represents
energy consumption in terms of average
performance over the fuel economy test
procedure, rather than explicitly
analyzing specific drive cycles. The tool
begins with an apportionment of fuel
consumption across several loss
mechanisms and accounts for the
average extent to which different
technologies affect these loss
mechanisms using estimates of engine,
drivetrain and vehicle characteristics
that are averaged over the EPA fuel
economy drive cycle. Results of this
analysis were generally consistent with
those of full-scale vehicle simulation
modeling performed in 2007 by Ricardo,
Inc.
For the current rulemaking, NHTSA
used the lumped parameter tool as
modified in the MY 2011 CAFE final
rule. NHTSA modified the lumped
parameter tool from the version
described in the EPA Staff Technical
Report in response to public comments
received in its rulemaking. The
modifications included updating the list
of technologies and their associated
effectiveness values to match the
updated list of technologies used in the
final rule. NHTSA also expanded the
list of synergy pairings based on further
consideration of the technologies for
which a competition for losses would be
expected. These losses are described in
more detail in Section V of the PRIA.
NHTSA and EPA incorporate
synergistic impacts in their analyses in
slightly different manners. Because
NHTSA applies technologies
individually in its modeling analysis,
NHTSA incorporates synergistic effects
between pairings of individual
technologies. The use of discrete
technology pair incremental synergies is
similar to that in DOE’s National Energy
Modeling System (NEMS).482 Inputs to
the Volpe model incorporate NEMSidentified pairs, as well as additional
pairs from the set of technologies
considered in the Volpe model.
NHTSA notes that synergies that
occur within a decision tree are already
addressed within the incremental values
assigned and therefore do not require a
synergy pair to address. For example, all
engine technologies take into account
incremental synergy factors of preceding
engine technologies, and all
Reduce Light-duty Vehicle Carbon Dioxide
Emissions; EPA420–R–08–008, March 2008.
482 U.S. Department of Energy, Energy
Information Administration, Transportation Sector
Module of the National Energy Modeling System:
Model Documentation 2007, May 2007,
Washington, DC, DOE/EIAM070(2007), at 29–30.
Available at https://tonto.eia.doe.gov/ftproot/
modeldoc/m070(2007).pdf (last accessed Jul. 6,
2009).
PO 00000
Frm 00214
Fmt 4701
Sfmt 4702
transmission technologies take into
account incremental synergy factors of
preceding transmission technologies.
These factors are expressed in the fuel
consumption improvement factors in
the input files used by the Volpe model.
For applying incremental synergy
factors in separate path technologies,
the Volpe model uses an input table (see
the tables in Chapter 3 of the TSD and
in the PRIA) which lists technology
pairings and incremental synergy factors
associated with those pairings, most of
which are between engine technologies
and transmission/electrification/hybrid
technologies. When a technology is
applied to a vehicle by the Volpe model,
all instances of that technology in the
incremental synergy table which match
technologies already applied to the
vehicle (either pre-existing or
previously applied by the Volpe model)
are summed and applied to the fuel
consumption improvement factor of the
technology being applied. Synergies for
the strong hybrid technology fuel
consumption reductions are included in
the incremental value for the specific
hybrid technology block since the
model applies technologies in the order
of the most effectiveness for least cost
and also applies all available
electrification and transmission
technologies before applying strong
hybrid technologies. NHTSA seeks
comment on whether the synergistic
effects presented are accurate, and
whether there are other synergies that
the agency may have overlooked.
d. Where Can Readers Find More
Detailed Information About NHTSA’s
Technology Analysis?
Much more detailed information is
provided in Section V of the PRIA, and
a discussion of how NHTSA and EPA
jointly reviewed and updated
technology assumptions for purposes of
this NPRM is available in Chapter 3 of
the TSD. Additionally, all of NHTSA’s
model input and output files are now
public and available for the reader’s
review and consideration. The
technology input files can be found in
the docket for this NPRM, Docket No.
NHTSA–2009–0059, and on NHTSA’s
Web site. And finally, because much of
NHTSA’s technology analysis for
purposes of this NPRM builds on the
work that was done for the MY 2011
final rule, we refer readers to that
document as well for background
information concerning how NHTSA’s
methodology for technology application
analysis has evolved over the past
several rulemakings, both in response to
comments and as a result of the agency’s
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
growing experience with this type of
analysis.483
3. How Did NHTSA Develop the
Economic Assumption Inputs?
NHTSA’s preliminary analysis of
alternative CAFE standards for the
model years covered by this proposed
rulemaking relies on a range of forecast
variables, economic assumptions, and
parameter values. This section describes
the proposed sources of these forecasts,
the rationale underlying each
assumption, and the agency’s
preliminary choices of specific
parameter values. These proposed
economic values play a significant role
in determining the benefits of
alternative CAFE standards, as they
have for the last several CAFE
rulemakings. Under those alternatives
where standards would be established
by reference to their costs and benefits,
these economic values also affect the
levels of the CAFE standards
themselves. Some of these variables
have more important effects on the level
of CAFE standards and the benefits from
requiring alternative increases in fuel
economy than do others.
In reviewing these variables and the
agency’s estimates of their values for
purposes of this NPRM, NHTSA
reconsidered previous comments it had
received and reviewed newly available
literature. As a consequence, the agency
elected to revise some of its economic
assumptions and parameter estimates,
49667
while retaining others. Some of the most
important changes, which are discussed
in greater detail below, as well as in
Chapter 4 of the joint TSD and in
Chapter VIII of the PRIA, include
significant revisions to the markup
factors for technology costs; reducing
the rebound effect from 15 to 10
percent; and revising the value of
reducing CO2 emissions based on recent
interagency efforts to develop estimates
of this value for government-wide use.
For the reader’s reference, Table IV.C.3–
1 below summarizes the values used to
calculate the economic benefits from
each alternative. The agency seeks
comment on the economic assumptions
presented in the table and discussed
below.
TABLE IV.C.3–1—ECONOMIC VALUES FOR BENEFITS COMPUTATIONS
(2007$)
Fuel Economy Rebound Effect ............................................................................................................................................................
‘‘Gap’’ between test and on-road MPG ...............................................................................................................................................
Value of refueling time per ($ per vehicle-hour) .................................................................................................................................
Annual growth in average vehicle use ................................................................................................................................................
Fuel Prices (2012–50 average, $/gallon)
Retail gasoline price .....................................................................................................................................................................
Pre-tax gasoline price ...................................................................................................................................................................
Economic Benefits from Reducing Oil Imports ($/gallon)
‘‘Monopsony’’ Component ............................................................................................................................................................
Price Shock Component ...............................................................................................................................................................
Military Security Component ........................................................................................................................................................
10%
20%
$ 24.64
1.1%
Total Economic Costs ($/gallon) ...........................................................................................................................................
Emission Damage Costs (2020, $/ton or $/metric ton)
Carbon monoxide .........................................................................................................................................................................
Volatile organic compounds (VOC) ..............................................................................................................................................
Nitrogen oxides (NOx)—vehicle use ............................................................................................................................................
Nitrogen oxides (NOx)—fuel production and distribution .............................................................................................................
Particulate matter (PM2.5)—vehicle use .......................................................................................................................................
Particulate matter (PM2.5)—fuel production and distribution ........................................................................................................
Sulfur dioxide (SO2) ......................................................................................................................................................................
Carbon dioxide (CO2) ...................................................................................................................................................................
Annual Increase in CO2 Damage Cost ........................................................................................................................................
External Costs from Additional Automobile Use ($/vehicle-mile)
Congestion ....................................................................................................................................................................................
Accidents ......................................................................................................................................................................................
Noise .............................................................................................................................................................................................
$ 0.17
$3.77
$3.40
$ 0.00
$ 0.17
$ 0.00
$0
$ 1,283
$ 5,116
$ 5,339
$ 238,432
$ 292,180
$ 30,896
$ 20
3%
$ 0.054
$ 0.023
$ 0.001
$ 0.078
Total External Costs ..............................................................................................................................................................
Discount Rate Applied to Future Benefits ...........................................................................................................................................
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Total External Costs ..............................................................................................................................................................
External Costs from Additional Light Truck Use ($/vehicle-mile)
Congestion ....................................................................................................................................................................................
Accidents ......................................................................................................................................................................................
Noise .............................................................................................................................................................................................
$0.075
3%
a. Costs of Fuel Economy-Improving
Technologies
We developed detailed estimates of
the costs of applying fuel economyimproving technologies to vehicle
models jointly with EPA for use in
analyzing the impacts of alternative
standards considered in this
483 74
rulemaking. The estimates were based
on those reported by the 2002 NAS
Report analyzing costs for increasing
fuel economy, but were modified for
purposes of this analysis as a result of
extensive consultations among
engineers from NHTSA, EPA, and the
Volpe Center. As part of this process,
the agency also developed varying cost
estimates for applying certain fuel
economy technologies to vehicles of
different sizes and body styles. We may
adjust these cost estimates based on
comments received to this NPRM.
The technology cost estimates used in
this analysis are intended to represent
FR 14233–308 (Mar. 30, 2009).
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00215
Fmt 4701
Sfmt 4702
$0.048
$0.026
$0.001
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49668
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
manufacturers’ direct costs for highvolume production of vehicles with
these technologies and sufficient
experience with their application so that
all remaining cost reductions due to
‘‘learning curve’’ effects have been fully
realized. However, NHTSA recognizes
that manufacturers’ actual costs for
employing these technologies include
additional outlays for accompanying
design or engineering changes to models
that use them, development and testing
of prototype versions, recalibrating
engine operating parameters, and
integrating the technology with other
attributes of the vehicle. Manufacturers’
indirect costs for employing these
technologies also include expenses for
product development and integration,
modifying assembly processes and
training assembly workers to install
them, increased expenses for operation
and maintaining assembly lines, higher
initial warranty costs for new
technologies, any added expenses for
selling and distributing vehicles that use
these technologies, and manufacturer
and dealer profit. In previous CAFE
rulemakings and in NHTSA’s safety
rulemakings, the agency has accounted
for these additional costs by using a
Retail Price Equivalent (RPE) multiplier
of 1.5. For purposes of this rulemaking,
based on recent work by EPA, NHTSA
has applied indirect cost multipliers
ranging from 1.11 to 1.64 to the
estimates of vehicle manufacturers’
direct costs for producing or acquiring
each technology to improve fuel
economy.484 These multipliers vary
with the complexity of each technology
and the time frame over which costs are
estimated. More complex technologies
are associated with higher multipliers
because of the larger increases in
manufacturers’ indirect costs for
developing, producing (or procuring),
and deploying these more complex
technologies. The appropriate
multipliers decline over time for
technologies of all complexity levels,
since increased familiarity and
experience with their application is
assumed to reduce manufacturers’
indirect costs for employing them.
NHTSA seeks comment regarding the
new indirect cost multiplier approach to
technology costs estimates. We note
additionally that this issue will be
addressed in the upcoming revised NAS
report.
484 NHTSA notes that in addition to the
technology cost analysis employing this ‘‘ICM’’
approach, the PRIA contains a sensitivity analysis
using a technology cost multiplier of 1.5.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
b. Potential Opportunity Costs of
Improved Fuel Economy
An important concern is whether
achieving the fuel economy
improvements required by alternative
CAFE standards would require
manufacturers to compromise the
performance, carrying capacity, safety,
or comfort of their vehicle models. To
the extent that it does so, the resulting
sacrifice in the value of these attributes
to consumers represents an additional
cost of achieving the required
improvements in fuel economy. While
exact dollar values of these attributes to
consumers are difficult to infer,
differences in vehicle purchase prices
and buyers’ choices among competing
models that feature different
combinations of these characteristics
clearly demonstrate that changing
vehicle attributes clearly affect the
utility and economic value that vehicles
provide to potential buyers.485
NHTSA and EPA have approached
this potential problem by developing
cost estimates for fuel economyimproving technologies that include any
additional manufacturing costs that
would be necessary to maintain the
originally planned levels of
performance, comfort, carrying capacity,
and safety of any light-duty vehicle
model to which those technologies are
applied. In doing so, the agencies
followed the precedent established by
the 2002 NAS Report, which estimated
‘‘constant performance and utility’’
costs for fuel economy technologies.
NHTSA has used these as the basis for
its continuing efforts to refine the
technology costs it uses to analyze
manufacturer’s costs for complying with
alternative passenger car and light truck
CAFE standards for MYs 2012–2016.
Although the agency has revised its
estimates of manufacturers’ costs for
some technologies significantly for use
in this rulemaking, these revised
estimates are still intended to represent
costs that would allow manufacturers to
maintain the performance, carrying
capacity, and utility of vehicle models
while improving their fuel economy.
Although we believe that our tentative
cost estimates for fuel economyimproving technologies should be
generally sufficient to prevent
485 See, e.g., Kleit A.N., 1990. ‘‘The Effect of
Annual Changes in Automobile Fuel Economy
Standards.’’ Journal of Regulatory Economics 2:
151–172; Berry, Steven, James Levinsohn, and Ariel
Pakes, 1995. ‘‘Automobile Prices in Market
Equilibrium,’’ Econometrica 63(4): 841–940;
McCarthy, Patrick S., 1996. ‘‘Market Price and
Income Elasticities of New Vehicle Demands.’’
Review of Economics and Statistics 78: 543–547;
and Goldberg, Pinelopi K., 1998. ‘‘The Effects of the
Corporate Average Fuel Efficiency Standards in the
US,’’ Journal of Industrial Economics 46(1): 1–33.
PO 00000
Frm 00216
Fmt 4701
Sfmt 4702
significant reductions in consumer
welfare provided by vehicle models to
which manufacturers apply those
technologies, it is possible that they do
not include adequate allowance for the
necessary efforts by manufacturers to
prevent sacrifices in these attributes on
all vehicle models. If this is the case, the
true economic costs of achieving higher
fuel economy should include the
opportunity costs to vehicle owners of
any sacrifices in vehicles’ performance,
carrying capacity, and utility and the
agency’s estimated technology costs
would underestimate the true economic
costs of improving fuel economy.
Recognizing this possibility, it may be
preferable for NHTSA to estimate
explicitly the changes in vehicle buyers’
welfare from the combination of higher
prices for new vehicle models, increases
in their fuel economy, and any
accompanying changes in vehicle
attributes such as performance,
passenger- and cargo-carrying capacity,
or other dimensions of utility. The net
change in buyer’s welfare that results
from the combination of these changes
would provide a more accurate estimate
of the true economic costs for improving
fuel economy. The agency seeks
comment on this or other possible ways
to deal with this extremely important
issue.
c. The On-Road Fuel Economy ‘‘Gap’’
Actual fuel economy levels achieved
by light-duty vehicles in on-road driving
fall somewhat short of their levels
measured under the laboratory-like test
conditions used by EPA to establish its
published fuel economy ratings for
different models. In analyzing the fuel
savings from alternative CAFE
standards, NHTSA has previously
adjusted the actual fuel economy
performance of each light truck model
downward from its rated value to reflect
the expected size of this on-road fuel
economy ‘‘gap.’’ On December 27, 2006,
EPA adopted changes to its regulations
on fuel economy labeling, which were
intended to bring vehicles’ rated fuel
economy levels closer to their actual onroad fuel economy levels.486
In its Final Rule, EPA estimated that
actual on-road fuel economy for lightduty vehicles averages 20 percent lower
than published fuel economy levels. For
example, if the overall EPA fuel
economy rating of a light truck is 20
mpg, the on-road fuel economy actually
achieved by a typical driver of that
vehicle is expected to be 16 mpg
(20*.80). NHTSA employed EPA’s
revised estimate of this on-road fuel
economy gap in its analysis of the fuel
486 71
E:\FR\FM\28SEP2.SGM
FR 77871 (Dec. 27, 2006).
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
savings resulting from alternative CAFE
standards evaluated in the MY 2011
final rule.
For purposes of this NPRM, NHTSA
conducted additional analysis of this
issue. The agency used data on the
number of passenger cars and light
trucks of each model year that were
registered for use during calendar years
2000 through 2006, average fuel
economy for passenger cars and light
trucks produced during each model
year, and estimates of average miles
driven per year by cars and light trucks
of different ages. These data were
combined to develop estimates of the
average fuel economy that the U.S.
passenger car and light truck fleets
would have achieved from 2000 through
2006 under test conditions.
NHTSA compared these estimates to
the Federal Highway Administration’s
(FHWA) published values of actual onroad fuel economy for passenger cars
and light trucks during each of those
years.487 FHWA’s estimates of actual
fuel economy for passenger cars
averaged 22 percent lower than
NHTSA’s estimates of its fleet-wide
average value under test conditions over
this period, while FHWA’s estimates for
light trucks averaged 17 lower than
NHTSA’s estimates of average light
truck fuel economy under test
conditions. These results appear to
confirm that the 20 percent on-road fuel
economy discount or gap represents a
reasonable estimate for use in evaluating
the fuel savings likely to result from
alternative CAFE standards for MY
2012–2016 vehicles.
d. Fuel Prices and the Value of Saving
Fuel
Projected future fuel prices are a
critical input into the preliminary
economic analysis of alternative CAFE
standards, because they determine the
value of fuel savings both to new
vehicle buyers and to society. NHTSA
relied on the most recent fuel price
projections from the U.S. Energy
Information Administration’s (EIA)
Annual Energy Outlook (AEO) for this
analysis. Specifically, we used the AEO
2009 (April 2009 release) Reference
Case forecasts of inflation-adjusted
(constant-dollar) retail gasoline and
diesel fuel prices, which represent the
EIA’s most up-to-date estimate of the
most likely course of future prices for
petroleum products.488
487 Federal Highway Administration, Highway
Statistics, 2000 through 2006 editions, Table VM–
1; see https://www.fhwa.dot.gov/policy/ohpi/hss/
hsspubs.cfm (last accessed July 27, 2009).
488 Energy Information Administration, Annual
Energy Outlook 2009, Revised Updated Reference
Case (April 2009), Table 12. Available at https://
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
While NHTSA relied on the forecasts
of fuel prices presented in AEO 2008
High Price Case in the MY 2011 final
rule, we noted at the time that we were
relying on that estimate primarily
because volatility in the oil market
appeared to have overtaken the
Reference Case, and that we anticipated
that the Reference Case forecast would
be significantly higher in the next AEO.
In fact, EIA’s AEO 2009 Reference Case
forecast projects higher retail fuel prices
in most future years than those forecast
in the High Price Case from AEO 2008.
NHTSA is thus confident that the AEO
2009 Reference Case is an appropriate
forecast for projected future fuel prices.
Measured in constant 2007 dollars,
the Reference Case forecast of retail
gasoline prices during calendar year
2020 is $3.62 per gallon, rising
gradually to $3.82 by the year 2030
(these values include Federal, State and
local taxes). To obtain fuel price
forecasts for the years 2031 through
2050, the agency assumes that retail fuel
prices will continue to increase after
2030 at the average annual rates
projected for 2020–2030 in the AEO
2009 Revised Reference Case.489 This
assumption results in a projected retail
price of gasoline that reaches $4.25 in
2007 dollars by the year 2050.
The value of fuel savings resulting
from improved fuel economy to buyers
of light-duty vehicles is determined by
the retail price of fuel, which includes
Federal, State, and any local taxes
imposed on fuel sales. Total taxes on
gasoline, including Federal, State, and
local levies averaged $0.42 per gallon
during 2006, while those levied on
diesel averaged $0.50. Because fuel
taxes represent transfers of resources
from fuel buyers to government
agencies, however, rather than real
resources that are consumed in the
process of supplying or using fuel, their
value must be deducted from retail fuel
prices to determine the value of fuel
savings resulting from more stringent
CAFE standards to the U.S. economy as
a whole.
NHTSA follows the assumptions used
by EIA in AEO 2009 that State and local
gasoline taxes will keep pace with
www.eia.doe.gov/oiaf/servicerpt/stimulus/excel/
aeostimtab_12.xls(last accessed July 26, 2009).
EIA’s Updated Reference Case reflects the effects of
the American Reinvestment and Recovery Act of
2009, as well as the most recent revisions to the
U.S. and global economic outlook.
489 This projection uses the rate of increase in fuel
prices for 2020–2030 rather than that over the
complete forecast period (2009–2030) because there
is extreme volatility in the forecasts for the years
2009 through approximately 2020. Using the
average rate of change over the complete 2009–2030
forecast period would result in projections of
declining fuel prices after 2030.
PO 00000
Frm 00217
Fmt 4701
Sfmt 4702
49669
inflation in nominal terms, and thus
remain constant when expressed in
constant 2007 dollars. In contrast, EIA
assumes that Federal gasoline taxes will
remain unchanged in nominal terms,
and thus decline throughout the forecast
period when expressed in constant 2007
dollars. These differing assumptions
about the likely future behavior of
Federal and State/local fuel taxes are
consistent with recent historical
experience, which reflects the fact that
Federal as well as most State motor fuel
taxes are specified on a cents-per-gallon
basis, and typically require legislation to
change.
The projected value of total taxes is
deducted from each future year’s
forecast of retail gasoline and diesel
prices reported in AEO 2009 to
determine the economic value of each
gallon of fuel saved during that year as
a result of improved fuel economy.
Subtracting fuel taxes results in a
projected value for saving gasoline of
$3.22 per gallon during 2020, rising to
$3.45 per gallon by the year 2030.
EIA includes ‘‘High Price Case’’ and
‘‘Low Price Case’’ forecasts in each
AEO, which reflect uncertainties
regarding future levels of oil production
and demand. These alternative
scenarios project retail gasoline prices
that range from a low of $2.02 to a high
of $5.04 per gallon during 2020, and
from $2.04 to $5.47 per gallon during
2030. In conjunction with our
assumption that fuel taxes will remain
constant in real or inflation-adjusted
terms over this period, these forecasts
imply pre-tax values of saving fuel
ranging from $1.63 to $4.65 per gallon
during 2020, and from $1.67 to $5.10
per gallon in 2030. In conducting the
preliminary analysis of uncertainty in
benefits and costs from alternative
CAFE standards required by OMB,
NHTSA evaluated the sensitivity of its
benefits estimates to these alternative
forecasts of future fuel prices. The
results of this sensitivity analysis can be
found in the PRIA.
e. Consumer Valuation of Fuel Economy
and Payback Period
In estimating the value of fuel
economy improvements that would
result from alternative CAFE standards
to potential vehicle buyers, NHTSA
assumes, as in the MY 2011 final rule,
that buyers value the resulting fuel
savings over only part of the expected
lifetime of the vehicles they purchase.
Specifically, we assume that buyers
value fuel savings over the first five
years of a new vehicle’s lifetime, and
discount the value of these future fuel
savings at a 3 percent annual rate. The
five-year figure represents
E:\FR\FM\28SEP2.SGM
28SEP2
49670
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
approximately the current average term
of consumer loans to finance the
purchase of new vehicles. We recognize
that the period over which individual
buyers finance new vehicle purchases
may not correspond exactly to the time
horizons they apply in valuing fuel
savings from higher fuel economy.
The agency deducts the discounted
present value of fuel savings over the
first five years of a vehicle model’s
lifetime from the technology costs
incurred by its manufacturer to improve
that model’s fuel economy to determine
the increase in its ‘‘effective price’’ to
buyers. The Volpe model uses these
estimates of effective costs for
increasing the fuel economy of each
vehicle model to identify the order in
which manufacturers would be likely to
select models for the application of fuel
economy-improving technologies in
order to comply with stricter standards.
The average value of the resulting
increase in effective cost from each
manufacturer’s simulated compliance
strategy is also used to estimate the
impact of alternative standards on its
total sales for future model years.
However, it is important to recognize
that NHTSA estimates the aggregate
value to the U.S. economy of fuel
savings resulting from alternative
standards—or their ‘‘social’’ value—over
the entire expected lifetimes of vehicles
manufactured under those standards,
rather than over this shorter ‘‘payback
period’’ we assume for their buyers. The
procedure the agency uses for doing so
is discussed in detail in the following
section.
f. Vehicle Survival and Use
Assumptions
mstockstill on DSKH9S0YB1PROD with PROPOSALS
NHTSA’s first step in estimating
lifetime fuel consumption by vehicles
produced during a model year is to
calculate the number expected to
remain in service during each year
following their production and sale.490
This is calculated by multiplying the
number of vehicles originally produced
490 Vehicles are defined to be of age 1 during the
calendar year corresponding to the model year in
which they are produced; thus for example, model
year 2000 vehicles are considered to be of age 1
during calendar year 2000, age 1 during calendar
year 2001, and to reach their maximum age of 26
years during calendar year 2025. NHTSA considers
the maximum lifetime of vehicles to be the age after
which less than 2 percent of the vehicles originally
produced during a model year remain in service.
Applying these conventions to vehicle registration
data indicates that passenger cars have a maximum
age of 26 years, while light trucks have a maximum
lifetime of 36 years. See Lu, S., NHTSA, Regulatory
Analysis and Evaluation Division, ‘‘Vehicle
Survivability and Travel Mileage Schedules,’’ DOT
HS 809 952, 8–11 (January 2006). Available at
https://www-nrd.nhtsa.dot.gov/Pubs/809952.pdf
(last accessed July 27, 2009).
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
during a model year by the proportion
typically expected to remain in service
at their age during each later year, often
referred to as a ‘‘survival rate.’’
To estimate production volumes of
passenger cars and light trucks for
individual manufacturers, NHTSA
relied on a baseline market forecast
constructed by EPA staff beginning with
MY 2008 CAFE certification data. After
constructing a MY 2008 baseline, EPA
used projected car and truck volumes
for this period from Energy Information
Administration’s (EIA’s) 2009 Annual
Energy Outlook (AEO).491 However,
AEO projects sales only at the car and
truck level, not at the manufacturer and
model-specific level, which are needed
in order to estimate the effects new
standards will have on individual
manufacturers.492 Therefore, EPA
purchased data from CSM–Worldwide
and used their projections of the
number of vehicles of each type
predicted to be sold by manufacturers in
2011–2015.493 This provided the yearby-year percentages of cars and trucks
sold by each manufacturer as well as the
percentages of each vehicle segment.
Although it was thus necessary to
assume the same manufacturer and
segment shares in 2016 as in 2015, 2016
estimates from CSM should be available
for the final rule. Using these
percentages normalized to the AEO
projected volumes then provided the
manufacturer-specific market share and
model-specific sales for model years
2011–2016.
To estimate the number of passenger
cars and light trucks originally
produced during model years 2012
through 2016 that will remain in use
during each subsequent year the agency
applied age-specific survival rates for
cars and light trucks to these adjusted
forecasts of passenger car and light truck
sales. In 2008, NHTSA updated its
previous estimates of car and light truck
survival rates using the most current
491 Available at https://www.eia.doe.gov/oiaf/aeo/
index.html. NHTSA and EPA made the simplifying
assumption that projected sales of cars and light
trucks during each calendar year from 2012 through
2016 represented the likely production volumes for
the corresponding model year. The agency did not
attempt to establish the exact correspondence
between projected sales during individual calendar
years and production volumes for specific model
years.
492 Because AEO 2009’s ‘‘car’’ and ‘‘truck’’ classes
did not reflect NHTSA’s recent reclassification (in
March 2009 for enforcement beginning MY 2011) of
many two wheel drive SUVs from the nonpassenger
(i.e., light truck) fleet to the passenger car fleet, EPA
staff made adjustments to account for such vehicles
in the baseline.
493 EPA also considered other sources of similar
information, such as J.D. Powers, and concluded
that CSM was better able to provide forecasts at the
requisite level of detail for most of the model years
of interest.
PO 00000
Frm 00218
Fmt 4701
Sfmt 4702
registration data for vehicles produced
during recent model years, in order to
ensure that they reflected recent
increases in the durability and expected
life spans of cars and light trucks.494
The next step in estimating fuel use
is to calculate the total number of miles
that model year 2012–2016 cars and
light trucks remaining in use will be
driven each year. To estimate total miles
driven, the number projected to remain
in use during each future year is
multiplied by the average number of
miles they are expected to be driven at
the age they will reach in that year. The
agency estimated annual usage of cars
and light trucks of each age using data
from the Federal Highway
Administration’s 2001 National
Household Transportation Survey
(NHTS).495 Because these estimates
reflect the historically low gasoline
prices that prevailed at the time the
2001 NHTS was conducted, however,
NHTSA adjusted them to account for
the effect on vehicle use of subsequent
increases in fuel prices. Details of this
adjustment are provided in Chapter VIII
of the PRIA and Chapter of the draft
joint TSD.
Increases in average annual use of
cars and light trucks have been an
important source of historical growth in
the total number of miles they are
driven each year. To estimate future
growth in their average annual use for
purposes of this rulemaking, NHTSA
calculated the rate of growth in the
adjusted mileage schedules derived
from the 2001 NHTS necessary for total
car and light truck travel to increase at
the rate forecast in the AEO 2009
Reference Case.496 This rate was
calculated to be consistent with future
changes in the overall size and age
distributions of the U.S. passenger car
and light truck fleets that result from the
agency’s forecasts of total car and light
truck sales and updated survival rates.
The resulting growth rate in average
annual car and light truck use of
approximately 1.1 percent per year was
494 Lu, S., NHTSA, Regulatory Analysis and
Evaluation Division, ‘‘Vehicle Survivability and
Travel Mileage Schedules,’’ DOT HS 809 952, 8–11
(January 2006). Available at https://wwwnrd.nhtsa.dot.gov/Pubs/809952.pdf (last accessed
August 9, 2009). These updated survival rates
suggest that the expected lifetimes of recent-model
passenger cars and light trucks are 13.8 and 14.5
years.
495 For a description of the Survey, see https://
nhts.ornl.gov/quickStart.shtml (last accessed
August 9, 2009).
496 This approach differs from that used in the
MY 2011 final rule, where it was assumed that
future growth in the total number of cars and light
trucks in use resulting from projected sales of new
vehicles was adequate by itself to account for
growth in total vehicle use, without assuming
continuing growth in average vehicle use.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
applied to the mileage figures derived
from the 2001 NHTS to estimate annual
mileage during each year of the
expected lifetimes of MY 2012–2016
cars and light trucks.497
Finally, the agency estimated total
fuel consumption by passenger cars and
light trucks remaining in use each year
by dividing the total number of miles
surviving vehicles are driven by the fuel
economy they are expected to achieve
under each alternative CAFE standard.
Each model year’s total lifetime fuel
consumption is the sum of fuel use by
the cars or light trucks produced during
that model year during each year of
their life spans. In turn, the savings in
a model year’s lifetime fuel use that will
result from each alternative CAFE
standard is the difference between its
lifetime fuel use at the fuel economy
level it attains under the Baseline
alternative, and its lifetime fuel use at
the higher fuel economy level it is
projected to achieve under that
alternative standard.498
mstockstill on DSKH9S0YB1PROD with PROPOSALS
g. Accounting for the Rebound Effect of
Higher Fuel Economy
The fuel economy rebound effect
refers to the fraction of fuel savings
expected to result from an increase in
vehicle fuel economy—particularly an
increase required by the adoption of
higher CAFE standards—that is offset by
additional vehicle use. The increase in
vehicle use occurs because higher fuel
economy reduces the fuel cost of
driving, typically the largest single
component of the monetary cost of
operating a vehicle, and vehicle owners
497 While the adjustment for future fuel prices
reduces average mileage at each age from the values
derived from the 2001 NHTS, the adjustment for
expected future growth in average vehicle use
increases it. The net effect of these two adjustments
is to increase expected lifetime mileage by about 18
percent significantly for both passenger cars and
about 16 percent for light trucks.
498 To illustrate these calculations, the agency’s
adjustment of the AEO 2009 Revised Reference Case
forecast indicates that 9.26 million passenger cars
will be produced during 2012, and the agency’s
updated survival rates show that 83 percent of these
vehicles, or 7.64 million, are projected to remain in
service during the year 2022, when they will have
reached an age of 10 years. At that age, passenger
achieving the fuel economy level they are projected
to achieve under the Baseline alternative are driven
an average of about 800 miles, so surviving model
year 2012 passenger cars will be driven a total of
82.5 billion miles (= 7.64 million surviving vehicles
× 10,800 miles per vehicle) during 2022. Summing
the results of similar calculations for each year of
their 26-year maximum lifetime, model year 2012
passenger cars will be driven a total of 1,395 billion
miles under the Baseline alternative. Under that
alternative, they are projected to achieve a test fuel
economy level of 32.4 mpg, which corresponds to
actual on-road fuel economy of 25.9 mpg (= 32.4
mpg × 80 percent). Thus their lifetime fuel use
under the Baseline alternative is projected to be
53.9 billion gallons (= 1,395 billion miles divided
by 25.9 miles per gallon).
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
respond to this reduction in operating
costs by driving slightly more. By
lowering the marginal cost of vehicle
use, improved fuel economy may lead to
an increase in the number of miles
vehicles are driven each year and over
their lifetimes. Even with their higher
fuel economy, this additional driving
consumes some fuel, so the rebound
effect reduces the net fuel savings that
result when new CAFE standards
require manufacturers to improve fuel
economy.
The magnitude of the rebound effect
is an important determinant of the
actual fuel savings that are likely to
result from adopting stricter CAFE
standards. Research on the magnitude of
the rebound effect in light-duty vehicle
use dates to the early 1980s, and
generally concludes that a statistically
significant rebound effect occurs when
vehicle fuel efficiency improves.499 The
agency reviewed studies of the rebound
effect it had previously relied upon,
considered more recently published
estimates, and developed new estimates
of its magnitude for purposes of this
NPRM.500 Recent studies provide some
evidence that the rebound effect has
been declining over time, and may
decline further over the immediate
future if incomes rise faster than
gasoline prices. This result appears
plausible, because the responsiveness of
vehicle use to variation in fuel costs is
expected to decline as they account for
a smaller proportion of the total
monetary cost of driving, which has
been the case until very recently. At the
same time, rising personal incomes
would be expected to reduce the
sensitivity of vehicle use to fuel costs as
the time component of driving costs—
which is likely to be related to income
levels—accounts for a larger fraction the
total cost of automobile travel. NHTSA
developed new estimates of the rebound
effect by using national data on lightduty vehicle travel over the period from
1950 through 2006 to estimate various
econometric models of the relationship
between vehicle miles-traveled and
factors likely to influence it, including
household income, fuel prices, vehicle
fuel efficiency, road supply, the number
of vehicles in use, vehicle prices, and
499 Some studies estimate that the long-run
rebound effect is significantly larger than the
immediate response to increased fuel efficiency.
Although their estimates of the adjustment period
required for the rebound effect to reach its long-run
magnitude vary, this long-run effect is most
appropriate for evaluating the fuel savings and
emissions reductions resulting from stricter
standards that would apply to future model years.
500 For details of the agency’s analysis, see
Chapter VIII of the PRIA and Chapter 4 of the draft
joint TSD accompanying this proposed rule.
PO 00000
Frm 00219
Fmt 4701
Sfmt 4702
49671
other factors.501 The results of NHTSA’s
analysis are consistent with the findings
from other recent research: The average
long-run rebound effect ranged from 16
percent to 30 percent over the period
from 1950 through 2007, while
estimates of the rebound effect in 2007
range from 8 percent to 14 percent.
Projected values of the rebound effect
for the period from 2010 through 2030,
which the agency developed using
forecasts of personal income, fuel
prices, and fuel efficiency from AEO
2009’s Reference Case, range from 4
percent to 16 percent, depending on the
specific model used to generate them.
In light of these results, the agency’s
judgment is that the apparent decline
over time in the magnitude of the
rebound effect justifies using a value for
future analysis that is lower than
historical estimates, which average 15–
25 percent. Because the lifetimes of
vehicles affected by the alternative
CAFE standards considered in this
rulemaking will extend from 2012 until
nearly 2050, a value that is significantly
lower than historical estimates appears
to be appropriate. Thus NHTSA has
elected to use a 10 percent rebound
effect in its analysis of fuel savings and
other benefits from higher CAFE
standards for this NPRM.
NHTSA also invites comment on
other alternatives for estimating the
rebound effect. As one illustration,
variation in the price per gallon of
gasoline directly affects the per-mile
cost of driving, and drivers may respond
just as they would to a change in the
cost of driving resulting from a change
in fuel economy, by varying the number
of miles they drive. Because vehicles’
fuel economy is fixed in the short run,
variation in the number of miles driven
in response to changes in fuel prices
will be reflected in changes in gasoline
consumption. Under the assumption
that drivers respond similarly to
changes in the cost of driving whether
they are caused by variation in fuel
prices or fuel economy, the short-run
price elasticity of gasoline—which
measures the sensitivity of gasoline
consumption to changes in its price per
gallon—may provide some indication
about the magnitude of the rebound
effect itself. NHTSA invites comment on
the extent to which the short-run
elasticity of demand for gasoline with
respect to its price can provide useful
information about the size of the
rebound effect. Specifically, we seek
comment on whether it would be
501 The agency used several different model
specifications and estimation procedures to control
for the effect of fuel prices on fuel efficiency in
order to obtain accurate estimates of the rebound
effect.
E:\FR\FM\28SEP2.SGM
28SEP2
49672
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
appropriate to use the price elasticity of
demand for gasoline, or other alternative
approaches, to guide the choice of a
value for the rebound effect.
Additionally, NHTSA recognizes that
as the world price of oil falls in
response to lower U.S. demand for oil,
there is the potential for an increase in
oil use and, in turn, greenhouse gas
emissions outside the U.S. This so
called international oil ‘‘take back’’
effect is difficult to estimate. Given that
oil consumption patterns vary across
countries, there will be different
demand responses to a change in the
world price of crude oil. In addition,
many countries around the world
subsidize their oil consumption. It is not
clear how oil consumption would
change due to changes in the market
price of oil given the current pattern of
demand and subsidies. Further, many
countries, especially in the developed
countries/regions (i.e., the European
Union), already have or anticipate
implementing policies to limit GHG
emissions. Further out in the future, it
is anticipated that developing countries
would take actions to reduce their GHG
emissions as well. Any increases in
petroleum consumption and GHG
emissions in other nations that occurs in
response to a decline in world
petroleum prices would be attributed to
those nations, and recorded in their
respective GHG emissions inventories.
Thus, including the same increase in
emissions as part of the impact of
adopting CAFE standards in the U.S.
would risk double-counting of global
emissions totals. NHTSA seeks
comment on how to estimate the
international ‘‘take back’’ effect and its
impact on fuel consumption and GHG
emissions. See the Energy Security
section of the TSD, 4.2.8, for more
discussion of the impact of the proposed
vehicle rule on oil markets.
h. Benefits From Increased Vehicle Use
The increase in vehicle use from the
rebound effect provides additional
benefits to their owners, who may make
more frequent trips or travel farther to
reach more desirable destinations. This
additional travel provides benefits to
drivers and their passengers by
improving their access to social and
economic opportunities away from
home. As evidenced by their decisions
to make more frequent or longer trips
when improved fuel economy reduces
their costs for driving, the benefits from
this additional travel exceed the costs
drivers and passengers incur in making
more frequent or longer trips.
The agency’s analysis estimates the
economic benefits from increased
rebound-effect driving as the sum of fuel
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
costs drivers incur plus the consumer
surplus they receive from the additional
accessibility it provides.502 Because the
increase in travel depends on the extent
of improvement in fuel economy, the
value of benefits it provides differs
among model years and alternative
CAFE standards. Under even those
alternatives that would impose the
highest standards, however, the
magnitude of these benefits represents a
small fraction of total benefits.
i. The Value of Increased Driving Range
Improving vehicles’ fuel economy
may also increase their driving range
before they require refueling. By
reducing the frequency with which
drivers typically refuel, and by
extending the upper limit of the range
they can travel before requiring
refueling, improving fuel economy thus
provides some additional benefits to
their owners.503 NHTSA re-examined
this issue for purposes of this
rulemaking, and found no information
in comments or elsewhere that would
cause the agency to revise its previous
approach. Since no direct estimates of
the value of extended vehicle range are
available, NHTSA calculates directly the
reduction in the annual number of
required refueling cycles that results
from improved fuel economy, and
applies DOT-recommended values of
travel time savings to convert the
resulting time savings to their economic
value.504
As an illustration, a typical small light
truck model has an average fuel tank
size of approximately 20 gallons.
Assuming that drivers typically refuel
when their tanks are 55 percent full (i.e.,
11 gallons in reserve), increasing this
model’s actual on-road fuel economy
from 24 to 25 mpg would extend its
driving range from 216 miles (= 9
gallons × 24 mpg) to 225 miles (= 9
gallons × 25 mpg). Assuming that it is
driven 12,000 miles/year, this reduces
the number of times it needs to be
refueled each year from 55.6 (= 12,000
miles per year/216 miles per refueling)
to 53.3 (= 12,000 miles per year/225
502 The consumer surplus provided by added
travel is estimated as one-half of the product of the
decline in fuel cost per mile and the resulting
increase in the annual number of miles driven.
503 If manufacturers respond to improved fuel
economy by reducing the size of fuel tanks to
maintain a constant driving range, the resulting cost
savings will presumably be reflected in lower
vehicle sales prices.
504 See Department of Transportation, Guidance
Memorandum, ‘‘The Value of Saving Travel Time:
Departmental Guidance for Conducting Economic
Evaluations,’’ Apr. 9, 1997. https://ostpxweb.dot.gov/
policy/Data/VOT97guid.pdf (last accessed August
9, 2009); update available at https://
ostpxweb.dot.gov/policy/Data/VOTrevision1_2-1103.pdf (last accessed August 9, 2009).
PO 00000
Frm 00220
Fmt 4701
Sfmt 4702
miles per refueling), or by 2.3 refuelings
per year.
Weighted by the nationwide mix of
urban and rural driving, personal and
business travel in urban and rural areas,
and average vehicle occupancy for
driving trips, the DOT-recommended
values of travel time per vehicle-hour is
$24.64 (in 2007 dollars).505 Assuming
that locating a station and filling up
requires five minutes, the annual value
of time saved as a result of less frequent
refueling amounts to $4.72 (calculated
as 5/60 × 2.3 × $24.64). This calculation
is repeated for each future year that
model year 2012–2016 cars and light
trucks would remain in service. Like
fuel savings and other benefits, the
value of this benefit declines over a
model year’s lifetime, because a smaller
number of vehicles originally produced
during that model year remain in
service each year, and those remaining
in service are driven fewer miles.
NHTSA recognizes that many
assumptions made in its estimate for the
value of increased driving range are
subject to uncertainty. Please see
Chapter 4 of the TSD and Chapter 8 of
NHTSA’s PRIA for more information
about the uncertainty regarding these
assumptions.
j. Added Costs From Congestion,
Crashes and Noise
Increased vehicle use associated with
the rebound effect also contributes to
increased traffic congestion, motor
vehicle accidents, and highway noise.
NHTSA relies on estimates of per-mile
congestion, accident, and noise costs
caused by increased use of automobiles
and light trucks developed by the
Federal Highway Administration to
estimate these increased costs.506
NHTSA employed these estimates
previously in its analysis accompanying
the MY 2011 final rule, and continues
505 The hourly wage rate during 2008 is estimated
to average $25.50 when expressed in 2007 dollars.
Personal travel in urban areas (which represents 94
percent of urban travel) is valued at 50 percent of
the hourly wage rate, while business travel (the
remaining 6 percent of urban travel) is valued at
100 percent of the hourly wage rate. For intercity
travel, personal travel (87 percent of total intercity
travel) is valued at 70 percent of the wage rate,
while business travel (13 percent) is valued at 100
percent of the wage rate. The resulting values of
travel time are $12.67 for urban travel and $17.66
for intercity travel, and must be multiplied by
vehicle occupancy (1.6) to obtain the estimated
values of time per vehicle hour in urban and rural
driving. Finally, about 66% of driving occurs in
urban areas, while the remaining 34% takes place
in rural areas, and these percentages are used to
calculate a weighted average of the value of time
in all driving.
506 These estimates were developed by FHWA for
use in its 1997 Federal Highway Cost Allocation
Study; see https://www.fhwa.dot.gov/policy/hcas/
final/index.htm (last accessed August 9, 2009).
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
to find them appropriate for this NPRM
after reviewing the procedures used by
FHWA to develop them and considering
other available estimates of these values.
The agency multiplies FHWA’s
estimates of per-mile costs by the
annual increases in automobile and
light truck use from the rebound effect
to yield the estimated increases in
congestion, accident, and noise
externality costs during each future
year.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
k. Petroleum Consumption and Import
Externalities
U.S. consumption and imports of
petroleum products also impose costs
on the domestic economy that are not
reflected in the market price for crude
petroleum, or in the prices paid by
consumers of petroleum products such
as gasoline. These costs include (1)
higher prices for petroleum products
resulting from the effect of U.S. oil
import demand on the world oil price;
(2) the risk of disruptions to the U.S.
economy caused by sudden reductions
in the supply of imported oil to the U.S.;
and (3) expenses for maintaining a U.S.
military presence to secure imported oil
supplies from unstable regions, and for
maintaining the strategic petroleum
reserve (SPR) to cushion against
resulting price increases.507
Higher U.S. imports of crude oil or
refined petroleum products increase the
magnitude of these external economic
costs, thus increasing the true economic
cost of supplying transportation fuels
above their market prices. Conversely,
lowering U.S. imports of crude
petroleum or refined fuels by reducing
domestic fuel consumption can reduce
these external costs, and any reduction
in their total value that results from
improved fuel economy represents an
economic benefit of more stringent
CAFE standards, in addition to the
value of saving fuel itself.
NHTSA has carefully reviewed its
assumptions regarding the appropriate
value of these benefits for this proposed
rule. In analyzing benefits from its
recent actions to increase light truck
CAFE standards for model years 2005–
07 and 2008–11, NHTSA relied on a
1997 study by Oak Ridge National
Laboratory (ORNL) to estimate the value
507 See, e.g., Bohi, Douglas R. and W. David
Montgomery (1982). Oil Prices, Energy Security,
and Import Policy, Washington, DC: Resources for
the Future, Johns Hopkins University Press; Bohi,
D. R., and M. A. Toman (1993). ‘‘Energy and
Security: Externalities and Policies,’’ Energy Policy
21:1093–1109; and Toman, M. A. (1993). ‘‘The
Economics of Energy Security: Theory, Evidence,
Policy,’’ in A. V. Kneese and J. L. Sweeney, eds.
(1993). Handbook of Natural Resource and Energy
Economics, Vol. III. Amsterdam: North-Holland, pp.
1167–1218.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
of reduced economic externalities from
petroleum consumption and imports.508
More recently, ORNL updated its
estimates of the value of these
externalities, using the analytic
framework developed in its original
1997 study in conjunction with recent
estimates of the variables and
parameters that determine their
value.509 The updated ORNL study was
subjected to a detailed peer review by
experts selected by EPA, and its
estimates of the value of oil import
externalities were subsequently revised
to reflect their comments and
recommendations.510
At the request of EPA, ORNL further
revised its 2008 estimates of external
costs from U.S. oil imports to reflect
recent changes in the outlook for world
petroleum prices and continuing
changes in the structure and
characteristics of global petroleum
supply and demand.
These most recent revisions increase
ORNL’s estimates of the ‘‘monopsony
premium’’ associated with U.S. oil
imports, which measures the reduced
value of payments from U.S. oil
purchasers to foreign oil suppliers
beyond the savings from reduced
purchases of petroleum itself that
results when lower U.S. import demand
reduces the world price of petroleum.511
Consistency with NHTSA’s use of
estimates of the global benefits from
reducing emissions of CO2 and other
greenhouse gases in this analysis,
however, requires the use of a global
perspective for assessing their net value.
From this perspective, reducing these
payments simply results in a transfer of
resources from foreign oil suppliers to
U.S. purchasers (or more properly, in a
savings in the value of resources
previously transferred from U.S.
purchasers to foreign producers), and
provides no real savings in resources to
the global economy. Thus NHTSA’s
analysis of the benefits from adopting
higher CAFE standards for MY 2012–
508 Leiby, Paul N., Donald W. Jones, T. Randall
Curlee, and Russell Lee, Oil Imports: An
Assessment of Benefits and Costs, ORNL–6851, Oak
Ridge National Laboratory, November 1, 1997.
Available at https://pzl1.ed.ornl.gov/ORNL6851.pdf
(last accessed August 9, 2009).
509 Leiby, Paul N. ‘‘Estimating the Energy Security
Benefits of Reduced U.S. Oil Imports,’’ Oak Ridge
National Laboratory, ORNL/TM–2007/028, Revised
July 23, 2007. Available at https://pzl1.ed.ornl.gov/
energysecurity.html (click on link below ‘‘Oil
Imports Costs and Benefits’’) (last accessed August
9, 2009).
510 Peer Review Report Summary: Estimating the
Energy Security Benefits of Reduced U.S. Oil
Imports, ICF, Inc., September 2007.
511 The reduction in payments from U.S. oil
purchasers to domestic petroleum producers is not
included as a benefit, since it represents a transfer
that occurs entirely within the U.S. economy.
PO 00000
Frm 00221
Fmt 4701
Sfmt 4702
49673
2016 cars and light trucks excludes the
reduced value of monopsony payments
by U.S. oil consumers that might result
from lower fuel consumption by these
vehicles.
The literature on the energy security
for the last two decades has routinely
combined the monopsony and the
macroeconomic disruption components
when calculating the total value of the
energy security premium. However, in
the context of using a global value for
the Social Cost of Carbon (SCC) the
question arises: How should the energy
security premium be used when some
benefits from the proposed rule, such as
the benefits of reducing greenhouse gas
emissions, are calculated at a global
level? Monopsony benefits represent
avoided payments by the U.S. to oil
producers in foreign countries that
result from a decrease in the world oil
price as the U.S. decreases its
consumption of imported oil. Although
there is clearly a benefit to the U.S.
when considered from the domestic
perspective, the decrease in price due to
decreased demand in the U.S. also
represents a loss of income to oilproducing countries. Given the
redistributive nature of this effect, do
the negative effects on other countries
‘‘net out’’ the positive impacts to the
U.S.? If this is the case, then, the
monopsony portion of the energy
security premium should be excluded
from the net benefits calculation for the
rule.
As the preceding discussion has
indicated, the agencies omitted the
reduction in monopsony payments that
occurs when U.S. petroleum
consumption and imports are reduced
from their estimates of economic
benefits for the proposed rules. Since
the reduction in monopsony payments
by U.S. oil consumers is exactly offset
by a decline in income to suppliers of
imported oil, this omission ensures
consistency of the agencies’ analysis
with the inclusion of global benefits
from reducing emissions of greenhouse
gas emissions. The agencies seek
comment on whether, from other
perspectives, it would be reasonable to
include both the global value of
reducing GHG emissions and the
reduction in monopsony payments by
U.S. consumers of petroleum products
in their estimates of total economic
benefits from reducing U.S. fuel
consumption.
ORNL’s most recently revised
estimates of the increase in the expected
costs associated with potential
disruptions in U.S. petroleum imports
imply that each gallon of imported fuel
or petroleum saved reduces the
expected costs of oil supply disruptions
E:\FR\FM\28SEP2.SGM
28SEP2
49674
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
to the U.S. economy by $0.16 per gallon
(in 2007$). The reduction in expected
disruption costs represents a real
savings in resources, and thus
contributes economic benefits in
addition to the savings in fuel
production costs that result from
increasing fuel economy. NHTSA
employs this value in its evaluation of
the economic benefits from adopting
higher CAFE standards for MY 2012–
2016 cars and light trucks.
NHTSA’s analysis does not include
savings in budgetary outlays to support
U.S. military activities among the
benefits of higher fuel economy and the
resulting fuel savings.512 NHTSA’s
analysis of benefits from alternative
CAFE standards for MY 2012–2016 also
excludes any cost savings from
maintaining a smaller SPR from its
estimates of the external benefits of
reducing gasoline consumption and
petroleum imports. This view concurs
with that of the recent ORNL study of
economic costs from U.S. oil imports,
which concludes that savings in
government outlays for these purposes
are unlikely to result from reductions in
consumption of petroleum products and
oil imports on the scale of those
resulting from higher CAFE standards.
Based on a detailed analysis of
differences in fuel consumption,
petroleum imports, and imports of
refined petroleum products among the
Reference Case, High Economic Growth,
and Low Economic Growth Scenarios
presented in AEO 2009, NHTSA
estimates that approximately 50 percent
of the reduction in fuel consumption
resulting from adopting higher CAFE
standards is likely to be reflected in
reduced U.S. imports of refined fuel,
while the remaining 50 percent would
be reduce domestic fuel refining.513 Of
this latter figure, 90 percent is
anticipated to reduce U.S. imports of
crude petroleum for use as a refinery
feedstock, while the remaining 10
percent is expected to reduce U.S.
domestic production of crude
petroleum.514 Thus on balance, each
mstockstill on DSKH9S0YB1PROD with PROPOSALS
512 However,
the agency conducted a sensitivity
analysis of the potential effect of assuming that
some reduction military spending would result
from fuel savings and reduced petroleum imports
in order to investigate its impacts on the standards
and fuel savings.
513 Differences between forecast annual U.S.
imports of crude petroleum and refined products
among these three scenarios range from 24–89
percent of differences in projected annual gasoline
and diesel fuel consumption in the U.S. These
differences average 49 percent over the forecast
period spanned by AEO 2009.
514 Differences between forecast annual U.S.
imports of crude petroleum among these three
scenarios range from 67–97 percent of differences
in total U.S. refining of crude petroleum, and
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
100 gallons of fuel saved as a
consequence of higher CAFE standards
is anticipated to reduce total U.S.
imports of crude petroleum or refined
fuel by 95 gallons.515
l. Air Pollutant Emissions
i. Impacts on Criteria Air Pollutant
Emissions
Criteria air pollutants emitted by
vehicles and during fuel production
include carbon monoxide (CO),
hydrocarbon compounds (usually
referred to as ‘‘volatile organic
compounds,’’ or VOC), nitrogen oxides
(NOX), fine particulate matter (PM2.5),
and sulfur oxides (SOX). While
reductions in domestic fuel refining and
distribution that result from lower fuel
consumption will reduce U.S. emissions
of these pollutants, additional vehicle
use associated with the rebound effect
from higher fuel economy will increase
their emissions. Thus the net effect of
stricter CAFE standards on emissions of
each criteria pollutant depends on the
relative magnitudes of its reduced
emissions in fuel refining and
distribution, and increases in its
emissions from vehicle use. Because the
relationship between emissions in fuel
refining and vehicle use is different for
each criteria pollutant, the net effect of
fuel savings from the proposed
standards on total emissions of each
pollutant is likely to differ. We note that
any benefits in terms of criteria air
pollutant reductions resulting from this
rule would not be direct benefits.
With the exception of SO2, NHTSA
calculated annual emissions of each
criteria pollutant resulting from vehicle
use by multiplying its estimates of car
and light truck use during each year
over their expected lifetimes by per-mile
emission rates appropriate to each
vehicle type, fuel, model year, and age.
These emission rates were developed by
U.S. EPA using its Motor Vehicle
Emission Simulator (Draft MOVES
2009).516 Emission rates for SO2 were
calculated by NHTSA using average fuel
sulfur content estimates supplied by
EPA, together with the assumption that
the entire sulfur content of fuel is
emitted in the form of SO2.517 Total SO2
average 85 percent over the forecast period spanned
by AEO 2009.
515 This figure is calculated as 50 gallons + 50
gallons * 90% = 50 gallons + 45 gallons = 95
gallons.
516 The MOVES model assumes that the per-mile
rates at which these pollutants are emitted are
determined by EPA regulations and the
effectiveness of catalytic after-treatment of engine
exhaust emissions, and are thus unaffected by
changes in car and light truck fuel economy.
517 These are 30 and 15 parts per million (ppm,
measured on a mass basis) for gasoline and diesel
respectively, which produces emission rates of 0.17
PO 00000
Frm 00222
Fmt 4701
Sfmt 4702
emissions under each alternative CAFE
standard were calculated by applying
the resulting emission rates directly to
estimated annual gasoline and diesel
fuel use by cars and light trucks.
As with other impacts, the changes in
emissions of criteria air pollutants
resulting from alternative increases in
CAFE standards for MY 2012–2016 cars
and light trucks were calculated from
the differences between emissions
under each alternative that would
increase CAFE standards, and emissions
under the baseline alternative.
NHTSA estimated the reductions in
criteria pollutant emissions from
producing and distributing fuel that
would occur under alternative CAFE
standards using emission rates obtained
by EPA from Argonne National
Laboratories’ Greenhouse Gases and
Regulated Emissions in Transportation
(GREET) model.518 The GREET model
provides separate estimates of air
pollutant emissions that occur in
different phases of fuel production and
distribution, including crude oil
extraction, transportation, and storage,
fuel refining, and fuel distribution and
storage.519 EPA modified the GREET
model to change certain assumptions
about emissions during crude petroleum
extraction and transportation, as well as
to update its emission rates to reflect
adopted and pending EPA emission
standards. NHTSA converted these
emission rates from the mass per fuel
energy content basis on which GREET
reports them to mass per gallon of fuel
supplied using estimates of fuel energy
content supplied by GREET.
The resulting emission rates were
applied to the agency’s estimates of fuel
consumption under each alternative
CAFE standard to develop estimates of
total emissions of each criteria pollutant
during fuel production and distribution.
The assumptions about the effects of
changes in fuel consumption on
domestic and imported sources of fuel
supply discussed above were then
employed to calculate the effects of
grams of SO2 per gallon of gasoline and 0.10 grams
per gallon of diesel.
518 Argonne National Laboratories, The
Greenhouse Gas and Regulated Emissions from
Transportation (GREET) Model, Version 1.8, June
2007, available at https://
www.transportation.anl.gov/modeling_simulation/
GREET/ (last accessed August 9, 2009).
519 Emissions that occur during vehicle refueling
at retail gasoline stations (primarily evaporative
emissions of volatile organic compounds, or VOCs)
are already accounted for in the ‘‘tailpipe’’ emission
factors used to estimate the emissions generated by
increased light truck use. GREET estimates
emissions in each phase of gasoline production and
distribution in mass per unit of gasoline energy
content; these factors are then converted to mass
per gallon of gasoline using the average energy
content of gasoline.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
reductions in fuel use from alternative
CAFE standards on changes in imports
of refined fuel and domestic refining.
NHTSA’s analysis assumes that
reductions in imports of refined fuel
would reduce criteria pollutant
emissions during fuel storage and
distribution only. Reductions in
domestic fuel refining using imported
crude oil as a feedstock are assumed to
reduce emissions during fuel refining,
storage, and distribution, because each
of these activities would be reduced.
Reduced domestic fuel refining using
domestically-produced crude oil is
assumed to reduce emissions during all
four phases of fuel production and
distribution.520
Finally, NHTSA calculated the net
changes in domestic emissions of each
criteria pollutant by summing the
increases in emissions projected to
result from increased vehicle use, and
the reductions anticipated to result from
lower domestic fuel refining and
distribution.521 As indicated previously,
the effect of adopting higher CAFE
standards on total emissions of each
criteria pollutant depends on the
relative magnitudes of the resulting
reduction in emissions from fuel
refining and distribution, and the
increase in emissions from additional
vehicle use. Although these net changes
vary significantly among individual
criteria pollutants, the agency projects
that on balance, adopting higher CAFE
standards would reduce emissions of all
criteria air pollutants except carbon
monoxide (CO).
The net changes in domestic
emissions of fine particulates (PM2.5)
and its chemical precursors (such as
NOX, SOX, and VOCs) are converted to
economic values using estimates of the
reductions in health damage costs per
ton of emissions of each pollutant that
is avoided, which were developed and
recently revised by EPA. These savings
represent the estimated reductions in
the value of damages to human health
resulting from lower atmospheric
concentrations and population exposure
to air pollution that occur when
emissions of each pollutant that
contributes to atmospheric PM2.5
concentrations are reduced. The value
of reductions in the risk of premature
death due to exposure to fine particulate
520 In effect, this assumes that the distances crude
oil travels to U.S. refineries are approximately the
same regardless of whether it travels from domestic
oilfields or import terminals, and that the distances
that gasoline travels from refineries to retail stations
are approximately the same as those from import
terminals to gasoline stations.
521 All emissions from increased vehicle use are
assumed to occur within the U.S., since CAFE
standards would apply only to vehicles produced
for sale in the U.S.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
pollution (PM2.5) account for a majority
of EPA’s estimated values of reducing
criteria pollutant emissions, although
the value of avoiding other health
impacts is also included in these
estimates. These values do not include
a number of unquantified benefits, such
as reduction in the welfare and
environmental impacts of PM2.5
pollution, or reductions in health and
welfare impacts related to other criteria
pollutants (ozone, NO2, and SO2) and air
toxics. EPA estimates different PMrelated per-ton values for reducing
emissions from vehicle use than for
reductions in emissions of that occur
during fuel production and
distribution.522 NHTSA applies these
separate values to its estimates of
changes in emissions from vehicle use
and fuel production and distribution to
determine the net change in total
economic damages from emissions of
these pollutants.
EPA projects that the per-ton values
for reducing emissions of criteria
pollutants from both mobile sources
(including motor vehicles) and
stationary sources such as fuel refineries
and storage facilities will increase over
time. These projected increases reflect
rising income levels, which are assumed
to increase affected individuals’
willingness to pay for reduced exposure
to health threats from air pollution, as
well as future population growth, which
increases population exposure to future
levels of air pollution.
ii. Reductions in CO2 Emissions
Emissions of carbon dioxide and other
greenhouse gases (GHGs) occur
throughout the process of producing
and distributing transportation fuels, as
well as from fuel combustion itself. By
reducing the volume of fuel consumed
by passenger cars and light trucks,
higher CAFE standards will reduce GHG
emissions generated by fuel use, as well
as throughout the fuel supply cycle.
Lowering these emissions is likely to
slow the projected pace and reduce the
ultimate extent of future changes in the
global climate, thus reducing future
economic damages that changes in the
global climate are expected to cause. By
reducing the probability that climate
changes with potentially catastrophic
economic or environmental impacts will
occur, lowering GHG emissions may
also result in economic benefits that
exceed the resulting reduction in the
expected future economic costs caused
522 These reflect differences in the typical
geographic distributions of emissions of each
pollutant, their contributions to ambient PM2.5
concentrations, pollution levels (predominantly
those of PM2.5), and resulting changes in population
exposure.
PO 00000
Frm 00223
Fmt 4701
Sfmt 4702
49675
by gradual changes in the earth’s
climatic systems.
Quantifying and monetizing benefits
from reducing GHG emissions is thus an
important step in estimating the total
economic benefits likely to result from
establishing higher CAFE standards.
The agency estimated emissions of CO2
from passenger car and light truck use
by multiplying the number of gallons of
each type of fuel (gasoline and diesel)
they are projected to consume under
alternative CAFE standards by the
quantity or mass of CO2 emissions
released per gallon of fuel consumed.
This calculation assumes that the entire
carbon content of each fuel is converted
to CO2 emissions during the combustion
process. Carbon dioxide emissions
account for nearly 95 percent of total
GHG emissions that result from fuel
combustion during vehicle use.
iii. Economic Value of Reductions in
CO2 Emissions
NHTSA has taken the economic
benefits of reducing CO2 emission into
account in this rulemaking, both in
developing proposed CAFE standards
and in assessing the economic benefits
of each alternative that was considered.
Since direct estimates of the economic
benefits from reducing GHG emissions
are generally not reported in published
literature on the impacts of climate
change, these benefits are typically
assumed to be the ‘‘mirror image’’ of the
estimated incremental costs resulting
from an increase in those emissions.
That is, the benefits from reducing
emissions are usually measured by the
savings in estimated economic damages
that an equivalent increase in emissions
would otherwise have caused.
The ‘‘social cost of carbon’’ (SCC) is
intended to be a monetary measure of
the incremental damage resulting from
carbon dioxide (CO2) emissions,
including (but not limited to) net
agricultural productivity loss, human
health effects, property damages from
sea level rise, and changes in ecosystem
services. Any effort to quantify and to
monetize the consequences associated
with climate change will raise serious
questions of science, economics, and
ethics. But with full regard for the limits
of both quantification and monetization,
the SCC can be used to provide an
estimate of the social benefits of
reductions in GHG emissions.
For at least four reasons, any
particular figure will be contestable.
First, scientific and economic
knowledge about the impacts of climate
change continues to grow. With new
and better information about relevant
questions, including the cost, burdens,
and possibility of adaptation, current
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49676
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
estimates will inevitably change over
time. Second, some of the likely and
potential damages from climate
change—for example, the loss of
endangered species—are generally not
included in current SCC estimates.
These omissions may turn out to be
significant; in the sense that they may
mean that the best current estimates are
too low. As noted by the IPCC Fourth
Assessment Report, ‘‘It is very likely that
globally aggregated figures
underestimate the damage costs because
they cannot include many nonquantifiable impacts.’’ Third, it is
unlikely that the damage estimates
account for the directed technological
change that will lead to innovations that
reduce the costs of responding to
climate change—for example, it is likely
that scientists will develop crops that
are better able to withstand high
temperatures. In this respect, the current
estimates may overstate the likely
damages. Fourth, controversial ethical
judgments, including those involving
the treatment of future generations, play
a role in judgments about the SCC (see
in particular the discussion of the
discount rate, below).
To date, SCC estimates presented in
recent regulatory documents have
varied within and among agencies,
including DOT, DOE, and EPA. For
example, a regulation proposed by DOT
in 2008 assumed a value of $7 per ton
CO2 523 (2006$) for 2011 emission
reductions (with a range of $0–14 for
sensitivity analysis). A regulation
finalized by DOE used a range of $0–$20
(2007$). Both of these ranges were
designed to reflect the value of damages
to the United States resulting from
carbon emissions, or the ‘‘domestic’’
SCC. In the final MY 2011 CAFE EIS,
DOT used both a domestic SCC value of
$2/tCO2 and a global SCC value of
$33/tCO2 (with sensitivity analysis at
$80/tCO2), increasing at 2.4 percent per
year thereafter. The final MY 2011
CAFE rule also presented a range from
$2 to $80/tCO2. EPA’s Advance Notice
of Proposed Rulemaking for Greenhouse
Gases discussed the benefits of reducing
GHG emissions and identified what it
described as ‘‘very preliminary’’ SCC
estimates ‘‘subject to revision’’ that
spanned three orders of magnitude.
EPA’s global mean values were $68 and
$40/tCO2 for discount rates of 2 percent
523 For the purposes of this discussion, we
present all values of the SCC as the cost per ton of
CO2 emissions. Some discussions of the SCC in the
literature use an alternative presentation of a dollar
per ton of Carbon. The standard adjustment factor
is 3.67, which means, for example, that a SCC of
$10 per ton of CO2 would be equivalent to a cost
of $36.70 for a ton of carbon emitted.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
and 3 percent respectively (in 2006 real
dollars for 2007 emissions).524
The current Administration has
worked to develop a transparent
methodology for selecting a set of
interim SCC estimates to use in
regulatory analyses until a more
comprehensive characterization of the
distribution of SCC is developed. This
discussion proposes a set of values for
the interim social cost of carbon. It
should be emphasized that the analysis
here is preliminary. Today’s proposed
joint rulemaking presents SCC estimates
that reflect the Administration’s current
understanding of the relevant literature.
These interim estimates are being used
for the short-term while an interagency
group develops a more comprehensive
characterization of the distribution of
SCC values for future economic and
regulatory analyses. The interim values
should not be viewed as a statement
about the results of the longer-term
process. The Administration will be
evaluating and seeking comment in the
preamble to today’s proposed rule on all
of the scientific, economic, and ethical
issues before establishing final estimates
for use in future rulemakings.
The outcomes of the Administration’s
process to develop interim values are
judgments in favor of (a) global rather
than domestic values, (b) an annual
growth rate of 3%, and (c) interim global
SCC estimates for 2007 (in 2006 dollars)
of $55, $33, $19, $10, and $5 per ton of
CO2. Notably, we have centered our
current attention on a SCC of $19. The
proposed figures are based on the
following judgments.
1. Global and domestic measures.
Because of the distinctive nature of the
climate change problem, we present
both a global SCC and a fraction of that
value that represents impacts that may
occur within the borders of the U.S.
alone, or a ‘‘domestic’’ SCC, but center
our current attention on the global
measure. This approach represents a
departure from past practices, which
relied, for the most part, on domestic
measures. As a matter of law, both
global and domestic values are
permissible; the relevant statutory
provisions are ambiguous and allow
selection of either measure.525
524 73 FR 44416 (July 30, 2008). EPA, ‘‘Advance
Notice of Proposed Rulemaking for Greenhouse
Gases Under the Clean Air Act, Technical Support
Document on Benefits of Reducing GHG
Emissions,’’ June 2008. www.regulations.gov.
Search for ID ‘‘EPA–HQ–OAR–2008–0318–0078.’’
525 It is true that Federal statutes are presumed
not to have extraterritorial effect, in part to ensure
that the laws of the United States respect the
interests of foreign sovereigns. But use of a global
measure for the SCC does not give extraterritorial
effect to Federal law and hence does not intrude on
such interests.
PO 00000
Frm 00224
Fmt 4701
Sfmt 4702
It is true that under OMB guidance,
analysis from the domestic perspective
is required, while analysis from the
international perspective is optional.
The domestic decisions of one nation
are not typically based on a judgment
about the effects of those decisions on
other nations. But the climate change
problem is highly unusual in the sense
that it involves (a) a global public good
in which (b) the emissions of one nation
may inflict significant damages on other
nations and (c) the United States is
actively engaged in promoting an
international agreement to reduce
worldwide emissions.
In these circumstances, we believe the
global measure is preferred. Use of a
global measure reflects the reality of the
problem and is expected to contribute to
the continuing efforts of the United
States to ensure that emissions
reductions occur in many nations.
Domestic SCC values are also
presented. The development of a
domestic SCC is greatly complicated by
the relatively few region- or countryspecific estimates of the SCC in the
literature. One potential source of
estimates comes from a recent
unpublished EPA modeling effort using
the FUND model. The resulting
estimates suggest that the ratio of
domestic to global benefits varies with
key parameter assumptions. With a 3
percent discount rate, for example, the
U.S. benefit is about 6 percent of the
global benefit for the ‘‘central’’ (mean)
FUND results, while, for the
corresponding ‘‘high’’ estimates
associated with a higher climate
sensitivity and lower global economic
growth, the U.S. benefit is less than 4
percent of the global benefit. With a 2
percent discount rate, the U.S. share is
about 2–5 percent of the global estimate.
Based on this available evidence, an
interim domestic SCC value equal to 6
percent of the global damages is
proposed. This figure is in the middle
of the range of available estimates from
the literature. It is recognized that the 6
percent figure is approximate and
highly speculative and alternative
approaches will be explored before
establishing final values for future
rulemakings.
2. Filtering existing analyses. There
are numerous SCC estimates in the
existing literature, and it is reasonable
to make use of those estimates in order
to produce a figure for current use. A
starting point is provided by the metaanalysis in Richard Tol, 2008.526 With
526 Richard Tol, The Social Cost of Carbon:
Trends, Outliers, and Catastrophes, Economics: The
Open-Access, Open-Assessment E-Journal, Vol. 2,
2008–25. https://www.economics-ejournal.org/
economics/journalarticles/2008-25 (2008).
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
that starting point, the Administration
proposes to ‘‘filter’’ existing SCC
estimates by using those that (1) are
derived from peer-reviewed studies; (2)
do not weight the monetized damages to
one country more than those in other
countries; (3) use a ‘‘business as usual’’
climate scenario; and (4) are based on
the most recent published version of
each of the three major integrated
assessment models (IAMs): FUND,
PAGE, and DICE.
Proposal (1) is based on the view that
those studies that have been subject to
peer review are more likely to be
reliable than those that have not been.
Proposal (2) is based on a principle of
neutrality and simplicity; it does not
treat the citizens of one nation (or
different citizens within the U.S.)
differently on the basis of speculative or
controversial considerations. Further, it
is consistent with the potential
compensation tests of Kaldor (1939) and
Hicks (1940), which use unweighted
sums of willingness to pay. Finally, this
is the approach used in rulemakings
across a variety of settings and
consequently keeps U.S. government
policy consistent across contexts.
Proposal (3) stems from the judgment
that as a general rule, the proper way to
assess a policy decision is by comparing
the implementation of the policy against
a counterfactual state where the policy
is not implemented. In addition, our
expectation is that most policies to be
evaluated using these interim SCC
estimates will constitute small enough
changes to the larger economy to safely
assume that the marginal benefits of
emissions reductions will not change
between the baseline and policy
scenarios. A departure from this
approach would be to consider a more
dynamic setting in which other
countries might implement policies to
reduce GHG emissions at an unknown
future date and the U.S. could choose to
implement such a policy now or at a
future date.
Proposal (4) is based on four
complementary judgments. First, the
FUND, PAGE, and DICE models now
stand as the most comprehensive and
reliable efforts to measure the economic
damages from climate change. Second,
the latest versions of the three IAMs are
likely to reflect the most recent evidence
and learning, and hence they are
presumed to be superior to those that
preceded them. Third, any effort to
choose among them, or to reject one in
favor of the others, would be difficult to
defend at the present time. In the
absence of a clear reason to choose
among them, it is reasonable to base the
SCC on all of them. Fourth, in light of
the uncertainties associated with the
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
SCC, the additional information offered
by different models is important.
3. Use a model-weighted average of
the estimates at each discount rate. At
this time, a scientifically valid reason to
prefer any of the three major IAMs
(FUND, PAGE, and DICE) has not been
identified. Accordingly, to address the
concern that certain models not be given
unequal weight relative to the other
models, the estimates are based on an
equal weighting of the means of the
estimates from each of the models.
Among estimates that remain after
applying the filter, we begin by taking
the average of all estimates within a
model. The estimated SCC is then
calculated as the average of the three
model-specific averages. This approach
is used to ensure that models with a
greater number of published results do
not exert unequal weight on the interim
SCC estimates.
4. Apply a 3 percent annual growth
rate to the chosen SCC values. SCC is
assumed to increase over time, because
future emissions are expected to
produce larger incremental damages as
physical and economic systems become
more stressed as the magnitude of
climate change increases. Indeed, an
implied growth rate in the SCC can be
produced by most of the models that
estimate economic damages caused by
increased GHG emissions in future
years. But neither the rate itself nor the
information necessary to derive its
implied value is commonly reported. In
light of the limited amount of debate
thus far about the appropriate growth
rate of the SCC, applying a rate of 3
percent per year seems appropriate at
this stage. This value is consistent with
the range recommended by IPCC (2007)
and close to the latest published
estimate (Hope 2008).
49677
For estimation of the benefits
associated with the mitigation of climate
change, one of the most complex issues
involves the appropriate discount rate.
OMB’s current guidance offers a
detailed discussion of the relevant
issues and calls for discount rates of 3
percent and 7 percent. It also permits a
sensitivity analysis with low rates (1–3
percent) for intergenerational problems:
‘‘If your rule will have important
intergenerational benefits or costs you
might consider a further sensitivity
analysis using a lower but positive
discount rate in addition to calculating
net benefits using discount rates of 3
and 7 percent.’’ 527
The choice of a discount rate,
especially over long periods of time,
raises highly contested and exceedingly
difficult questions of science,
economics, philosophy, and law. See,
e.g., William Nordhaus, The Challenge
of Global Warming (2008); Nicholas
Stern, The Economics of Climate
Change (2007); Discounting and
Intergenerational Equity (Paul Portney
and John Weyant eds. 1999). It is not
clear that future generations would be
willing to trade environmental quality
for consumption at the same rate as the
current generations. Under imaginable
assumptions, decisions based on costbenefit analysis with high discount rates
might harm future generations—at least
if investments are not made for the
benefit of those generations. See Robert
Lind, Analysis for Intergenerational
Discounting, id. at 173, 176–177. It is
also possible that the use of low
discount rates for particular projects
might itself harm future generations, by
ensuring that resources are not used in
a way that would greatly benefit them.
In the context of climate change,
questions of intergenerational equity are
especially important.
Reasonable arguments support the use
of a 3 percent discount rate. First, that
rate is among the two figures suggested
by OMB guidance, and hence it fits with
existing national policy. Second, it is
standard to base the discount rate on the
compensation that people receive for
delaying consumption, and the 3
percent is close to the risk-free rate of
return, proxied by the return on long
term inflation-adjusted U.S. Treasury
Bonds, as of this writing. Although
these rates are currently closer to 2.5
percent, the use of 3 percent provides an
adjustment for the liquidity premium
that is reflected in these bonds’ returns.
At the same time, others would argue
that a 5 percent discount rate can be
supported. The argument relies on
several assumptions. First, that rate can
also be justified by reference to the level
of compensation for delaying
consumption, because it fits with
market behavior with respect to
individuals’ willingness to trade-off
consumption across periods as
measured by the estimated post-tax
average real returns to risky private
investments (e.g., the S&P 500). In the
climate setting, the 5 percent discount
rate may be preferable to the riskless
rate because it is based on risky
investments and the return to projects to
mitigate climate change is also risky. In
contrast, the 3 percent riskless rate may
be a more appropriate discount rate for
527 See OMB Circular A–4, pp. 35–36, citing
Portney and Weyant, eds. (1999), Discounting and
Intergenerational Equity, Resources for the Future,
Washington, DC.
(1) Discount Rates
PO 00000
Frm 00225
Fmt 4701
Sfmt 4702
E:\FR\FM\28SEP2.SGM
28SEP2
49678
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
projects where the return is known with
a high degree of confidence (e.g.,
highway guardrails). In principal, the
correct discount rate would reflect the
variance in payoff from climate
mitigation policy and the correlation
between the payoffs of the policy and
the broader economy.528
Second, 5 percent, and not 3 percent,
is roughly consistent with estimates
implied by reasonable inputs to the
theoretically derived Ramsey equation,
which specifies the optimal time path
for consumption. That equation
specifies the optimal discount rate as
the sum of two components. The first
term (the product of the elasticity of the
marginal utility of consumption and the
growth rate of consumption) reflects the
fact that consumption in the future is
likely to be higher than consumption
today, so diminishing marginal utility
implies that the same monetary damage
will cause a smaller reduction of utility
in the future. Standard estimates of this
term from the economics literature are
in the range of 3 percent–5 percent. The
second component reflects the
possibility that a lower weight should
be placed on utility in the future, to
account for social impatience or
extinction risk, which is specified by a
pure rate of time preference (PRTP). A
common estimate of the PRTP is 2
percent, though some observers believe
that a principle of intergenerational
equity suggests that the PRTP should be
close to zero. It follows that discount
rate of 5 percent is near the middle of
the range of values that are able to be
derived from the Ramsey equation.
It is recognized that the arguments
above—for use of market behavior and
the Ramsey equation—face objections in
the context of climate change, and of
course there are alternative approaches.
In light of climate change, it is possible
that consumption in the future will not
be higher than consumption today, and
if so, the Ramsey equation will suggest
a lower figure. However, the historical
evidence is consistent with rising
consumption over time.
Some critics note that using observed
interest rates for inter-generational
decisions imposes current preferences
on future generations, which some
economists say may not be appropriate.
For generational equity, they argue that
the discount rate should be below
market rates to correct for market
distortions and inefficiencies in intergenerational transfers of wealth (which
are presumed to compensate future
generations for damage), and to treat
generations equitably based on ethical
principles (see Broome 2008).529
Additionally, some analyses attempt
to deal with uncertainty with respect to
interest rates over time. We explore
below how this might be done.530
(2) Proposed Interim Estimates
The application of the methodology
outlined above yields interim estimates
of the SCC that are reported in Table
IV.C.3–2. These estimates are reported
separately using 3 percent and 5 percent
discount rates. The cells are empty in
rows 10 and 11, because these studies
did not report estimates of the SCC at
a 3 percent discount rate. The modelweighted means are reported in the final
or summary row; they are $33 per tCO2
at a 3 percent discount rate and $5 per
tCO2 with a 5 percent discount rate.
TABLE IV.C.3–2—GLOBAL SOCIAL COST OF CARBON (SCC) ESTIMATES ($/tCO2 IN 2007 (2006$)), BASED ON 3% AND
5% DISCOUNT RATES*
Model
Study
Climate scenario
3%
.................................................
.................................................
.................................................
.................................................
.................................................
.................................................
.................................................
.................................................
Anthoff et al. 2009 ...................................
Anthoff et al. 2009 ...................................
Anthoff et al. 2009 ...................................
Link and Tol 2004 ...................................
Link and Tol 2004 ...................................
Guo et al. 2006 .......................................
Guo et al. 2006 .......................................
Guo et al. 2006 .......................................
9 PAGE .................................................
10 PAGE ...............................................
11 DICE .................................................
Wahba & Hope 2006 ...............................
Hope 2006 ...............................................
Nordhaus 2008 ........................................
FUND default ...........................................
SRES A1b ...............................................
SRES A2 .................................................
No THC ...................................................
THC continues .........................................
Constant PRTP .......................................
Gollier discount 1 ....................................
Gollier discount 2 ....................................
FUND Mean ............................................
A2-scen ...................................................
..................................................................
..................................................................
6
1
9
12
12
5
14
7
8.25
57
..........
..........
mstockstill on DSKH9S0YB1PROD with PROPOSALS
1
2
3
4
5
6
7
8
FUND
FUND
FUND
FUND
FUND
FUND
FUND
FUND
528 Specifically, if the benefits of the policy are
highly correlated with the returns from broader
economy, then the market rate should be used to
discount the benefits. If the benefits are
uncorrelated with the broader economy the long
term government bond rate should be applied.
Furthermore, if the benefits are negatively
correlated with the broader economy a rate less
than that on long term government bonds should be
used (Lind, 1982 pp. 89–90).
529 See Arrow, K.J., W.R. Cline, K-G Maler, M.
Munasinghe, R. Squiteri, J.E. Stiglitz, 1996.
‘‘Intertemporal equity, discounting and economic
efficiency,’’ in Climate Change 1995: Economic and
Social Dimensions of Climate Change, Contribution
of Working Group III to the Second Assessment
Report of the Intergovernmental Panel on Climate
Change. See also Weitzman, M.L., 1999. In Portney,
P.R. and Weyant J.P. (eds.), Discounting and
Intergenerational Equity, Resources for the Future,
Washington, DC.
530 Richard Newell and William Pizer,
Discounting the distant future: how much do
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
uncertain rates increase valuations? J. Environ.
Econ. Manage. 46 (2003) 52–71.
531 Most of the estimates in Table 1 rely on
climate scenarios developed by the
Intergovernmental Panel on Climate Change (IPCC).
The IPCC published a new set of scenarios in 2000
for use in the Third Assessment Report (Special
Report on Emissions Scenarios—SRES). The SRES
scenarios define four narrative storylines: A1, A2,
B1 and B2, describing the relationships between the
forces driving greenhouse gas and aerosol emissions
and their evolution during the 21st century for large
world regions and globally. Each storyline
represents different demographic, social, economic,
technological, and environmental developments
that diverge in increasingly irreversible ways. The
storylines are summarized in Nakicenovic et al.,
2000 (see also https://sedac.ciesin.columbia.edu/
ddc/sres/). Because the B1 and B2 storylines
represent policy cases rather than business-as-usual
projections, estimates derived from these scenarios
to be less appropriate for use in benefit-cost
analysis. They are therefore excluded.
PO 00000
Frm 00226
Fmt 4701
Sfmt 4702
5%
¥1
¥1
¥1
3
2
¥1
0
¥1
0
7
7
8
532 Guo et al. (2006) report estimates based on two
Gollier discounting schemes. The Gollier
discounting assumes complex specifications about
individual utility functions and risk preferences.
After various conditions are satisfied, declining
social discount rates emerge. Gollier Discounting
Scheme 1 employs a certainty-equivalent social rate
of time preference (SRTP) derived by assuming the
regional growth rate is equally likely to be 1%
above or below the original forecast growth rate.
Gollier Discounting Scheme 2 calculates a certaintyequivalent social rate of time preference (SRTP)
using five possible growth rates, and applies the
new SRTP instead of the original. Hope (2008)
conducts Monte Carlo analysis on the PRTP
component of the discount rate. The PRTP is
modeled as a triangular distribution with a min
value of 1%/yr, a most likely value of 2%/yr, and
a max value of 3%/yr.
E:\FR\FM\28SEP2.SGM
28SEP2
49679
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
TABLE IV.C.3–2—GLOBAL SOCIAL COST OF CARBON (SCC) ESTIMATES ($/tCO2 IN 2007 (2006$)), BASED ON 3% AND
5% DISCOUNT RATES*—Continued
Model
Study
Climate scenario
3%
Summary .................................................
..................................................................
Model-weighted Mean .............................
5%
33
5
* The sample includes all peer reviewed, non-equity-weighted estimates included in Tol (2008), Nordhaus (2008), Hope (2008), and Anthoff et
al. (2009), that are based on the most recent published version of FUND, PAGE, or DICE and use business-as-usual climate scenarios.531 532 All
values are based on the best available information from the underlying studies about the base year and year dollars, rather than the Tol (2008)
assumption that all estimates included in his review are 1995 values in 1995$. All values were updated to 2007 using a 3 percent annual growth
rate in the SCC, and adjusted for inflation using GDP deflator.
Analyses have been conducted at $33
and $5 as these represent the estimates
associated with the 3 percent and 5
percent discount rates, respectively.533
The 3 percent and 5 percent estimates
have independent appeal, and at this
time a clear preference for one over the
other is not warranted. Thus, we have
also included—and centered our current
attention on—the average of the
estimates associated with these discount
rates, which is $19. (Based on the $19
global value, the approximate domestic
fraction of these benefits would be $1.14
per ton of CO2 assuming that domestic
benefits are 6 percent of the global
benefits.
It is true that there is uncertainty
about interest rates over long time
horizons. Recognizing that point,
Newell and Pizer (2003) have made a
careful effort to adjust for that
uncertainty. The Newell-Pizer approach
models discount rate uncertainty as
something that evolves over time.534
This is a relatively recent contribution
to the literature, and estimates based on
this method are included with the aim
of soliciting comment.
There are several concerns with using
this approach in this context. First, it
would be a departure from current OMB
guidance. Second, an approach that
would average what emerges from
discount rates of 3 percent and 5
percent reflects uncertainty about the
discount rate, but based on a different
model of uncertainty. The Newell-Pizer
approach models discount rate
uncertainty as something that evolves
over time; in contrast, the preferred
approach (outlined above) assumes that
there is a single discount rate with equal
probability of 3 percent and 5 percent.
Table IV.C.3–3 reports on the
application of the Newell-Pizer
adjustments. The precise numbers
depend on the assumptions about the
data generating process that governs
interest rates. Columns (1a) and (1b)
assume that ‘‘random walk’’ model best
describes the data and uses 3 percent
and 5 percent discount rates,
respectively. Columns (2a) and (2b)
repeat this, except that it assumes a
‘‘mean-reverting’’ process. While the
empirical evidence does not rule out a
mean-reverting model, Newell and Pizer
find stronger empirical support for the
random walk model.
TABLE IV.C.3–3—GLOBAL SOCIAL COST OF CARBON (SCC) ESTIMATES ($/tCO2 IN 2007 (2006$))*, USING NEWELL &
PIZER (2003) ADJUSTMENT FOR FUTURE DISCOUNT RATE UNCERTAINTY**
Random-walk
model
Model
Study
Climate scenario
3%
(1a)
...........................
...........................
...........................
...........................
...........................
...........................
...........................
...........................
Anthoff et al. 2009 ................................
Anthoff et al. 2009 ................................
Anthoff et al. 2009 ................................
Link and Tol 2004 .................................
Link and Tol 2004 .................................
Guo et al. 2006 .....................................
Guo et al. 2006 .....................................
Guo et al. 2006 .....................................
9 PAGE ...........................
10 PAGE .........................
11 DICE ..........................
Summary ...........................
mstockstill on DSKH9S0YB1PROD with PROPOSALS
1
2
3
4
5
6
7
8
FUND
FUND
FUND
FUND
FUND
FUND
FUND
FUND
Wahba & Hope 2006 ............................
Hope 2006 ............................................
Nordhaus 2008 .....................................
...............................................................
FUND default ........................................
SRES A1b .............................................
SRES A2 ...............................................
No THC .................................................
THC continues ......................................
Constant PRTP .....................................
Gollier discount 1 ..................................
Gollier discount 2 ..................................
FUND Mean ..........................................
A2-scen .................................................
...............................................................
...............................................................
Model-weighted Mean ..........................
10
2
15
20
20
9
14
7
12
97
..........
..........
55
5%
(1b)
0
0
0
6
4
0
0
¥1
1
13
13
15
10
Meanreverting
model
3%
(2a)
7
1
10
13
13
6
14
7
9
63
..........
..........
36
5%
(2b)
¥1
¥1
¥1
4
2
¥1
0
¥1
0
8
8
9
6
* The sample includes all peer reviewed, non-equity-weighted estimates included in Tol (2008), Nordhaus (2008), Hope (2008), and Anthoff et
al. (2009), that are based on the most recent published version of FUND, PAGE, or DICE and use business-as-usual climate scenarios. All values are based on the best available information from the underlying studies about the base year and year dollars, rather than the Tol (2008) assumption that all estimates included in his review are 1995 values in 1995$. All values were updated to 2007 using a 3 percent annual growth
rate in the SCC, and adjusted for inflation using GDP deflator. See the Notes to Table 1 for further details.
** Assumes a starting discount rate of 3 percent or 5 percent. Newell and Pizer (2003) based adjustment factors are not applied to estimates
from Guo et al. (2006) that use a different approach to account for discount rate uncertainty (rows 7–8).
Note that the correction factor from Newell and Pizer is based on the DICE model. The proper adjustment may differ for other integrated assessment models that produce different time schedules of marginal damages. We would expect this difference to be minor.
533 It should be noted that reported discount rates
may not be consistently derived across models or
specific applications of models: While the discount
rate may be identical, it may reflect different
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
assumptions about the individual components of
the Ramsey equation identified earlier.
534 In contrast, an alternative approach based on
Weitzman (2001) would assume that there is a
constant discount rate that is uncertain and
PO 00000
Frm 00227
Fmt 4701
Sfmt 4702
represented by a probability distribution. The
Newell and Pizer, and Weitzman approaches are
relatively recent contributions, and we invite
comment on the advantages and disadvantages of
each.
E:\FR\FM\28SEP2.SGM
28SEP2
49680
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
The resulting estimates of the social
cost of carbon are necessarily greater.
When the adjustments from the random
walk model are applied, the estimates of
the social cost of carbon are $10 and $55
per ton of CO2, with the 5 percent and
3 percent discount rates, respectively.
The application of the mean-reverting
adjustment yields estimates of $6 and
$36. Relying on the random walk model,
analyses are also conducted with the
value of the SCC set at $10 and $55.
(3) Caveats
There are at least four caveats to the
approach outlined above.
First, the impacts of climate change
are expected to be widespread, diverse,
and heterogeneous. In addition, the
exact magnitude of these impacts is
uncertain, because of the inherent
randomness in the Earth’s atmospheric
processes, the U.S. and global
economies, and the behaviors of current
and future populations. Current IAM do
not currently individually account for
and assign value to all of the important
physical and other impacts of climate
change that are recognized in the
climate change literature. Although it is
likely that our capability to quantify and
monetize impacts will improve with
time, it is also likely that even in future
applications, there are a number of
potentially significant benefits
categories that will remain
unmonetized.
Second, in the opposite direction, it is
unlikely that the damage estimates
adequately account for the directed
technological change that climate
change will cause. In particular, climate
change will increase the return on
investment to develop technologies that
allow individuals to better cope with
climate change. For example, it is likely
that scientists will develop crops that
are better able to withstand high
temperatures. In this respect, the current
estimates may overstate the likely
damages.
Third, there has been considerable
recent discussion of the risk of
catastrophic impacts and of how best to
account for worst-case scenarios. Recent
research by Weitzman (2009) specifies
some conditions under which the
possibility of catastrophe would
undermine the use of IAMs and
conventional cost-benefit analysis. This
research requires further exploration
before its generality is known and the
optimal way to incorporate it into
regulatory reviews is understood.
Fourth, it is also worth noting that the
SCC estimates are only relevant for
incremental policies relative to the
projected baselines, which capture
business-as-usual scenarios. To evaluate
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
non-marginal changes, such as might
occur if the U.S. acts in tandem with
other nations, then it might be necessary
to go beyond the simple expedient of
using the SCC along the BAU path. In
particular, it would be correct to
calculate the aggregate WTP to move
from the BAU scenario to the policy
scenario, without imposing the
restriction that the marginal benefit
remains constant over this range.
All of the values derived from this
process are expressed in 2006 dollars.
NHTSA has adjusted them to their
equivalent values in 2007 dollars for
consistency with other values used in
its analysis of benefits from adopting
higher CAFE standards for MY 2012–
2016 passenger cars and light trucks.
The resulting value upon which we
have centered our analysis, which is
derived from the figures reported in the
tables above, is equivalent to $20 per
metric ton of CO2 emissions avoided
when expressed in 2007$, and the
agency has relied on this value in its
analysis. NHTSA has also analyzed the
sensitivity of its benefit estimates to
alternative values of $5, $10, $34, and
$56 per metric ton of CO2 emissions
avoided, with all figures again in 2007$.
Each of these values applies to
emissions during 2007, and are assumed
to grow in real terms by 3 percent
annually beginning in 2007. NHTSA
seeks comments on these values and the
approach used to derive them.
m. Discounting Future Benefits and
Costs
Discounting future fuel savings and
other benefits is intended to account for
the reduction in their value to society
when they are deferred until some
future date, rather than received
immediately. The discount rate
expresses the percent decline in the
value of these benefits—as viewed from
today’s perspective—for each year they
are deferred into the future. In
evaluating the benefits from alternative
increases in CAFE standards for MY
2012–2016 passenger cars and light
trucks, NHTSA has employed a
discount rate of 3 percent per year. The
agency has also tested the sensitivity of
these benefit and cost estimates to the
use of a 7 percent discount rate.
Although these are the same discount
rates analyzed in the MY 2011 final
rule, NHTSA has chosen to use 3
percent as the basis for the Reference
Case in this proposed rule rather than
the 7 percent rate it employed
previously, for the reasons discussed
below.
The primary reason that NHTSA has
selected 3 percent as the appropriate
rate for discounting future benefits from
PO 00000
Frm 00228
Fmt 4701
Sfmt 4702
increased CAFE standards is that most
or all of vehicle manufacturers’ costs for
complying with higher CAFE standards
are likely to be reflected in higher sales
prices for their new vehicle models. By
increasing sales prices for new cars and
light trucks, CAFE regulation will thus
primarily affect vehicle purchases and
other private consumption decisions.
Both economic theory and OMB
guidance on discounting indicate that
the future benefits and costs of
regulations that mainly affect private
consumption should be discounted at
the social rate of time preference.535
OMB guidance also indicates that
savers appear to discount future
consumption at an average real (that is,
adjusted to remove the effect of
inflation) rate of about 3 percent when
they face little risk about its likely level.
Since the real rate that savers use to
discount future consumption represents
a reasonable estimate of the social rate
of time preference, NHTSA has
employed the 3 percent rate to discount
projected future benefits and costs
resulting from higher CAFE standards
for MY 2012–2016 passenger cars and
light trucks.536
Because there is some uncertainty
about the extent to which vehicle
manufacturers will be able to recover
their costs for complying with higher
CAFE standards by increasing vehicle
sales prices, however, NHTSA has also
tested the sensitivity of these benefit
and cost estimates to the use of a higher
percent discount rate. OMB guidance
indicates that the real economy-wide
opportunity cost of capital is the
appropriate discount rate to apply to
future benefits and costs when the
primary effect of a regulation is ‘‘* * *
to displace or alter the use of capital in
the private sector,’’ and estimates that
this rate currently averages about 7
percent.537 Thus the agency has also
tested the sensitivity of its benefit and
cost estimates for alternative MY 2012–
2016 CAFE standards to the use of a 7
percent real discount rate. NHTSA seeks
comment on whether it should evaluate
CAFE standards using a discount rate of
3 percent, 7 percent, or an alternative
value.
n. Accounting for Uncertainty in
Benefits and Costs
In analyzing the uncertainty
surrounding its estimates of benefits and
costs from alternative CAFE standards,
535 Id.
536 Office of Management and Budget, Circular A–
4, ‘‘Regulatory Analysis,’’ September 17, 2003, 33.
Available at https://www.whitehouse.gov/omb/
circulars/a004/a-4.pdf (last accessed August 9,
2009).
537 Id.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
NHTSA has considered alternative
estimates of those assumptions and
parameters likely to have the largest
effect. These include the projected costs
of fuel economy-improving technologies
and their expected effectiveness in
reducing vehicle fuel consumption,
forecasts of future fuel prices, the
magnitude of the rebound effect, the
reduction in external economic costs
resulting from lower U.S. oil imports,
the value to the U.S. economy of
reducing carbon dioxide emissions, and
the discount rate applied to future
benefits and costs. The range for each of
these variables employed in the
uncertainty analysis is presented in the
section of this notice discussing each
variable.
The uncertainty analysis was
conducted by assuming independent
normal probability distributions for
each of these variables, using the low
and high estimates for each variable as
the values below which 5 percent and
95 percent of observed values are
believed to fall. Each trial of the
uncertainty analysis employed a set of
values randomly drawn from each of
these probability distributions,
assuming that the value of each variable
is independent of the others. Benefits
and costs of each alternative standard
were estimated using each combination
of variables. A total of 1,000 trials were
used to establish the likely probability
distributions of estimated benefits and
costs for each alternative standard.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
o. Where Can Readers Find More
Information About the Economic
Assumptions?
Much more detailed information is
provided in Chapter VIII of the PRIA,
and a discussion of how NHTSA and
EPA jointly reviewed and updated
economic assumptions for purposes of
this NPRM is available in Chapter 4 of
the TSD. In addition, all of NHTSA’s
model input and output files are now
public and available for the reader’s
review and consideration. The
economic input files can be found in the
docket for this NPRM, NHTSA–2009–
0059, and on NHTSA’s Web site.
Finally, because much of NHTSA’s
economic analysis for purposes of this
NPRM builds on the work that was done
for the MY 2011 final rule, we refer
readers to that document as well for
background information concerning
how NHTSA’s assumptions regarding
economic inputs for CAFE analysis have
evolved over the past several
rulemakings, both in response to
comments and as a result of the agency’s
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
growing experience with this type of
analysis.538
4. How Does NHTSA Use the
Assumptions in Its Modeling Analysis?
In developing today’s proposed CAFE
standards, NHTSA has made significant
use of results produced by the CAFE
Compliance and Effects Model
(commonly referred to as ‘‘the CAFE
model’’ or ‘‘the Volpe model’’), which
DOT’s Volpe National Transportation
Systems Center developed specifically
to support NHTSA’s CAFE rulemakings.
The model, which has been constructed
specifically for the purpose of analyzing
potential CAFE standards, integrates the
following core capabilities:
(1) Estimating how manufacturers
could apply technologies in response to
new fuel economy standards,
(2) Estimating the costs that would be
incurred in applying these technologies,
(3) Estimating the physical effects
resulting from the application of these
technologies, such as changes in travel
demand, fuel consumption, and
emissions of carbon dioxide and criteria
pollutants, and
(4) Estimating the monetized societal
benefits of these physical effects.
An overview of the model follows
below. Separate model documentation
provides a detailed explanation of the
functions the model performs, the
calculations it performs in doing so, and
how to install the model, construct
inputs to the model, and interpret the
model’s outputs. Documentation of the
model, along with model installation
files, source code, and sample inputs are
available at NHTSA’s web site. The
model documentation is also available
in the docket for today’s proposed rule,
as are inputs for and outputs from
analysis of today’s proposed CAFE
standards.
a. How Does the Model Operate?
As discussed above, the agency uses
the Volpe model to estimate the extent
to which manufacturers could attempt
to comply with a given CAFE standard
by adding technology to fleets that the
agency anticipates they will produce in
future model years. This exercise
constitutes a simulation of
manufacturers’ decisions regarding
compliance with CAFE standards.
This compliance simulation begins
with the following inputs: (a) The
baseline market forecast discussed
above in Section IV.C.1, (b) technologyrelated estimates discussed above in
Section IV.C.2, (c) economic inputs
discussed above in Section IV.C.3, and
(d) inputs defining the characteristics of
538 74
PO 00000
FR 14308–14358 (Mar. 30, 2009).
Frm 00229
Fmt 4701
Sfmt 4702
49681
potential new CAFE standards. For each
manufacturer, the model applies
technologies in a sequence that follows
a defined engineering logic (‘‘decision
trees’’ discussed in the MY 2011 final
rule and in the model documentation)
and a cost-minimizing strategy in order
to identify a set of technologies the
manufacturer could apply in response to
new CAFE standards. The model
applies technologies to each of the
projected individual vehicles in a
manufacturer’s fleet, until one of three
things occurs:
(1) The manufacturer’s fleet achieves
compliance with the applicable
standard;
(2) The manufacturer ‘‘exhausts’’ 539
available technologies; or
(3) For manufacturers estimated to be
willing to pay civil penalties, the
manufacturer reaches the point at which
doing so would be more cost-effective
(from the manufacturer’s perspective)
than adding further technology.540
As discussed below, the model has
also been modified in order to apply
additional technology in early model
years if doing so will facilitate
compliance in later model years.
The model accounts explicitly for
each model year, applying most
technologies when vehicles are
scheduled to be redesigned or
freshened, and carrying forward
technologies between model years. The
CAFE model accounts explicitly for
each model year because EPCA requires
that NHTSA make a year-by-year
determination of the appropriate level of
539 In a given model year, the model makes
additional technologies available to each vehicle
model within several constraints, including (a)
whether or not the technology is applicable to the
vehicle model’s technology class, (b) whether the
vehicle is undergoing a redesign or freshening in
the given model year, (c) whether engineering
aspects of the vehicle make the technology
unavailable (e.g., secondary axle disconnect cannot
be applied to two-wheel drive vehicles), and (d)
whether technology application remains within
‘‘phase in caps’’ constraining the overall share of a
manufacturer’s fleet to which the technology can be
added in a given model year. Once enough
technology is added to a given manufacturer’s fleet
in a given model year that these constraints make
further technology application unavailable,
technologies are exhausted for that manufacturer in
that model year.
540 This possibility was added to the model to
account for the fact that under EPCA/EISA,
manufacturers must pay fines if they do not achieve
compliance with applicable CAFE standards. 49
U.S.C. 32912(b). NHTSA recognizes that some
manufacturers will find it more cost-effective to pay
fines than to achieve compliance, and believes that
to assume these manufacturers would exhaust
available technologies before paying fines would
cause unrealistically high estimates of market
penetration of expensive technologies such as
diesel engines and strong hybrid electric vehicles,
as well as correspondingly inflated estimates of
both the costs and benefits of any potential CAFE
standards.
E:\FR\FM\28SEP2.SGM
28SEP2
49682
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
stringency and then set the standard at
that level, while ensuring ratable
increases in average fuel economy.541
The model also calculates the costs,
effects, and benefits of technologies that
it estimates could be added in response
to a given CAFE standard.542 It
calculates costs by applying the cost
estimation techniques discussed above
in Section IV.C.2, and by accounting for
the number of affected vehicles. It
accounts for effects such as changes in
vehicle travel, changes in fuel
consumption, and changes in
greenhouse gas and criteria pollutant
emissions. It does so by applying the
fuel consumption estimation techniques
also discussed in Section IV.C.2, and the
vehicle survival and mileage
accumulation forecasts, the rebound
effect estimate and the fuel properties
and emission factors discussed in
Section IV.C.3. Considering changes in
travel demand and fuel consumption,
the model estimates the monetized
value of accompanying benefits to
society, as discussed in Section IV.C.3.
The model calculates both the
undiscounted and discounted value of
benefits that accrue over time in the
future.
The Volpe model has other
capabilities that facilitate the
development of a CAFE standard. It can
be used to fit a mathematical function
forming the basis for an attribute-based
CAFE standard, following the steps
described below. It can also be used to
evaluate many (e.g., 200 per model year)
potential levels of stringency
sequentially, and identify the stringency
at which specific criteria are met. For
example, it can identify the stringency
at which net benefits to society are
maximized, the stringency at which a
specified total cost is reached, or the
stringency at which a given average
required fuel economy level is attained.
This allows the agency to compare more
easily the impacts in terms of fuel
541 49 U.S.C. 32902(a) states that at least 18
months before the beginning of each model year,
the Secretary of Transportation shall prescribe by
regulation average fuel economy standards for
automobiles manufactured by a manufacturer in
that model year, and that each standard shall be the
maximum feasible average fuel economy level that
the Secretary decides the manufacturers can
achieve in that year. NHTSA has long interpreted
this statutory language to require year-by-year
assessment of manufacturer capabilities. 49 U.S.C.
32902(b)(2)(C) also requires that standards increase
ratably between MY 2011 and MY 2020.
542 As for all of its other rulemakings, NHTSA is
required by Executive Order 12866 and DOT
regulations to analyze the costs and benefits of
CAFE standards. Executive Order 12866, 58 FR
51735 (Oct. 4, 1993); DOT Order 2100.5,
‘‘Regulatory Policies and Procedures,’’ 1979,
available at https://regs.dot.gov/
rulemakingrequirements.htm (last accessed August
21, 2009).
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
savings, emissions reductions, and costs
and benefits of achieving different levels
of stringency according to different
criteria. The model can also be used to
perform uncertainty analysis (i.e.,
Monte Carlo simulation), in which input
estimates are varied randomly according
to specified probability distributions,
such that the uncertainty of key
measures (e.g., fuel consumption, costs,
benefits) can be evaluated.
b. Has NHTSA Considered Other
Models?
Nothing in EPCA requires NHTSA to
use the Volpe model. In principle,
NHTSA could perform all of these tasks
through other means. For example, in
developing the standards proposed
today, the agency did not use the Volpe
model’s curve fitting routines, because
they could not be modified in time to
reflect the change in the mathematical
function defining the proposed CAFE
standards. The Volpe model may be
modified to do so for the final rule,
although the agency can also continue
to fit the mathematical function outside
the model. In general, though, these
model capabilities have greatly
increased the agency’s ability to rapidly,
systematically, and reproducibly
conduct key analyses relevant to the
formulation and evaluation of new
CAFE standards.
During its previous rulemaking,
which led to the final MY 2011
standards promulgated earlier this year,
NHTSA received comments from the
Alliance and CARB encouraging
NHTSA to examine the usefulness of
other models. As discussed in that final
rule, NHTSA, having undertaken such
consideration, concluded that the Volpe
model is a sound and reliable tool for
the development and evaluation of
potential CAFE standards.543
In reconsidering and reaffirming this
conclusion for purposes of this NPRM,
NHTSA notes that the Volpe model not
only has been formally peer-reviewed
and tested through three rulemakings,
but also has some features especially
important for the analysis of CAFE
standards under EPCA/EISA. Among
these are the ability to perform year-byyear analysis, and the ability to account
for engineering differences between
specific vehicle models.
EPCA requires that NHTSA set CAFE
standards for each model year at the
level appropriate for that year.544 Doing
so requires the ability to analyze each
model year and, when developing
regulations covering multiple model
years, to account for the
543 74
544 49
PO 00000
FR 14372 (Mar. 30, 2009).
U.S.C. 32902(a).
Frm 00230
Fmt 4701
Sfmt 4702
interdependency of model years in
terms of the appropriate levels of
stringency for each one. Also, as part of
the evaluation of the economic
practicability of the standards, as
required by EPCA, NHTSA has
traditionally assessed the annual costs
and benefits of the standards as it is
permitted to do so. The first (2002)
version of DOT’s model treated each
model year separately, and did not
perform this type of explicit accounting.
Manufacturers took strong exception to
these shortcomings. For example, GM
commented in 2002 that ‘‘although the
table suggests that the proposed
standard for MY 2007, considered in
isolation, promises benefits exceeding
costs, that anomalous outcome is merely
an artifact of the peculiar Volpe
methodology, which treats each year
independently of any other * * *.’’ In
2002, GM also criticized DOT’s analysis
for, in some cases, adding a technology
in MY 2006 and then replacing it with
another technology in MY 2007. GM
(and other manufacturers) argued that
this completely failed to represent true
manufacturer product-development
cycles, and therefore could not be
technologically feasible or economically
practicable.
In response to these concerns, and
related concerns expressed by other
manufacturers, DOT modified the CAFE
model in order to account for
dependencies between model years and
to better represent manufacturers’
planning cycles, in a way that still
allowed NHTSA to comply with the
statutory requirement to determine the
appropriate level of the standards for
each model year. This was
accomplished by limiting the
application of many technologies to
model years in which vehicle models
are scheduled to be redesigned (or, for
some technologies, ‘‘freshened’’), and by
causing the model to ‘‘carry forward’’
applied technologies from one model
year to the next.
During the recent rulemaking for MY
2011 passenger cars and light trucks,
DOT further modified the CAFE model
to account for cost reductions
attributable to ‘‘learning effects’’ related
to volume (i.e., economies of scale) and
the passage of time (i.e., time-based
learning), both of which evolve on yearby-year basis. These changes were
implemented in response to comments
by environmental groups and other
stakeholders.
The Volpe model is also able to
account for important engineering
differences between specific vehicle
models, and to thereby reduce the risk
of applying technologies that may be
incompatible with or already present on
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
a given vehicle model. Some
commenters have previously suggested
that manufacturers are most likely to
broadly apply generic technology
‘‘packages,’’ and the Volpe model does
tend to form ‘‘packages’’ dynamically,
based on vehicle characteristics,
redesign schedules, and schedules for
increases in CAFE standards. For
example, under the proposed CAFE
standards for passenger cars, the CAFE
model estimated that manufacturers
could apply turbocharged SGDI engines
mated with dual-clutch AMTs to 1.8
million passenger cars in MY 2016,
about 16 percent of the MY 2016
passenger car fleet. Recent
modifications to the model, discussed
below, to represent multi-year planning,
increase the model’s tendency to add
relatively cost-effective technologies
when vehicles are estimated to be
redesigned, and thereby increase the
model’s tendency to form such
packages.
On the other hand, some
manufacturers have indicated that
especially when faced with significant
progressive increases in the stringency
of new CAFE standards, they are likely
to also look for narrower opportunities
to apply specific technologies. By
progressively applying specific
technologies to specific vehicle models,
the CAFE model also produces such
outcomes. For example, under the
proposed CAFE standards for passenger
cars, the CAFE model estimated that in
MY 2012, some manufacturers could
find it advantageous to apply SIDI to
some vehicle models without also
adding turbochargers.
By following this approach of
combining technologies incrementally
and on a model-by-model basis, the
CAFE model is able to account for
important engineering differences
between vehicle models and avoid
unlikely technology combinations. For
example, the model does not apply
dual-clutch AMTs (or strong hybrid
systems) to vehicle models with 6-speed
manual transmissions. Some vehicle
buyers prefer a manual transmission;
this preference cannot be assumed
away. The model’s accounting for
manual transmissions is also important
for vehicles with larger engines: For
example, cylinder deactivation cannot
be applied to vehicles with manual
transmissions, because there is no
reliable means of predicting when the
driver will change gears. By retaining
cylinder deactivation as a specific
technology rather than part of a predetermined package and by retaining
differentiation between vehicles with
different transmissions, DOT’s model is
able to target cylinder deactivation only
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
to vehicle models for which it is
technologically feasible.
The Volpe model also produces a
single vehicle-level output file that, for
each vehicle model, shows which
technologies were present at the outset
of modeling, which technologies were
superseded by other technologies, and
which technologies were ultimately
present at the conclusion of modeling.
For each vehicle, the same file shows
resultant changes in vehicle weight, fuel
economy, and cost. This provides for
efficient identification, analysis, and
correction of errors, a task with which
the public can now assist the agency,
since all inputs and outputs are public.
Such considerations, as well as those
related to the efficiency with which the
Volpe model is able to analyze attributebased CAFE standards and changes in
vehicle classification, and to perform
higher-level analysis such as stringency
estimation (to meet predetermined
criteria), sensitivity analysis, and
uncertainty analysis, lead the agency to
conclude that the model remains the
best available to the agency for the
purposes of analyzing potential new
CAFE standards.
c. What Changes Has DOT Made to the
Model?
Prior to being used for analysis
supporting today’s proposal, the Volpe
model was revised to make some minor
improvements, and to add one
significant new capability: the ability to
simulate manufacturers’ ability to
engage in ‘‘multi-year planning.’’ Multiyear planning refers to the fact that
when redesigning or freshening
vehicles, manufacturers can anticipate
future fuel economy or CO2 standards,
and add technologies accounting for
these standards. For example, a
manufacturer might choose to overcomply in a given model year when
many vehicle models are scheduled for
redesign, in order to facilitate
compliance in a later model year when
standards will be more stringent yet few
vehicle models are scheduled for
redesign.545 Prior comments have
indicated that the Volpe model, by not
representing such manufacturer choices,
tended to overestimate compliance
costs. However, because of the technical
complexity involved in representing
these choices when, as in the Volpe
model, each model year is accounted for
separately and explicitly, the model
could not be modified to add this
545 Although a manufacturer may, in addition,
generate CAFE credits in early model years for use
in later model years (or, less likely, in later years
for use in early years), EPCA does not allow
NHTSA, when setting CAFE standards, to account
for manufacturers’ use of CAFE credits.
PO 00000
Frm 00231
Fmt 4701
Sfmt 4702
49683
capability prior to the statutory deadline
for the MY 2011 final standards.
The model now includes this
capability, and NHTSA has applied it in
analyzing the standards proposed today.
Consequently, this often produces
results indicating that manufacturers
could over-comply in some model years
(with corresponding increases in costs
and benefits in those model years) and
thereby ‘‘carry forward’’ technology into
later model years in order to reduce
compliance costs in those later model
years. NHTSA believes this better
represents how manufacturers would
actually respond to new CAFE
standards, and thereby produces more
realistic estimates of the costs and
benefits of such standards.
The Volpe model has also been
modified to accommodate inputs
specifying the amount of CAFE credit to
be applied to each manufacturer’s fleet.
Although the model is not currently
capable of estimating manufacturers’
decisions regarding the generation and
use of CAFE credits, and EPCA does not
allow NHTSA, in setting CAFE
standards, to take into account
manufacturers’ potential use of credits,
this additional capability in the Volpe
model provides a basis for more
accurately estimating costs, effects, and
benefits that may actually result from
new CAFE standards. Insofar as some
manufacturers actually do earn and use
CAFE credits, this provides NHTSA
with some ability to examine outcomes
more realistically than EPCA allows for
purposes of setting new CAFE
standards.
In comments on recent NHTSA
rulemakings, some reviewers have
suggested that the Volpe model should
be modified to estimate the extent to
which new CAFE standards would
induce changes in the mix of vehicles in
the new vehicle fleet. NHTSA, like EPA,
agrees that a ‘‘market shift’’ model, also
called a consumer vehicle choice model,
could provide useful information
regarding the possible effects of
potential new CAFE standards. An
earlier experimental version of the
Volpe model included a multinomial
logit model that estimated changes in
sales resulting from CAFE-induced
increases in new vehicle fuel economy
and prices. A fuller description of this
attempt can be found in Section V of the
PRIA. However, NHTSA has thus far
been unable to develop credible
coefficients specifying such a model. In
addition, as discussed in Section II.H.4,
such a model is sensitive to the
coefficients used in it, and there is great
variation over some key values of these
coefficients in published studies.
NHTSA seeks comment on ways to
E:\FR\FM\28SEP2.SGM
28SEP2
49684
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
improve on this earlier work and
develop this capability effectively. If the
agency is able to do so prior to
conducting analysis supporting
decisions regarding final CAFE
standards, it will attempt to reintegrate
this capability in the Volpe model and
include these effects in its analysis of
final standards. If not, NHTSA will
continue efforts to develop and make
use of this capability in future
rulemakings.
d. Does the Model Set the Standards?
Although NHTSA currently uses the
Volpe model as a tool to inform its
consideration of potential CAFE
standards, the Volpe model does not
determine the CAFE standards that
NHTSA proposes or promulgates as
final regulations. The results it produces
are completely dependent on inputs
selected by NHTSA, based on the best
available information and data available
in the agency’s estimation at the time
standards are set. Although the model
has been programmed in previous
rulemakings to estimate at what
stringency net benefits are maximized,
NHTSA has not done so here and has
instead used the Volpe model to
estimate stringency levels that produce
roughly constant rates of increase in the
combined average required fuel
economy. Ultimately, NHTSA’s
selection of a CAFE standard is
governed and guided by the statutory
requirements of EPCA, as amended by
EISA: NHTSA sets the standard at the
maximum feasible average fuel economy
level that it determines is achievable
during a particular model year,
considering technological feasibility,
economic practicability, the effect of
other standards of the Government on
fuel economy, and the need of the
nation to conserve energy.
NHTSA considers the results of
analyses conducted by the Volpe model
and analyses conducted outside of the
Volpe model, including analysis of the
impacts of carbon dioxide and criteria
pollutant emissions, analysis of
technologies that may be available in
the long term and whether NHTSA
could expedite their entry into the
market through these standards, and
analysis of the extent to which changes
in vehicle prices and fuel economy
might affect vehicle production and
sales. Using all of this information—not
solely that from the Volpe model—the
agency considers the governing
statutory factors, along with
environmental issues and other relevant
societal issues such as safety, and
promulgates the standards based on its
best judgment on how to balance these
factors.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
This is why the agency considered
eight regulatory alternatives, only one of
which reflects the agency’s proposed
standards, based on the agency’s
determinations and assumptions. Others
assess alternative standards, some of
which exceed the proposed standards
and/or the point at which net benefits
are maximized. These comprehensive
analyses, which also included scenarios
with different economic input
assumptions as presented in the FEIS
and FRIA, are intended to inform and
contribute to the agency’s consideration
of the ‘‘need of the United States to
conserve energy,’’ as well as the other
statutory factors. 49 U.S.C. 32902(f).
Additionally, the agency’s analysis
considers the need of the nation to
conserve energy by accounting for
economic externalities of petroleum
consumption and monetizing the
economic costs of incremental CO2
emissions in the social cost of carbon.
NHTSA uses information from the
model when considering what standards
to propose and finalize, but the model
does not determine the standards.
e. How Does NHTSA Make the Model
Available and Transparent?
Model documentation, which is
publicly available in the rulemaking
docket and on NHTSA’s web site,
explains how the model is installed,
how the model inputs (all of which are
available to the public) 546 and outputs
are structured, and how the model is
used. The model can be used on any
Windows-based personal computer with
Microsoft Office 2003 and the Microsoft
.NET framework installed (the latter
available without charge from
Microsoft). The executable version of
the model and the underlying source
code are also available at NHTSA’s Web
site. The input files used to conduct the
core analysis documented in this
proposed rule are available in the public
docket. With the model and these input
files, anyone is capable of
independently running the model to
repeat, evaluate, and/or modify the
agency’s analysis.
5. How Did NHTSA Develop the Shape
of the Target Curves for the Proposed
Standards?
In developing the shape of the target
curves for today’s proposed standards,
NHTSA took a new approach, primarily
in response to comments received in the
MY 2011 rulemaking. NHTSA’s
authority under EISA allows
546 We note, however, that files from any
supplemental analysis conducted that relied in part
on confidential manufacturer product plans cannot
be made public, as prohibited under 49 CFR part
512.
PO 00000
Frm 00232
Fmt 4701
Sfmt 4702
consideration of any ‘‘attribute related
to fuel economy’’ and any
‘‘mathematical function.’’ While the
attribute, footprint, is the same for these
proposed standards as the attribute used
for the MY 2011 standards, the
mathematical function is new.
Both vehicle manufacturers and
public interest groups expressed
concern in the MY 2011 rulemaking
process that the constrained logistic
function, particularly the function for
the passenger car standards, was overly
steep and could lead, on the one hand,
to fuel economy targets that were overly
stringent for small footprint vehicles,
and on the other hand, to a greater
incentive for manufacturers to upsize
vehicles in order to reduce their
compliance obligation (because largerfootprint vehicles have less stringent
targets) in ways that could compromise
energy and environmental benefits. We
tentatively believe that the constrained
linear function developed here
significantly mitigates steepness
concerns, but we seek comment on
whether readers agree, and whether
there are any other issues relating to the
new approach that NHTSA should
consider in developing the curves for
the final rule.
a. Standards Are Attribute-Based and
Defined by a Mathematical Function
EPCA, as amended by EISA, expressly
requires that CAFE standards for
passenger cars and light trucks be based
on one or more vehicle attributes related
to fuel economy, and be expressed in
the form of a mathematical function.547
Like the MY 2011 standards, the MY
2012–2016 passenger car and light truck
standards are attribute-based and
defined by a mathematical function.548
Also like the MY 2011 standards, the
MY 2012–2016 standards are based on
the footprint attribute. However, unlike
the MY 2011 standards, the MY 2012–
2016 standards are defined by a
constrained linear rather than a
constrained logistic function. The
reasons for these similarities and
differences are explained below.
As discussed above in Section II,
under attribute-based standards, the
fleet-wide average fuel economy that a
particular manufacturer must achieve in
a given model year depends on the mix
of vehicles that it produces for sale.
547 49
U.S.C. 32902(a)(3)(A).
discussed in Chapter 2 of the TSD, EPA is
also proposing to set attribute-based CO2 standards
that are defined by a mathematical function, given
the advantages of using attribute-based standards
and given the goal of coordinating and harmonizing
the CAFE and CO2 standards as expressed by
President Obama in his announcement of the new
National Program and in the joint NOI.
548 As
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
Until NHTSA began to set ‘‘Reformed’’
attribute-based standards for light trucks
in MYs 2008–2011, and until EISA gave
NHTSA authority to set attribute-based
standards for passenger cars beginning
in MY 2011, NHTSA set ‘‘universal’’ or
‘‘flat’’ industry-wide average CAFE
standards. Attribute-based standards are
preferable to universal industry-wide
average standards for several reasons.
First, attribute-based standards increase
fuel savings and reduce emissions when
compared to an equivalent universal
industry-wide standard under which
each manufacturer is subject to the same
numerical requirement. Absent a policy
to require all full-line manufacturers to
produce and sell essentially the same
mix of vehicles, the stringency of the
universal industry-wide standards is
constrained by the capability of those
full-line manufacturers whose product
mix includes a relatively high
proportion of larger and heavier
vehicles. In effect, the standards are
based on the mix of those
manufacturers. As a result, the
standards are generally set below the
capabilities of full-line and limited-line
manufacturers that sell predominantly
lighter and smaller vehicles.
Under an attribute-based system, in
contrast, every manufacturer is more
likely to be required to continue adding
more fuel-saving technology each year
because the level of the compliance
obligation of each manufacturer is based
on its own particular product mix.
Thus, the compliance obligation of a
manufacturer with a higher percentage
of lighter and smaller vehicles will have
a higher compliance obligation than a
manufacturer with a lower percentage of
such vehicles. As a result, all
manufacturers must use technologies to
enhance the fuel economy levels of the
vehicles they sell. Therefore, fuel
savings and CO2 emissions reductions
should be higher under an attributebased system than under a comparable
industry-wide standard.
Second, attribute-based standards
minimize the incentive for
manufacturers to respond to CAFE in
ways harmful to safety.549 Because each
vehicle model has its own target (based
on the attribute chosen), attribute-based
standards provide no incentive to build
smaller vehicles simply to meet a fleetwide average. Since smaller vehicles are
subject to more stringent fuel economy
targets, a manufacturer’s increasing its
proportion of smaller vehicles would
549 The 2002 NAS Report described at length and
quantified the potential safety problem with average
fuel economy standards that specify a single
numerical requirement for the entire industry. See
NAS Report at 5, finding 12.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
simply cause its compliance obligation
to increase.
Third, attribute-based standards
provide a more equitable regulatory
framework for different vehicle
manufacturers.550 A universal industrywide average standard imposes
disproportionate cost burdens and
compliance difficulties on the
manufacturers that need to change their
product plans and no obligation on
those manufacturers that have no need
to change their plans. Attribute-based
standards spread the regulatory cost
burden for fuel economy more broadly
across all of the vehicle manufacturers
within the industry.
And fourth, attribute-based standards
respect economic conditions and
consumer choice, instead of having the
government mandate a certain fleet mix.
Manufacturers are required to invest in
technologies that improve the fuel
economy of their fleets, regardless of
vehicle mix. Additionally, attributebased standards help to avoid the need
to conduct rulemakings to amend
standards if economic conditions
change, causing a shift in the mix of
vehicles demanded by the public.
NHTSA conducted three rulemakings
during the 1980s to amend passenger
car standards for MYs 1986–1989 in
response to unexpected drops in fuel
prices and resulting shifts in consumer
demand that made the passenger car
standard of 27.5 mpg infeasible for
several years following the change in
fuel prices.
As discussed above in Section II, for
purposes of the CAFE standards
proposed in this NPRM, NHTSA
recognizes that the risk, even if small,
does exist that low fuel prices in MYs
2012–2016 might lead indirectly to less
than currently anticipated fuel savings
and emissions reductions. Thus, we
seek comment on whether backstop
standards, or any other method within
the agencies’ statutory authority, should
and can be implemented for the import
and light truck fleets in order to achieve
the fuel savings that attribute-based
standards might not absolutely
guarantee. Commenters are encouraged,
but not required, to review and respond
to NHTSA’s discussion of this issue in
the MY 2011 final rule as a starting
point.551
b. What Attribute Does NHTSA Use, and
Why?
Consistent with the MY 2011 CAFE
standards, NHTSA is proposing to use
footprint as the attribute for the MY
2012–2016 CAFE standards. There are
550 Id.
551 74
PO 00000
at 4–5, finding 10.
FR 14409–14412 (Mar. 30, 2009).
Frm 00233
Fmt 4701
Sfmt 4702
49685
several policy reasons why NHTSA and
EPA both believe that footprint is the
most appropriate attribute on which to
base the standards, as discussed below.
As discussed in the PRIA, in
NHTSA’s judgment, from the standpoint
of vehicle safety, it is important that the
CAFE standards be set in a way that
does not encourage manufacturers to
respond by selling vehicles that are in
any way less safe. While NHTSA’s
research also indicates that reductions
in vehicle mass tend to compromise
vehicle safety, footprint-based standards
provide an incentive to use advanced
lightweight materials and structures that
would be discouraged by weight-based
standards, because manufacturers can
use them to improve a vehicle’s fuel
economy without their use necessarily
resulting in a change in the vehicle’s
target level of fuel economy.
Further, although we recognize that
weight is better correlated with fuel
economy than is footprint, we continue
to believe that there is less risk of
‘‘gaming’’ (artificial manipulation of the
attribute(s) to achieve a more favorable
target) by increasing footprint under
footprint-based standards than by
increasing vehicle mass under weightbased standards—it is relatively easy for
a manufacturer to add enough weight to
a vehicle to decrease its applicable fuel
economy target a significant amount, as
compared to increasing vehicle
footprint. We also agree with concerns
raised in 2008 by some commenters in
the MY 2011 CAFE rulemaking that
there would be greater potential for
gaming under multi-attribute standards,
such as standards under which targets
would also depend on attributes such as
weight, torque, power, towing
capability, and/or off-road capability.
Standards that incorporate such
attributes in conjunction with footprint
would not only be significantly more
complex, but by providing degrees of
freedom with respect to more easilyadjusted attributes, they would make it
less certain that the future fleet would
actually achieve the projected average
fuel economy and CO2 reduction levels.
However, while NHTSA tentatively
concludes that footprint is the most
appropriate attribute upon which to
base the proposed standards,
recognizing strong public interest in this
issue, we seek comment on whether the
agency should consider setting
standards for the final rule based on
another attribute or another
combination of attributes. If commenters
suggest that the agency should consider
another attribute or another
combination of attributes, the agency
specifically requests that the
commenters address the concerns raised
E:\FR\FM\28SEP2.SGM
28SEP2
49686
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
in the paragraphs above regarding the
use of other attributes, and explain how
standards should be developed using
the other attribute(s) in a way that
contributes more to fuel savings and
CO2 reductions than the footprint-based
standards, without compromising
safety.
c. What Mathematical Function Did
NHTSA Use for the RecentlyPromulgated MY 2011 CAFE Standards?
The MY 2011 CAFE standards are
defined by a continuous, constrained
TARGET =
1
)
1 ⎛ 1 1 ⎞ e(
+⎜ − ⎟
a ⎝ b a ⎠ 1 + e ( FOOTPRINT −c ) d
FOOTPRINT −c d
After fitting this mathematical form
(separately) to the passenger car and
d. What Mathematical Function is
NHTSA Proposing to Use for New CAFE
Standards, and Why?
In finalizing the MY 2011 standards,
NHTSA noted that the agency is not
required to use a constrained logistic
function and indicated that the agency
may consider defining future CAFE
standards in terms of a different
mathematical function. NHTSA has
light truck fleets and determining the
stringency of the standards (i.e., the
vertical positions of the curves), NHTSA
arrived at the following curves to define
the MY 2011 standards:
done so in preparation for the proposed
CAFE standards.
In revisiting this question, NHTSA
found that the final MY 2011 CAFE
standard for passenger cars, though less
552 e is the irrational number for which the slope
of the function y = numberx is equal to 1 when x
is equal to zero. The first 8 digits of e are 2.7182818.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00234
Fmt 4701
Sfmt 4702
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.031</GPH>
the lower and upper asymptotes, and d is a
parameter (in square feet) that determines
how gradually the fuel economy target
transitions from the upper toward the lower
asymptote as the footprint increases.
EP28SE09.052</MATH>
Here, TARGET is the fuel economy target
(in mpg) applicable to vehicles of a given
footprint (FOOTPRINT, in square feet), b and
a are the function’s lower and upper
asymptotes (also in mpg), e is approximately
equal to 2.718,552 c is the footprint (in square
feet) at which the inverse of the fuel economy
target falls halfway between the inverses of
mstockstill on DSKH9S0YB1PROD with PROPOSALS
logistic function, which takes the form
of an S-curve, and is defined according
to the following formula:
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
difficult for a full-line manufacturer to
meet, while requiring very little of a
manufacturer concentrating on small
vehicles, and a flat standard may
provide an incentive to manufacturers
to downsize certain vehicles, in order to
‘‘balance out’’ other vehicles subject to
the same standard.
As a potential alternative to the
constrained logistic function, NHTSA
had, in proposing MY 2011 standards,
presented information regarding a
constrained linear function. As shown
in the 2008 NPRM, a constrained linear
function has the potential to avoid
creating a localized region (in terms of
vehicle footprint) over which the slope
of the function is relatively steep.
Although NHTSA did not receive public
comments on this option, the agency
indicated that it still believed a linear
function constrained by upper (on a
gpm basis) and possibly lower limits
could merit reconsideration in future
CAFE rulemakings.
TARGET =
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Here, TARGET is the fuel economy target
(in mpg) applicable to vehicles of a given
footprint (FOOTPRINT, in square feet), b and
a are the function’s lower and upper
asymptotes (also in mpg), respectively, c is
the slope (in gpm per square foot) of the
sloped portion of the function, and d is the
intercept (in gpm) of the sloped portion of
the function (that is, the value the sloped
portion would take if extended to a footprint
of 0 square feet. The MIN and MAX functions
take the minimum and maximum,
respectively of the included values; for
example, MIN(1,2) = 1, MAX(1,2) = 2, and
MIN[MAX(1,2),3)]=2. The following chart
shows an example of a linear target function,
where a = 0.0241 gpm (41.6 mpg), b = 0.032
gpm (31.2 mpg), c = 0.000531 gpm per square
foot, and d = 0.002292 gpm (436 mpg).
Because the function is linear on a gpm basis,
not an mpg basis, it is plotted on this basis.
e. How Did NHTSA Fit the Coefficients
That Determine the Shape of the
Proposed Curves?
For purposes of this NPRM, and for
EPA’s use in developing new CO2
emissions standards, the basic curve
shapes were developed using methods
similar to those applied by NHTSA in
fitting the curves defining the MY 2011
standards. We began with the market
inputs discussed above, but because the
baseline fleet is technologically
heterogeneous, NHTSA used the CAFE
model to develop a fleet to which nearly
all the technologies discussed in Section
V of the PRIA and Chapter 3 of the joint
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
1
⎡
1 ⎞ 1⎤
⎛
MIN ⎢ MAX ⎜ c × FOOTPRINT + d, ⎟ , ⎥
a ⎠ b⎦
⎝
⎣
TSD 553 were applied, by taking the
following steps: (1) Treating all
manufacturers as unwilling to pay civil
penalties rather than applying
technology, (2) applying any technology
at any time, irrespective of scheduled
vehicle redesigns or freshening, and (3)
ignoring ‘‘phase-in caps’’ that constrain
the overall amount of technology that
can be applied by the model to a given
manufacturer’s fleet. These steps helped
to increase technological parity among
vehicle models, thereby providing a
better basis (than the baseline fleet) for
estimating the statistical relationship
between vehicle size and fuel economy.
More information on the process for
fitting the passenger car and light truck
curves for MYs 2012–2016 is available
above in Section II.C, and NHTSA refers
the reader to that section and to Chapter
2 of the joint TSD. NHTSA seeks
comment on this approach to fitting the
curves. We note that final decisions on
this issue will play an important role in
determining the form and stringency of
the final CAFE and CO2 standards, the
553 The agencies excluded diesel engines and
strong hybrid vehicle technologies from this
exercise (and only this exercise) because the
agencies expect that manufacturers would not need
to rely heavily on these technologies in order to
comply with the proposed standards. NHTSA and
EPA did include diesel engines and strong hybrid
vehicle technologies in all other portions of their
analyses.
PO 00000
Having re-examined a constrained
linear function for purposes of the
proposed standards, NHTSA tentatively
concludes that for both passenger cars
and light trucks, it remains
meaningfully sloped over a wide
footprint range, thereby providing a
well-distributed disincentive to
downsize vehicles in ways that could
compromise highway safety. Further,
the constrained linear function
proposed today is not so steeply sloped
that it would provide a strong incentive
to increase vehicle size in order to
obtain a lower CAFE requirement and
higher CO2 limit, thereby compromising
energy and environmental benefits.
Therefore, the CAFE standards proposed
today are defined by constrained linear
functions.
The constrained linear function is
defined according to the following
formula:
Frm 00235
Fmt 4701
Sfmt 4702
incentives those standards will provide
(e.g., with respect to downsizing small
vehicles), and the relative compliance
burden faced by each manufacturer.
D. Statutory Requirements
1. EPCA, as Amended by EISA
a. Standard Setting
NHTSA must establish separate
standards for MY 2011–2020 passenger
cars and light trucks, subject to two
principal requirements.554 First, the
standards are subject to a minimum
requirement regarding stringency: They
must be set at levels high enough to
ensure that the combined U.S. passenger
car and light truck fleet achieves an
average fuel economy level of not less
than 35 mpg not later than MY 2020.555
Second, as discussed above and at
length in the March 2009 final rule
establishing the MY 2011 CAFE
standards, EPCA requires that the
554 EISA added the following additional
requirements. Standards must be attribute-based
and expressed in the form of a mathematical
function. 49 U.S.C. 32902(b)(3)(A). Standards for
MYs 2011–2020 must ‘‘increase ratably’’ in each
model year. 49 U.S.C. 32902(b)(2)(C). NHTSA
interprets this requirement, in combination with the
requirement to set the standards for each model
year at the level determined to be the maximum
feasible level for that model year, to mean that the
annual increases should not be disproportionately
large or small in relation to each other.
555 49 U.S.C. 32902(b)(2)(A).
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.053</MATH>
steep than the MY 2011 standard
NHTSA proposed in 2008, continues to
concentrate the sloped portion of the
curve (from a compliance perspective,
the area in which upsizing results in a
slightly lower applicable target) within
a relatively narrow footprint range
(approximately 47–55 square feet).
Further, most passenger car models
have footprints smaller than the curve’s
51.4 square foot inflection point, and
many passenger car models have
footprints at which the curve is
relatively flat.
For both passenger cars and light
trucks, a mathematical function that has
some slope at most footprints where
vehicles are produced is advantageous
in terms of fairly balancing regulatory
burdens among manufacturers, and in
terms of providing a disincentive to
respond to new standards by
downsizing vehicles in ways that
compromise vehicle safety. For
example, a flat standard may be very
49687
49688
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
agency establish standards for all new
passenger cars and light trucks at the
maximum feasible average fuel economy
level that the Secretary decides the
manufacturers can achieve in that
model year.556 The implication of this
second requirement is that it calls for
exceeding the minimum requirement if
the agency determines that the
manufacturers can achieve a higher
level. When determining the level
achievable by the manufacturers, EPCA
requires that the agency consider the
four statutory factors of technological
feasibility, economic practicability, the
effect of other motor vehicle standards
of the Government on fuel economy,
and the need of the United States to
conserve energy. In addition, the agency
has the authority to and traditionally
does consider other relevant factors,
such as the effect of the CAFE standards
on motor vehicle safety.
i. Statutory Factors Considered in
Determining the Achievable Level of
Average Fuel Economy
As none of the four factors is defined
in EPCA and each remains interpreted
only to a limited degree by case law,
NHTSA has considerable latitude in
interpreting them. NHTSA interprets the
four statutory factors as set forth below.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
(1) Technological Feasibility
‘‘Technological feasibility’’ refers to
whether a particular technology for
improving fuel economy is available or
can become available for commercial
application in the model year for which
a standard is being established. Thus,
the agency is not limited in determining
the level of new standards to technology
that is already being commercially
applied at the time of the rulemaking. It
can, instead, set technology-forcing
standards, i.e., ones that make it
necessary for manufacturers to engage in
research and development in order to
bring a new technology to market.
(2) Economic Practicability
‘‘Economic practicability’’ refers to
whether a standard is one ‘‘within the
financial capability of the industry, but
not so stringent as to’’ lead to ‘‘adverse
economic consequences, such as a
significant loss of jobs or the
unreasonable elimination of consumer
choice.’’ 557 In an attempt to ensure the
economic practicability, the agency
considers a variety of factors, including
the annual rate at which manufacturers
can increase the percentage of its fleet
that has a particular type of fuel saving
technology, and cost to consumers.
556 49
557 67
U.S.C. 32902(a).
FR 77015, 77021 (Dec. 16, 2002).
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
Consumer acceptability is also an
element of economic practicability.
At the same time, the law does not
preclude a CAFE standard that poses
considerable challenges to any
individual manufacturer. The
Conference Report for EPCA, as enacted
in 1975, makes clear, and the case law
affirms, ‘‘(A) determination of maximum
feasible average fuel economy should
not be keyed to the single manufacturer
which might have the most difficulty
achieving a given level of average fuel
economy.’’ 558 Instead, the agency is
compelled ‘‘to weigh the benefits to the
nation of a higher fuel economy
standard against the difficulties of
individual automobile manufacturers.’’
Id. The law permits CAFE standards
exceeding the projected capability of
any particular manufacturer as long as
the standard is economically practicable
for the industry as a whole. Thus, while
a particular CAFE standard may pose
difficulties for one manufacturer, it may
also present opportunities for another.
The CAFE program is not necessarily
intended to maintain the competitive
positioning of each particular company.
Rather, it is intended to enhance fuel
economy of the vehicle fleet on
American roads, while protecting motor
vehicle safety and being mindful of the
risk of harm to the overall United States
economy.
Thus, NHTSA believes that this term
must be applied in the context of the
competing concerns associated with
different levels of standards. Prior to
switching to attribute-based standards
in the MY 2008–2011 rulemaking, the
agency sought to ensure the economy
practicability of standards in part by
setting them at or near the capability of
the ‘‘least capable manufacturer’’ with a
significant share of the market, i.e.,
typically the manufacturer whose
vehicles are, on average, the heaviest
and largest. In the first several
rulemakings to establish attribute based
standards, the agency applied marginal
cost benefit analysis. This ensured that
the agency’s application of technologies
was limited to those that would pay for
themselves and thus would have
significant appeal to consumers.
However, the agency can and has
limited its application of technologies to
those technologies, with or without the
use of such analysis.
(3) The Effect of Other Motor Vehicle
Standards of the Government on Fuel
Economy
‘‘The effect of other motor vehicle
standards of the Government on fuel
economy,’’ involves an analysis of the
558 CEI–I,
PO 00000
793 F.2d 1322, 1352 (D.C. Cir. 1986).
Frm 00236
Fmt 4701
Sfmt 4702
effects of compliance with emission,559
safety, noise, or damageability standards
on fuel economy capability and thus on
average fuel economy. In previous CAFE
rulemakings, the agency has said that
pursuant to this provision, it considers
the adverse effects of other motor
vehicle standards on fuel economy. It
said so because, from the CAFE
program’s earliest years 560 until
present, the effects of such compliance
on fuel economy capability over the
history of the CAFE program have been
negative ones. In those instances in
which the effects are negative, NHTSA
is called upon to ‘‘mak[e] a
straightforward adjustment to the fuel
economy improvement projections to
account for the impacts of other Federal
standards, principally those in the areas
of emission control, occupant safety,
vehicle damageability, and vehicle
noise. However, only the unavoidable
consequences should be accounted for.
The automobile manufacturers must be
expected to adopt those feasible
methods of achieving compliance with
other Federal standards which minimize
any adverse fuel economy effects of
those standards.’’ 561 For example,
safety standards that have the effect of
increasing vehicle weight lower vehicle
fuel economy capability and thus
decrease the level of average fuel
economy that the agency can determine
to be feasible.
The ‘‘other motor vehicle standards’’
consideration has thus in practice
functioned in a fashion similar to the
provision in EPCA, as originally
enacted, for adjusting the statutorilyspecified CAFE standards for MY 1978–
1980 passengers cars.562 EPCA did not
permit NHTSA to amend those
standards based on a finding that the
maximum feasible level of average fuel
economy for any of those three years
was greater or less than the standard
specified for that year. Instead, it
provided that the agency could only
reduce the standards and only on one
basis: if the agency found that there had
been a Federal standards fuel economy
reduction, i.e., a reduction in fuel
economy due to changes in the Federal
vehicle standards, e.g., emissions and
safety, relative to the year of enactment,
1975.
559 In the case of emission standards, this
includes standards adopted by the Federal
Government and can include standards adopted by
the States as well, since in certain circumstances
the Clean Air Act allows States to adopt and enforce
State standards different from the Federal ones.
560 42 FR 63184, 63188 (Dec. 15, 1977). See also
42 FR 33534, 33537 (Jun. 30, 1977).
561 42 FR 33534, 33537 (Jun. 30, 1977).
562 That provision was deleted as obsolete when
EPCA was codified in 1994.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
The ‘‘other motor vehicle standards’’
provision is broader than the Federal
standards fuel economy reduction
provision. Although the effects analyzed
to date under the ‘‘other motor vehicle
standards’’ provision have been
negative, there could be circumstances
in which the effects are positive. In the
event that the agency encountered such
circumstances, it would be required to
consider those positive effects. For
example, if changes in vehicle safety
technology led to NHTSA’s amending a
safety standard in a way that permits
manufacturers to reduce the weight
added in complying with that standard,
that weight reduction would increase
vehicle fuel economy capability and
thus increase the level of average fuel
economy that could be determined to be
feasible.
In the wake of Massachusetts v. EPA
and of EPA’s proposed endangerment
finding, granting of a waiver to
California for its motor vehicle GHG
standards, and its own proposal of GHG
standards, the agency is confronted with
the issue of how to treat those standards
under the ‘‘other motor vehicle
standards’’ provision. To the extent the
GHG standards result in increases in
fuel economy, they would do so almost
exclusively as a result of inducing
manufacturers to install the same types
of technologies used by manufacturers
in complying with the CAFE standards.
The primary exception would involve
increases in the efficiency of air
conditioners.
Thus, NHTSA tentatively concludes
that the effects of the EPA and
California standards are neither positive
nor negative because the proposed rule
results in consistent standards among
all components of the National Program.
Comment is requested on whether and
in what way the effects of the California
and EPA standards should be
considered under the ‘‘other motor
vehicle standards’’ provision or other
provisions of EPCA in 49 U.S.C. 32902,
consistent with NHTSA’s independent
obligation under EPCA/EISA to issue
CAFE standards? The agency has
already considered EPA’s proposal and
the harmonization benefits of the
National Program in developing its own
proposal.
(4) The Need of the United States To
Conserve Energy
‘‘The need of the United States to
conserve energy’’ means ‘‘the consumer
cost, national balance of payments,
environmental, and foreign policy
implications of our need for large
quantities of petroleum, especially
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
imported petroleum.’’ 563 Environmental
implications principally include those
associated with reductions in emissions
of criteria pollutants and CO2. A prime
example of foreign policy implications
are energy independence and security
concerns.
ii. Other Factors Considered by NHTSA
The agency historically has
considered the potential for adverse
safety consequences in setting CAFE
standards. This practice is recognized
approvingly in case law. As the courts
have recognized, ‘‘NHTSA has always
examined the safety consequences of the
CAFE standards in its overall
consideration of relevant factors since
its earliest rulemaking under the CAFE
program.’’ Competitive Enterprise
Institute v. NHTSA, 901 F.2d 107, 120
n. 11 (DC Cir. 1990) (‘‘CEI I’’) (citing 42
Fed. Reg. 33534, 33551 (June 30, 1977)).
The courts have consistently upheld
NHTSA’s implementation of EPCA in
this manner. See, e.g., Competitive
Enterprise Institute v. NHTSA, 956 F.2d
321, 322 (D.C. Cir. 1992) (‘‘CEI II’’) (in
determining the maximum feasible fuel
economy standard, ‘‘NHTSA has always
taken passenger safety into account.’’)
(citing CEI I, 901 F.2d at 120 n. 11);
Competitive Enterprise Institute v.
NHTSA, 45 F.3d 481, 482–83 (D.C. Cir.
1995) (‘‘CEI III’’) (same); Center for
Biological Diversity v. NHTSA, 538 F.3d
1172, 1203–04 (9th Cir. 2008)
(upholding NHTSA’s analysis of vehicle
safety issues associated with weight in
connection with the MY 2008–11 light
truck CAFE rule). Thus, in evaluating
what levels of stringency would result
in maximum feasible standards, NHTSA
assesses the potential safety impacts and
considers them in balancing the
statutory considerations and to
determine the appropriate level of the
standards.
Under the universal or ‘‘flat’’ CAFE
standards that NHTSA was previously
authorized to establish, the primary risk
to safety came from the possibility that
manufacturers would respond to higher
standards by building smaller, less safe
vehicles in order to ‘‘balance out’’ the
larger, safer vehicles that the public
generally preferred to buy. Under the
attribute-based standards being
proposed today, that risk is reduced
because building smaller vehicles
would tend to raise a manufacturer’s
overall CAFE obligation, rather than
only raising its fleet average CAFE.
However, even if the manufacturers did
not engage in any downsizing under
attribute-based standards, there is still
the possibility that manufacturers
would rely on downweighting to
improve their fuel economy (for a given
vehicle at a given footprint target) in
ways that may reduce safety to a greater
or lesser extent. While NHTSA
recognizes that manufacturers may
nonetheless choose this option for
raising their CAFE levels, in prior
rulemakings we have limited the
application of downweighting/material
substitution in our modeling analysis to
vehicles over 5,000 lbs GVWR.564
For purposes of today’s proposed
standards, however, NHTSA has revised
its modeling analysis to allow some
application of downweighting/material
substitution for all vehicles, including
those under 5,000 lbs GVWR, because
we believe that this is more consistent
with how manufacturers will actually
respond to the standards. However, as
discussed above, NHTSA does not
mandate the use of any particular
technology by manufacturers in meeting
the standards. More information on the
new approach to modeling
manufacturer use of downweighting/
material substitution is available in
Chapter 3 of the draft joint TSD and in
Section V of the PRIA; and the
estimated safety impacts that may be
due to the proposed standards are
described below.
iii. Factors That NHTSA Is Prohibited
From Considering
EPCA also provides that in
determining the level at which it should
set CAFE standards for a particular
model year, NHTSA may not consider
the ability of manufacturers to take
advantage of several EPCA provisions
that facilitate compliance with the
CAFE standards and thereby reduce the
costs of compliance.565 As discussed
further below, manufacturers can earn
compliance credits by exceeding the
CAFE standards and then use those
credits to achieve compliance in years
in which their measured average fuel
economy falls below the standards.
Manufacturers can also increase their
CAFE levels through MY 2019 by
producing alternative fuel vehicles.
EPCA provides an incentive for
producing these vehicles by specifying
that their fuel economy is to be
determined using a special calculation
procedure that results in those vehicles
being assigned a high fuel economy
level.
The effect of the prohibitions against
considering these flexibilities in setting
the CAFE standards is that the
flexibilities remain voluntarilyemployed measures. If the agency were
564 See
563 42
PO 00000
FR 63184, 63188 (1977).
Frm 00237
Fmt 4701
Sfmt 4702
49689
565 49
E:\FR\FM\28SEP2.SGM
74 FR 14396–14407 (Mar. 30, 2009).
U.S.C. 32902(h).
28SEP2
49690
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
instead to assume manufacturer use of
those flexibilities in setting new
standards, that assumption would result
in higher standards and thus tend to
require manufacturers to use those
flexibilities.
iv. Determining the Level of the
Standards by Balancing the Factors
NHTSA has broad discretion in
balancing the above factors in
determining the appropriate levels of
average fuel economy at which to set the
CAFE standards for each model year.
Congress ‘‘specifically delegated the
process of setting * * * fuel economy
standards with broad guidelines
concerning the factors that the agency
must consider.’’ 566 The breadth of those
guidelines, the absence of any
statutorily prescribed formula for
balancing the factors, the fact that the
relative weight to be given to the various
factors may change from rulemaking to
rulemaking as the underlying facts
change, and the fact that the factors may
often be conflicting with respect to
whether they militate toward higher or
lower standards give NHTSA discretion
to decide what weight to give each of
the competing policies and concerns
and then determine how to balance
them. The exercise of that discretion is
subject to the necessity of ensuring that
NHTSA’s balancing does not undermine
the fundamental purpose of the EPCA:
Energy conservation,567 and as long as
that balancing reasonably
accommodates ‘‘conflicting policies that
were committed to the agency’s care by
the statute.’’ 568 The balancing of the
factors in any given rulemaking is
highly dependent on the factual and
policy context of that rulemaking. Given
the changes over time in facts bearing
on assessment of the various factors,
such as those relating to the economic
conditions, fuel prices and the state of
climate change science, the agency
recognizes that what was a reasonable
balancing of competing statutory
priorities in one rulemaking may not be
a reasonable balancing of those
priorities in another rulemaking.569
Nevertheless, the agency retains
substantial discretion under EPCA to
choose among reasonable alternatives.
EPCA neither requires nor precludes
the use of any type of cost-benefit
analysis as a tool to help inform the
566 Center for Auto Safety v. NHTSA, 793 F.2d
1322, 1341 (C.A.D.C. 1986).
567 Center for Biological Diversity v. NHTSA, 538
F.3d 1172, 1195 (9th Cir. 2008).
568 CAS, 1338 (quoting Chevron U.S.A., Inc. v.
Natural Resources Defense Council, Inc., 467 U.S.
837, 845).
569 CBD v. NHTSA, 538 F.3d 1172, 1198 (9th Cir.
2008).
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
balancing process. While NHTSA used
marginal cost-benefit analysis in the
first two rulemakings to establish
attribute-based CAFE standards, it was
not required to do so and is not required
to continue to do so. Regardless of what
type of analysis is or is not used,
considerations relating to costs and
benefits remain an important part of
CAFE standard setting.
Because the relevant considerations
and factors can reasonably be balanced
in a variety of ways under EPCA, and
because of uncertainties associated with
the many technological and cost inputs,
NHTSA considers a wide variety of
alternative sets of standards, each
reflecting different balancing of those
policies and concerns, to aid it in
discerning reasonable outcomes. Among
the alternatives providing for an
increase in the standards in this
rulemaking, the alternatives range in
stringency from a set of standards that
increase, on average, 3 percent annually
to a set of standards that increase, on
average, 7 percent annually.
2. Administrative Procedure Act
To be upheld under the ‘‘arbitrary and
capricious’’ standard of judicial review
in the APA, an agency rule must be
rational, based on consideration of the
relevant factors, and within the scope of
the authority delegated to the agency by
the statute. The agency must examine
the relevant data and articulate a
satisfactory explanation for its action
including a ‘‘rational connection
between the facts found and the choice
made.’’ Burlington Truck Lines, Inc. v.
United States, 371 U.S. 156, 168 (1962).
Statutory interpretations included in
an agency’s rule are subjected to the
two-step analysis of Chevron, U.S.A.,
Inc. v. Natural Resources Defense
Council, 467 U.S. 837, 104 S.Ct. 2778,
81 L.Ed.2d 694 (1984). Under step one,
where a statute ‘‘has directly spoken to
the precise question at issue,’’ id. at 842,
104 S.Ct. 2778, the court and the agency
‘‘must give effect to the unambiguously
expressed intent of Congress,’’ id. at
843, 104 S.Ct. 2778. If the statute is
silent or ambiguous regarding the
specific question, the court proceeds to
step two and asks ‘‘whether the agency’s
answer is based on a permissible
construction of the statute.’’ Id.
If an agency’s interpretation differs
from the one that it has previously
adopted, the agency need not
demonstrate that the prior position was
wrong or even less desirable. Rather, the
agency would need only to demonstrate
that its new position is consistent with
the statute and supported by the record,
and acknowledge that this is a departure
from past positions. The Supreme Court
PO 00000
Frm 00238
Fmt 4701
Sfmt 4702
emphasized this recently in FCC v. Fox
Television, 129 S.Ct. 1800 (2009). When
an agency changes course from earlier
regulations, ‘‘the requirement that an
agency provide reasoned explanation for
its action would ordinarily demand that
it display awareness that it is changing
position,’’ but ‘‘need not demonstrate to
a court’s satisfaction that the reasons for
the new policy are better than the
reasons for the old one; it suffices that
the new policy is permissible under the
statute, that there are good reasons for
it, and that the agency believes it to be
better, which the conscious change of
course adequately indicates.’’ 570
3. National Environmental Policy Act
As discussed above, EPCA requires
the agency to determine what level at
which to set the CAFE standards for
each model year by considering the four
factors of technological feasibility,
economic practicability, the effect of
other motor vehicle standards of the
Government on fuel economy, and the
need of the United States to conserve
energy. NEPA directs that
environmental considerations be
integrated into that process. To
accomplish that purpose, NEPA requires
an agency to compare the potential
environmental impacts of its proposed
action to those of a reasonable range of
alternatives.
To explore the environmental
consequences in depth, NHTSA has
prepared a draft environmental impact
statement. The purpose of an EIS is to
‘‘provide full and fair discussion of
significant environmental impacts and
[to] inform decisionmakers and the
public of the reasonable alternatives
which would avoid or minimize adverse
impacts or enhance the quality of the
human environment.’’ 40 CFR 1502.1.
NEPA is ‘‘a procedural statute that
mandates a process rather than a
particular result.’’ Stewart Park &
Reserve Coal., Inc. v. Slater, 352 F.3d at
557. The agency’s overall EIS-related
obligation is to ‘‘take a ‘hard look’ at the
environmental consequences before
taking a major action.’’ Baltimore Gas &
Elec. Co. v. Natural Res. Def. Council,
Inc., 462 U.S. 87, 97, 103 S.Ct. 2246, 76
L.Ed.2d 437 (1983). Significantly, ‘‘[i]f
the adverse environmental effects of the
proposed action are adequately
identified and evaluated, the agency is
not constrained by NEPA from deciding
that other values outweigh the
environmental costs.’’ Robertson v.
Methow Valley Citizens Council, 490
U.S. 332, 350, 109 S.Ct. 1835, 104
L.Ed.2d 351 (1989).
570 Ibid.,
E:\FR\FM\28SEP2.SGM
1181.
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
The agency must identify the
‘‘environmentally preferable’’
alternative, but need not adopt it.
‘‘Congress in enacting NEPA * * * did
not require agencies to elevate
environmental concerns over other
appropriate considerations.’’ Baltimore
Gas and Elec. Co. v. Natural Resources
Defense Council, Inc., 462 U.S. 87, 97
(1983). Instead, NEPA requires an
agency to develop alternatives to the
proposed action in preparing an EIS. 42
U.S.C. 4332(2)(C)(iii). The statute does
not command the agency to favor an
environmentally preferable course of
action, only that it make its decision to
proceed with the action after taking a
hard look at environmental
consequences.
E. What Are the Proposed CAFE
Standards?
1. Form of the Standards
Each of the CAFE standards that
NHTSA is proposing today for
TARGET =
Here, TARGET is the fuel economy target
(in mpg) applicable to vehicles of a given
footprint (FOOTPRINT, in square feet), b and
a are the function’s lower and upper
asymptotes (also in mpg), respectively, c is
the slope (in gpm per square foot) of the
sloped portion of the function, and d is the
intercept (in gpm) of the sloped portion of
the function (that is, the value the sloped
portion would take if extended to a footprint
of 0 square feet). The MIN and MAX
functions take the minimum and maximum,
respectively of the included values.
As also discussed in Section II.C,
under the proposed standards (as under
the recently-promulgated MY 2011
standards), the CAFE level required of
any given manufacturer will be
determined by calculating the
49691
passenger cars and light trucks is
expressed as a mathematical function
that defines a fuel economy target
applicable to each vehicle model and,
for each fleet, establishes a required
CAFE level determined by computing
the sales-weighted harmonic average of
those targets.571
As discussed above in Section II.C,
NHTSA is proposing to determine fuel
economy targets using a constrained
linear function defined according to the
following formula:
1
1 ⎞ 1⎤
⎡
⎛
MIN ⎢ MAX ⎜ c × FOOTPRINT + d, ⎟ , ⎥
a ⎠ b⎦
⎝
⎣
production-weighted harmonic average
of the fuel economy targets applicable to
each vehicle model:
CAFErequired =
∑ SALES
i
i
SALESi
∑ TARGET
i
i
Here, CAFErequired is the required level for
a given fleet, SALESi is the number of units
of model i produced for sale in the United
States, TARGETi is the fuel economy target
applicable to model i (according to the
equation shown in Chapter II and based on
the footprint of model i), and the summations
in the numerator and denominator are both
performed over all models in the fleet in
question.
The proposed standards are, therefore,
specified by the four coefficients
defining fuel economy targets:
a = upper limit (mpg)
b = lower limit (mpg)
c = slope (gpm per square foot)
d = intercept (gpm)
The values of the coefficients are
different for the passenger car standards
and the light truck standards.
2. Passenger Car Standards for MYs
2012–2016
For passenger cars, NHTSA is
proposing CAFE standards defined by
the following coefficients during MY
2012–2016:
TABLE IV.E.2–1—COEFFICIENTS DEFINING PROPOSED MY 2012–2016 FUEL ECONOMY TARGETS FOR PASSENGER CARS
Coefficient
2012
a (mpg) .......................................................................
b (mpg) .......................................................................
c (gpm/sf) ...................................................................
d (gpm) .......................................................................
36.23
28.12
0.0005308
0.005842
2013
2014
37.15
28.67
0.0005308
0.005153
2015
38.08
29.22
0.0005308
0.004498
39.55
30.08
0.0005308
0.003520
2016
41.38
31.12
0.0005308
0.002406
a constrained linear function, is shown
for comparison.
571 Required CAFE levels shown here are
estimated required levels based on NHTSA’s
current projection of manufacturers’ vehicle fleets
in MYs 2012–2016. Actual required levels are not
determined until the end of each model year, when
all of the vehicles produced by a manufacturer in
that model year are known and their compliance
obligation can be determined with certainty. The
target curves, as defined by the constrained linear
function, and as embedded in the function for the
sales-weighted harmonic average, are the real
‘‘standards’’ being proposed today.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00239
Fmt 4701
Sfmt 4702
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.055</MATH>
standard, which is specified by a
constrained logistic function rather than
EP28SE09.054</MATH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
These coefficients result in footprintdependent target curves shown
graphically below. The MY 2011 final
49692
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
As discussed, the CAFE levels
required of individual manufacturers
will depend on the mix of vehicles they
produce for sale in the United States.
Based on the market forecast of future
sales that NHTSA has used to examine
today’s proposed CAFE standards, the
agency estimates that the targets shown
above will result in the following
average required fuel economy levels for
individual manufacturers during MYs
2012–2016 (an updated estimate of the
average required fuel economy level
under the final MY 2011 standard is
shown for comparison): 572
TABLE IV.E.2–2—ESTIMATED AVERAGE FUEL ECONOMY REQUIRED UNDER FINAL MY 2011 AND PROPOSED MY 2012–
2016 CAFE STANDARDS FOR PASSENGER CARS
MY 2011
MY 2012
MY 2013
MY 2014
MY 2015
MY 2016
BMW ........................................................
Chrysler ....................................................
Daimler .....................................................
Ford ..........................................................
General Motors ........................................
Honda .......................................................
Hyundai ....................................................
Kia ............................................................
Mazda ......................................................
Mitsubishi .................................................
Nissan ......................................................
Porsche ....................................................
Subaru ......................................................
Suzuki ......................................................
Tata ..........................................................
Toyota ......................................................
Volkswagen ..............................................
30.2
29.6
29.4
29.8
30.3
30.8
30.8
30.6
30.7
31.0
30.7
31.2
31.0
31.2
27.8
30.8
30.8
33.2
33.0
32.6
33.0
33.0
33.9
33.8
33.6
34.1
34.4
33.5
36.2
34.8
35.9
30.7
34.1
34.6
34.0
33.7
33.1
33.7
33.8
34.7
34.6
34.4
34.8
35.3
34.2
37.2
35.7
36.8
31.4
34.9
35.4
34.8
34.5
33.8
34.5
34.6
35.5
35.5
35.2
35.7
36.1
35.0
38.1
36.5
37.7
32.1
35.7
36.2
36.0
35.3
35.0
35.8
35.8
36.8
36.8
36.5
37.0
37.4
36.2
39.6
37.9
39.2
33.1
37.0
37.5
37.5
36.8
36.4
37.3
37.3
38.4
38.3
38.0
38.6
39.2
37.8
41.4
39.6
41.0
34.4
38.6
39.1
Average .............................................
30.5
33.6
34.4
35.2
36.4
38.0
572 In the March 2009 final rule establishing MY
2011 standards for passenger cars and light trucks,
NHTSA estimated that the required fuel economy
levels for passenger cars would average 30.2 mpg
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
under the MY 2011 passenger car standard. Based
on the agency’s current forecast of the MY 2011
passenger car market, which anticipates greater
numbers of passenger cars than the forecast used in
PO 00000
Frm 00240
Fmt 4701
Sfmt 4702
the MY 2011 final rule, NHTSA now estimates that
the average required fuel economy level for
passenger cars will be 30.5 mpg in MY 2011.
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.033</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Manufacturer
49693
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
We note that a manufacturer’s
required average fuel economy level for
a model year under the proposed
standards would be based on its actual
production numbers in that model year.
Therefore, its official required fuel
economy level would not be known
until the end of that model year.
However, because the targets for each
vehicle footprint would be established
in advance of the model year, a
manufacturer should be able to estimate
its required level accurately.
3. Minimum Domestic Passenger Car
Standards
EISA expressly requires each
manufacturer to meet a minimum fuel
economy standard for domestically
manufactured passenger cars in addition
to meeting the standards set by NHTSA.
According to the statute (49 U.S.C.
32902(b)(4)) the minimum standard
shall be the greater of (A) 27.5 miles per
gallon; or (B) 92 percent of the average
fuel economy projected by the Secretary
for the combined domestic and nondomestic passenger automobile fleets
manufactured for sale in the United
States by all manufacturers in the model
year. The agency must publish the
projected minimum standards in the
Federal Register when the passenger car
standards for the model year in question
are promulgated.
Based on NHTSA’s current market
forecast, the agency’s estimates of these
minimum standards under the proposed
MY 2012–2016 CAFE standards (and,
for comparison, the final MY 2011
standard) are summarized below in
Table IV.E.2–1.573 For eventual
compliance calculations, the final
calculated minimum standards will be
updated to reflect any changes in the
average fuel economy level required
under the final standards.
TABLE IV.E.3–1—ESTIMATED MINIMUM STANDARD FOR DOMESTICALLY MANUFACTURED PASSENGER CARS UNDER FINAL
MY 2011 AND PROPOSED MY 2012–2016 CAFE STANDARDS FOR PASSENGER CARS
2011
2012
2013
2014
2015
2016
28.0
30.9
31.6
32.4
33.5
34.9
4. Light Truck Standards
For light trucks, NHTSA is proposing CAFE standards defined by the following coefficients during MYs 2012–2016:
TABLE IV.E.4–1—COEFFICIENTS DEFINING PROPOSED MY 2012–2016 FUEL ECONOMY TARGETS FOR LIGHT TRUCKS
Coefficient
2012
a (mpg) .......................................................................
b (mpg) .......................................................................
c (gpm/sf) ...................................................................
d (gpm) .......................................................................
29.44
22.06
0.0004546
0.01533
2013
2014
30.32
22.55
0.0004546
0.01434
2015
31.30
23.09
0.0004546
0.01331
32.70
23.84
0.0004546
0.01194
2016
34.38
24.72
0.0004546
0.01045
mstockstill on DSKH9S0YB1PROD with PROPOSALS
These coefficients result in footprintdependent targets shown graphically
below. The MY 2011 final standard,
which is specified by a constrained
logistic function rather than a
constrained linear function, is shown
for comparison.
573 In the March 2009 final rule establishing MY
2011 standards for passenger cars and light trucks,
NHTSA estimated that the minimum required
CAFE standard for domestically manufactured
passenger cars would be 27.8 mpg under the MY
2011 passenger car standard. Based on the agency’s
current forecast of the MY 2011 passenger car
market, NHTSA now estimates that the minimum
required CAFE standard will be 28.0 mpg in MY
2011.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00241
Fmt 4701
Sfmt 4700
E:\FR\FM\28SEP2.SGM
28SEP2
49694
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
Given these targets, the CAFE levels
required of individual manufacturers
will depend on the mix of vehicles they
produce for sale in the United States.
Based on the market forecast NHTSA
has used to examine today’s proposed
CAFE standards, the agency estimates
that the targets shown above will result
in the following average required fuel
economy levels for individual
manufacturers during MYs 2012–2016
(an updated estimate of the average
required fuel economy level under the
final MY 2011 standard is shown for
comparison): 574
TABLE IV.E.4–2—ESTIMATED AVERAGE FUEL ECONOMY REQUIRED UNDER FINAL MY 2011 AND PROPOSED MY 2012–
2016 CAFE STANDARDS FOR LIGHT TRUCKS
MY 2011
MY 2012
MY 2013
MY 2014
MY 2015
MY 2016
BMW ........................................................
Chrysler ....................................................
Daimler .....................................................
Ford ..........................................................
General Motors ........................................
Honda .......................................................
Hyundai ....................................................
Kia ............................................................
Mazda ......................................................
Mitsubishi .................................................
Nissan ......................................................
Porsche ....................................................
Subaru ......................................................
Suzuki ......................................................
Tata ..........................................................
Toyota ......................................................
Volkswagen ..............................................
25.7
24.2
24.7
23.3
22.9
25.6
25.9
25.1
26.3
26.4
24.1
25.5
26.5
26.3
26.1
25.2
25.0
26.3
25.2
25.4
24.3
23.6
26.4
26.6
25.8
27.4
27.4
25.0
26.0
27.5
27.2
26.9
25.7
25.6
27.0
25.8
26.1
24.9
24.2
27.1
27.3
26.4
28.1
28.1
25.6
26.7
28.3
27.9
27.6
26.3
26.2
27.7
26.4
26.9
25.3
24.8
27.9
28.1
27.2
28.8
28.9
26.1
27.4
29.2
28.7
28.4
27.1
26.9
28.8
27.3
27.9
26.2
25.6
29.0
29.3
28.3
29.9
30.1
27.0
28.5
30.4
29.9
29.6
28.1
27.9
30.1
28.5
29.1
27.3
26.6
30.4
30.6
29.6
31.4
31.6
28.2
29.8
31.8
31.3
31.0
29.3
29.2
Average .............................................
24.2
25.0
25.6
26.2
27.1
28.3
574 In the March 2009 final rule establishing MY
2011 standards for passenger cars and light trucks,
NHTSA estimated that the required fuel economy
levels for light trucks would average 24.1 mpg
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
under the MY 2011 light truck standard. Based on
the agency’s current forecast of the MY 2011 light
truck market, NHTSA now estimates that the
required fuel economy levels will average 24.2 mpg
PO 00000
Frm 00242
Fmt 4701
Sfmt 4700
in MY 2011. The increase in the estimate reflects
a slight decrease in the size of the average light
truck.
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.034</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Manufacturer
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
As discussed above with respect to
the proposed passenger cars standards,
we note that a manufacturer’s required
fuel economy level for a model year
under the proposed standards would be
based on its actual production numbers
in that model year.
F. How Do the Proposed Standards
Fulfill NHTSA’s Statutory Obligations?
In developing the proposed MY 2012–
16 standards, the agency developed and
considered a wide variety of
alternatives. NHTSA took a new
approach to defining alternatives as
compared to the most recent prior CAFE
rulemaking. In response to comments
received in the last round of
rulemaking, in our March 2009 notice of
intent to prepare an environmental
impact statement, the agency selected a
range of candidate stringencies that
increased annually, on average, 3% to
7%.575 That same approach has been
carried over to this NPRM and to the
accompanying DEIS and PRIA. The
majority of the alternatives considered
in this rulemaking are defined as
average percentage increases in
stringency—3 percent per year, 4
percent per year, 5 percent per year, and
so on. NHTSA believes that this
approach more clearly communicates
the level of stringency of each
alternative and is more intuitive than
alternatives defined in terms of different
cost-benefit ratios, and still allows us to
identify alternatives that represent
different ways to balance NHTSA’s
statutory requirements under EPCA/
EISA.
In the notice of intent, we noted that
each of the listed alternatives
represents, in part, a different way in
which NHTSA could conceivably
balance conflicting policies and
of intent to prepare an EIS, 74 FR
14857, 14859–60, April 1, 2009.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
575 Notice
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
considerations in setting the standards.
We were mindful that the agency would
need to weigh and balance many factors,
such as the technological feasibility,
economic practicability, including
leadtime considerations for the
introduction of technologies and
impacts on the auto industry, the
impacts of the standards on fuel savings
and CO2 emissions, fuel savings by
consumers; as well as other relevant
factors such as safety. For example, the
7% Alternative, the most stringent
alternative, weighs energy conservation
and climate change considerations more
heavily and technological feasibility and
economic practicability less heavily. In
contrast, the 3% Alternative, the least
stringent alternative, places more weight
on technological feasibility and
economic practicability. We recognized
that the ‘‘feasibility’’ of the alternatives
also may reflect differences and
uncertainties in the way in which key
economic (e.g., the price of fuel and the
social cost of carbon) and technological
inputs could be assessed and estimated
or valued.
In subsequently developing the NPRM
and the associated analytical
documents, the agency expanded the
list of alternatives to provide a degree of
analytical continuity between the old
and new approach to defining
alternatives in an effort help the agency
and the public understand the
similarities and dissimilarities between
the two approaches and to make the
transition to the new approach. To that
end, we included and analyzed two
additional alternatives, one that sets
standards at the point where net
benefits are maximized, and another
that sets standards at the point at which
total costs are equal to total benefits.576
576 The stringency indicated by each of these
alternatives depends on the value of inputs to
NHTSA’s analysis. Results presented here for these
PO 00000
Frm 00243
Fmt 4701
Sfmt 4700
49695
With respect to the first of those
alternatives, we note that Executive
Order 12866 focuses attention on an
approach that maximizes net benefits.
Further, since NHTSA has thus far set
attribute-based CAFE standards at the
point at which net benefits are
maximized, we believed it would be
useful and informative to consider the
potential impacts of that approach as
compared to the new approach for MYs
2012–2016.
After working with EPA in thoroughly
reviewing and in some cases reassessing
the effectiveness and costs of
technologies, most of which are already
being incorporated in at least some
vehicles, market forecasts and economic
assumptions, we used the Volpe model
extensively to assess the technologies
that the manufacturers could apply in
order to comply with each of the
alternatives. This permitted us to assess
the variety, amount and cost of the
technologies that could be needed to
enable the manufacturers to comply
with each of the alternatives. NHTSA
estimated how the application of these
and other technologies could increase
vehicle costs. The following five figures
show industry-wide average
incremental (i.e., relative to the
reference fleet) per-vehicle costs, for
each model year, each fleet, and the
combined fleet. Estimates specific to
each manufacturer are shown in the
accompanying PRIA.
two alternatives are based on NHTSA’s reference
case inputs, which underlie the central analysis of
the proposed standards. In the accompanying PRIA,
the agency presents the results of that analysis to
explore the sensitivity of results to changes in key
economic inputs. Because of numerous changes in
model inputs (e.g., discount rate, rebound effect,
CO2 value, technology cost estimates), our analysis
often exhausts all available technologies before
reaching the point at which total costs equal total
benefits. In these cases, the stringency that exhausts
all available technologies is considered.
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.036</GPH>
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00244
Fmt 4701
Sfmt 4725
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.035</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49696
EP28SE09.038</GPH>
49697
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00245
Fmt 4701
Sfmt 4725
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.037</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
49698
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
large U.S.-headquartered and three large
foreign-headquartered full-line
manufacturers.
EP28SE09.040</GPH>
results for MY 2012–2016 for industry
and Chrysler, Ford, General Motors,
Honda, Nissan, and Toyota. This figure
focuses on these manufacturers as they
currently (in MY 2008) represent three
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00246
Fmt 4701
Sfmt 4725
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.039</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Corresponding to these per-vehicle
cost increases, NHTSA estimated total
incremental outlays for additional
technology in each model year. The
following figure shows cumulative
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
For each alternative, NHTSA has also
estimated all corresponding effects for
each model year, including fuel savings,
CO2 reductions, and other effects, as
49699
well as the estimated societal benefits of
these effects.
TABLE IV.F.1—FUEL SAVINGS, CO2 REDUCTIONS, AND TECHNOLOGY COSTS FOR REGULATORY ALTERNATIVES
Fuel savings
(b. gal)
Regulatory alternative
CO2
reductions
(mmt)
Cost
($b)
3% per Year .................................................................................................................................
4% per Year .................................................................................................................................
5% per Year .................................................................................................................................
6% per Year .................................................................................................................................
Maximum Net Benefit ..................................................................................................................
7% per Year .................................................................................................................................
37
54
69
83
90
91
404
582
718
846
923
934
29
46
74
103
111
116
Total Cost = Total Benefit ....................................................................................................
95
977
122
economic practicability and the need of
the nation to conserve energy, the
following figure compares the
incremental technology outlays
presented above to the corresponding
cumulative fuel savings.
The agency then assessed which
alternative would represent a reasonable
balancing of the statutory criteria, given
the difficulties confronting the industry
and the economy, and the priorities and
policy goals of the President. Those
priorities and goals include achieving
nationally harmonized and coordinated
program for regulating fuel economy
and GHG emissions.
Part of that assessment entailed an
evaluation of the stringencies necessary
to achieve both Federal and State GHG
emission reduction goals, especially
those of California and the States that
have adopted its GHG emission
standard for motor vehicles. Given that
EPCA requires attribute-based
standards, NHTSA and EPA determined
the level at which an attribute-based
GHG emissions standard would need to
be set to achieve the goals of California.
This was done by evaluating a
nationwide CAA standard for MY 2016
that would require the levels of
technology upgrade, across the country,
which California standards would
require for the subset of vehicles sold in
California under the California
standards for MY 2009–2016 (known as
‘‘Pavley 1’’). In essence, the stringency
of the California Pavley 1 program was
evaluated, but for a national standard.
For a number of reasons discussed in
section III.D, an assessment was
developed of an equivalent national
new vehicle fleet-wide CO2 performance
standards for model year 2016 which
would result in the new vehicle fleet in
the State of California having CO2
performance equal to the performance
from the California Pavley 1 standards.
That level, 250 g/mi, is equivalent to
35.5 mpg if the GHG standard is met
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00247
Fmt 4701
Sfmt 4700
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.041</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
The accompanying PRIA presents a
detailed analysis of these results.
Relevant to EPCA’s requirement that
NHTSA consider, among other factors,
49700
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
exclusively by fuel economy
improvements.
To obtain the counterpart CAFE
standard, we then adjusted that level
downward to account for differences
between the more prescriptive EPCA
and the more flexible CAA. These
differences give EPA greater ability
under the CAA to provide compliance
flexibilities that would enable
manufacturers to achieve compliance
with a given level of requirement under
the CAA at less cost than with the same
level of requirement under EPCA.
Principal among those greater
flexibilities are the credits that EPA can
provide for improving the efficiency of
air conditioners and reducing the
leakage of refrigerants from them. The
adjustments result in a figure of 34.1
mpg as the appropriate counterpart
CAFE standard. This differential gives
manufacturers the opportunity to reach
35.5 mpg under the CAA in ways that
would significantly reduce their costs.
Were NHTSA instead to establish its
standard at the same level,
manufacturers would need to make
substantially greater expenditures on
fuel-saving technologies to reach 35.5
mpg under EPCA.
Given the importance to this
rulemaking of achieving a harmonized
National Program, we created a new
alternative whose annual percentage
increases would achieve 34.1 mpg by
MY 2016. That alternative is one which
increases on average at 4.3% annually.
This new alternative, like the seven
alternative presented above, represents a
unique balancing of the statutory factors
and other relevant considerations. We
have added that alternative to the table
below.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
3% per Year .....
4% per Year .....
VerDate Nov<24>2008
656
718
846
60
74
103
90
91
923
934
111
116
95
977
122
Cost
($b)
As noted earlier, NHTSA has used the
Volpe model to analyze each of these
alternatives based on analytical inputs
determined jointly with EPA. For a
given regulatory alternative, the Volpe
model estimates how each manufacturer
could apply technology in response to
the MY 2012 standard (separately for
cars and trucks), carries technologies
applied in MY 2012 forward to MY
2013, and then estimates how each
manufacturer could apply technology in
response to the MY 2013 standard.
When analyzing MY 2013, the model
considers the potential to add ‘‘extra’’
technology in MY 2012 in order to carry
that technology into MY 2013, thereby
avoiding the use of more expensive
technologies in MY 2013. The model
continues in this fashion through MY
2016, and then performs calculations to
estimate the costs, effects, and benefits
of the applied technologies, and to
estimate any civil penalties owed based
on projected noncompliance. For each
regulatory alternative, the model
calculates incremental costs, effects, and
benefits relative to the regulatory
baseline (i.e., the no-action alternative),
under which the MY 2011 CAFE
standards continue through MY 2016.
The model calculates results for each
model year, because EPCA requires that
NHTSA set its standards for each model
year at the ‘‘maximum feasible average
fuel economy level that the Secretary
37
54
404
582
29
46
Jkt 217001
PO 00000
23:31 Sep 25, 2009
62
69
83
Total Cost =
Total
Benefit ....
CO2
reductions
(mmt)
Cost
($b)
CO2
reductions
(mmt)
Proposed (4.3%
per Year) .......
5% per Year .....
6% per Year .....
Maximum Net
Benefit ...........
7% per Year .....
Fuel
savings
(b. gal)
Regulatory
alternative
Fuel
savings
(b. gal)
Regulatory
alternative
Frm 00248
Fmt 4701
Sfmt 4700
decides the manufacturers can achieve
in that model year’’ considering four
statutory factors. Pursuant to EPCA’s
directive notice not to consider statutory
credits in establishing CAFE standards,
NHTSA did not FFV credits, credits
carried forward and backward, and
transferred credit.577 578 In addition, the
analysis reflects the ability of
manufacturers to pay fines in lieu of
compliance.
Because it entails year-by-year
examination of eight regulatory
alternatives for, separately, passenger
cars and light trucks, NHTSA’s analysis
involves a large amount of information.
Detailed results of this analysis are
presented separately in the PRIA
accompanying today’s notice. The
remainder of this section discusses a
combination of aggregated and
illustrative results of this analysis.
The following figure compares
average fuel economy levels required of
manufacturers under the eight
regulatory alternatives in MYs 2012,
2014, and 2016. Required levels for MY
2013 and MY 2015 fall between those
for MYs 2012 and 2014 and MYs 2014
and 2016, respectively. Although
required levels for these interim years
are not presented in the following figure
to limit the complexity of the figure,
they do appear in the accompanying
PRIA.579
577 Separately, NHTSA has conducted analysis
that accounts for EPCA’s provisions regarding FFVs.
578 Because NHTSA’s modeling represents every
model year explicitly, accounts for estimates of
when vehicle model redesigns will occur, and sets
aside these compliance flexibilities, the agency’s
modeling produces results that differ varyingly
from EPA’s for specific manufacturers, fleets, and
model years.
579 Also, the ‘‘Max NB’’ and the ‘‘TC = TB’’
alternatives depend on the inputs to the agencies’
analysis. The sensitivity analysis presented in the
PRIA documents the response of these alternatives
to changes in key economic inputs. For example,
the combined average required fuel economy under
the ‘‘Max NB’’ alternative is 36.8 mpg under the
reference case economic inputs presented here, and
ranges from 32.8 mpg to 37.2 mpg under the
alternative economic inputs presented in the PRIA.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
accompanying PRIA presents detailed
estimates of additional technology
penetration into the NHTSA reference
fleet associated with each regulatory
alternative. The following four charts
illustrate the results of this analysis,
considering the application of four
technologies by six manufacturers and
the industry as a whole. Technologies
include gasoline direct injection (GDI),
engine turbocharging and downsizing,
diesel engines, and strong HEV systems
(including CISG systems). GDI and
turbocharging are among the
technologies that play an important role
in achieving the fuel economy
improvements shown in NHTSA’s
PO 00000
Frm 00249
Fmt 4701
Sfmt 4700
analysis, and diesels and strong HEVs
represent technologies involving
significant challenges for widespread
use through MY 2016. These figures
focus on Chrysler, Ford, General Motors,
Honda, Nissan, and Toyota, as these
manufacturers currently (in MY 2008)
represent three large U.S.-headquartered
and three large foreign-headquartered
full-line manufacturers. For each
alternative, the figures show additional
application of technology by MY 2016.
The PRIA presents results for all model
years, technologies, and manufacturers,
and NHTSA has considered these
broader results when considering the
eight regulatory alternatives.
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.042</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
As this figure illustrates, the proposed
standards involve a ‘‘faster start’’ toward
increased stringency than do any of the
alternatives that increase steadily (i.e.,
the 3%/y, 4%/y, 5%/y, 6%/y, and 7%/
y alternatives). However, by MY 2016,
the stringency of the proposed standards
reflects an average annual increase of
4.3%/y. The proposed standards,
therefore, represent an alternative that
could be referred to as ‘‘4.3% per year
with a fast start’’ or a ‘‘front-loaded
4.3% average annual increase.’’
In NHTSA’s analysis, these achieved
average fuel economy levels result from
the application of technology rather
than changes in the mix of vehicles
produced for sale in the U.S. The
49701
EP28SE09.044</GPH>
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00250
Fmt 4701
Sfmt 4725
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.043</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49702
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
light trucks to achieve at least 35 mpg
not later than MY 2020, as required by
EISA. Achieving that level makes it
necessary for the chosen alternative to
increase at over 3 percent annually.
NHTSA has concluded that it must
reject the 3%/y and 4%/y alternatives.
Given that CO2 and fuel savings are very
PO 00000
Frm 00251
Fmt 4701
Sfmt 4700
closely correlated, the above chart
reveals that the 3%/y and 4%/y
alternative would not produce the
reductions in fuel savings and CO2
emissions that the Nation needs at this
time. Picking either of those alternatives
would unnecessarily result in foregoing
substantial benefits, in terms of fuel
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.046</GPH>
The agency began the process of
winnowing the alternatives by
determining whether any of the lower
stringency alternatives should be
eliminated from consideration. To begin
with, the agency needs to ensure that its
standards are high enough to enable the
combined fleet of passenger cars and
49703
EP28SE09.045</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
49704
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
savings and reduced CO2 emissions,
which would be achievable at
reasonable cost. Further, NHTSA has
tentatively concluded that it must reject
the 3%/y and 4%/y alternatives, as
neither would lead to the regulatory
harmonization that forms a vital core
principle of the National Program that
EPA and NHTSA are jointly striving to
implement. In order to achieve a
harmonized National Program, an
average annual increase of 4.3% is
necessary.
In contrast, at the upper end of the
range of alternatives, the agency was
concerned that the increased benefits
offered by those alternatives were
available only at excessive cost and
might not be practicable in all cases
within the available leadtime.
NHTSA first considered the
environmentally-preferable alternative.
Based on the information provided in
the DEIS, the environmentallypreferable alternative would be that
involving stringencies at which total
costs most nearly equal total benefits.
NHTSA notes that NEPA does not
require that agencies choose the
environmentally-preferable alternative if
doing so would be contrary to the
choice that the agency would otherwise
make under its governing statute. Given
the levels of stringency required by the
environmentally-preferable alternative
and the lack of lead time to achieve
such levels between now and MY 2016,
NHTSA tentatively concludes that the
environmentally-preferable alternative
would not be economically practicable
or technologically feasible, and thus
tentatively concludes that it would
result in standards that would be
beyond the level achievable for MYs
2012–2016.
NHTSA determined that it would be
inappropriate to propose any of the
other more stringent alternatives due to
concerns over lead time and economic
practicability. At a time when the entire
industry remains in an economically
critical state, the agencies believe that it
would be unreasonable to propose more
stringent standards. Even in a case
where economic factors were not a
consideration, there are real-world time
constraints which must be considered
due to the short lead time available for
the early years of this program, in
particular for MYs 2012 and 2013.
As revealed by the figures shown
above, the proposed standards already
require aggressive application of
technologies, and more stringent
standards which would require more
widespread use (including more
substantial implementation of advanced
technologies such as stoichiometric
gasoline direct injection engines and
strong hybrids) raise serious issues of
adequacy of lead time, not only to meet
the standards but to coordinate such
significant changes with manufacturers’
redesign cycles.
NHTSA does not believe that more
stringent standards would meet EPCA’s
requirement that CAFE standards be
economically practicable. The figures
presented above reveal that increasing
stringency beyond the proposed
standards would entail significant
additional application of technology—
technology that, though perhaps feasible
for individual vehicle models, would
not be economically practicable for the
industry at the scales involved. Among
the more stringent alternatives, the one
closest in stringency to the standards
proposed today is the alternative under
which combined CAFE stringency
increases at 5% annually. As indicated
above, this alternative would yield fuel
savings and CO2 reductions about 12%
and 9% higher, respectively, than the
proposed standards. However,
compared to the proposed standards,
this alternative would increase outlays
for new technologies during MY 2012–
2016 by about 24%, or $14b. Average
MY 2016 cost increases would, in turn,
rise from $1,076 under the proposed
standards to $1,409 when stringency
increases at 5% annually. This
represents a 30% increase in per-vehicle
cost for only a 3% increase in average
performance (on a gallon-per-mile basis
to which fuel savings are proportional).
The following three tables summarize
estimated manufacturer-level average
incremental costs for the 5%/y
alternative and the average of the
passenger and light truck fleets:
TABLE IV.F.3—AVERAGE INCREMENTAL COSTS ($/VEHICLE) UNDER THE 5%/Y ALTERNATIVE CAFE STANDARDS FOR
PASSENGER CARS
Manufacturer
MY 2012
MY 2013
MY 2014
MY 2015
MY 2016
mstockstill on DSKH9S0YB1PROD with PROPOSALS
BMW ....................................................................................
Chrysler ................................................................................
Daimler .................................................................................
Ford ......................................................................................
General Motors ....................................................................
Honda ...................................................................................
Hyundai ................................................................................
Kia ........................................................................................
Mazda ..................................................................................
Mitsubishi .............................................................................
Nissan ..................................................................................
Porsche ................................................................................
Subaru ..................................................................................
Suzuki ..................................................................................
Tata ......................................................................................
Toyota ..................................................................................
Volkswagen ..........................................................................
474
726
132
979
94
55
518
180
603
1,106
298
209
353
204
202
133
231
541
1,464
209
1,556
934
263
531
344
919
1,141
587
240
454
1,453
239
127
550
667
1,832
814
1,572
1,242
408
943
440
1,294
2,594
1,344
350
1,828
2,444
428
194
688
883
1,928
1,094
1,918
1,541
451
1,007
612
1,569
2,962
1,402
465
2,258
2,580
632
285
828
1,190
1,913
1,467
2,181
1,808
671
1,152
796
1,863
2,913
1,517
581
2,201
2,624
1,350
446
1,202
Average .........................................................................
337
664
916
1,079
1,291
TABLE IV.F.4—AVERAGE INCREMENTAL COSTS ($/VEHICLE) UNDER THE 5%/Y ALTERNATIVE CAFE STANDARDS FOR
LIGHT TRUCKS
Manufacturer
MY 2012
BMW ..................................................................................
Chrysler ..............................................................................
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00252
MY 2013
297
113
Fmt 4701
Sfmt 4700
MY 2014
306
475
E:\FR\FM\28SEP2.SGM
403
1,058
28SEP2
MY 2015
753
1,271
MY 2016
935
1,538
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
49705
TABLE IV.F.4—AVERAGE INCREMENTAL COSTS ($/VEHICLE) UNDER THE 5%/Y ALTERNATIVE CAFE STANDARDS FOR
LIGHT TRUCKS—Continued
Manufacturer
MY 2012
MY 2013
MY 2014
MY 2015
MY 2016
Daimler ...............................................................................
Ford ....................................................................................
General Motors ..................................................................
Honda .................................................................................
Hyundai ..............................................................................
Kia ......................................................................................
Mazda ................................................................................
Mitsubishi ...........................................................................
Nissan ................................................................................
Porsche ..............................................................................
Subaru ................................................................................
Suzuki ................................................................................
Tata ....................................................................................
Toyota ................................................................................
Volkswagen ........................................................................
172
732
..........................
646
990
..........................
434
11
793
(17)
1,398
6
..........................
113
(11)
198
1,201
786
614
1,009
309
608
88
891
55
1,370
2,169
77
427
55
227
1,685
1,121
1,139
2,106
713
612
2,102
1,419
117
1,501
2,093
160
906
127
459
2,345
1,275
1,265
2,206
1,181
722
2,081
1,535
962
1,441
2,028
242
1,065
209
528
2,380
1,457
1,624
2,148
1,692
953
2,817
1,907
1,009
1,486
2,155
695
1,291
286
Average .......................................................................
373
742
1,179
1,449
1,641
TABLE IV.F.5—AVERAGE INCREMENTAL COSTS ($/VEHICLE) UNDER THE 5%/Y ALTERNATIVE CAFE STANDARDS
Manufacturer
MY 2012
MY 2013
MY 2014
MY 2015
MY 2016
415
351
148
872
52
272
610
143
571
959
462
120
743
152
71
125
182
469
888
205
1,401
868
386
625
337
862
975
683
172
787
1,637
144
233
460
590
1,392
591
1,623
1,189
638
1,167
489
1,181
2,525
1,367
272
1,709
2,349
267
440
586
848
1,632
884
2,110
1,426
701
1,228
707
1,443
2,854
1,441
623
1,964
2,434
420
549
716
1,123
1,747
1,167
2,269
1,660
955
1,330
942
1,732
2,902
1,627
717
1,942
2,504
1,001
724
1,043
Average .........................................................................
mstockstill on DSKH9S0YB1PROD with PROPOSALS
BMW ....................................................................................
Chrysler ................................................................................
Daimler .................................................................................
For∧d ....................................................................................
General Motors ....................................................................
Honda ...................................................................................
Hyundai ................................................................................
Kia ........................................................................................
Mazda ..................................................................................
Mitsubishi .............................................................................
Nissan ..................................................................................
Porsche ................................................................................
Subaru ..................................................................................
Suzuki ..................................................................................
Tata ......................................................................................
Toyota ..................................................................................
Volkswagen ..........................................................................
350
692
1,010
1,207
1,409
These cost increases derive from
accelerated application of advanced
technologies as stringency increases
past the levels in the proposed
standards. For example, under the
proposed standards, additional diesel
application rates average 2% for the
industry and range from 0% to 7%
among Chrysler, Ford, GM, Honda,
Nissan, and Toyota. Under standards
increasing in combined stringency at
5% annually, these rates more than
double, averaging 5% for the industry
and ranging from 2% to 13% for the
same six manufacturers. The agency
tentatively concludes that the levels of
technology penetration required by the
proposed standards are reasonable.
Increasing the standards beyond those
levels would lead to rapidly increasing
dependence on advanced technologies
with higher costs, particularly in the
early years of the rulemaking time
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
frame, according to the agency’s
analysis, and potentially pose too great
an economic burden given the state of
the industry.
In contrast, through analysis of the
illustrative results shown above, as well
as the more complete and detailed
results presented in the accompanying
PRIA, NHTSA has concluded that the
proposed standards are technologically
feasible and economically practicable.
The proposed standards will require
manufacturers to apply considerable
additional technology. Although
NHTSA cannot predict how
manufacturers will respond to the
proposed standards, the agency’s
analysis indicates that the standards
could lead to significantly greater use of
advanced engine and transmission
technologies. As shown above, the
agency’s analysis shows considerable
increases in the application of SGDI
PO 00000
Frm 00253
Fmt 4701
Sfmt 4700
systems and engine turbocharging and
downsizing. Though not presented
above, the agency’s analysis also shows
similarly large increases in the use of
dual-clutch automated manual
transmissions (AMTs). However, the
agency’s analysis does not suggest that
the additional application of these
technologies in response to the
proposed standards would extend
beyond levels achievable by the
industry. These technologies are likely
to be applied to at least some extent
even in the absence of new CAFE
standards. In addition, the agency’s
analysis indicates that most
manufacturers would rely only to a
limited extent on the most expensive
and advanced technologies, including
diesel engines and strong HEVs.
As shown above, NHTSA estimates
that the proposed standards could lead
to average incremental costs ranging
E:\FR\FM\28SEP2.SGM
28SEP2
49706
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
from $291 per vehicle (for light trucks
in MY 2011) to $1,085 per vehicle (for
passenger cars in MY 2016), increasing
steadily from $421 per vehicle in for all
light vehicles in MY 2011 $1,076 for all
light vehicle in MY 2016. NHTSA
estimates that these costs would vary
considerably among manufacturers, but
would rarely exceed $2,000 per vehicle.
The following three tables summarize
estimated manufacturer-level average
incremental costs for the proposed
standards and the average of the
passenger and light truck fleets:
TABLE IV.F.6—AVERAGE INCREMENTAL COSTS ($/VEHICLE) UNDER PROPOSED PASSENGER CAR CAFE STANDARDS
Manufacturer
MY 2012
MY 2013
MY 2014
MY 2015
MY 2016
BMW ....................................................................................
Chrysler ................................................................................
Daimler .................................................................................
Ford ......................................................................................
General Motors ....................................................................
Honda ...................................................................................
Hyundai ................................................................................
Kia ........................................................................................
Mazda ..................................................................................
Mitsubishi .............................................................................
Nissan ..................................................................................
Porsche ................................................................................
Subaru ..................................................................................
Suzuki ..................................................................................
Tata ......................................................................................
Toyota ..................................................................................
Volkswagen ..........................................................................
524
775
182
1,746
143
31
418
319
658
1,156
653
270
408
259
246
133
286
552
1,304
215
1,719
990
122
452
359
735
1,076
712
256
465
1,001
244
127
561
634
1,473
781
1,735
1,189
205
643
387
965
1,715
1,155
306
1,493
1,445
395
155
650
828
1,583
1,039
1,880
1,387
287
726
473
991
2,076
1,153
399
1,877
1,494
577
257
767
1,124
1,582
1,401
2,078
1,553
494
868
647
1,26
2,035
1,275
498
1,838
1,675
1,284
267
1,125
Average .........................................................................
498
674
820
930
1,085
TABLE IV.F.7—AVERAGE INCREMENTAL COSTS ($/VEHICLE) UNDER PROPOSED LIGHT TRUCK CAFE STANDARDS
Manufacturer
MY 2012
MY 2013
MY 2014
MY 2015
MY 2016
BMW ....................................................................................
Chrysler ................................................................................
Daimler .................................................................................
Ford ......................................................................................
General Motors ....................................................................
Honda ...................................................................................
Hyundai ................................................................................
Kia ........................................................................................
Mazda ..................................................................................
Mitsubishi .............................................................................
Nissan ..................................................................................
Porsche ................................................................................
Subaru ..................................................................................
Suzuki ..................................................................................
Tata ......................................................................................
Toyota ..................................................................................
Volkswagen ..........................................................................
325
152
322
471
33
390
774
228
340
55
541
28
1,203
50
44
172
28
327
399
289
629
533
380
744
373
608
94
608
46
1,140
1,451
83
309
61
380
749
316
693
752
616
1,301
547
610
1,546
903
84
1,213
1,404
127
665
99
708
892
420
1,323
792
749
1,322
843
679
1,732
1,022
913
1,197
1,358
193
764
160
884
1,188
478
1,365
962
1,006
1,292
1,218
776
2,123
1,312
954
1,184
1,373
635
877
231
Average .........................................................................
291
485
701
911
1,058
TABLE IV.F.8—AVERAGE INCREMENTAL COSTS ($/VEHICLE) UNDER PROPOSED CAFE STANDARDS
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Manufacturer
MY 2012
BMW ....................................................................................
Chrysler ................................................................................
Daimler .................................................................................
Ford ......................................................................................
General Motors ....................................................................
Honda ...................................................................................
Hyundai ................................................................................
Kia ........................................................................................
Mazda ..................................................................................
Mitsubishi .............................................................................
Nissan ..................................................................................
Porsche ................................................................................
Subaru ..................................................................................
Suzuki ..................................................................................
Tata ......................................................................................
Toyota ..................................................................................
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00254
MY 2013
457
393
236
1,195
94
162
488
300
598
1,007
616
174
705
204
115
147
Fmt 4701
Sfmt 4700
MY 2014
483
777
243
1,242
785
212
509
362
712
921
679
179
711
1,117
150
191
E:\FR\FM\28SEP2.SGM
560
1,061
604
1,262
997
335
769
416
907
1,692
1,078
231
1,392
1,434
234
331
28SEP2
MY 2015
796
1,271
834
1,629
1,131
429
835
535
944
2,033
1,115
562
1,632
1,458
368
429
MY 2016
1,061
1,408
1,106
1,762
1,304
647
944
740
1,193
2,045
1,286
643
1,602
1,598
938
468
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
49707
TABLE IV.F.8—AVERAGE INCREMENTAL COSTS ($/VEHICLE) UNDER PROPOSED CAFE STANDARDS—Continued
Manufacturer
MY 2012
MY 2013
MY 2014
MY 2015
MY 2016
Volkswagen ..........................................................................
233
470
550
657
970
Average .........................................................................
421
605
777
924
1,076
In summary, NHTSA has considered
eight regulatory alternatives, including
the proposed standards, examining
technologies that could be applied in
response to each alternative, as well as
corresponding costs, effects, and
benefits. The agency has concluded that
alternatives less stringent than the
proposed standards would not produce
the fuel savings and CO2 reductions
necessary at this time to achieve either
the overarching purpose of EPCA, i.e.,
energy conservation, or an important
part of the regulatory harmonization
underpinning the National Program.
Conversely, the agency has concluded
that more stringent standards would
involve levels of additional technology
and cost that, considering the fragile
state of the automotive industry, would
not be economically practicable.
Therefore, having considered these eight
regulatory alternatives, and the
statutorily-relevant factors of
technological feasibility, economic
practicability, the effect of other motor
vehicle standards of the Government on
fuel economy, and the need of the
United States to conserve energy, along
with other relevant factors such as the
safety impacts of the proposed
standards,580 NHTSA tentatively
concludes that the proposed standards
represent a reasonable balancing of all
of these concerns, and are the maximum
feasible average fuel economy levels
that the manufacturers can achieve in
MYs 2012–2016.
G. Impacts of the Proposed CAFE
Standards
1. How Would These Proposed
Standards Improve Fuel Economy and
Reduce GHG Emissions for MY 2012–
2016 Vehicles?
As discussed above, the CAFE level
required under an attribute-based
standard depends on the mix of vehicles
produced for sale in the U.S. Based on
the market forecast that NHTSA and
EPA have used to develop and analyze
new CAFE and CO2 emissions
standards, NHTSA estimates that the
new CAFE standards will require CAFE
levels to increase by an average of 4.3
percent annually through MY 2016,
reaching a combined average fuel
economy requirement of 34.1 mpg in
that model year:
TABLE IV.G.1–1—AVERAGE REQUIRED FUEL ECONOMY (MPG) UNDER PROPOSED STANDARDS
2012
2013
2014
2015
2016
Passenger Cars ...................................................................
Light Trucks .........................................................................
33.6
25.0
34.4
25.6
35.2
26.2
36.4
27.1
38.0
28.3
Combined ......................................................................
29.8
30.6
31.4
32.6
34.1
NHTSA estimates that average
achieved fuel economy levels will
correspondingly increase through MY
2016, but that manufacturers will, on
reaching a combined average fuel
average, undercomply 581 in some model economy of 33.7 mpg in MY 2016: 583
years and overcomply 582 in others,
TABLE IV.G.1–2—AVERAGE ACHIEVED FUEL ECONOMY (MPG) UNDER PROPOSED STANDARDS
2012
2013
2014
2015
2016
Passenger Cars ...................................................................
Light Trucks .........................................................................
32.9
24.9
34.2
25.7
35.2
26.5
36.5
27.4
37.6
28.1
Combined ......................................................................
29.3
30.5
31.5
32.7
33.7
mstockstill on DSKH9S0YB1PROD with PROPOSALS
NHTSA estimates that these fuel
economy increases will lead to fuel
savings totaling 61.6 billion gallons
580 See
during the useful lives of vehicles sold
in MYs 2012–2016:
Section IV.G.7 below.
NHTSA’s analysis, ‘‘undercompliance’’ is
mitigated either through use of FFV credits, use of
existing or ‘‘banked’’ credits, or through fine
payment. Because NHTSA cannot consider
availability of credits in setting standards, the
estimated achieved CAFE levels presented here do
not account for their use. In contrast, because
NHTSA is not prohibited from considering fine
581 In
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
payment, the estimated achieved CAFE levels
presented here include the assumption that BMW,
Daimler (i.e., Mercedes), Porsche, and Tata (i.e.,
Jaguar and Rover) will only apply technology up to
the point that it would be less expensive to pay
civil penalties.
582 In NHTSA’s analysis, ‘‘overcompliance’’
occurs through multi-year planning: Manufacturers
apply some ‘‘extra’’ technology in early model years
PO 00000
Frm 00255
Fmt 4701
Sfmt 4700
(e.g., MY 2014) in order to carry that technology
forward and thereby facilitate compliance in later
model years (e.g., MY 2016)
583 Consistent with EPCA, NHTSA has not
accounted for manufacturers’ ability to earn CAFE
credits for selling FFVs, carry credits forward and
back between model years, and transfer credits
between the passenger car and light truck fleets.
E:\FR\FM\28SEP2.SGM
28SEP2
49708
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
TABLE IV.G.1–3—FUEL SAVED (BILLION GALLONS)
[Under proposed standards]
2012
2013
2014
2015
2016
Total
Passenger Cars .......................................
Light Trucks .............................................
2.5
1.8
5.3
3.7
7.5
5.4
9.4
6.8
11.4
7.8
36.0
25.6
Combined ..........................................
4.3
9.1
12.9
16.1
19.2
61.6
The agency also estimates that these
new CAFE standards will lead to
corresponding reductions of CO2
emissions totaling 656 million metric
tons (mmt) during the useful lives of
vehicles sold in MYs 2012–2016:
TABLE IV.G.1–4—AVOIDED CARBON DIOXIDE EMISSIONS (MMT) UNDER PROPOSED STANDARDS
2012
2013
2014
2015
2016
Total
Passenger Cars ...............................................................................................................
Light Trucks .....................................................................................................................
25
19
56
40
79
58
99
73
121
85
381
275
Combined ..................................................................................................................
44
96
137
173
206
656
2. How Would These Proposed
Standards Improve Fleet-Wide Fuel
Economy and Reduce GHG Emissions
Beyond MY 2016?
Under the assumption that CAFE
standards at least as stringent as those
proposed for MY 2016 would be
established for subsequent model years,
the effects of the proposed standards on
fuel consumption and GHG emissions
will continue to increase for many
years. This will occur because over
time, a growing fraction of the U.S.
light-duty vehicle fleet will be
comprised of cars and light trucks that
meet the MY 2016 standard. The impact
of the proposed standards on fuel use
and GHG emissions will continue to
grow through approximately 2050,
when virtually all cars and light trucks
in service will have met the MY 2016
standard.
As Table IV.G.2–1 shows, NHTSA
estimates that the fuel economy
increases resulting from the proposed
standards will lead to reductions in total
fuel consumption by cars and light
trucks of 9 billion gallons during 2020,
increasing to 30 billion gallons by 2050.
Over the period from 2012—when the
proposed standards would begin to take
effect—through 2050, cumulative fuel
savings would total 693 billion gallons,
as Table IV.G.2–1 also indicates.
TABLE IV.G.2–1—REDUCTION IN FLEET-WIDE FUEL USE (BILLION GALLONS) UNDER PROPOSED STANDARDS
Calendar year
2020
2030
2040
Total,
2012–
2050
2050
Passenger Cars ...........................................................................................................
Light Trucks .................................................................................................................
5
4
12
7
16
9
19
11
431
262
Combined ..............................................................................................................
9
19
25
30
693
As a consequence of these reductions
in fleet-wide fuel consumption, the
agency also estimates that the proposed
CAFE standards for MYs 2012–2016
will lead to corresponding reductions in
CO2 emissions from the U.S. light-duty
vehicle fleet. Specifically, NHTSA
estimates that total CO2 emissions
associated with passenger car and light
truck use in the U.S. use will decline by
111 million metric tons (mmt) during
2020 as a consequence of the proposed
standards, as Table IV.G.2–2 reports.
The table also shows that the this
reduction is estimated to grow to 355
million metric tons by the year 2050,
and will total 8,247 million metric tons
over the period from 2012, when the
proposed standards would take effect,
through 2050.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
TABLE IV.G.2–2—REDUCTION IN FLEET-WIDE CARBON DIOXIDE EMISSIONS (MMT) FROM PASSENGER CAR AND LIGHT
TRUCK USE UNDER PROPOSED STANDARDS
Calendar year
2020
2030
2040
2050
Total,
2012–
2050
Passenger Cars ...........................................................................................................
Light Trucks .................................................................................................................
64
47
144
87
186
110
222
132
5,117
3,130
Combined ..............................................................................................................
111
231
295
355
8,247
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00256
Fmt 4701
Sfmt 4700
E:\FR\FM\28SEP2.SGM
28SEP2
49709
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
These reductions in fleet-wide CO2
emissions, together with corresponding
reductions in other GHG emissions from
fuel production and use, would lead to
small but significant reductions in
projected changes in the future global
climate. These changes are summarized
in Table IV.G.2–3 below.
TABLE IV.G.2–3—EFFECTS OF REDUCTIONS IN FLEET-WIDE CARBON DIOXIDE EMISSIONS (MMT) ON PROJECTED
CHANGES IN GLOBAL CLIMATE
Projected change in measure
Measure
Units
Date
No action
Atmospheric CO2 Concentration .........................
Increase in Global Mean Surface Temperature ..
Sea Level Rise ....................................................
Global Mean Precipitation ...................................
3. How Would These Proposed
Standards Impact Non-GHG Emissions
and Their Associated Effects?
Under the assumption that CAFE
standards at least as stringent as those
proposed for MY 2016 would be
established for subsequent model years,
the effects of the proposed standards on
air quality and its associated health
effects will continue to be felt over the
foreseeable future. This will occur
because over time a growing fraction of
the U.S. light-duty vehicle fleet will be
comprised of cars and light trucks that
meet the MY 2016 standard, and this
growth will continue until
approximately 2050.
Increases in the fuel economy of lightduty vehicles required by the proposed
ppm ............................................
°C ...............................................
cm ..............................................
% change from 1980–1999 avg.
2100
2100
2100
2090
CAFE standards will cause a slight
increase in the number of miles they are
driven, through the fuel economy
‘‘rebound effect.’’ In turn, this increase
in vehicle use will lead to increases in
emissions of criteria air pollutants and
some airborne toxics, since these are
products of the number of miles
vehicles are driven.
At the same time, however, the
projected reductions in fuel production
and use reported in Table IV.G.2–1
above will lead to corresponding
reductions in emissions of these
pollutants that occur during fuel
production and distribution
(‘‘upstream’’ emissions). For most of
these pollutants, the reduction in
upstream emissions resulting from
With proposed
standards
Difference
783.0
3.136
38.00
4.59%
780.3
3.126
37.91
4.57%
¥2.7
¥0.010
¥0.09
¥0.02%
lower fuel production and distribution
will outweigh the increase in emissions
from vehicle use, resulting in a net
decline in their total emissions.
Tables IV.G.3–1a and 3–1b report
estimated reductions in emissions of
selected criteria air pollutants (or their
chemical precursors) and airborne
toxics expected to result from the
proposed standards during calendar
year 2030. By that date, the majority of
light-duty vehicles in use will have met
the proposed MY 2016 CAFE standards,
so these reductions provide a useful
index of the long-term impact of the
proposed standards on air pollution and
its consequences for human health.
TABLE IV.G.3–1a—PROJECTED CHANGES IN EMISSIONS OF CRITERIA AIR POLLUTANTS FROM CAR AND LIGHT TRUCK
USE
[Calendar year 2030; tons]
Criteria air pollutant
Vehicle class
Source of emissions
Passenger Cars ................................
Vehicle use .......................................
Fuel production and distribution .......
1,791
¥19,022
630
¥2,539
¥2,375
¥11,363
2,157
¥75,031
All sources ........................................
¥17,231
¥1,909
¥13,738
¥72,874
Vehicle use .......................................
Fuel production and distribution .......
1,137
¥11,677
257
¥1,569
¥1,401
¥7,031
1,094
¥43,667
All sources ........................................
¥10,540
¥1,312
¥8,432
¥42,573
Vehicle use .......................................
Fuel production and distribution .......
2,928
¥30,699
887
¥4,108
¥3,776
¥18,394
3,251
¥118,698
All sources ........................................
¥27,771
¥3,221
¥22,170
¥115,447
Light Trucks ......................................
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Total ...........................................
Nitrogen oxides (NOX)
Particulate
matter (PM2.5)
Sulfur oxides
(SOX)
Volatile organic compounds (VOC)
TABLE IV.F.3–1b—PROJECTED CHANGES IN EMISSIONS OF AIRBORNE TOXICS FROM CAR AND LIGHT TRUCK USE
[Calendar year 2030; tons]
Toxic air pollutant
Vehicle class
Source of emissions
Benzene
Passenger Cars ..............................................
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
Vehicle use .....................................................
PO 00000
Frm 00257
Fmt 4701
Sfmt 4700
E:\FR\FM\28SEP2.SGM
1,3-Butadiene
67
28SEP2
Formaldehyde
19
72
49710
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
TABLE IV.F.3–1b—PROJECTED CHANGES IN EMISSIONS OF AIRBORNE TOXICS FROM CAR AND LIGHT TRUCK USE—
Continued
[Calendar year 2030; tons]
Toxic air pollutant
Vehicle class
Source of emissions
Benzene
1,3-Butadiene
Formaldehyde
Fuel production and distribution .....................
¥54
¥91
18
18
Vehicle use .....................................................
Fuel production and distribution .....................
45
¥93
9
¥1
32
¥33
All sources ......................................................
¥48
8
¥1
Vehicle use .....................................................
Fuel production and distribution .....................
112
¥251
28
¥2
104
¥87
All sources ......................................................
Total .........................................................
¥1
All sources ......................................................
Light Trucks ....................................................
¥158
¥139
26
17
Note: Positive values indicate increases in emissions; negative values indicate reductions.
In turn, the reductions in emissions
reported in Tables IV.G.3–1a and 3–1b
are projected to result in significant
declines in the health effects that result
from population exposure to these
pollutants. Table IV.G.3–2 reports the
estimated reductions in selected PM2.5related human health impacts that are
expected to result from reduced
population exposure to unhealthful
atmospheric concentrations of PM2.5.
The estimates reported in Table IV.G.3–
2 are derived from PM2.5-related dollarper-ton estimates that include only
quantifiable reductions in health
impacts likely to result from reduced
population exposure to particular matter
(PM). They do not include all health
impacts related to reduced exposure to
PM, nor do they include any reductions
in health impacts resulting from lower
population exposure to other criteria air
pollutants (particularly ozone) and air
toxics. NHTSA and EPA are using PMrelated benefits-per-ton values as an
interim approach to estimating the PMrelated benefits of the proposal. To
model the ozone and PM air quality
benefit sof the final rule, the analysis
will utilize ambient concentration data
derived from full-scale photochemical
air quality modeling.
TABLE IV.G.3–2—PROJECTED REDUCTIONS IN HEALTH IMPACTS OF EXPOSURE TO CRITERIA AIR POLLUTANTS FROM
PROPOSED STANDARDS
[Calendar year 2030]
Projected reduction (2030)
Health impact
Measure
Mortality (ages 30 and older) ...................................................
Chronic Bronchitis .....................................................................
Emergency Room Visits for Asthma ........................................
Work Loss .................................................................................
premature deaths per year ......................................................
cases per year .........................................................................
number per year .......................................................................
workdays per year ....................................................................
4. What Are the Estimated Costs and
Benefits of These Proposed Standards?
mstockstill on DSKH9S0YB1PROD with PROPOSALS
NHTSA estimates that the proposed
standards could entail significant
additional technology beyond the levels
reflected in the baseline market forecast
used by NHTSA. This additional
technology will lead to increases in
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
costs to manufacturers and vehicle
buyers, as well as fuel savings to vehicle
buyers. The following three tables
summarize the extent to which the
agency estimates technologies could be
added to the passenger car, light truck,
and overall fleets in each model year in
response to the proposed standards.
Percentages reflect the technology’s
PO 00000
Frm 00258
Fmt 4701
Sfmt 4700
217 to 554
142
198
25,522
additional application in the market,
and are negative in cases where one
technology is superseded (i.e.,
displaced) by another. For example, the
agency estimates that many automatic
transmissions used in light trucks could
be displaced by dual clutch
transmissions.
BILLING CODE 6560–50–P
E:\FR\FM\28SEP2.SGM
28SEP2
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00259
Fmt 4701
Sfmt 4725
E:\FR\FM\28SEP2.SGM
28SEP2
49711
EP28SE09.047</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
VerDate Nov<24>2008
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00260
Fmt 4701
Sfmt 4725
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.048</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49712
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
In order to pay for this additional
technology (and, for some
manufacturers, civil penalties), NHTSA
estimates that average passenger car and
light truck prices will, relative to levels
resulting from compliance with baseline
(MY 2011) standards, increase by $591$1,127 and $283-$1,020, respectively,
during MYs 2011–2016. The following
tables summarize the agency’s estimates
of average price increases for each
manufacturer’s passenger car, light
truck, and overall fleets (with
corresponding averages for the
industry):
TABLE IV.G.4–4—AVERAGE PASSENGER CAR INCREMENTAL PRICE INCREASES ($) UNDER PROPOSED STANDARDS
Manufacturer
MY 2012
BMW ....................................................................................
Chrysler ................................................................................
Daimler .................................................................................
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00261
MY 2013
524
775
182
Fmt 4701
Sfmt 4700
MY 2014
552
1,304
215
E:\FR\FM\28SEP2.SGM
634
1,473
781
28SEP2
MY 2015
828
1,583
1,039
MY 2016
1,124
1,582
1,401
EP28SE09.049</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
BILLING CODE 6560–50–C
49713
49714
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
TABLE IV.G.4–4—AVERAGE PASSENGER CAR INCREMENTAL PRICE INCREASES ($) UNDER PROPOSED STANDARDS—
Continued
Manufacturer
MY 2012
MY 2013
MY 2014
MY 2015
MY 2016
Ford ......................................................................................
General Motors ....................................................................
Honda ...................................................................................
Hyundai ................................................................................
Kia ........................................................................................
Mazda ..................................................................................
Mitsubishi .............................................................................
Nissan ..................................................................................
Porsche ................................................................................
Subaru ..................................................................................
Suzuki ..................................................................................
Tata ......................................................................................
Toyota ..................................................................................
Volkswagen ..........................................................................
1,746
143
31
418
319
658
1,156
653
270
408
259
246
133
286
1,719
990
122
452
359
735
1,076
712
256
465
1,001
244
127
561
1,735
1,189
205
643
387
965
1,715
1,155
306
1,493
1,445
395
155
650
1,880
1,387
287
726
473
991
2,076
1,153
399
1,877
1,494
577
257
767
2,078
1,553
494
868
647
1,263
2,035
1,275
498
1,838
1,675
1,284
267
1,125
Total/Average ................................................................
498
674
820
930
1,085
TABLE IV.G.4–5—AVERAGE LIGHT TRUCK INCREMENTAL PRICE INCREASES ($) UNDER PROPOSED STANDARDS
Manufacturer
MY 2012
MY 2013
MY 2014
MY 2015
MY 2016
BMW ....................................................................................
Chrysler ................................................................................
Daimler .................................................................................
Ford ......................................................................................
General Motors ....................................................................
Honda ...................................................................................
Hyundai ................................................................................
Kia ........................................................................................
Mazda ..................................................................................
Mitsubishi .............................................................................
Nissan ..................................................................................
Porsche ................................................................................
Subaru ..................................................................................
Suzuki ..................................................................................
Tata ......................................................................................
Toyota ..................................................................................
Volkswagen ..........................................................................
325
152
322
471
33
390
774
228
340
55
541
28
1,203
50
44
172
28
327
399
289
629
533
380
744
373
608
94
608
46
1,140
1,451
83
309
61
380
749
316
693
752
616
1,301
547
610
1,546
903
84
1,213
1,404
127
665
99
708
892
420
1,323
792
749
1,322
843
679
1,732
1,022
913
1,197
1,358
193
764
160
884
1,188
478
1,365
962
1,006
1,292
1,218
776
2,123
1,312
954
1,184
1,373
635
877
231
Total/Average ................................................................
291
485
701
911
1,058
TABLE IV.G.4–6—AVERAGE INCREMENTAL PRICE INCREASES ($) BY MANUFACTURER UNDER PROPOSED STANDARDS
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Manufacturer
MY 2012
MY 2013
MY 2014
MY 2015
MY 2016
BMW ....................................................................................
Chrysler ................................................................................
Daimler .................................................................................
Ford ......................................................................................
General Motors ....................................................................
Honda ...................................................................................
Hyundai ................................................................................
Kia ........................................................................................
Mazda ..................................................................................
Mitsubishi .............................................................................
Nissan ..................................................................................
Porsche ................................................................................
Subaru ..................................................................................
Suzuki ..................................................................................
Tata ......................................................................................
Toyota ..................................................................................
Volkswagen ..........................................................................
457
393
236
1,195
94
162
488
300
598
1,007
616
174
705
204
115
147
233
483
777
243
1,242
785
212
509
362
712
921
679
179
711
1,117
150
191
470
560
1,061
604
1,262
997
335
769
416
907
1,692
1,078
231
1,392
1,434
234
331
550
796
1,271
834
1,629
1,131
429
835
535
944
2,033
1,115
562
1,632
1,458
368
429
657
1,061
1,408
1,106
1,762
1,304
647
944
740
1,193
2,045
1,286
643
1,602
1,598
938
468
970
Total/Average ................................................................
421
605
777
924
1,076
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00262
Fmt 4701
Sfmt 4700
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
Based on the agencies’ estimates of
manufacturers’ future sales volumes,
these price increases will lead to a total
of $60.2 billion in incremental outlays
during MYs 2012–2016 for additional
49715
technology attributable to the proposed
standards:
TABLE IV.G.4–7—INCREMENTAL TECHNOLOGY OUTLAYS ($B) UNDER PROPOSED STANDARDS
2012
2013
2014
2015
2016
Total
Passenger Cars .......................................
Light Trucks .............................................
4.1
1.5
6.5
2.8
8.4
4.0
9.9
5.2
11.8
5.9
40.8
19.4
Combined ..........................................
5.7
9.3
12.5
15.1
17.6
60.2
NHTSA notes that these estimates of
the economic costs for meeting higher
CAFE standards omit certain potentially
important categories of costs, and may
also reflect underestimation (or possibly
overestimation) of some costs that are
included. For example, although the
agency’s analysis attempts to hold
vehicle performance, capacity, and
utility constant in estimating the costs
of applying fuel-saving technologies to
vehicles, the analysis imputes no cost to
any actual reductions in vehicle
performance, capacity, and utility that
may result from manufacturers’ efforts
to comply with the proposed CAFE
standards. Although these costs are
difficult to estimate accurately, they
nonetheless represent a potentially
significant category of omitted costs.
Similarly, the agency’s estimates of
costs for meeting higher CAFE standards
does not estimate the economic value of
potential increases in motor vehicle
fatalities and injuries that could result
from reductions in the size or weight of
vehicles. While NHTSA reports worstcase estimates of these increases in
fatalities and injuries, no estimate of
their economic value is included in the
agency’s estimates of the net benefits
resulting from the proposed standards
due to ongoing discussion regarding
these potential impacts.
Finally, it is possible that the agency
may have underestimated or
overestimated manufacturers’ direct
costs for applying some fuel economy
technologies, or the increases in
manufacturer’s indirect costs associated
with higher vehicle manufacturing
costs. In either case, the technology
outlays reported here will not correctly
represent the costs of meeting higher
CAFE standards. Similarly, NHTSA’s
estimates of increased costs of
congestion, accidents, and noise
associated with added vehicle use are
drawn from a 1997 study, and the
correct magnitude of these values may
have changed since they were
developed.584 If this is the case, the
costs of increased vehicle use associated
with the fuel economy rebound effect
will differ from the agency’s estimates
in this analysis. Thus, like the agency’s
estimates of economic benefits,
estimates of total compliance costs
reported here may underestimate or
overestimate the true economic costs of
the proposed standards.
However, offsetting these costs, the
achieved increases in fuel economy will
also produce significant benefits to
society. NHTSA estimates that, in
present value terms (at a discount rate
of 3 percent), these benefits will total
$201.7 billion over the useful lives of
light vehicles sold during MYs 2012–
2016:
TABLE IV.G.4–8—PRESENT VALUE OF BENEFITS ($BILLION) UNDER PROPOSED STANDARDS
2012
2013
2014
2015
2016
Total
Passenger Cars .......................................
Light Trucks .............................................
7.6
5.5
17.0
11.6
24.4
17.3
31.2
22.2
38.7
26.0
119.1
82.6
Combined ..........................................
13.1
28.7
41.8
53.4
64.7
201.7
NHTSA attributes most of these
benefits to reductions in fuel
consumption, valuing fuel at future
pretax prices in EIA’s reference case
forecast from AEO 2009. The total
benefits shown in the above table also
include other benefits and disbenefits,
examples of which include the social
values of reductions in CO2 and criteria
pollutant emissions, the value of
additional travel (induced by the
rebound effect), and the social cost of
additional congestion, accidents, and
noise attributable to that additional
travel. The PRIA accompanying today’s
proposed rule presents a detailed
analysis of specific benefits of the
proposed rule.
For both the passenger car and light
truck fleets, NHTSA estimates that the
benefits of today’s proposed standards
will exceed the corresponding costs in
every model year. Over the useful lives
of the affected (MY 2012–2016)
vehicles, the agency estimates that the
benefits of the proposed standards will
exceed the costs of the proposed
standards by $141.5 billion:
mstockstill on DSKH9S0YB1PROD with PROPOSALS
TABLE IV.G.4–9—PRESENT VALUE OF NET BENEFITS ($BILLION) UNDER PROPOSED STANDARDS
2012
Passenger Cars .......................................
Light Trucks .............................................
2013
3.5
3.9
2014
10.5
8.9
2015
16.0
13.3
2016
21.3
17.0
584 The agency seeks comment above on
appropriate values for these costs.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00263
Fmt 4701
Sfmt 4700
E:\FR\FM\28SEP2.SGM
28SEP2
Total
26.9
20.1
78.3
63.2
49716
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
TABLE IV.G.4–9—PRESENT VALUE OF NET BENEFITS ($BILLION) UNDER PROPOSED STANDARDS—Continued
2012
Combined ..........................................
2013
7.4
NHTSA’s estimates of economic
benefits from establishing higher CAFE
are also subject to considerable
uncertainty. Most important, the
agency’s estimates of the fuel savings
likely to result from adopting higher
CAFE standards depend critically on the
accuracy of the estimated fuel economy
levels that will be achieved under both
the baseline scenario, which assumes
that manufacturers will continue to
comply with the MY 2011 CAFE
standards, and under alternative
increases in the standards that apply to
MY 2012–16 passenger cars and light
trucks. Specifically, if the agency has
underestimated the fuel economy levels
that manufacturers will achieve under
the baseline scenario, its estimates of
fuel savings and the resulting economic
benefits will be too large. As another
example, the agency’s estimate of
benefits from reducing the threat of
economic damages from disruptions in
the supply of imported petroleum to the
U.S. applies to calendar year 2015. If the
magnitude of this estimate would be
expected to grow after 2015 in response
to increases in U.S. petroleum imports,
growth in the level of U.S. economic
activity, or increases in the likelihood of
disruptions in the supply of imported
petroleum, the agency may have
underestimated the benefits from the
reduction in petroleum imports
2014
19.4
2015
29.3
expected to result from adopting higher
CAFE standards.
However, it is also possible that
NHTSA’s estimates of economic benefits
from establishing higher CAFE
standards underestimate the true
economic benefits of the fuel savings
those standards would produce. This is
partly because the agency has been
unable to develop monetized estimates
of the economic value of certain
potentially significant categories of
benefits from reducing fuel
consumption. Specifically, the agency’s
estimate of the economic value of
reduced damages to human health
resulting from lower exposure to criteria
air pollutants includes only the effects
of reducing population exposure to
PM2.5 emissions. Although this is likely
to be the most significant component of
health benefits from reduced emissions
of criteria air pollutants, it excludes the
value of reduced damages to human
health and other impacts resulting from
lower emissions and reduced
population exposure to other criteria air
pollutants, including ozone and nitrous
oxide (N2O), as well as airborne toxics.
The agency’s analysis excludes these
benefits because no reliable estimates of
the health impacts of criteria pollutants
other than PM2.5 or of the health impacts
of airborne toxics were available to use
in developing estimates of these
benefits.
2016
38.3
Total
47.1
141.5
In addition, the agency’s estimate of
the value of reduced climate-related
economic damages from lower
emissions of GHGs excludes many
sources of potential benefits from
reducing the pace and extent of global
climate change. These include
reductions in the risk of catastrophic
changes in the global climate, lower
costs for necessary adaptations to
changes in climate, reduced water
supply within specific global subregions, reductions in damages caused
by severe storms, lower population
exposure to harmful air pollution levels,
reductions in ecosystem impacts and
risks to natural resources of global
significance, and reduced threats from
widespread social or political unrest.
Including monetized estimates of
benefits from reducing the extent of
climate change and these associated
impacts would increase the agency’s
estimates of benefits from adopting
higher CAFE standards.
The benefits, costs, and net benefits
shown above are all based on a discount
rate of 3 percent. As documented in the
accompanying PRIA, the agency
examined the sensitivity of results to
changes in many economic inputs. With
an alternative discount rate of 7 percent,
incremental technology outlays were
virtually identical to those estimated at
a 3 percent discount rate: 585
TABLE IV.G.4–10—INCREMENTAL TECHNOLOGY OUTLAYS ($B) UNDER PROPOSED STANDARDS (USING 7 PERCENT
DISCOUNT RATE)
2012
2013
2014
2015
2016
Total
Passenger Cars .......................................
Light Trucks .............................................
4.1
1.5
6.5
2.8
8.4
4.0
9.9
5.2
11.8
5.9
40.8
19.4
Combined ..........................................
5.7
9.3
12.5
15.1
17.6
60.2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
However, the present value of the
benefits accrued over the lifetime of the
vehicles covered by the proposal is
about 20 percent smaller when
discounted at a 7 percent annual rate
than when discounted at a 3 percent
annual rate:
TABLE IV.G.4–11—PRESENT VALUE OF BENEFITS ($BILLION) UNDER PROPOSED STANDARDS (USING 7 PERCENT
DISCOUNT RATE)
2012
Passenger Cars .......................................
Light Trucks .............................................
585 Because some economic inputs change the
effective cost of some technologies, and NHTSA
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
2013
6.0
4.3
2014
13.6
9.1
2015
19.5
13.5
assumes some manufacturers will be willing to pay
PO 00000
Frm 00264
Fmt 4701
Sfmt 4700
2016
25.0
17.4
Total
31.1
20.4
95.3
64.6
civil penalties based on economic considerations,
this outcome is not assured.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
49717
TABLE IV.G.4–11—PRESENT VALUE OF BENEFITS ($BILLION) UNDER PROPOSED STANDARDS (USING 7 PERCENT
DISCOUNT RATE)—Continued
2012
Combined ..........................................
2013
10.3
2014
22.6
2015
33.1
2016
42.4
Total
51.5
159.8
As a result, net benefits are 38 percent
lower when total benefits are
discounted at a 7 percent annual rate:
TABLE IV.G.4–12—PRESENT VALUE OF NET BENEFITS ($BILLION) UNDER PROPOSED STANDARDS (USING 7 PERCENT
DISCOUNT RATE)
2012
2013
2014
2015
2016
Total
Passenger Cars .......................................
Light Trucks .............................................
1.9
2.7
7.0
6.3
11.1
9.5
15.1
12.2
19.3
14.5
54.5
45.2
Combined ..........................................
4.6
13.3
20.6
27.3
33.8
99.7
The following tables also present
itemized costs and benefits for the
combined fleet for each year of the
proposed standards and for all the years
combined, at 3 and 7 percent discount
rates, respectively. Numbers in
parentheses represent negative values.
TABLE IV.G.4–13—ITEMIZED COST AND BENEFIT ESTIMATES FOR THE COMBINED VEHICLE FLEET, 3% DISCOUNT RATE
MY 2012
Costs:
Technology Costs .............................
Benefits
Lifetime Fuel Expenditures ...............
Consumer Surplus from Additional
Driving ...........................................
Refueling Time Value .......................
Petroleum Market Externalities .........
Congestion Costs .............................
Noise Costs ......................................
Crash Costs ......................................
CO2 ...................................................
CO .....................................................
VOC ..................................................
NOX ...................................................
PM .....................................................
SOX ...................................................
MY 2013
MY 2014
MY 2015
MY 2016
Total
$5,695
$9,295
$12,454
$15,080
$17,633
$60,157
10,197
22,396
32,715
41,880
50,823
158,012
751
776
559
(460)
(7)
(217)
1,028
0
41
82
220
161
1,643
1,551
1,194
(934)
(14)
(437)
2,287
0
80
132
438
345
2,389
2,198
1,700
(1,332)
(21)
(625)
3,382
0
108
155
621
490
3,029
2,749
2,129
(1,657)
(26)
(776)
4,376
0
131
174
771
613
3,639
3,277
2,538
(1,991)
(31)
(930)
5,372
0
156
200
904
731
11,451
10,550
8,121
(6,376)
(99)
(2,985)
16,446
0
518
744
2,956
2,341
Total ...........................................
13,132
28,680
41,781
53,394
64,687
201,676
Net Benefits .............................................
7,044
18,759
27,090
34,710
41,386
128,992
TABLE IV.G.4–14—ITEMIZED COST AND BENEFIT ESTIMATES FOR THE COMBINED VEHICLE FLEET, 7% DISCOUNT RATE
mstockstill on DSKH9S0YB1PROD with PROPOSALS
MY 2012
Costs
Technology Costs .............................
Benefits:
Lifetime Fuel Expenditures ...............
Consumer Surplus from Additional
Driving ...........................................
Refueling Time Value .......................
Petroleum Market Externalities .........
Congestion Costs .............................
Noise Costs ......................................
Crash Costs ......................................
CO2 ...................................................
CO .....................................................
VOC ..................................................
NOX ...................................................
PM .....................................................
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
MY 2013
MY 2014
MY 2015
MY 2016
Total
$5,695
$9,295
$12,454
$15,080
$17,633
$60,157
7,991
17,671
25,900
33,264
40,478
125,305
590
624
448
(371)
(6)
(173)
797
0
33
60
170
1,301
1,249
960
(753)
(12)
(352)
1,781
0
65
99
344
1,896
1,770
1,367
(1,074)
(16)
(503)
2,634
0
87
120
492
2,412
2,215
1,712
(1,335)
(21)
(626)
3,410
0
106
135
613
2,904
2,642
2,043
(1,606)
(24)
(749)
4,189
0
125
156
721
9,102
8,500
6,531
(5,138)
(80)
(2,403)
12,813
0
416
570
2,339
PO 00000
Frm 00265
Fmt 4701
Sfmt 4700
E:\FR\FM\28SEP2.SGM
28SEP2
49718
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
TABLE IV.G.4–14—ITEMIZED COST AND BENEFIT ESTIMATES FOR THE COMBINED VEHICLE FLEET, 7% DISCOUNT RATE—
Continued
MY 2012
MY 2013
MY 2014
MY 2015
MY 2016
Total
SOX ...................................................
129
278
394
493
588
1,882
Total ...........................................
10,292
22,631
33,066
42,380
51,468
159,837
Net Benefits .............................................
4,281
12,832
18,818
24,414
29,293
89,638
The above benefit and cost estimates
did not reflect the availability and use
of flexibility mechanisms, such as
compliance credits and credit trading,
because EPCA prohibits NHTSA from
considering the effects of those
mechanisms in setting CAFE standards.
However, the agency noted that, in
reality, manufacturers were likely to
rely to some extent on flexibility
mechanisms provided by EPCA and
would thereby reduce the cost of
complying with the proposed standards
to a meaningful extent.
As discussed in the PRIA, NHTSA has
performed an analysis to estimate the
costs and benefits if EPCA’s provisions
regarding FFVs are accounted for. The
agency considered also attempting to
account for other EPCA flexibility
mechanisms, in particular credit
transfers between the passenger and
nonpassenger fleets, but has concluded
that, at least within a context in which
each model year is represented
explicitly, technologies carry forward
between model years, and multiyear
planning effects are represented, there is
no basis to reliably estimate how
manufacturers might use these
mechanisms. Accounting for the FFV
provisions indicates that achieved fuel
economies would be 0.6–1.1 mpg lower
than when these provisions are not
considered (for comparison see Table
IV.G.1–2 above):
TABLE IV.G.4–15—AVERAGE ACHIEVED FUEL ECONOMY (MPG) UNDER PROPOSED STANDARDS (WITH FFV CREDITS)
2012
Passenger Cars ...................................................................
Light Trucks .........................................................................
Combined ......................................................................
As a result, NHTSA estimates that,
when FFV credits are taken into
2013
32.5
24.1
28.7
2014
33.4
24.6
29.6
account, fuel savings will total 58.8
billion gallons—about 4.5 percent less
2015
34.3
25.3
30.4
2016
35.3
26.3
31.6
36.5
27.0
32.7
than the 61.6 billion gallons estimated
when these credits are not considered:
TABLE IV.G.4–16—FUEL SAVED (BILLION GALLONS) UNDER PROPOSED STANDARDS (WITH FFV CREDITS)
2012
2013
2014
2015
2016
Total
Passenger Cars .......................................
Light Trucks .............................................
2.5
2.0
5.0
3.3
6.9
5.0
8.6
6.8
10.9
7.9
33.9
24.9
Combined ..........................................
4.5
8.2
11.8
15.4
18.8
58.8
The agency similarly estimates CO2
emissions reductions would total 639
million metric tons (mmt), about 2.6
percent less than the 656 mmt estimated
when these credits are not
considered:586
TABLE IV.G.4–17—AVOIDED CARBON DIOXIDE EMISSIONS (MMT) UNDER PROPOSED STANDARDS (WITH FFV CREDITS)
2012
2013
2014
2015
2016
Total
27
22
54
36
75
54
93
74
118
86
368
272
Combined ..........................................
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Passenger Cars .......................................
Light Trucks .............................................
49
90
129
167
204
639
This analysis further indicates
significant reductions in outlays for
additional technology when FFV
provisions are taken into account—
about $45b, or about 25 percent less
586 Differences in the application of diesel engines
lead to differences in the incremental percentage
changes in fuel consumption and carbon dioxide
emissions.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00266
Fmt 4701
Sfmt 4700
than the $60b estimated when excluding
these provisions:
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
49719
TABLE IV.G.4–18—INCREMENTAL TECHNOLOGY OUTLAYS ($B) UNDER PROPOSED STANDARDS (WITH FFV CREDITS)
2012
2013
2014
2015
2016
Total
Passenger Cars .......................................
Light Trucks .............................................
2.5
1.3
4.4
2.0
6.1
3.1
7.4
4.3
9.3
5.0
29.6
15.6
Combined ..........................................
3.7
6.3
9.2
11.7
14.2
45.2
Because NHTSA’s analysis indicated
that FFV provisions would not
significantly reduce fuel savings, the
agency’s estimate of discounted benefits
when including these provisions,
$192.5b, is only about 4.5 percent lower
than the $201.7b shown above for the
analysis that excluded these provisions:
TABLE IV.G.4–19—PRESENT VALUE OF BENEFITS ($BILLION) UNDER PROPOSED STANDARDS (WITH FFV CREDITS)
2012
2013
2014
2015
2016
Total
Passenger Cars .......................................
Light Trucks .............................................
7.8
6.1
15.9
10.2
22.5
15.9
28.6
22.1
37.1
26.3
111.9
80.5
Combined ..........................................
13.9
26.1
38.4
50.7
63.3
192.5
However, although the agency
estimates lower discounted benefits
when FFV provisions are taken into
account, the agency estimates that these
provisions slightly increase net benefits
(by about 4 percent, from $141.5b to
$147.2b) because costs decrease by more
than discounted benefits:
TABLE IV.G.4–20—PRESENT VALUE OF NET BENEFITS ($BILLION) UNDER PROPOSED STANDARDS (WITH FFV CREDITS)
2012
2013
2014
2015
2016
Total
5.3
4.8
11.5
8.2
16.4
12.8
21.2
17.8
27.8
21.3
82.3
64.9
Combined ..........................................
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Passenger Cars .......................................
Light Trucks .............................................
10.2
19.7
29.2
39.0
49.1
147.2
The agency has performed several
sensitivity analyses to examine
important assumptions. We examine
sensitivity with respect to the following
five economic parameters:
(1) The price of gasoline: The
Reference Case uses the AEO 2009
reference case estimate for the price of
gasoline. In this sensitivity analysis we
examine the effect of using the AEO
high or low forecast estimates instead.
(2) The discount rate: The Reference
Case uses a discount rate of 3 percent to
discount future benefits. In the
sensitivity analysis, we equally examine
the effect of using a 7 percent discount
rate instead.
(3) The rebound effect: The Reference
Case uses a rebound effect of 10 percent
to project increased miles traveled as
the cost per mile driven decreases. In
the sensitivity analysis, we examine the
effect of using a 5 percent or 15 percent
rebound effect instead.
(4) The values of CO2 benefits and
monopsony: The Reference Case uses
$20 per ton to quantify the benefits of
reducing CO2 emissions and $0.178 per
gallon to quantify the benefits of
reducing fuel consumption. In the
sensitivity analysis, we examine the
effect of using values of $5, $10, $34, or
$56 per ton instead to value CO2
benefits. These values can be translated
into cents per gallon by multiplying by
0.0089,587 giving the following values:
($5 per ton CO2) x 0.0089 = $0.0445 per
gallon
($10 per ton CO2) x 0.0089 = $0.089 per
gallon
($20 per ton CO2) x 0.0089 = $0.178 per
gallon
($34 per ton CO2) x 0.0089 = $0.3026
per gallon
($56 per ton CO2) x 0.0089 = $0.4984
per gallon
The $5 per ton value reflects the
domestic impacts of CO2 emissions and
so we use a nonzero monopsony cost,
namely $0.30 cents per gallon, when
valuing CO2 emissions at $5 per ton.
The higher per-ton values of CO2
emissions reflect the global impacts of
CO2 emissions and we so use $0 per
gallon for monopsony in these cases.
(5) Military security: The Reference
Case uses $0 per gallon to quantify the
military security benefits of reducing
fuel consumption. In the sensitivity
analysis, we examine the impact of
using a value of 5 cents per gallon
instead.
Varying each of the above 5
parameters in isolation results in 10
economic scenarios, not including the
Reference case. These are listed in Table
IV.G.4–21 below, together with two
additional scenarios that use values for
these parameters that produce the
lowest and highest valued benefits.
587 The molecular weight of Carbon (C) is 12, the
molecular weight of Oxygen (O) is 16, thus the
molecular weight of CO2 is 44. One ton of C = 44/
12 tons CO2 = 3.67 tons CO2. 1 gallon of gas weighs
2,819 grams, of that 2,433 grams are carbon. $1.00
CO2 = $3.67 C and $3.67/ton * ton/1000kg * kg/
1000g * 2433g/gallon = (3.67 * 2433)/1000 * 1000
= $0.0089/gallon.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00267
Fmt 4701
Sfmt 4700
E:\FR\FM\28SEP2.SGM
28SEP2
49720
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
TABLE IV.G.4–21—SENSITIVITY ANALYSES EVALUATED IN NHTSA’S PRIA
Name
Fuel price
Reference ..........................................
High Fuel Price ..................................
Low Fuel Price ...................................
7% Discount Rate ..............................
5% Rebound Effect ............................
15% Rebound Effect ..........................
$56/ton CO2 Value .............................
$34/ton CO2 .......................................
$10/ton CO2 .......................................
$5/ton CO2 .........................................
5¢/gal Military Security Value ............
Lowest Discounted Benefits ..............
Highest Discounted Benefits .............
Reference ............
High .....................
Low ......................
Reference ............
Reference ............
Reference ............
Reference ............
Reference ............
Reference ............
Reference ............
Reference ............
Low ......................
High .....................
mstockstill on DSKH9S0YB1PROD with PROPOSALS
The basic results of the sensitivity
analyses were as follows:
(1) The various economic
assumptions have similar effects on the
passenger car and light truck standards.
(2) Varying the economic assumptions
has virtually no impact on achieved fuel
economy.
(3) The economic parameter with the
greatest impact is fuel price. Changing
the fuel price forecast to AEO’s High or
Low forecasts impacts benefits by about
±37 percent. However, the impact of
fuel price on other quantities, such as
cost, is much smaller, resulting in
increases or decreases of 3–8 percent.
(4) Economic parameters other than
fuel price and the rebound effect had no
effect on per-vehicle cost, total cost, fuel
savings, or CO2 reductions. Their
impacts on benefits were 6 percent or
less, with the exception of the 7 percent
discount rate, which decreased benefits
by 20 percent, and the $56/ton CO2
value, which raised benefits by 14
percent.
(5) Changing all economic parameters
simultaneously (among the considered
values) changes benefits by at most
about 60 percent. However impacts to
other quantities, such as cost, are much
smaller, resulting in increases or
decreases of 6 percent or less.
(6) Impacts other than those discussed
in 1) through 5) were small (5 percent
or less).
For more detailed information
regarding NHTSA’s sensitivity analyses
for this NPRM, please see Chapter X of
NHTSA’s PRIA.
5. How Would These Proposed
Standards Impact Vehicle Sales?
Higher fuel economy standards are
expected to increase the price of
passenger cars and light trucks, because
manufacturers will have to add
technology to vehicles to increase their
fuel economy, the cost for which they
will likely pass on in some fashion to
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
Discount rate
Rebound
effect
3%
3%
3%
7%
3%
3%
3%
3%
3%
3%
3%
7%
3%
10%
10%
10%
10%
5%
15%
10%
10%
10%
10%
10%
15%
5%
consumers. NHTSA examined the
potential impact of higher vehicle prices
on sales on an industry-wide basis for
passenger cars and light trucks
separately. We note that the analysis
conducted for this rule does not have
the precision to examine effects on
individual manufacturers or different
vehicle classes.
There is a broad consensus in the
economic literature that the price
elasticity for demand for automobiles is
approximately –1.0.588 Thus, every one
percent increase in the price of the
vehicle would reduce sales by one
percent. Elasticity estimates assume no
perceived change in the quality of the
product. However, in this case, vehicle
price increases result from adding
technologies that improve fuel
economy. If consumers did not value
improved fuel economy at all, and
considered nothing but the increase in
price in their purchase decisions, then
the estimated impact on sales from price
elasticity could be applied directly.
However, NHTSA believes that
consumers do value improved fuel
economy, because it reduces the
operating cost of the vehicles. NHTSA
also believes that consumers consider
other factors that affect their costs and
have included these in the analysis.
The main question, however, is how
much of the retail price needed to cover
the technology investments to meet
higher fuel economy standards will
manufacturers be able to pass on to
consumers. The ability of manufacturers
to pass the compliance costs on to
consumers depends upon how
588 Kleit, A.N. (1990). ‘‘The Effect of Annual
Changes in Automobile Fuel Economy Standards,’’
Journal of Regulatory Economics, vol. 2, pp. 151–
172; Bordley, R. (1994). ‘‘An Overlapping Choice
Set Model of Automotive Price Elasticities,’’
Transportation Research B, vol. 28B, no. 6, pp. 401–
408; McCarthy, P.S. (1996). ‘‘Market Price and
Income Elasticities of New Vehicle Demands,’’ The
Review of Economics and Statistics, vol. LXXVII,
no. 3, pp. 543–547.
PO 00000
Frm 00268
Fmt 4701
Sfmt 4700
Monopsony
effect
SCC
$20
$20
$20
$20
$20
$20
$56
$34
$10
$5
$20
$5
$56
0¢/gal
0¢/gal
0¢/gal
0¢/gal
0¢/gal
0¢/gal
0¢/gal
0¢/gal
0¢/gal
30¢/gal
0¢/gal
0¢/gal
0¢/gal
Military
security
0¢/gal
0¢/gal
0¢/gal
0¢/gal
0¢/gal
0¢/gal
0¢/gal
0¢/gal
0¢/gal
0¢/gal
5¢/gal
0¢/gal
5¢/gal
consumers value the fuel economy
improvements.589 Consumer valuation
of fuel economy improvements often
depends upon the price of gasoline,
which has recently been very volatile.
The estimates reported below as part of
NHTSA’s analysis on sales impacts
assume that manufacturers will be able
to pass all of their costs to improve fuel
economy on to consumers. To the extent
that NHTSA has accurately predicted
the price of gasoline and consumers’
reactions, and manufacturers can pass
on all of the costs to consumers, then
the sales and employment impact
analyses are reasonable. On the other
hand, if manufacturers only increase
retail prices to the extent that
consumers value these fuel economy
improvements (i.e., to the extent that
they value fuel savings), then there
would be no impact on sales, although
manufacturers’ profit levels would fall.
Sales losses are predicted to occur only
if consumers fail to value fuel economy
improvements at least as much as they
pay in higher vehicle prices. Likewise,
if fuel prices rise beyond levels used in
this analysis, consumer valuation of
improved fuel economy could increase
to match or exceed their initial
investment, resulting in no impact or
even an increase in sales levels.
To estimate the average value
consumers place on fuel savings at the
time of purchase, NHTSA assumes that
the average purchaser considers the fuel
savings they would receive over a 5-year
time frame. NHTSA chose 5 years
because this is the average length of
time of a financing agreement.590 The
589 Gron, Ann and Swenson, Deborah, 2000, ‘‘Cost
Pass-Through in the U.S. Automobile Market,’’ The
Review of Economics and Statistics, 82: 316–324.
590 National average financing terms for
automobile loans are available from the Board of
Governors of the Federal Reserve System G.19
‘‘Consumer Finance’’ release. See https://
www.federalreserve.gov/releases/g19/ (last accessed
August 9, 2009).
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
present values of these savings were
calculated using a 3 percent discount
rate. NHTSA used a fuel price forecast
that included taxes, because this is what
consumers must pay. Fuel savings were
calculated over the first 5 years and
discounted back to a present value.
NHTSA believes that consumers may
consider several other factors over the 5year horizon when contemplating the
purchase of a new vehicle. NHTSA
added these factors into the calculation
to represent how an increase in
technology costs might affect
consumers’ buying considerations.
First, consumers might consider the
sales taxes they have to pay at the time
of purchasing the vehicle. NHTSA took
sales taxes in 2007 by State and
weighted them by population by State to
determine a national weighted-average
sales tax of 5.5 percent.
Second, NHTSA considered insurance
costs over the 5-year period. More
expensive vehicles will require more
expensive collision and comprehensive
(e.g., theft) car insurance. The increase
in insurance costs is estimated from the
average value of collision plus
comprehensive insurance as a
proportion of average new vehicle price.
Collision plus comprehensive insurance
is the portion of insurance costs that
depends on vehicle value. The
Insurance Information Institute provides
the average value of collision plus
comprehensive insurance in 2006 as
$448.591 This is compared to an average
price for light vehicles of $24,033 for
2006.592 Average prices and estimated
sales volumes are needed because price
elasticity is an estimate of how a percent
increase in price affects the percent
decrease in sales.
Dividing the insurance cost by the
average price of a new vehicle gives the
proportion of comprehensive plus
collision insurance as 1.86 percent of
the price of a vehicle. If we assume that
this premium is proportional to the new
vehicle price, it represents about 1.86
percent of the new vehicle price, and
insurance is paid each year for the fiveyear period we are considering for
payback. Discounting that stream of
insurance costs back to present value
indicates that the present value of the
component of insurance costs that vary
with vehicle price is equal to 8.5
percent of the vehicle’s price at a 3
percent discount rate.
Third, NHTSA considered that 70
percent of new vehicle purchasers take
out loans to finance their purchase. The
average new vehicle loan is for 5 years
at a 6 percent rate.593 At these terms, the
average person taking a loan will pay 16
percent more for their vehicle over the
5 years than a consumer paying cash for
the vehicle at the time of purchase.594
Discounting the additional 3.2 percent
(16 percent/5 years) per year over the 5
years using a 3 percent mid-year
discount rate 595 results in a discounted
present value of 14.87 percent higher for
those taking a loan. Multiplying that by
the 70 percent of consumers who take
out a loan means that the average
consumer would pay 10.2 percent more
than the retail price for loans the
consumer discounted at a 3 percent
discount rate.
49721
Fourth, NHTSA considered the
residual value (or resale value) of the
vehicle after 5 years and expressed this
as a percentage of the new vehicle price.
In other words, if the price of the
vehicle increases due to fuel economy
technologies, the resale value of the
vehicle will go up proportionately. The
average resale price of a vehicle after 5
years is about 35 percent of the original
purchase price.596 Discounting the
residual value back 5 years using a 3
percent discount rate (35 percent *
.8755) gives an effective residual value
at new of 30.6 percent.
NHTSA then adds these four factors
together. At a 3 percent discount rate,
the consumer considers she could get
30.6 percent back upon resale in 5 years,
but will pay 5.5 percent more for taxes,
8.5 percent more in insurance, and 10.2
percent more for loans, resulting in a
6.48 percent return on the increase in
price for fuel economy technology.
Thus, the increase in price per vehicle
is multiplied by 0.9352 (1¥0.0648)
before subtracting the fuel savings to
determine the overall net consumer
valuation of the increase of costs on her
purchase decision.
The following table shows the
estimated impact on sales for passenger
cars and light trucks combined for the
proposed alternative. For all model
years except MY 2012, NHTSA
anticipates an increase in sales, based
on consumers valuing the improvement
in fuel economy more than the increase
in price.
TABLE IV.G.5–1—POTENTIAL IMPACT ON SALES, PASSENGER CARS AND LIGHT TRUCKS COMBINED
MY 2012
MY 2013
MY 2014
MY 2015
MY 2016
¥58,058 ..........................................................................................................................
52,719
178,470
342,628
454,520
6. What Are the Consumer Welfare
Impacts of These Proposed Standards?
mstockstill on DSKH9S0YB1PROD with PROPOSALS
There are two viewpoints for
evaluating the costs and benefits of the
proposed increase in CAFE standards:
The private perspective of vehicle
buyers themselves on the higher fuel
economy levels the proposed rule
would require, and the economy-wide
or ‘‘social’’ perspective on the costs and
benefits of requiring higher fuel
economy. From the perspective of
vehicle buyers, raising CAFE standards
would impose significant costs in the
form of higher prices for new vehicles,
as manufacturers attempt to recover
their added costs for producing vehicles
with higher fuel efficiency. If vehicle
manufacturers are unable to fully
recover their higher costs for producing
more fuel-efficient cars and light trucks
through higher sales prices, they will
bear part of these costs in the form of
reduced ‘‘producer surplus’’ or shortterm profits.
Other private costs from requiring
higher fuel economy also result from
changes in the welfare of potential
vehicle buyers, as they respond to
591 Insurance Information Institute, 2008,
‘‘Average Expenditures for Auto Insurance By State,
2005–2006.’’ Available at https://www.iii.org/media/
facts/statsbyissue/auto/ (last accessed August 9,
2009).
592 $29,678/$26,201 = 1.1327 * $22,651 = $25,657
average price for light trucks. In 2006, passenger
cars were 54 percent of the on-road fleet, and light
trucks were 46 percent of the on-road fleet,
resulting in an average light vehicle price for 2006
of $24,033.
593 New car loan rates in 2007 averaged about 7.8
percent at commercial banks and 4.5 percent at auto
finance companies, so their average is close to 7
percent.
594 Based on www.bankrate.com auto loan
calculator for a 5-year loan at 6 percent.
595 For a 3 percent discount rate, the summation
of 3.2 percent × 0.9853 in year one, 3.2 × 0.9566
in year two, 3.2 × 0.9288 in year three, 3.2 × 0.9017
in year 4, and 3.2 × 0.8755 in year five.
596 Consumer Reports, August 2008, ‘‘What That
Car Really Costs to Own.’’ Available at https://
www.consumerreports.org/cro/cars/pricing/whatthat-car-really-costs-to-own-4-08/overview/whatthat-car-really-costs-to-own-ov.htm (last accessed
August 9, 2009).
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00269
Fmt 4701
Sfmt 4700
E:\FR\FM\28SEP2.SGM
28SEP2
49722
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
higher vehicle prices by purchasing
different models or postponing their
purchases of new vehicles. The effects
of requiring higher fuel economy on
consumer welfare also depend on
whether manufacturers elect to make
other changes in vehicle attributes as
they comply with stricter CAFE
standards, such as performance,
passenger- and cargo-carrying capacity,
comfort, or occupant safety. Although
NHTSA believes it has employed
estimates of costs for improving fuel
economy that include adequate
allowances for any accompanying
modifications necessary to maintain
new vehicles’ current levels of other
attributes, any changes in these
attributes that manufacturers elect to
make will represent additional private
costs to vehicle buyers from requiring
increased fuel economy.
At the same time, raising CAFE
standards also provides important
private benefits to vehicle buyers,
mainly in the form of the values buyers
assign to the future savings in fuel costs
they believe are likely to result from
purchasing more fuel-efficient vehicles.
Although these values are likely to vary
significantly among buyers depending
on their expectations about future fuel
prices, how long they anticipate owning
their vehicles, and how much they
expect to drive, fuel savings are the
primary source of private benefits from
increased fuel economy. In addition,
requiring new cars and light trucks to
attain higher fuel economy will also
provide benefits to their buyers through
the increase in vehicle use associated
with the fuel economy rebound effect,
as well as from increases in vehicles’
driving range, which allow drivers to
refuel less frequently.
From the social perspective, the
economic benefits and costs of
establishing higher CAFE standards
include not only these private benefits
and costs, but also changes in the value
of environmental and economic
externalities that result from fuel
consumption and vehicle use.597 These
include the reduction in potential
climate-related economic damages
resulting from lower CO2 emissions,
597 Vehicle buyers are likely to value fuel savings
using retail fuel prices, which include taxes levied
by Federal, State, and some local governments.
Because the reduction in these tax payments
resulting from lower fuel purchases is exactly offset
by lower tax revenues to government agencies (and
reduced spending on the transportation
infrastructure and other investments financed by
fuel taxes), it does not represent a net benefit from
the perspective of the U.S. economy as a whole.
Thus the social costs of requiring higher fuel
efficiency also include an adjustment to reflect the
reduction in fuel tax revenues that results from
reduced fuel purchases by new-car buyers.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
reduced damages to human health from
lower emissions of criteria air
pollutants, reductions in economic
externalities associated with U.S.
petroleum imports, and increases in
traffic congestion, vehicle noise, and
accidents caused by the increased
driving that results through the fuel
economy rebound effect.
NHTSA has estimated most elements
of the private and social benefits and
costs that will result from its proposal
to establish higher CAFE standards for
model years 2012 through 2016, and the
agency reports detailed empirical
estimates of these impacts in this
document and its Preliminary
Regulatory Impact Analysis for the
proposed rule. However, the agency is
unable to provide a definitive
accounting of the private costs and
benefits from establishing higher CAFE
standards, because we are unable to
estimate the losses in consumer welfare
that are likely to result from the effects
of higher prices for on the number of
new vehicles sold or on the mix of
specific vehicle models that buyers
decide to purchase. Assuming that the
agency has correctly estimated each of
the other costs and benefits that will
result from the proposed rule, its
estimates of the net private and total
(private plus social) benefits represent
their maximum possible values, and
considering the rule’s impacts on
consumer welfare would invariably
reduce the agency’s reported estimates
of the proposed rule’s net private and
total benefits.
If the agency’s estimates of technology
costs are indeed adequate to maintain
vehicles’ current levels of these other
attributes constant, the only changes in
vehicles’ characteristics resulting from
higher CAFE standards will be
improvements in the fuel economy and
increases in sales prices for some (or
perhaps even all) models. In this case,
the welfare effects of requiring higher
fuel economy depend on exactly how
potential vehicle buyers value the future
savings in fuel costs that they anticipate
will result from purchasing vehicles
with higher fuel economy.
If the market for new vehicles is
perfectly competitive and consumers
have reliable information to estimate the
likely magnitude and value of future
fuel savings from buying more efficient
models, economic theory suggests that
they will make correct trade-offs
between higher initial costs for
purchasing more fuel-efficient vehicles
and subsequent reductions in their
operating costs. These include lower
fuel expenditures, savings in the time
they spend refueling, and the benefits
from any additional driving they do in
PO 00000
Frm 00270
Fmt 4701
Sfmt 4700
response to its lower per-mile cost. The
assumption that consumers have
adequate information, foresight, and
capability to make such trade-offs has
been challenged on both theoretical and
empirical grounds. If this assumption is
accurate, however, no net private
benefits can result from requiring higher
fuel economy, since doing so will alter
both the purchase prices of new cars
and their lifetime streams of operating
costs in ways that will inevitably reduce
consumers’ well-being.
The essence of this view is that in the
absence of the regulation, consumers
fully understand their current and
future costs for owning and using
vehicles, and make tradeoffs between
these that maximize their individual
welfare. From this viewpoint, CAFE
standards—or any other regulation that
alters this trade-off—will reduce their
private well being. The intuition behind
this conclusion is probably best
captured by recognizing that automobile
manufacturers currently sell a wide
range of vehicle models, including
many that already comply with the
CAFE standards proposed in this rule.
Yet sufficiently few buyers elect to
purchase these vehicles that the average
fuel economy of new vehicles sold
today remains well below the levels this
rule would require.
On the other hand, a great deal of
recent evidence suggests that many
consumers do not accurately trade off
current and future costs of owning and
operating cars. For example, it appears
that some buyers do not know how to
estimate future savings in fuel costs
from purchasing a higher-mpg vehicle,
or that they incorrectly estimate the
increased expense of purchasing a more
fuel-efficient new car. In this situation,
higher CAFE standards—which will
increase purchase prices for new cars,
but reduce their lifetime operating
costs—can indeed improve consumers’
financial well-being. If these
circumstances are widespread, then it is
likely that requiring manufacturers to
achieve higher fuel economy can
increase private well-being, and thus
that potentially significant savings in
private costs can result from the
proposed rule.
Whether these circumstances are
indeed typical is largely a question of
the values that consumers place on
additional fuel economy. NHTSA is not
currently in a position to reach a
conclusive judgment on this issue, and
is thus unable to determine how
requiring higher fuel economy levels is
likely to affect consumer welfare, even
if the only impacts of the proposed rule
are to change the sales prices and fuel
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
economy levels of new cars and light
trucks, as the agency assumes.
Even if these are the only changes that
result from the proposed rule, however,
changes in the sales prices and fuel
economy levels of some new vehicle
models are likely to affect some
potential buyers’ decisions about
whether to purchase a car and what type
or model to purchase. Research has
demonstrated that previous CAFE rules
and market-based changes in operating
costs (for example, resulting from
changes in gasoline prices) lead
consumers to alter the number and
types of cars they purchase, and that
these changes can lead to losses in
consumer well-being. However, NHTSA
is not currently able to provide
empirical estimates of the magnitude of
potential losses in vehicle buyers’
welfare resulting from postponement of
their decisions to purchase new vehicles
or changes in the specific models they
elect to buy.
For both of these reasons, the likely
impacts of adopting higher CAFE
standards on consumer welfare remain
unknown. Because changes in consumer
welfare are an important component of
the total private costs and benefits
resulting from higher standards, the
magnitude and even the direction of the
net private economic impact of adopting
stricter CAFE standards also remains
unknown.
How Do Consumers Value Fuel
Economy?
For this proposed rule, NHTSA
estimates several sources of private
benefits to vehicle buyers, including
savings in future fuel costs, the value of
time saved due to less frequent
refueling, and utility gained from
additional travel that results from the
rebound effect. In combination, the
agency’s estimates suggest that these
private savings greatly outweigh its
estimates of the costs to consumers for
providing higher fuel economy, even
without accounting for the additional
social benefits from higher fuel
economy. This is due primarily to the
very large estimated value of future fuel
savings from higher fuel economy,
which in turn partly reflects the
agency’s use of modest discount rates (3
percent and 7 percent).
Even without considering the
unmeasured welfare losses likely to
result from changes in the number of
new cars sold and the specific models
purchased, however, this finding
presents a conundrum. On the one
hand, requiring higher fuel economy
levels appears likely to produce large
net benefits, primarily because the
increased cost of producing more fuel-
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
efficient cars and light trucks appears to
be far outweighed by the value of the
future fuel savings projected to result
from higher fuel economy (assuming
modest discount rates). At the same
time, however, vehicle manufacturers
currently produce many models that
would allow them to meet the proposed
higher CAFE standards, yet at least on
average, buyers reveal a preference for
lower fuel economy than the proposed
rule would require.
In this situation, often referred to as
the Energy Efficiency Paradox,
consumers appear not to purchase
products that are in their economic
self-interest. There are theoretical
reasons that could explain such
behavior: consumers may be myopic,
and thus undervalue the long term; they
might lack information or be unable to
use it properly even when it is
presented to them; they may be
particularly averse to potential
short-term losses associated with
purchasing energy-efficient products
(the behavioral phenomenon of ‘‘loss
aversion’’); or even if consumers have
relevant knowledge, the benefits of
energy efficient vehicles might not seem
sufficiently important to them at the
time they decide to purchase a new car.
A great deal of work in behavioral
economics has suggested the possibility
that factors of this sort help account for
the Energy Efficiency Paradox.
Another possible explanation for the
paradox between the apparently large
private benefits to vehicle buyers from
requiring higher fuel economy and the
reluctance of many buyers to purchase
new vehicles with higher fuel economy
is that consumers may apply much
higher discount rates than the agency
has used when they evaluate future cost
savings from purchasing more fuelefficient vehicles or other capital goods
offering gains in energy efficiency. For
example, the Energy Information
Agency (1996) has used discount rates
as high as 111 percent for water heaters
and 120 percent for electric clothes
dryers.598
Some evidence also suggests directly
that vehicle buyers employ high
discount rates: consumers surveyed by
Kubik (2006) reported that fuel savings
would have to be adequate to pay back
the additional purchase price of a more
fuel-efficient vehicle in less than 3 years
to persuade a typical buyer to purchase
598 Energy Information Administration, U.S.
Department of Energy (1996). Issues in Midterm
Analysis and Forecasting 1996, DOE/EIA–0607(96),
Washington, D.C. Available at https://www.osti.gov/
bridge/purl.cover.jsp?purl=/366567–BvCFp0/
webviewable/ (last accessed Jul. 7, 2009).
PO 00000
Frm 00271
Fmt 4701
Sfmt 4700
49723
it. 599 In short, there appears to be no
consensus in the literature on what the
private discount rate should be in the
context of vehicle purchase decisions.
Another possible reconciliation of the
Energy Efficiency Paradox, which poses
a significant complication for evaluating
the private benefits resulting from
higher CAFE standards, is that the
values consumers place on the future
savings from higher fuel economy may
vary sufficiently widely that it is
unclear whether on average this value
exceeds the costs of providing higher
fuel economy. A 1988 review of
consumers’ willingness to pay for
improved fuel economy found estimates
that varied by more than an order of
magnitude: For a $1 per year reduction
in vehicle operating costs, consumers
would be willing to spend between
$0.74 and $25.97 in increased vehicle
price.600 (For comparison, the present
value of saving $1 per year on fuel for
15 years at a 3 percent discount rate is
$11.94, while a 7 percent discount rate
produces a present value of $8.78.)
Thus, this study finds that some
consumers appear to be willing to pay
far too much to obtain future fuel
savings, while others may be willing to
pay far too little.
Although NHTSA has not found an
updated survey of these values, a few
examples suggest that vehicle choice
models also imply wide variation in
estimates of how much people are
willing to pay for fuel savings. For
instance, Espey and Nair (2005) and
McManus (2006) find that consumers
are willing to pay nearly $600 extra to
purchase a vehicle that achieves one
additional mile per gallon.601 In
contrast, Gramlich (2008) finds that
consumers’ willingness to pay for an
increase from 25 mpg to 30 mpg varies
between $4,100 (for luxury cars when
gasoline costs $2/gallon) to $20,560 (for
SUVs when gasoline costs $3.50/
gallon).602 Thus, some buyers appear
599 Kubik, M. (2006). Consumer Views on
Transportation and Energy. Second Edition.
Technical Report: National Renewable Energy
Laboratory.
600 Greene, David L., and Jin-Tan Liu (1988).
‘‘Automotive Fuel Economy Improvements and
Consumers’ Surplus.’’ Transportation Research Part
A 22A(3): 203–218. The study actually calculated
the willingness to pay for reduced vehicle operating
costs, of which vehicle fuel economy is a major
component.
601 Espey, Molly, and Santosh Nair (2005).
‘‘Automobile Fuel Economy: What is it Worth?’’
Contemporary Economic Policy 23(3): 317–323;
McManus, Walter M. (2006). ‘‘Can Proactive Fuel
Economy Strategies Help Automakers Mitigate
Fuel-Price Risks?’’ University of Michigan
Transportation Research Institute.
602 Gramlich, Jacob (2008). ‘‘Gas Prices and
Endogenous Product Selection in the U.S.
E:\FR\FM\28SEP2.SGM
Continued
28SEP2
49724
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
not to make accurate trade-offs between
higher initial purchase prices and
subsequent fuel savings. At the same
time, however, these results may simply
reflect the fact that the expected savings
from purchasing higher fuel economy
vary widely among individuals, because
they travel different amounts or have
different driving styles.
Finally, it is possible that the
apparent Energy Efficiency Paradox is in
fact not a paradox at all when one
considers the uncertainty surrounding
future fuel prices and a vehicle’s
expected lifetime and usage. As Metcalf
and Rosenthal (1995) indicate,
purchasing higher fuel economy
requires buyers to weigh known,
up-front costs that are essentially
irreversible (that is, they have a
relatively low salvage value if the return
never materializes) against an unknown
future stream of fuel savings.603 They
find some evidence that this accounts
for a large portion of the seeming
inconsistency between low cost
opportunities to invest in energy
efficiency and the current lack of
investment in them. This would not
imply failure on the part of consumers
in making decisions, but rather that the
rate of return buyers require on their
vehicle purchases (or other energy
efficiency investments) is much higher
than that implied by a 3 percent
discount rate that does not include a
provision for uncertainty.
Greene et al. (2009) find additional
support for this conclusion in the
context of fuel economy decisions: They
find that the expected net present value
of increasing the fuel economy of a
passenger car from 28 to 35 miles per
gallon falls from $405 when calculated
using standard net present value
calculations to nearly zero when
uncertainty regarding future cost
savings is taken into account.604 In
contrast to Metcalf and Rosenthal,
Greene et al. find that uncertainty
regarding the future price of gasoline is
less important than uncertainty
surrounding the expected lifetimes of
new vehicles. Supporting this
hypothesis is a finding by Dasgupta et
al. (2007) that consumers are more
likely to lease than buy a vehicle with
Automobile Industry.’’ Available at https://
www.econ.yale.edu/seminars/apmicro/am08/
gramlich-081216.pdf (last accessed May 1, 2009).
603 Metcalf, G., and D. Rosenthal (1995). ‘‘The
‘New’ View of Investment Decisions and Public
Policy Analysis: An Application to Green Lights
and Cold Refrigerators,’’ Journal of Policy Analysis
and Management 14: 517–531.
604 Greene, D., J. German, and M. Delucchi (2009).
‘‘Fuel Economy: The Case for Market Failure’’ in
Reducing Climate Impacts in the Transportation
Sector, Sperling, D., and J. Cannon, eds. Springer
Science.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
higher maintenance costs, because
leasing provides them with the option to
return it before those costs become too
high.605
In contrast, other research suggests
that the Energy Efficiency Paradox is
real and significant, and owes to
consumers’ inability to value future fuel
savings appropriately. For example,
Sanstad and Howarth (1994) argue that
consumers optimize behavior without
full information by resorting to
imprecise but convenient rules of
thumb. Larrick and Soll (2008) find
evidence that consumers do not
understand how to translate changes in
miles per gallon into fuel savings.606 If
the behavior identified in these studies
is indeed widespread, then significant
gains to consumers can result from
requiring higher fuel economy.
How NHTSA Proposes To Treat the
Issue of Welfare Losses
In the course of future rulemakings,
the agency intends to explore methods
that would allow it to present a more
comprehensive accounting of private
costs and benefits from requiring higher
fuel economy, including more detailed
estimates of changes in the welfare of
new vehicle buyers that are likely to
result from higher CAFE standards. One
promising approach to estimating the
full welfare loss associated with CAFE’s
impact on vehicle purchasing decisions
is using consumer vehicle choice
models to evaluate the simultaneous
effects of increases in sales prices,
improvements in fuel economy, and
changes in other attributes of specific
vehicle models, rather than in the
average values of these variables.
NHTSA invites comments on the state
of the art of consumer vehicle choice
modeling, as well as on the prospects
for these models to yield reliable
estimates of changes in consumer
welfare from requiring higher fuel
economy.
7. What Are the Estimated Safety
Impacts of These Proposed Standards?
As discussed above, in evaluating the
appropriate levels at which to establish
new CAFE standards, NHTSA must
assess any potential safety trade-offs.
Safety trade-offs associated with fuel
economy increases have occurred in the
past and the possibility of future ones
605 Dasgupta, S., S. Siddarth, and J. Silva-Risso
(2007). ‘‘To Lease or to Buy? A Structural Model of
a Consumer’s Vehicle and Contract Choice
Decisions.’’ Journal of Marketing Research 44: 490–
502.
606 Sanstad, A., and R. Howarth (1994). ‘‘ ‘Normal’
Markets, Market Imperfections, and Energy
Efficiency.’’ Energy Policy 22(10): 811–818; Larrick,
R.P., and J.B. Soll (2008). ‘‘The MPG illusion.’’
Science 320: 1593–1594.
PO 00000
Frm 00272
Fmt 4701
Sfmt 4700
remains a concern. In the
congressionally-mandated report
entitled ‘‘Effectiveness and Impact of
Corporate Average Fuel Economy
(CAFE) Standards,’’ a committee of the
National Academy of Sciences (NAS)
(‘‘2002 NAS Report’’) 607 concluded that
the then-existing form of passenger car
and light truck CAFE standards,
together with market forces, created an
incentive for vehicle manufacturers to
comply in part by downweighting and
even downsizing their vehicles and that
these actions led to additional fatalities.
Given the cost advantages of downsizing
instead of substituting lighter, higher
strength materials, NAS urged that the
CAFE program be restructured to reduce
the regulatory incentive to downsize. As
NAS observed, the ability to reduce
weight without reducing size does not
mean they will exclusively rely on those
means of weight reduction. Responding
to NAS’ concern, Congress mandated in
EISA that CAFE standards be based on
an attribute related to fuel economy, like
footprint or weight.
Given the relative cost-effectiveness of
at least some approaches to weight
reduction, it is reasonable to assume
that the vehicle manufacturers will
choose weight reduction as one means
of achieving compliance with the
proposed standards. In fact, informal
statements by the vehicle manufacturers
themselves indicate that they intend to
engage in some weight reduction, as
appropriate for certain vehicle models,
during the rulemaking time frame.
While the manufacturers generally
indicate that they plan to reduce weight
without reducing size, their adherence
to those plans would not remove all
bases for any safety concerns.
The question of the effect of changes
in vehicle weight on safety in the
context of fuel economy is a complex
question that poses serious analytic
challenges and has been a contentious
issue for many years. This
contentiousness arises, at least in part,
from the difficulty of isolating vehicle
weight from other confounding factors
(e.g., driver behavior, or vehicle factors
such as engine size and wheelbase). In
addition, at least in the past, several
vehicle factors have been closely
related, such as vehicle mass,
wheelbase, track width, and structural
integrity. The issue has been addressed
in the literature for more than two
decades. For the reader’s reference,
much more information about safety in
607 National Research Council, ‘‘Effectiveness and
Impact of Corporate Average Fuel Economy (CAFE)
Standards,’’ National Academy Press, Washington,
DC (2002). Available at https://www.nap.edu/
openbook.php?isbn=0309076013 (last accessed
September 11, 2009).
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
the CAFE context is available in the MY
2011 final rule 608 and in Section IX of
the PRIA.
Conducting the safety assessment for
this rulemaking is thus difficult since,
in general, it is unclear to what extent
the higher fatality risk of smaller and
lighter vehicles is associated with their
reduced mass as compared to their
reduced physical dimensions. That is
because, historically, the safest vehicles
have been heavy and large, while the
vehicles with the highest fatal-crash
rates have been light and small, both
because the crash rate is higher for
small/light vehicles and because the
fatality rate is higher for small/light
vehicle crashes.609 Intuitively, a
reduction in mass while maintaining
physical dimensions is likely to be less
harmful than a reduction in both mass
and physical dimensions.
As noted above, the manufacturers
have generally informally stated that
they plan to use weight reduction
methods that do not involve size
reduction. That is plausible since the
selection of footprint as the attribute in
setting CAFE standards helps to
minimize the incentive to reduce a
vehicle’s physical dimensions. This is
because as footprint decreases, the
corresponding fuel economy target
decreases.610
However, NHTSA cautions that
vehicle footprint is not synonymous
with vehicle size. Since the footprint is
only that portion of the vehicle bounded
by the front and rear axles and by the
wheels, footprint based standards do not
discourage downsizing the portions of a
vehicle in front of the front axle and to
the rear of the rear axle (front and rear
overhand). Similarly, they do not
discourage downsizing the portions of a
vehicle outside its wheels (side
overhang). The crush space provided by
those portions of a vehicle can make
important contributions to managing
crash energy. We note that at least one
manufacturer has confidentially
indicated plans to reduce overhang as a
way of reducing weight on some
608 74
FR 14396–14407 (Mar. 30, 2009).
Charles J., Ph.D., ‘‘Vehicle Weight,
Fatality Risk and Crash Compatibility of Model
Year 1991–99 Passenger Cars and Light Trucks,’’
DOT HS 809 662, October 2003, Executive
Summary. Available at https://www.nhtsa.dot.gov/
cars/rules/regrev/evaluate/809662.html (last
accessed August 12, 2009).
610 Vehicle footprint is not synonymous with
vehicle size. Since the footprint is only that portion
of the vehicle between the front and rear axles,
footprint based standards do not discourage
downsizing the portions of a vehicle in front of the
front axle and to the rear of the rear axle. The crush
space provided by those portions of a vehicle can
make important contributions to managing crash
energy.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
609 Kahane,
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
vehicles during the rulemaking time
frame.
Neither the CAFE standards nor our
analysis of the feasibility of fuel
economy improvements mandates mass
reduction or any other specific
technology application. In addition,
considering NHTSA’s analysis of the
observed relationship between vehicle
mass and the prevalence of fatalities,
NHTSA has, except for vehicles with
baseline curb weight over 5,000 pounds,
excluded weight reduction from its
analysis of potential CAFE standards in
past rulemakings. The agency followed
this analytical approach in order to
ensure that its consideration of new
standards was not dependent on weight
reduction that could potentially
compromise highway safety,
recognizing, though, that the structure
of CAFE standards does not prohibit
manufacturers from making such
responses to new CAFE standards. The
agency implemented this approach by
setting the Volpe model to apply this
exclusion when estimating how
manufacturers could apply technology
in response to new CAFE standards.
In its rulemakings on MY 2008–2011
light truck CAFE standards and MY
2011 car and light truck CAFE
standards, NHTSA received comments
suggesting that NHTSA expand the
applicability of weight reduction
technologies in its modeling to vehicles
under 5,000 pounds, because, according
to the commenters, weight reduction
can be accompanied by proper vehicle
design to assure that vehicle safety is
not compromised. In the final rules in
those rulemakings, the agency said that
there may be great possibilities in the
use of material substitution and other
processes to minimize the safety effects
of reducing weight. The agency further
noted that this should be explored as
data become available.
After reviewing its assumptions and
methodologies per the President’s
January 26 memorandum and working
with EPA in this rulemaking, NHTSA
revised its approach to include weight
reduction of up to 5–10 percent of
baseline curb weight, depending on
vehicle type. Recently-submitted
manufacturer product plans as well as
public statements from a number of the
manufacturers suggest some of them
expect that by MY 2016, they will be
able to reduce the weight of some
specific vehicle models by similar
levels. However, NHTSA does not
believe that, except where already
planned, such significant weight
reductions can be achieved in MY 2012
or MY 2013, because there is not enough
lead time for the necessary design,
engineering, and tooling. NHTSA
PO 00000
Frm 00273
Fmt 4701
Sfmt 4700
49725
estimates that weight reductions of 1.5
percent can be achieved during
redesigns occurring prior to MY 2014,
and that weight reductions of 5–10
percent can be achieved in redesigns
occurring in MY 2014 or later. For
purposes of analyzing CAFE standards,
NHTSA has further assumed that weight
reductions would be limited to 5
percent for small vehicles (e.g.,
subcompact passenger cars), and that
reductions of 10 percent would only be
applied to the larger vehicle types (e.g.,
large light trucks).
NHTSA’s modeling approach is
similar to EPA’s in terms of maximum
available weight reduction for any
vehicle model, sensitive to vehicle
safety in terms of when and to which
vehicle types significant weight
reduction can be achieved safely, and
supported by information in some
manufacturers’ product plans. Some
manufacturers have indicated that, in
later model years, they plan to reduce
significantly the weight of some specific
vehicle models, and that they plan to do
so without reducing vehicle size.
NHTSA’s analysis results in similar
degrees of weight reduction, applied
more widely to some manufacturers.
NHTSA notes, though, that some
manufacturers are also planning
considerable changes in product mix,
and some of these changes could mean
reduced average size along with reduced
average weight. In NHTSA’s (and EPA’s)
analysis, such changes in product mix
are not counted, because they are either
in the baseline market forecast, or are
not estimated.
As stated above, neither the CAFE
standards nor our analysis mandates
mass reduction, or mandates that if
mass reduction occurs, it be done in any
specific manner. However, mass
reduction is one of the technology
applications available to the
manufacturers and has been used by
them in the past. A degree of mass
reduction is used by the Volpe model in
determining the capabilities of
manufacturers and in predicting both
cost and fuel consumption impacts of
improved CAFE standards.
In this section, we briefly summarize
our analysis of the potential impacts of
these mass reductions on vehicle safety.
NHTSA’s quantified analysis is based
on the 2003 Kahane study,611 which
estimates the effect of 100-pound
reductions in MYs 1991–1999 heavy
light trucks and vans (LTVs), light LTVs,
heavy passenger cars, and light
passenger cars. The study compares the
fatality rates of LTVs and cars to
quantify differences between vehicle
611 Id.
E:\FR\FM\28SEP2.SGM
28SEP2
49726
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
types, given drivers of the same age/
gender, etc. In this analysis, the effect of
‘‘weight reduction’’ is not limited to the
effect of mass per se, but includes all the
factors, such as length, width, structural
strength, and size of the occupant
compartment, that were naturally or
historically confounded with mass in
MYs 1991–1999 vehicles. The rationale
is that adding length, width, or strength
to a vehicle will also make it heavier.
The agency utilized the relationships
between weight and safety from Kahane
(2003), expressed as percentage
increases in fatalities per 100-pound
weight reduction, and examined the
weight impacts assumed in this CAFE
analysis. However, there are several
identifiable safety trends that are
already in place or expected to occur in
the foreseeable future and that are not
accounted for in the study. For example,
two important new safety standards that
have already been issued and will be
phasing in during the rulemaking time
frame. Federal Motor Vehicle Safety
Standard No. 126 (49 CFR 571.126) will
require electronic stability control in all
new vehicles by MY 2012, and the
upgrade to Federal Motor Vehicle Safety
Standard No. 214 (Side Impact
Protection, 49 CFR 571.214) will likely
result in all new vehicles being
equipped with head-curtain air bags by
MY 2014.612 Additionally, we anticipate
continued improvements in driver (and
passenger) behavior, such as higher
safety belt use rates. All of these will
tend to reduce the absolute number of
fatalities resulting from weight
reductions. Thus, while the percentage
increases in Kahane (2003) was applied,
the reduced base has resulted in smaller
absolute increases than those that were
predicted in the 2003 report.
The agency examined the impacts of
the identifiable safety trends over the
lifetime of the vehicles produced in
each model year. An estimate of these
impacts was contained in a previous
agency report.613 The impacts were
estimated on a year-by-year basis, but
612 We note that the Volpe model currently does
not account for the weight of safety standards that
will be added compared to the MY 2008 baseline,
nor does it account for the societal cost of
reductions in weight. However, both of these items
will be added to the model for the final rule; doing
so will raise the weight of every vehicle by roughly
17 pounds in MY 2016 (slightly less in earlier
years), which will likely require manufacturers to
add slightly more technology to reach the final
standards than they were estimated to need to reach
the proposed standards. However, NHTSA does not
expect the impact of these roughly 17 pounds per
vehicle to have a significant impact on the safety
analysis.
613 Blincoe, L. and Shankar, U, ‘‘The Impact of
Safety Standards and Behavioral Trends on Motor
Vehicle Fatality Rates,’’ DOT HS 810 777, January
2007. See Table 4 comparing 2020 to 2007 (37,906/
43,363 = 12.6% reduction (1¥.126 = .874).
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
could be examined in a combined
fashion. The agency assumed that the
safety trends will result in a reduction
in the target population of fatalities from
which the weight impacts are derived.
Using this method, we found a 12.6
percent reduction in fatality levels
between 2007 and 2020. The estimates
derived from applying Kahane’s
percentages to a baseline of 2007
fatalities were thus multiplied by 0.874
to account for changes that the agency
believes will take place in passenger car
and light truck safety between the 2007
baseline on-road fleet used for this
particular analysis and year 2020.
We note that because these new
analyses are based on the method
shown in Kahane (2003), which predicts
the safety effect of 100-pound mass
reductions in MY 1991–1999 light
trucks and vans (LTVs) and passenger
cars, the new analyses need to be
understood in the context of that study.
Specifically, the numbers in the new
analyses represent an upper bound (or
worst case) fatality estimate—that is, the
estimate would only apply if all weight
reductions come from reducing both
weight and footprint. Kahane’s
conclusions are based upon a crosssectional analysis of the actual on-road
safety experience of 1991–1999
vehicles. For those vehicles, heavier
usually also meant larger-footprint.
Hence, the numbers in the new analyses
predict the safety-related fatalities that
would occur in the unlikely event that
weight reduction for MYs 2012–2016 is
accomplished entirely by reducing mass
and reducing footprint.
Exclusive reliance on downsizing for
the model years covered by this
rulemaking is unlikely for the following
reasons. As noted above, the
manufacturers have generally indicated
that they plan reduce weight without
reducing size. Further, the flat CAFE
standards in effect when those MY
1991–1999 vehicles were produced had
no penalty for such a strategy for
improving fuel economy. In contrast, as
discussed above, the current attributebased CAFE standards do not encourage
vehicle downsizing by reducing
footprint. This structural change to the
CAFE program means that the CAFE
standards now favor the use of weight
reduction strategies that do not involve
simply making that portion of the
vehicle smaller. These other strategies
include downsizing the engine and
adding turbocharging, as well as
materials substitution.
Given this structural change to the
CAFE program, it is likely that a
significant portion of the weight
reduction in the MY 2012–2016 vehicles
will be accomplished by strategies that
PO 00000
Frm 00274
Fmt 4701
Sfmt 4700
have a lesser safety impact than the
prevalent 1990s strategy of simply
making the vehicles smaller, although
NHTSA is unable to predict how large
a portion. For example, a manufacturer
could conceivably add length, width, or
strength to a vehicle by replacing
existing materials with light, highstrength components.
To the extent that future weight
reductions could be achieved by
substituting light, high-strength
materials for existing materials—
without any accompanying reduction in
the size or structural strength of the
vehicle—then NHTSA believes that the
fatality increases associated with the
weight reductions anticipated by the
model as a result of the proposed
standards could be significantly smaller
than those in the worst-case scenario.
However, NHTSA does not currently
have information (on-road data) to
calibrate and predict how much smaller
those increases would be for any given
mixture of material substitution and
downsizing, since the data on the safety
effects of mass reduction alone is not
available due to the low numbers of
vehicles in the current on-road fleet that
have utilized this technology
extensively. Further, to the extent that
weight reductions were accomplished
through use of light, high-strength
materials, there would be significant
additional costs that would need to be
determined and accounted for. Those
higher costs are not reflected in
NHTSA’s cost-benefit analysis for this
proposal.
Nevertheless, even though NHTSA
cannot quantify these safety effects, we
can project that they could be
significantly less than those that would
result from simple downsizing.
However, we are also convinced that the
safety effects are larger than zero for the
following reasons:
• The effects of mass per se (laws of
physics) will persist regardless whether
mass is reduced by material
substitution, downsizing, or any other
method. There are a variety of crash
types that could be impacted in various
ways by changes in vehicle weight and
at times by the way in which the
vehicle’s weight is changed. The
following discussion examines weight
reduction by either engine size
reductions or material substitution and
its impact on each of the different crash
types.614
Let us assume that Car A weighs X
pounds and that Car B weighs X¥100
614 For a similar discussion of effect of weight
reduction on different crash modes, see
Effectiveness and Impact of Corporate Average Fuel
Economy Standards, NAS 1972, pp 74–75.
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
pounds and that Cars A and B have the
same footprint, overhang and structural
strength.
Æ Single-vehicle crashes
Hitting an immovable object (like a
big tree or bridge abutment).
In most cases, there would be little
impact on vehicle safety if Car A and
Car B each hit a different immovable
object at the same speed because the
change in velocity (delta-V) would be
the same for both vehicles.
Hitting a partially movable object (like
a small tree, parked car, storefront, or
dwelling).
Heavier vehicles will impart more
force to movable objects than lighter
vehicles. This will increase the chance
that the movable objects will break,
crush, or otherwise give way and
increase the distance over which the
striking vehicle can decelerate, which
will reduce the delta-V for the vehicle’s
occupants.
Single-vehicle rollovers.
Smaller vehicles end up in more
rollover crashes than larger vehicles.
Part of the reason for this is the static
stability factor, since smaller vehicles
have less track width. Part of the reason
for this is the way smaller vehicles are
driven. Given the same track width for
Car A and Car B, the impact on rollovers
is hard to determine since the weight
helps build up momentum and the
influence of momentum versus weight
for tripped rollovers is hard to discern.
Æ Multi-vehicle crashes
Frontal impact—two light vehicles.
While a collision of Car B with Car B
is likely to have the same risk as a
similar collision of Car A with Car A,
the final answer on safety will depend
upon what vehicle sizes receive overall
weight reductions. As NHTSA’s study
shows, if weight is taken out of the
larger light trucks, overall safety is
improved. If weight is taken out of
passenger cars or smaller light trucks,
overall safety decreases. Overall, we
can’t determine whether there will be an
overall difference in safety.
Side impact—struck vehicle.
As a struck vehicle, Car B is at a
disadvantage because its delta V would
be increased. Car B would be less safe.
Side impact—striking vehicle.
NHTSA analyses have shown that for
a striking vehicle in a side impact,
weight is not as important as striking
height. Weight does have an impact,
because of imparting a lower delta V on
the struck vehicle. When struck by Car
B, the struck vehicle would be
somewhat safer.
Side impact—overall.
Overall, there will be a minimal
difference in safety.
Collision with an older light vehicle.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
Car B would experience a higher delta
V and a higher fatality risk than Car A,
if either were struck by the same pre2012 vehicle. But the occupants of the
older vehicle would experience a lower
delta V and a lower risk if struck by Car
B.
Collision with a medium-sized truck
(somewhat over 10,000 GVWR).
Medium-size trucks are not affected
by CAFE and do not need to decrease
their weight. Car B would experience a
higher delta V and a higher risk than Car
A. (The risk to the occupants of the
medium-size truck would be minimally
higher with Car A.) Overall, Car B
would be less safe.
Collision with a fully-loaded tractor
trailer (significantly over 10,000
GVWR).
Car B would experience a higher delta
V than Car A, but in this case, the
difference in delta V would be minimal.
Risk would be similar in both cars.
Æ Pedestrian/bicyclist impacts
In general, Car A would impose a
slightly higher delta V on the pedestrian
than Car B, but the difference would be
so small that risk for the pedestrian
would essentially be the same either
way.
• Our attribute-based standards have
the excellent feature that they can avoid
encouraging reductions in footprint.
However, weight can be removed by
downsizing, rather than material
substitution, even while maintaining
footprint:
Æ By reducing the overhang in front
of the front wheels and behind the rear
wheels. These are protective structures
whose removal would increase risk to
occupants by reducing vehicle crush
space.
Æ By thinning or removing structures
within the vehicle.
• NHTSA has found that lighter
vehicles are driven in a manner that
results in a higher involvement rate in
fatal crashes, even after controlling for
the driver’s age, gender, urbanization,
and region of the country. However, in
our response in the MY 2011 final rule
to the DRI analyses, we were unable to
attribute this effect to any obvious
‘‘size’’ parameter such as track width or
wheelbase. In non-rollover crashes,
weight continued to be the most
important parameter, even when track
width and wheelbase were included as
independent variables. Until we
understand the phenomenon better, we
assume that weight reduction is likely to
be associated with higher fatal-crash
rates, no matter how the weight
reduction is achieved.
Table IV.G.7–1 below shows the
results of NHTSA’s worst case analysis
of safety-related fatalities separately for
PO 00000
Frm 00275
Fmt 4701
Sfmt 4700
49727
each model year. Additionally, the
societal impacts of increasing fatalities
can be monetized using DOT’s
estimated comprehensive cost per life of
$6.1 million. This consists of a value of
a statistical life of $5.8 million plus
external economic costs associated with
fatalities such as medical care,
insurance administration costs and legal
costs.615
NHTSA has also calculated an
assumed impact on injuries and added
that to the societal costs of fatalities.
This assumed impact is based on past
studies indicating that fatalities account
for roughly 44 percent of total
comprehensive costs due to injury.616 If
weight impacts non-fatal injuries
roughly proportional to its impact on
fatalities, then total costs would be
roughly 2.3 times those noted in Table
IV.G.7–2. The potential societal costs for
just fatalities are shown in Table IV.G.7–
2. The combined potential social costs
are shown in Table IV.G.7–4.
Looking at the results on a calendar
year basis, we also note that the safety
impacts of the Kahane analysis based
weight reduction have a slow onset.
Passenger cars typically have a 10–25
year lifetime, and light trucks somewhat
longer. Thus, some of the fatalities for
MY 2016 light trucks will not occur
until after 2050. Moreover, the weight
reductions are small in the early model
years 2012 and 2013. The vehicles with
reduced weight will only be a small
proportion of the entire on-road fleet in
the initial calendar years of these
proposed CAFE standards. The
influence of these factors is illustrated
in Table IV.G.7–3 below.
Additionally, there will be significant
fuel-saving benefits from these proposed
standards, up to 61.6 billion gallons
during the lifetime of MYs 2012–2016
vehicles. There will also be significant
reductions in CO2 emissions, up to 656
million metric tons during that same
time period.
Improved fuel economy will also
result in a decrease in harmful criteria
pollutants, which will decrease
premature deaths due to a number of
diseases related to environmental
pollution. The literature strongly
supports the causal relationship
between health and exposure to criteria
pollutants. However, as with vehicle
safety impacts, there is much
615 Blincoe et al., The Economic Impact of Motor
Vehicle Crashes 2000, May 2002, DOT HS 809 446.
Data from this report were updated for inflation and
combined with the current DOT guidance on value
of a statistical life to estimate the comprehensive
value of a statistical life.
616 Based on data in Blincoe et al., updated for
inflation and reflecting the Department’s current
VSL of $5.8 million.
E:\FR\FM\28SEP2.SGM
28SEP2
49728
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
uncertainty regarding the exact level of
health impacts that might be achieved
with this rule. Thus, there are
potentially both positive and negative
impacts that could result from this
rulemaking. We have not attempted to
quantify other beneficial health impacts
that are expected to result from the
proposed standards, including the
results of a decrease in the rate of global
warming, and increased energy security
resulting from a lesser dependence on
oil imported volatile regions of the
world, but they, too, could be
significant.
In summary, the agency recognizes
the balancing inherent in achieving
higher levels of fuel economy through
reduction of vehicle weight. We
emphasize that these safety-related
fatality estimates represent a worst case
scenario for the potential effects of this
rulemaking, and that actual fatalities
will be less than these estimates,
possibly significantly less, based on the
qualitative discussion above of the
various factors that could reduce the
estimates. At the same time, however,
the agency cannot specify a reasonable
lower-bound estimate. It is possible that
the impact could be fairly small, but the
agency is unable to specify a lowerbound at this time due to a lack of
studies that address the safety risk
associated with weight reduction that is
not also accompanied by size reduction.
Additionally, the estimates presented
here do not include estimates for
injuries. Nevertheless, we believe that
the balancing is reasonable.
In the absence of data that permit
examining the fatality impact of
reductions in weight and footprint
independently, we considered whether
it would be appropriate to use the
industry-sponsored DRI study to
estimate a lower-bound value. However,
as noted below, the agency’s inability to
reproduce DRI’s results raises questions
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
whether the DRI reports sufficiently
satisfy reproducibility criteria and thus
have the quality, objectivity, utility, and
integrity needed for information relied
upon and disseminated by the Federal
Government to the public. Reliance
upon non-reproducible studies
undermines the credibility of the
Government’s scientific information.
Further, the DRI reports raise a
significant additional data quality
concern. They have not been subjected
to a rigorous form of peer review.
DRI produced several studies between
2000 and 2005, funded by a
manufacturer of small vehicles and
purporting to analyze mass, track width,
and wheelbase as independent
variables. DRI’s 2002 paper indicated
that reducing mass would be beneficial,
while reducing track width and
wheelbase would be harmful. If true,
this meant that weight reduction would
benefit safety if track width and
wheelbase were maintained. However,
NHTSA has concluded that the 2002
DRI study inadvertently introduced
significant biases in the analysis, as a
result of including 2-door cars in the
analysis. Dr. Kahane’s analyses have
excluded 2-door passenger cars on the
grounds that in the data reviewed in
those analyses (and by DRI in its
analysis), 2-door cars consisted in
considerable part of sports and muscle
cars. Including sports and muscle cars
in a regression analysis of vehicle
weight and safety biases the results for
two primary reasons: first, because
sports and muscle cars tend to have
short wheelbases but be relatively heavy
for their size, they function as outliers
in the regression analysis and thus
distort the derived relationships and
second, because sports and muscle cars
as a group tend to be disproportionately
involved in crashes. NHTSA provided
PO 00000
Frm 00276
Fmt 4701
Sfmt 4700
this response to DRI publicly in 2004.617
In response, DRI submitted a new study
in 2005 with a sensitivity analysis
limited to 4-door cars, excluding police
cars. DRI further stated that it could
mimic NHTSA’s logistic regression
approach for an analysis of model year
1991–98 4-door cars in calendar year
1995–1999 crashes. DRI stated that its
updated 2005 analysis still showed
results directionally similar to its earlier
work—increased risk for lower track
width and wheelbase, reduced risk for
lower mass—although DRI
acknowledged that the wheelbase and
mass effects were no longer statistically
significant after removing the 2-door
cars from the analysis.
Since receiving it, NHTSA has
disagreed with the results of DRI’s 2005
analysis, most recently on record in the
MY 2011 CAFE final rule, for two
primary reasons. First, even using the
same (NHTSA) data and methodology as
DRI used, NHTSA has been unable to
reproduce DRI’s 2005 results. And
second, to our knowledge, unlike Dr.
Kahane’s 2003 study, DRI’s 2005 study
has not been rigorously peer-reviewed.
The following provides an example of
how NHTSA has tried to reproduce
DRI’s results, unsuccessfully. In MY
1991–1998, the average car weighing x
+ 100 pounds had a track width that
was 0.34 inches larger and a wheelbase
that was 1.01 inches longer. Thus, one
could say that a ‘‘historical’’ 100-pound
weight reduction would have been
accompanied by a 0.34 inch track width
reduction and a 1.01 inch wheelbase
reduction. However, using a reasonable
check, if one dissociates weight, track
width, and wheelbase and treats them as
independent parameters, DRI’s logistic
regression of model year 1991–1998 4door cars excluding police cars
attributes the following effects:
617 Docket
E:\FR\FM\28SEP2.SGM
No. NHTSA–2003–16318–0016.
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
49729
effect, exceeding track width, and it
moves in the expected direction.
NHTSA obtained its estimates by
adding the results from 12 individual
logistic regressions: Six types of crashes
multiplied by two car-weight groups
(less than 2,950 pounds; 2,950 pounds
or more).619 DRI does not appear to have
followed the same procedures, based on
the widely differing results.
Based on our review, NHTSA is not
persuaded by the DRI analysis.
NHTSA’s analyses do not corroborate
the 2005 DRI study that suggested mass
could be reduced without safety harm
and perhaps with safety benefit.
Moreover, even though NHTSA’s
analyses continue to attribute a much
larger effect for mass than for track
width or wheelbase in small cars,
NHTSA has never said that mass alone
is the single factor that increases or
decreases fatality risk. There may not be
a single factor, but rather it may be that
mass and some of the other factors that
are historically correlated with mass,
such as wheelbase and track width,
together are the factors.
We note that comparatively it would
seem the least harmful way to reduce
mass would be from material
substitution, where one replaces a heavy
material with a lighter one that delivers
the same performance, or other designs
that reduce mass while maintaining
wheelbase and track width. While this
may seem intuitively to be the case,
there is an absence of supporting data
for the thrust of the 2005 DRI analysis,
because those changes have not
happened to any substantial number of
vehicles in the real world. NHTSA thus
has no way, yet, of proving the intuitive
conclusion. We do know that mass has
historically been correlated with
wheelbase and track width, and that
reductions in mass have also reduced
those other factors. Until there is an
analysis that clearly demonstrates that
mass does not matter for safety, NHTSA
concludes it should be guided by the
decades’ worth of studies suggesting
618 Regression analysis involves modeling and
analyzing several variables, when the focus is on
the relationship between a dependent variable and
one or more independent variables. Logistic
regression analysis involves three variables.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00277
Fmt 4701
Sfmt 4700
619 See,
E:\FR\FM\28SEP2.SGM
e.g., Kahane (2003), Table 2 on p. xi.
28SEP2
EP28SE09.051</GPH>
2003 report, except for limiting the data
to model years 1991–98, instead of
1991–99, produces results that are not at
all like DRI’s. Mass still has the largest
EP28SE09.050</GPH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
However, applying NHTSA’s logistic
regression analyses 618 to NHTSA’s
database, exactly as described in the
agency’s response to comments on its
49730
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
In addition, we note that the
implementation of new Federal Motor
Vehicle Safety Standards, combined
with behavioral changes (e.g., further
increases in safety belt use), will
produce important reductions in the
number of deaths and injuries that
would otherwise occur in the vehicles
subject to this rulemaking over their
lifetime.
NHTSA seeks comments on its
analysis of the safety impacts of the
proposed standards. To aid the agency
in refining its analysis for the final rule,
including its attempts to assess
reasonable upper and lower ends of the
potential range of estimated fatalities,
NHTSA requests that each vehicle
manufacturer provide, for inclusion in
the record of this rulemaking, detailed
that mass is the most important of the
related factors.
The tables below contain NHTSA’s
estimates of the safety-related fatality
impacts of the proposed standards, the
costs associated with those impacts, and
the overall change in impacts given
other anticipated mitigating effects
during the next several years. Again, we
emphasize that the safety-related fatality
impacts presented below represent a
worst case scenario, and that NHTSA
believes that the fatality increases
associated with the anticipated weight
reductions could be significantly
smaller than those shown, because
manufacturers are unlikely to respond
to this rulemaking by decreasing the
footprint or reducing the structural
integrity of their vehicles.
information concerning the extent to
which and manner in which it plans to
reduce the weight of each of its models
for the period covered by this
rulemaking, and the cost of each method
used. Manufacturers should include in
those plans whether there will be any
footprint or other size reduction,
whether through reducing the size of an
existing model, mix shifting or other
means. Please also submit the analysis,
including engineering or computer
simulation analysis, performed to assess
the possible safety impacts of such
planned weight reduction. In addition,
please submit the results of any vehicle
crash or component tests that would aid
in assessing those impacts.
TABLE IV.G.7–1—COMPARISON OF THE CALCULATED WORST CASE WEIGHT SAFETY-RELATED FATALITY IMPACTS OF THE
PENDING PROPOSED STANDARDS OVER THE LIFETIME OF THE VEHICLES PRODUCED IN EACH MODEL YEAR
[Increase in fatalities compared to the Calendar Year 2007 fatality level]
MY 2012
MY 2013
MY 2014
MY 2015
MY 2016
Baseline MY 2011 standards continued for lifetime of vehicles
Passenger cars ....................................................................
Light trucks ...........................................................................
13
13
15
15
18
17
18
17
19
18
Combined ......................................................................
26
30
35
35
37
Proposed standards
Passenger cars ....................................................................
Light trucks ...........................................................................
42
18
64
20
165
64
242
106
379
150
Combined ......................................................................
60
84
229
348
530
Difference between proposed standards and baseline continued
Passenger cars ....................................................................
Light trucks ...........................................................................
29
5
49
5
147
47
224
89
360
132
Combined ......................................................................
34
54
194
313
493
NOTE—all estimates in this table are worst-case. Actual values could be significantly less.
TABLE IV.G.7–2—CALCULATED WORST CASE WEIGHT SAFETY-RELATED FATALITY IMPACTS ON SOCIETAL COSTS FOR
THE PROPOSED STANDARDS OVER THE LIFETIME OF THE VEHICLES PRODUCED IN EACH MODEL YEAR
[$ millions]
MY 2012
MY 2013
MY 2014
MY 2015
MY 2016
Total
Passenger cars ........................................
Light trucks ...............................................
177
31
299
31
897
287
1,366
543
2,916
805
4,935
1,696
Combined ..........................................
207
329
1,183
1,909
3,001
6,637
mstockstill on DSKH9S0YB1PROD with PROPOSALS
NOTE—all estimates in this table are worst-case. Actual values could be significantly less.
TABLE IV.G.7–3—ESTIMATED WORST CASE IMPACT OF WEIGHT ON CALCULATED FATALITIES BY CALENDAR YEAR
[Additional fatalities by model year and calendar year]
MY 2012
2012
2013
2014
2015
2016
.....
.....
.....
.....
.....
VerDate Nov<24>2008
3
3
3
3
3
MY 2013
MY 2014
MY 2015
MY 2016
MY 2017
MY 2018
MY 2019
MY 2020
..................
5
5
5
5
..................
..................
19
19
18
..................
..................
..................
30
29
..................
..................
..................
..................
47
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00278
Fmt 4701
Sfmt 4700
E:\FR\FM\28SEP2.SGM
28SEP2
Totals
3
8
27
57
102
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
49731
TABLE IV.G.7–3—ESTIMATED WORST CASE IMPACT OF WEIGHT ON CALCULATED FATALITIES BY CALENDAR YEAR—
Continued
[Additional fatalities by model year and calendar year]
MY 2012
2017
2018
2019
2020
.....
.....
.....
.....
MY 2013
3
3
3
2
MY 2014
5
5
4
4
MY 2015
17
16
16
15
MY 2016
28
27
26
24
MY 2017
46
44
42
40
47
46
44
42
MY 2018
MY 2019
MY 2020
..................
47
46
44
..................
..................
47
46
Totals
..................
..................
..................
47
146
187
226
264
NOTE—all estimates in this table are worst-case. Actual values could be significantly less.
The following table is based on the
worst-case scenario estimate for
fatalities.
TABLE IV.G.7–4—CALCULATED WORST CASE WEIGHT SAFETY IMPACTS ON SOCIETAL COSTS FOR THE PROPOSED
STANDARDS OVER THE LIFETIME OF THE VEHICLES PRODUCED IN EACH MODEL YEAR, ESTIMATED FATALITIES AND
ASSUMED INJURIES
[$ millions]
MY 2012
Undiscounted:
Passenger Cars .........................
Light Trucks ...............................
Combined ..................................
Discounted 3%:
Passenger Cars ................................
Light Trucks ......................................
Combined ..........................................
Discounted 7%:
Passenger Cars ................................
Light Trucks ......................................
Combined ..........................................
MY 2013
MY 2014
MY 2015
MY 2016
Total
$406
70
476
$686
70
756
$2,058
658
2,716
$3,136
1,246
4,382
$5,040
1,848
6,888
$11,326
3,892
15,218
337
56
393
570
56
626
1,709
528
2,237
2,604
1,000
3,604
4,185
1,482
5,668
9,405
3,122
12,527
272
44
316
460
44
504
1,379
415
1,794
2,101
785
2,886
3,377
1,165
4,542
7,588
2,453
10,042
NOTE—all estimates in this table are worst-case. Actual values could be significantly less.
Discount factors: passenger cars, 3% = 0.8304, 7% = 0.67; light trucks, 3% = 0.8022, 7% = 0.6303.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
8. What Other Impacts (Quantitative and
Unquantifiable) Will These Proposed
Standards Have?
In addition to the quantified benefits
and costs of fuel economy standards, the
standards we are proposing will have
other impacts that we have not
quantified in monetary terms. The
decision on whether or not to quantify
a particular impact depends on several
considerations:
• Does the impact exist, and can the
magnitude of the impact reasonably be
attributed to the outcome of this
rulemaking?
• Would quantification help NHTSA
and the public evaluate standards that
may be set in rulemaking?
• Is the impact readily quantifiable in
monetary terms? Do we know how to
quantify a particular impact?
• If quantified, would the monetary
impact likely be material?
• Can a quantification be derived
with a sufficiently narrow range of
uncertainty so that the estimate is
useful?
NHTSA expects that this rulemaking
will have a number of genuine, material
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
impacts that have not been quantified
due to one or more of the considerations
listed above. In some cases, further
research may yield estimates for future
rulemakings.
Technology Forcing
The proposed rule will improve the
fuel economy of the U.S. new vehicle
fleet, but it will also increase the cost
(and presumably, the price) of new
passenger cars and light trucks built
during MYs 2012–2016. We anticipate
that the cost, scope, and duration of this
rule, as well as the steadily rising
standards it requires, will cause
automakers and suppliers to devote
increased attention to methods of
improving vehicle fuel economy.
This increased attention will
stimulate additional research and
engineering, and we anticipate that,
over time, innovative approaches to
reducing the fuel consumption of light
duty vehicles will emerge. These
innovative approaches may reduce the
cost of the proposed rule in its later
years, and also increase the set of
feasible technologies in future years.
PO 00000
Frm 00279
Fmt 4701
Sfmt 4700
We have attempted to estimate the
effect of learning on known technologies
within the period of the proposed
rulemaking. We have not attempted to
estimate the extent to which not-yetinvented technologies will appear,
either within the time period of the
current rulemaking or that might be
available after MY 2016.
Effects on Vehicle Maintenance,
Operation, and Insurance Costs
Any action that increases the cost of
new vehicles will subsequently make
such vehicles more costly to maintain,
repair, and insure. In general, this effect
can be expected to be a positive linear
function of vehicle costs. The proposed
rulemaking, however, raises vehicle
costs by only a few percent at most, and
hence the change in maintenance and
operation costs, distributed over the
expected life of regulated vehicles and
discounted back to the present, is
probably de minimus in terms of the full
analysis.
One of the common consequences of
using more complex or innovative
technologies is a decline in vehicle
reliability and an increase in
E:\FR\FM\28SEP2.SGM
28SEP2
49732
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
maintenance costs, borne, in part, by the
manufacturer (through warranty costs,
which are included in the indirect costs
of production) and, in part by the
vehicle owner. NHTSA believes that
this effect is difficult to quantify, but
likely to be de minimus as well.
Effects on Vehicle Miles Traveled
(VMT)
While NHTSA has estimated the
impact of the rebound effect on VMT,
we have not estimated how a change in
vehicle sales could impact VMT. Since
the value of the fuel savings to
consumers outweighs the technology
costs, new vehicle sales are predicted to
increase. A change in vehicle sales will
have complicated and a hard-to-quantify
effect on vehicle miles traveled given
the rebound effect, the trade-in of older
vehicles, etc. In general, overall VMT
should not be significantly affected.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Effect on Composition of Passenger Car
and Light Truck Sales
In addition, manufacturers, to the
extent that they pass on costs to
customers, may distribute these costs
across their motor vehicle fleets in ways
that affect the composition of sales by
model. To the extent that changes in the
composition of sales occur, this could
affect fuel savings to some degree.
However, NHTSA’s view is that the
scope for compositional effects is
relatively small, since the total effect of
the regulation itself will be to increase
costs by only a few percent.
Compositional effects might be
important with respect to compliance
costs for individual manufacturers, but
are unlikely to be material for the rule
as a whole.
NHTSA is continuing to study
methods of estimating compositional
effects and may be able to develop
methods for use in future rulemakings.
Effects on the Used Vehicle Market
The effect of this rule on the use and
scrappage of older vehicles will be
related to its effects on new vehicle
prices, the fuel efficiency of new vehicle
models, and the total sales of new
vehicles. If the value of fuel savings
resulting from improved fuel efficiency
to the typical potential buyer of a new
vehicle outweighs the average increase
in new models’ prices, sales of new
vehicles will rise, while scrappage rates
of used vehicles will increase slightly.
This will cause the ‘‘turnover’’ of the
vehicle fleet—that is, the retirement of
used vehicles and their replacement by
new models—to accelerate slightly, thus
accentuating the anticipated effect of the
rule on fleet-wide fuel consumption and
CO2 emissions. However, if potential
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
buyers value future fuel savings
resulting from the increased fuel
efficiency of new models at less than the
increase in their average selling price,
sales of new vehicles will decline, as
will the rate at which used vehicles are
retired from service. This effect will
slow the replacement of used vehicles
by new models, and thus partly offset
the anticipated effects of the proposed
rules on fuel use and emissions.
Because the agencies are uncertain
about how the value of projected fuel
savings from the proposed rules to
potential buyers will compare to their
estimates of increases in new vehicle
prices, we have not attempted to
estimate explicitly the effects of the rule
on scrappage of older vehicles and the
turnover of the vehicle fleet. We seek
comment on the methods that might be
used to estimate the effect of the
proposed rule on the scrappage and use
of older vehicles as part of the analysis
to be conducted for the final rule.
Impacts of Changing Fuel Composition
on Costs, Benefits, and Emissions
EPAct, as amended by EISA, creates a
Renewable Fuels Standard that sets
targets for greatly increased usage of
renewable fuels over the next decade.
The law requires fixed volumes of
renewable fuels to be used—volumes
that are not linked to actual usage of
transportation fuels.
Ethanol and biodiesel (in the required
volumes) may increase the cost of
gasoline and diesel depending on crude
oil prices and tax subsidies. The extra
cost of renewable fuels will be borne
through a cross-subsidy: The price of
every gallon of gasoline will rise
sufficiently to pay for the extra cost of
renewable fuels. The proposed CAFE
rule, by reducing total fuel
consumption, would tend to increase
any necessary cross-subsidy per gallon
of fuel, and hence raise the market price
of transportation fuels, while there
would be no change in the volume or
cost of renewable fuels used.
Some of these effects are indirectly
incorporated in NHTSA’s analysis of the
proposed CAFE rule because they are
directly incorporated in EIA’s
projections of future gasoline and diesel
prices in the Annual Energy Outlook,
which incorporates in its baseline both
a Renewable Fuel Standard and an
increasing CAFE standard.
The net effect of incorporating an RFS
then might be to slightly reduce the
benefits of the rule because affected
vehicles might be driven slightly less,
and because they emit slightly fewer
greenhouse gas emissions per gallon. In
addition there might be deadweight
losses from the induced reduction in
PO 00000
Frm 00280
Fmt 4701
Sfmt 4700
VMT. All of these effects are difficult to
estimate, because of uncertainty in
future crude oil prices, uncertainty in
future tax policy, and uncertainty about
how petroleum marketers will actually
comply with the RFS, but they are likely
to be small, because the cumulative
deviation from baseline fuel
consumption induced by the proposed
rule will itself be small.
Macroeconomic Impacts of This Rule
The proposed rule will have a number
of consequences that may have shortrun and longer-run macroeconomic
effects. It is important to recognize,
however, that these effects do not
represent benefits in addition to those
resulting directly from reduced fuel
consumption and emissions. Instead,
they represent the economic effects that
occur as these direct impacts filter
through the interconnected markets
comprising the U.S. economy.
• Increasing the cost and quality (in
the form of better fuel economy) of new
light duty vehicles will have ripple
effects through the rest of the economy.
Depending on the assumptions made,
the rule could generate very small
increases or declines in output.
• Reducing consumption of imported
petroleum should induce an increase in
long-run output.
• Decreasing the world price of oil
should induce an increase in long-run
output.
NHTSA has not studied the
macroeconomic effects of the proposal,
however a discussion of the economywide impacts of this rule conducted by
EPA is included in Section III.H.5.
Although economy-wide models do not
capture all of the potential impacts of
this rule (e.g., improvements in product
quality), these models can provide
valuable insights on how this proposal
would impact the U.S. economy in ways
that extend beyond the transportation
sector.
Military Expenditures
This analysis contains quantified
estimates for the social cost of
petroleum imports based on monopsony
effects and the risk of oil market
disruption. We have not included
estimates of the cost of military
expenditures associated with petroleum
imports.
H. Vehicle Classification
Vehicle classification, for purposes of
the CAFE program, refers to whether
NHTSA considers a vehicle to be a
passenger automobile or a light truck,
and thus subject to either the passenger
automobile or the light truck standards.
As NHTSA explained in the MY 2011
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
rulemaking, EPCA categorizes some
light 4-wheeled vehicles as passenger
automobiles (cars) and the balance as
non-passenger automobiles (light
trucks). EPCA defines passenger
automobiles as any automobile (other
than an automobile capable of offhighway operation) which NHTSA
decides by rule is manufactured
primarily for use in the transportation of
not more than 10 individuals. EPCA
501(2), 89 Stat. 901. NHTSA created
regulatory definitions for passenger
automobiles and light trucks, found at
49 CFR part 523, to guide the agency
and manufacturers in classifying
vehicles.
Under EPCA, there are two general
groups of automobiles that qualify as
non-passenger automobiles or light
trucks: (1) Those defined by NHTSA in
its regulations as other than passenger
automobiles due to their having design
features that indicate they were not
manufactured ‘‘primarily’’ for
transporting up to ten individuals; and
(2) those expressly excluded from the
passenger category by statute due to
their capability for off-highway
operation, regardless of whether they
might have been manufactured
primarily for passenger transportation.
NHTSA’s classification rule directly
tracks those two broad groups of nonpassenger automobiles in subsections (a)
and (b), respectively, of 49 CFR 523.5.
For the purpose of this NPRM for the
MYs 2012–2016 standards, EPA agreed
to use NHTSA’s regulatory definitions
for determining which vehicles would
be subject to which CO2 standards.
In the MY 2011 rulemaking, NHTSA
took a fresh look at the regulatory
definitions in light of several factors and
developments: its desire to ensure
clarity in how vehicles are classified,
the passage of EISA, and the Ninth
Circuit’s decision in CBD v. NHTSA.620
NHTSA explained the origin of the
current definitions of passenger
automobiles and light trucks by tracing
them back through the history of the
CAFE program, and did not propose to
change the definitions themselves at
that time, because the agency concluded
that the definitions were largely
consistent with Congress’ intent in
separating passenger automobiles and
light trucks, but also in part because the
agency tentatively concluded that doing
so would not lead to increased fuel
savings. However, the agency tightened
the definitions in § 523.5 to ensure that
only vehicles that actually have 4WD
will be classified as off-highway
vehicles by reason of having 4WD (to
prevent 2WD SUVs that also come in a
620 538
F.3d 1172 (9th Cir. 2008).
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
4WD ‘‘version’’ from qualifying
automatically as ‘‘off-road capable’’
simply by reason of the existence of the
4WD version). It also took this action to
ensure that manufacturers may only use
the ‘‘greater cargo-carrying capacity’’
criterion of 523.5(a)(4) for cargo vantype vehicles, rather than for SUVs with
removable second-row seats unless they
truly have greater cargo-carrying than
passenger-carrying capacity ‘‘as sold’’ to
the first retail purchaser. NHTSA
concluded that these changes increased
clarity, were consistent with EPCA and
EISA, and responded to the Ninth
Circuit’s decision with regard to vehicle
classification.
However, manufacturers currently
have an incentive to classify vehicles as
light trucks because, generally speaking,
the fuel economy target for light trucks
with a given footprint is less stringent
than the target for passenger cars with
the same footprint. This is due to the
fact that the curves are based on actual
fuel economy capabilities of the
vehicles to which they apply. Because
of characteristics like 4WD, towing and
hauling capacity, and heavy weight, the
vehicles in the current light truck fleet
are generally less capable of achieving
higher fuel economy levels as compared
to the vehicles in the passenger car fleet.
2WD SUVs are the vehicles that could
be most readily redesigned so that they
can be ‘‘moved’’ from the passenger car
to the light truck fleet. A manufacturer
could do this by adding a third row of
seats, for example, or boosting GVWR
over 6,000 lbs for a 2WD SUV that
already meets the ground clearance
requirements for ‘‘off-road capability.’’
A change like this may only be possible
during a vehicle redesign, but since
vehicles are redesigned, on average,
every 5 years, at least some
manufacturers may make such changes
before or during the model years
covered by this rulemaking.
In looking forward to model years
beyond 2011 and considering how
CAFE should operate in the context of
the National Program and previouslyreceived comments as requested by
President Obama, NHTSA seeks
comment on the following potential
changes to NHTSA’s vehicle
classification system. We request
comment also on whether, if any of the
changes were to be adopted, they should
be applied to any of the model years
covered by this rulemaking or whether,
due to lead time concerns, they should
apply only to MY 2017 and thereafter.
Reclassifying Minivans and other ‘‘3row’’ light trucks as passenger cars (i.e.,
removing 49 CFR 523.5(a)(5)):
NHTSA has received repeated
comments over the course of the last
PO 00000
Frm 00281
Fmt 4701
Sfmt 4700
49733
several rulemakings from environmental
and consumer groups regarding the
classification of minivans as light trucks
instead of as passenger cars.
Commenters have argued that because
minivans generally have three rows of
seats, are built on unibody chassis, and
are used primarily for transporting
passengers, they should be classified as
passenger cars. NHTSA did not accept
these arguments in the MY 2011 final
rule, due to concerns that moving
minivans to the passenger car fleet
would lower the fuel economy targets
for those passenger cars having
essentially the same footprint as the
minivans, and thus lower the overall
fuel average fuel economy level that the
manufacturers would need to meet.
However, due to the new methodology
for setting standards, the as-yetunknown fuel-economy capabilities of
future minivans and 3-row 2WD SUVs,
and the unknown state of the vehicle
market (particularly for MYs 2017 and
beyond), NHTSA can no longer say with
certainty that moving these vehicles
could negatively affect potential
stringency levels for either passenger
cars or light trucks.
Although such a change would not be
made applicable during the MY 2012–
2016 time frame, we seek comment on
why NHTSA should or should not
consider, as part of this rulemaking,
reclassifying minivans (and other
current light trucks that qualify as such
because they have three rows of
designated seating positions as standard
equipment) for MYs 2017 and after.
Classifying ‘‘like’’ vehicles together:
Many commenters objected in the
rulemaking for the MY 2011 standards
to NHTSA’s regulatory separation of
‘‘like’’ vehicles. Industry commenters
argued that it was technologically
inappropriate for NHTSA to place 4WD
and 2WD versions of the same SUV in
separate classes. They argued that the
vehicles are the same, except for their
drivetrain features, thus giving them
similar fuel economy improvement
potential. They further argued that all
SUVs should be classified as light
trucks. Environmental and consumer
group commenters, on the other hand,
argued that 4WD SUVs and 2WD SUVs
that are ‘‘off-highway capable’’ by virtue
of a GVWR above 6,000 pounds should
be classified as passenger cars, since
they are primarily used to transport
passengers. In the MY 2011 rulemaking,
NHTSA rejected both of these sets of
arguments. NHTSA concluded that 2WD
SUVs that were neither ‘‘off-highway
capable’’ nor possessed ‘‘truck-like’’
functional characteristics were
appropriately classified as passenger
cars. At the same time, NHTSA also
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49734
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
concluded that because Congress
explicitly designated vehicles with
GVWRs over 6,000 pounds as ‘‘offhighway capable’’ (if they meet the
ground clearance requirements
established by the agency), NHTSA did
not have authority to move these
vehicles to the passenger car fleet.
With regard to the first argument, that
‘‘like’’ vehicles should be classified
similarly (i.e., that 2WD SUVs should be
classified as light trucks because,
besides their drivetrain, they are ‘‘like’’
the 4WD version that qualifies as a light
truck), NHTSA continues to believe that
2WD SUVs that do not meet any part of
the existing regulatory definition for
light trucks should be classified as
passenger cars. However, NHTSA
recognizes the additional point raised
by industry commenters in the MY 2011
rulemaking that manufacturers may
respond to this tighter classification by
ceasing to build 2WD versions of SUVs,
which could reduce fuel savings. In
response to that point, NHTSA stated in
the MY 2011 final rule that it expects
that manufacturer decisions about
whether to continue building 2WD
SUVs will be driven in much greater
measure by consumer demand than by
NHTSA’s regulatory definitions. If it
appears, in the course of the next
several model years, that manufacturers
are indeed responding to the CAFE
regulatory definitions in a way that
reduces overall fuel savings from
expected levels, it may be appropriate
for NHTSA to review this question
again. NHTSA seeks comment on how
the agency might go about reviewing
this question as more information about
manufacturer behavior is accumulated.
With regard to the second argument,
that NHTSA should move vehicles that
qualify as ‘‘off-highway capable’’ from
the light truck to the passenger car fleet
because they are primarily used to
transport passengers, NHTSA reiterates
that EPCA is clear that certain vehicles
are non-passenger automobiles (i.e.,
light trucks) because of their offhighway capabilities, regardless of how
they may be used day-to-day.
However, NHTSA could explore
additional approaches, although not all
could be pursued on current law.
Possible alternative legal regimes might
include: (a) classifying vehicles as
passenger cars or light trucks based on
use alone (rather than characteristics);
(b) removing the regulatory distinction
altogether and setting standards for the
entire fleet of vehicles instead of for
separate passenger car and light truck
fleets; or (c) dividing the fleet into
multiple categories more consistent
with current vehicle fleets (i.e., sedans,
minivans, SUVs, pickup trucks, etc.).
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
NHTSA seeks comment on whether and
why it should pursue any of these
courses of action.
I. Compliance and Enforcement
1. Overview
NHTSA’s CAFE enforcement program
and the compliance flexibilities
available to manufacturers are largely
established by statute—unlike the CAA,
EPCA and EISA are very prescriptive
and leave the agency limited authority
to increase the flexibilities available to
manufacturers. This was intentional,
however. Congress balanced the energy
saving purposes of the statute against
the benefits of the various flexibilities
and incentives it provided and placed
precise limits on those flexibilities and
incentives. For example, while the
Department sought authority for
unlimited transfer of credits between a
manufacturer’s car and light truck fleets,
Congress limited the extent to which a
manufacturer could raise its average fuel
economy for one of its classes of
vehicles through credit transfer in lieu
of adding more fuel saving technologies.
It did not want these provisions to slow
progress toward achieving greater
energy conservation or other policy
goals. In keeping with EPCA’s focus on
energy conservation, NHTSA has done
its best, for example, in crafting the
credit transfer and trading regulations
authorized by EISA, to ensure that total
fuel savings are preserved when
manufacturers exercise their compliance
flexibilities.
The following sections explain how
NHTSA determines whether
manufacturers are in compliance with
the CAFE standards for each model
year, and how manufacturers may
address potential non-compliance
situations through the use of
compliance flexibilities or fine payment.
2. How Does NHTSA Determine
Compliance?
a. Manufacturer Submission of Data and
CAFE Testing by EPA
NHTSA begins to determine CAFE
compliance by considering pre- and
mid-model year reports submitted by
manufacturers pursuant to 49 CFR part
537, Automotive Fuel Economy
Reports.621 The reports for the current
model year are submitted to NHTSA
every December and July. As of the time
of this NPRM, NHTSA has received
mid-model year reports from
manufacturers for MY 2009, and
anticipates receiving pre-model year
reports for MY 2010 at the end of this
621 49 CFR Part 537 is authorized by 49 U.S.C.
32907.
PO 00000
Frm 00282
Fmt 4701
Sfmt 4700
year. Although the reports are used for
NHTSA’s reference only, they help the
agency, and the manufacturers who
prepare them, anticipate potential
compliance issues as early as possible,
and help manufacturers plan
compliance strategies. Currently,
NHTSA receives these reports in paper
form. In order to facilitate submission
by manufacturers and consistent with
the President’s electronic government
initiatives, NHTSA proposes to amend
Part 537 to allow for electronic
submission of the pre- and mid-model
year CAFE reports.
NHTSA makes its ultimate
determination of manufacturers’ CAFE
compliance upon receiving EPA’s
official certified and reported CAFE
data. The EPA certified data is based on
vehicle testing and on final model year
data submitted by manufacturers to EPA
pursuant to 40 CFR 600.512, Model Year
Report, no later than 90 days after the
end of the calendar year. Pursuant to 49
U.S.C. 32904(e), EPA is responsible for
calculating automobile manufacturers’
CAFE values so that NHTSA can
determine compliance with the CAFE
standards. In measuring the fuel
economy of passenger cars, EPA is
required by EPCA 622 to use the EPA test
procedures in place as of 1975 (or
procedures that give comparable
results), which are the city and highway
tests of today, with adjustments for
procedural changes that have occurred
since 1975. EPA uses similar procedures
for light trucks, although, as noted
above, EPCA does not require it to do
so. One notable shortcoming of the 1975
test procedure is that it does not include
a provision for air conditioner usage
during the test cycle. As discussed in
Section III above of the preamble, air
conditioner usage increases the load on
a vehicle’s engine, reducing fuel
efficiency and increasing CO2
emissions. Since the air conditioner is
not turned on during testing, equipping
a vehicle model with a relatively
inefficient air conditioner will not
adversely affect that model’s measured
fuel economy, while quipping a vehicle
model with a relatively efficient air
conditioner will not raise that model’s
measured fuel economy. The fuel
economy test procedures for light trucks
could be amended through rulemaking
to provide for air conditioner operation
during testing and to take other steps for
improving the accuracy and
representativeness of fuel economy
measurements. Comment is sought in
section I.D.2 regarding implementing
such amendments beginning in MY
2017 and also on the more immediate
622 49
E:\FR\FM\28SEP2.SGM
U.S.C. 32904(c).
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
interim step of providing credits under
49 U.S.C. 32904(c) for light trucks
equipped with relatively efficient air
conditioners for MYs 2012–2016.
Modernizing the passenger car test
procedures as well would not be
possible under EPCA as currently
written.
b. NHTSA Then Analyzes EPA–
Certified CAFE Values for Compliance
Determining CAFE compliance is
fairly straightforward. After testing, EPA
verifies the data submitted by
manufacturers and issues final CAFE
reports to manufacturers and to NHTSA
between April and October of each year
(for the previous model year). NHTSA
then identifies the manufacturers’
compliance categories (fleets) that do
not meet the applicable CAFE fleet
standards.
To determine if manufacturers have
earned credits that would offset those
shortfalls, NHTSA calculates a
cumulative credit status for each of a
manufacturer’s vehicle compliance
categories according to 49 U.S.C. 32903.
If a manufacturer’s compliance category
exceeds the applicable fuel economy
standard, NHTSA adds credits to the
account for that compliance category. If
a manufacturer’s vehicles in a particular
compliance category fall below the
standard fuel economy value, NHTSA
will provide written notification to the
manufacturer that it has not met a
particular fleet standard. The
manufacturer will be required to
confirm the shortfall and must either:
Submit a plan indicating it will allocate
existing credits, and/or for MY 2011 and
later, how it will earn, transfer and/or
acquire credits; or pay the appropriate
civil penalty. The manufacturer must
submit a plan or payment within 60
days of receiving agency notification.
The amount of credits are determined
by multiplying the number of tenths of
a mpg by which a manufacturer
exceeds, or falls short of, a standard for
a particular category of automobiles by
the total volume of automobiles of that
category manufactured by the
manufacturer for a given model year.
Credits used to offset shortfalls are
subject to the three and five year
limitations as described in 49 U.S.C.
32903(a). Transferred credits are subject
to the limitations specified by 49 U.S.C.
32903(g)(3). The value of each credit,
when used for compliance, received via
trade or transfer is adjusted, using the
adjustment factor described in 49 CFR
part 536.4, pursuant to 49 U.S.C.
32903(f)(1). Credit allocation plans
received from the manufacturer will be
reviewed and approved by NHTSA.
NHTSA will approve a credit allocation
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
plan unless it finds the proposed credits
are unavailable or that it is unlikely that
the plan will result in the manufacturer
earning sufficient credits to offset the
subject credit shortfall. If a plan is
approved, NHTSA will revise the
respective manufacturer’s credit account
accordingly. If a plan is rejected,
NHTSA will notify the respective
manufacturer and request a revised plan
or payment of the appropriate fine.
In the event that a manufacturer does
not comply with a CAFE standard, even
after the consideration of credits, EPCA
provides for the assessing of civil
penalties. The Act specifies a precise
formula for determining the amount of
civil penalties for such a
noncompliance. The penalty, as
adjusted for inflation by law, is $5.50 for
each tenth of a mpg that a
manufacturer’s average fuel economy
falls short of the standard for a given
model year multiplied by the total
volume of those vehicles in the affected
fleet (i.e., import or domestic passenger
car, or light truck), manufactured for
that model year. The amount of the
penalty may not be reduced except
under the unusual or extreme
circumstances specified in the statute.
All penalties are paid to the U.S.
Treasury and not to NHTSA itself.
Unlike the National Traffic and Motor
Vehicle Safety Act, EPCA does not
provide for recall and remedy in the
event of a noncompliance. The presence
of recall and remedy provisions 623 in
the Safety Act and their absence in
EPCA is believed to arise from the
difference in the application of the
safety standards and CAFE standards. A
safety standard applies to individual
vehicles; that is, each vehicle must
possess the requisite equipment or
feature which must provide the
requisite type and level of performance.
If a vehicle does not, it is noncompliant.
Typically, a vehicle does not entirely
lack an item or equipment or feature.
Instead, the equipment or features fails
to perform adequately. Recalling the
vehicle to repair or replace the
noncompliant equipment or feature can
usually be readily accomplished.
In contrast, a CAFE standard applies
to a manufacturer’s entire fleet for a
model year. It does not require that a
particular individual vehicle be
equipped with any particular equipment
or feature or meet a particular level of
fuel economy. It does require that the
manufacturer’s fleet, as a whole,
comply. Further, although under the
attribute-based approach to setting
CAFE standards fuel economy targets
623 49 U.S.C. 30120, Remedies for defects and
noncompliance.
PO 00000
Frm 00283
Fmt 4701
Sfmt 4700
49735
are established for individual vehicles
based on their footprints, the vehicles
are not required to comply with those
targets on a model-by-model or vehicleby-vehicle basis. However, as a practical
matter, if a manufacturer chooses to
design some vehicles so they fall below
their target levels of fuel economy, it
will need to design other vehicles so
they exceed their targets if the
manufacturer’s overall fleet average is to
meet the applicable standard.
Thus, under EPCA, there is no such
thing as a noncompliant vehicle, only a
noncompliant fleet. No particular
vehicle in a noncompliant fleet is any
more, or less, noncompliant than any
other vehicle in the fleet.
After enforcement letters are sent,
NHTSA continues to monitor receipt of
credit allocation plans or civil penalty
payments that are due within 60 days
from the date of receipt of the letter by
the vehicle manufacturer, and takes
further action if the manufacturer is
delinquent in responding.
3. What Compliance Flexibilities Are
Available Under the CAFE Program and
How Do Manufacturers Use Them?
There are three basic flexibilities
permitted by EPCA/EISA that
manufacturers can use to achieve
compliance with CAFE standards
beyond applying fuel economyimproving technologies: (1) Building
dual- and alternative-fueled vehicles; (2)
banking, trading, and transferring
credits earned for exceeding fuel
economy standards; and (3) paying
fines. We note again that while these
flexibility mechanisms will reduce
compliance costs to some degree for
most manufacturers, 49 U.S.C. 32902(h)
expressly prohibits NHTSA from
considering the availability of credits
(either for building dual- or alternativefueled vehicles or from accumulated
transfers or trades) in determining the
level of the standards. Thus, NHTSA
may not raise CAFE standards because
manufacturers have enough credits to
meet higher standards. This is an
important difference from EPA’s
authority under the CAA, which does
not contain such a restriction, and
which allows EPA to set higher
standards as a result.
a. Dual- and Alternative-Fueled
Vehicles
As discussed at length in prior
rulemakings, EPCA encourages
manufacturers to build alternativefueled and dual- (or flexible-) fueled
vehicles by providing special fuel
economy calculations for ‘‘dedicated’’
(that is, 100 percent) alternative fueled
vehicles and ‘‘dual-fueled’’ (that is,
E:\FR\FM\28SEP2.SGM
28SEP2
49736
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
capable of running on either the
alternative fuel or gasoline) vehicles.
The fuel economy of a dedicated
alternative fuel vehicle is determined by
dividing its fuel economy in equivalent
miles per gallon of gasoline or diesel
fuel by 0.15.624 Thus, a 15 mpg
dedicated alternative fuel vehicle would
be rated as 100 mpg. For dual-fueled
vehicles, the rating is the average of the
fuel economy on gasoline or diesel and
the fuel economy on the alternative fuel
vehicle divided by 0.15.625
For example, this calculation
procedure turns a dual-fueled vehicle
that averages 25 mpg on gasoline or
diesel into a 40 mpg vehicle for CAFE
purposes. This assumes that (1) the
vehicle operates on gasoline or diesel 50
percent of the time and on alternative
fuel 50 percent of the time; (2) fuel
economy while operating on alternative
fuel is 15 mpg (15/.15 = 100 mpg); and
(3) fuel economy while operating on gas
or diesel is 25 mpg. Thus:
CAFE FE = 1/{0.5/(mpg gas) + 0.5/(mpg
alt fuel)} = 1/{0.5/25 + 0.5/100) =
40 mpg
In the case of natural gas, the
calculation is performed in a similar
manner. The fuel economy is the
weighted average while operating on
natural gas and operating on gas or
diesel. The statute specifies that 100
cubic feet (ft3) of natural gas is
equivalent to 0.823 gallons of gasoline.
The gallon equivalency of natural gas is
equal to 0.15 (as for other alternative
fuels).626 Thus, if a vehicle averages 25
miles per 100 ft3 of natural gas, then:
CAFE FE = (25/100) * (100/.823)* (1/
0.15) = 203 mpg
Congress extended the incentive in
EISA for dual-fueled automobiles
through MY 2019, but provided for its
phase out between MYs 2015 and
2019.627 The maximum fuel economy
increase which may be attributed to the
incentive is thus as follows:
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Model year
mpg
increase
MYs 1993–2014 .....................
MY 2015 .................................
MY 2016 .................................
MY 2017 .................................
MY 2018 .................................
MY 2019 .................................
After MY 2019 ........................
1.2
1.0
0.8
0.6
0.4
0.2
0
624 49
U.S.C. 32905(a).
U.S.C. 32905(b)
626 49 U.S.C. 32905(c).
627 49 U.S.C. 32906(a). NHTSA notes that the
incentive for dedicated alternative-fuel
automobiles, automobiles that run exclusively on
an alternative fuel, at 49 U.S.C. 32905(a), was not
phased-out by EISA.
625 49
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
49 CFR part 538 implements the
statutory alternative-fueled and dualfueled automobile manufacturing
incentive. NHTSA is proposing to
update Part 538 as part of this NPRM to
reflect the EISA changes, but to the
extent that 49 U.S.C. 32906(a) differs
from the current version of 49 CFR
538.9, the statute supersedes the
regulation, and regulated parties may
rely on the text of the statute.
A major difference between EPA’s
statutory authority and NHTSA’s
statutory authority is that the CAA
contains no specific prescriptions with
regard to credits for dual- and
alternative-fueled vehicles comparable
to those found in EPCA/EISA. As an
exercise of that authority, and as
discussed in Section III above, EPA is
offering similar credits for dual- and
alternative-fueled vehicles through MY
2015 for compliance with its CO2
standards, but for MY 2016 and beyond
EPA will establish CO2 emission levels
for alternative fuel vehicles based on
measurement of actual CO2 emissions
during testing, plus a manufacturer
demonstration that the vehicles are
actually being run on the alternative
fuel. NHTSA has no such authority
under EPCA/EISA to require that
vehicles manufactured for the purpose
of obtaining the credit actually be run
on the alternative fuel, but requests
comment on whether it should seek
legislative changes to revise its authority
to address this issue.
b. Credit Trading and Transfer
In the MY 2011 final rule, NHTSA
established Part 536 for credit trading
and transfer. Part 536 implements the
provisions in EISA authorizing NHTSA
to establish by regulation a credit
trading program and directing it to
establish by regulation a credit transfer
program.628 Since its enactment, EPCA
has permitted manufacturers to earn
credits for exceeding the standards and
to carry those credits backward or
forward. EISA extended the ‘‘carryforward’’ period from three to five
model years, and left the ‘‘carry-back’’
period at three model years. Under Part
536, credit holders (including, but not
limited to, manufacturers) will have
credit accounts with NHTSA, and will
be able to hold credits, use them to
achieve compliance with CAFE
628 Congress required that DOT establish a credit
‘‘transferring’’ regulation, to allow individual
manufacturers to move credits from one of their
fleets to another (e.g., using a credit earned for
exceeding the light truck standard for compliance
with the domestic passenger car standard). Congress
allowed DOT to establish a credit ‘‘trading’’
regulation, so that credits may be bought and sold
between manufacturers and other parties.
PO 00000
Frm 00284
Fmt 4701
Sfmt 4700
standards, transfer them between
compliance categories, or trade them. A
credit may also be cancelled before its
expiry date, if the credit holder so
chooses. Traded and transferred credits
are subject to an ‘‘adjustment factor’’ to
ensure total oil savings are preserved, as
required by EISA. EISA also prohibits
credits earned before MY 2011 from
being transferred, so NHTSA has
developed several regulatory restrictions
on trading and transferring to facilitate
Congress’ intent in this regard. EISA
also establishes a ‘‘cap’’ for the
maximum increase in any compliance
category attributable to transferred
credits: for MYs 2011–2013, transferred
credits can only be used to increase a
manufacturer’s CAFE level in a given
compliance category by 1.0 mpg; for
MYs 2014–2017, by 1.5 mpg; and for
MYs 2018 and beyond, by 2.0 mpg.
NHTSA recognizes that some
manufacturers may have to rely on
credit transferring for compliance in
MYs 2012–2017.629 As a way to improve
the transferring flexibility mechanism
for manufacturers, NHTSA interprets
EISA not to prohibit the banking of
transferred credits for use in later model
years. Thus, NHTSA believes that the
language of EISA may be read to allow
manufacturers to transfer credits from
one fleet that has an excess number of
credits, within the limits specified, to
another fleet that may also have excess
credits instead of transferring only to a
fleet that has a credit shortfall. This
would mean that a manufacturer could
transfer a certain number of credits each
year and bank them, and then the
credits could be carried forward or back
‘‘without limit’’ later if and when a
shortfall ever occurred in that same
fleet. NHTSA bases this interpretation
on 49 U.S.C. 32903(g)(2), which states
that transferred credits ‘‘are available to
be used in the same model years that the
manufacturer could have applied such
credits under subsections (a), (b), (d),
and (e), as well as for the model year in
which the manufacturer earned such
credits.’’ The EISA limitation applies
only to the application of such credits
for compliance in particular model
years, and not their transfer per se. If
transferred credits have the same
lifespan and may be used in carry-back
and carry-forward plans, it seems
reasonable that they should be allowed
to be stored in any fleet, rather than
only in the fleet in which they were
629 In contrast, manufacturers stated in comments
in NHTSA’s MY 2011 rulemaking that they did not
anticipate a robust market for credit trading, due to
competitive concerns. NHTSA does not yet know
whether those concerns will continue to deter
manufacturers from exercising the trading
flexibility during MYs 2012–2016.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
earned. Of course, manufacturers could
not transfer and bank credits for
purposes of achieving the minimum
standard for domestically-manufactured
passenger cars, as prohibited by 49
U.S.C. 32903(g)(4). Transferred and
banked credits would additionally still
be subject to the adjustment factor when
actually used, which would help to
ensure that total oil savings are
preserved while still offering greater
flexibility to manufacturers. This
interpretation of EISA also helps
NHTSA, to some extent, to harmonize
better with EPA’s CO2 program, which
allows unlimited banking and transfer
of credits. NHTSA seeks comment on
this interpretation of EISA.
c. Payment of Fines
If a manufacturer’s average miles per
gallon for a given compliance category
(domestic passenger car, imported
passenger car, light truck) falls below
the applicable standard, and the
manufacturer cannot make up the
difference by using credits earned or
acquired, the manufacturer is subject to
penalties. The penalty, as mentioned, is
$5.50 for each tenth of a mpg that a
manufacturer’s average fuel economy
falls short of the standard for a given
model year, multiplied by the total
volume of those vehicles in the affected
fleet, manufactured for that model year.
NHTSA has collected $772,850,459.00
to date in CAFE penalties, the largest
ever being paid by DaimlerChrysler for
its MY 2006 import passenger car fleet,
$30,257,920.00. For their MY 2007
fleets, five manufacturers paid CAFE
fines for not meeting an applicable
standard—Ferrari, Maserati, MercedesBenz, Porsche, and Volkswagen—for a
total of $37,385,941.00
NHTSA recognizes that some
manufacturers may use the option to
pay fines as a CAFE compliance
flexibility—presumably, when paying
fines is deemed more cost-effective than
applying additional fuel economyimproving technology, or when adding
fuel economy-improving technology
would fundamentally change the
characteristics of the vehicle in ways
that the manufacturer believes its target
consumers would not accept. NHTSA
has no authority under EPCA/EISA to
prevent manufacturers from turning to
fine-payment if they choose to do so.
This is another important difference
from EPA’s authority under the CAA,
which allows EPA to revoke a
manufacturer’s certificate of compliance
that permits it to sell vehicles if EPA
determines that the manufacturer is in
non-compliance, and does not permit
manufacturers to pay fines in lieu of
compliance with applicable standards.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
NHTSA has grappled repeatedly with
the issue of whether fines are
motivational for manufacturers, and
whether raising fines would increase
manufacturers’ compliance with the
standards. EPCA authorizes increasing
the civil penalty very slightly up to
$10.00, exclusive of inflationary
adjustments, if NHTSA decides that the
increase in the penalty ‘‘will result in,
or substantially further, substantial
energy conservation for automobiles in
the model years in which the increased
penalty may be imposed; and will not
have a substantial deleterious impact on
the economy of the United States, a
State, or a region of a State.’’ 49 U.S.C.
32912(c).
To support a decision that increasing
the penalty would result in ‘‘substantial
energy conservation’’ without having ‘‘a
substantial deleterious impact on the
economy,’’ NHTSA would likely need to
provide some reasonably certain
quantitative estimates of the fuel that
would be saved, and the impact on the
economy, if the penalty were raised.
Comments received on this issue in the
past have not explained in clear
quantitative terms what the benefits and
drawbacks to raising the penalty might
be. Additionally, it may be that the
range of possible increase that the
statute provides, i.e., up to $10 per tenth
of a mpg, is insufficient to result in
substantial energy conservation,
although changing this would require an
amendment to the statute by Congress.
While NHTSA continues to seek to gain
information on this issue to inform a
future rulemaking decision, we request
that commenters wishing to address this
issue please provide, as specifically as
possible, estimates of how raising or not
raising the penalty amount will or will
not substantially raise energy
conservation and impact the economy.
4. Other CAFE Enforcement Issues—
Variations in Footprint
NHTSA has a standardized test
procedure for determining vehicle
footprint,630 which is defined by
regulation as follows:
Footprint is defined as the product of
track width (measured in inches,
calculated as the average of front and
rear track widths, and rounded to the
nearest tenth of an inch) times
wheelbase (measured in inches and
rounded to the nearest tenth of an inch),
divided by 144 and then rounded to the
nearest tenth of a square foot.631
630 NHTSA TP–537–01, March 30, 2009.
Available at https://www.nhtsa.gov/portal/site/
nhtsa/
menuitem.b166d5602714f9a73baf3210dba046a0/,
scroll down to ‘‘537’’ (last accessed July 18, 2009).
631 49 CFR 523.2.
PO 00000
Frm 00285
Fmt 4701
Sfmt 4700
49737
‘‘Track width,’’ in turn, is defined as
‘‘the lateral distance between the
centerlines of the base tires at ground,
including the camber angle.’’ 632
‘‘Wheelbase’’ is defined as ‘‘the
longitudinal distance between front and
rear wheel centerlines.’’ 633
NHTSA began requiring
manufacturers to submit this
information as part of their pre-model
year reports in MY 2008 for light trucks,
and will require manufacturers to
submit this information for passenger
cars as well beginning in MY 2011.
Manufacturers have submitted the
required information for their light
trucks, but NHTSA has identified
several issues with regard to footprint
measurement, that could affect how
required fuel economy levels are
calculated for a manufacturer. The
paragraphs that follow explain NHTSA’s
views regarding these issues, and solicit
public input on what NHTSA should do
to address them in the future.
a. Variations in Track Width
By definition, wheelbase
measurement should be very consistent
from one vehicle to another of the same
model. Track width, in contrast, may
vary in two respects: Wheel offset,634
and camber. Most current vehicles have
wheels with positive offset, with
technical specifications for offset
typically expressed in millimeters.
Additionally, for most vehicles, the
camber angle of each of a vehicle’s
wheels is specified as a range, i.e., front
axle, left and right within minus 0.9 to
plus 0.3 degree and rear axle, left and
right within minus 0.9 to plus 0.1
degree. Given the small variations in
offset and camber angle dimensions, the
potential effects of components (wheels)
and vehicle specifications (camber)
within existing designs on vehicle
footprints are considered insignificant.
However, NHTSA recognizes that
manufacturers may change the
specifications of and the equipment on
vehicles, even those that are not
redesigned or refreshed, during a model
year and from year to year. There may
be opportunity for manufacturers to
change specifications for wheel offset
and camber to increase a vehicle’s track
632 Id.
633 Id.
634 Offset of a wheel is the distance from its hub
mounting surface to the centerline of the wheel, i.e.,
measured laterally inboard or outboard.
Zero offset—the hub mounting surface is even
with the centerline of the wheel.
Positive offset—the hub mounting surface is
outboard of the centerline of the wheel (toward
street side).
Negative offset—the hub mounting surface is
inboard of the centerline of the wheel (away from
street side).
E:\FR\FM\28SEP2.SGM
28SEP2
49738
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
width and footprint, and thus decrease
their required fuel economy level.
NHTSA believes that this is likely
easiest on vehicles that already have
sufficient space to accommodate
changes without accompanying changes
to the body profile and/or suspension
component locations.
There may be drawbacks to such a
decision, however. Changing from
positive offset wheels to wheels with
zero or negative offset will move tires
and wheels outward toward the fenders.
Increasing the negative upper limit of
camber will tilt the top of the tire and
wheel inward and move the bottom
outward, placing the upper portion of
the rotating tires and wheels in closer
proximity to suspension components. In
addition, higher negative camber can
adversely affect tire life and the on-road
fuel economy of the vehicle.
Furthermore, it is likely that most
vehicle designs have already used the
available space in wheel areas since, by
doing so, the vehicle’s handling
performance is improved. Therefore, it
seems unlikely that manufacturers will
make significant changes to wheel offset
and camber.
b. How Manufacturers Designate ‘‘Base
Tires’’ and Wheels
According to the definition of ‘‘track
width’’ in 49 CFR 523.2, manufacturers
must determine track width when the
vehicle is equipped with ‘‘base tires.’’
Section 523.2 defines ‘‘base tire,’’ in
turn, as ‘‘the tire specified as standard
equipment by a manufacturer on each
configuration of a model type.’’ NHTSA
did not define ‘‘standard equipment.’’
In their pre-model year reports
required by 49 CFR part 537,
manufacturers have the option of either
(A) reporting a base tire for each model
type, or (B) reporting a base tire for each
vehicle configuration within a model
type, which represents an additional
level of specificity. If different vehicle
configurations have different footprint
values, then reporting the number of
vehicles for each footprint will improve
the accuracy of the required fuel
economy level for the fleet, since the
pre-model year report data is part of
what manufacturers use to determine
their CAFE obligations.
For example, assume a manufacturer’s
pre-model year report listed five vehicle
configurations that comprise one model
type. If the manufacturer provides only
one vehicle configuration’s front and
rear track widths, wheelbase, footprint
and base tire size to represent the model
type, and the other vehicle
configurations all have a different tire
size specified as standard equipment,
the footprint value represented by the
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
manufacturer may not capture the full
spectrum of footprint values for that
model type. Similarly, the base tires of
a model type may be mounted on two
or more wheels with different offset
dimensions for different vehicle
configurations. Of course, if the
footprint value for all vehicle
configurations is essentially the same,
there would be no need to report by
vehicle configuration. However, if
footprints are different—larger or
smaller—reporting for each group with
similar footprints or for each vehicle
configuration would produce a more
accurate result.
c. Vehicle ‘‘Design’’ Values Reported by
Manufacturers
NHTSA understands that the track
widths and wheelbase values and the
calculated footprint calculated values,
as provided in pre-model year reports,
are based on vehicle designs. This can
lead to inaccurate calculations of
required fuel economy level. For
example, if the values reported by
manufacturers are within an expected
range of values, but are skewed to the
higher end of the ranges, the required
fuel economy level for the fleet will be
artificially lower, an inaccurate attribute
based value. Likewise, it would be
inaccurate for manufacturers to submit
values on the lower end of the ranges,
but would decrease the likelihood that
measured values would be less than the
values reported and reduce the
likelihood of an agency inquiry. Since
not every vehicle is identical, it is also
probable that variations between
vehicles exist that can affect track
width, wheelbase and footprint. As with
other self-certifications, each
manufacturer must decide how it will
report, by model type, vehicle
configuration, or a combination, and
whether the reported values have
sufficient margin to account for
variations.
To address this, the agency will be
monitoring the track widths, wheelbases
and footprints reported by
manufacturers, and anticipates
measuring vehicles to determine if the
reported and measured values are
consistent. We will look for year-to-year
changes in the reported values. We can
compare MY 2008 light truck
information and MY 2010 passenger car
information to the information reported
in subsequent model years. Moreover,
under 49 CFR 537.8, manufacturers may
make separate reports to explain why
changes have occurred or they may be
contacted by the agency to explain
them.
PO 00000
Frm 00286
Fmt 4701
Sfmt 4700
d. How Manufacturers Report This
Information in their Pre-Model Year
Reports
49 CFR 537.7(c) requires that
manufacturers’ pre-model year reports
include ‘‘model type and configuration
fuel economy and technical
information.’’ The fuel economy of a
‘‘model type’’ is, for many
manufacturers, comprised of a number
of vehicle configurations. 49 CFR 537.4
states that ‘‘model type’’ and ‘‘vehicle
configuration’’ are defined in 40 CFR
part 600. Under that Part, ‘‘model type’’
includes engine, transmission, and drive
configuration (2WD, 4WD, or all-wheel
drive), while ‘‘vehicle configuration’’
includes those parameters plus test
weight. Model type is important for
calculating fuel economy in the new
attribute-based system—the required
fuel economy level for each of a
manufacturer’s fleets is calculated using
the number of vehicles within each
model type and the applicable fuel
economy target for each model type.
In MY 2008 and 2009 pre-model year
reports for light trucks, manufacturers
have expressed information in different
ways. Some manufacturers that have
many vehicle configurations within a
model type have included information
for each vehicle configuration’s track
width, wheelbase and footprint. Other
manufacturers reported vehicle
configuration information per
§ 537.7(c)(4), but provided only model
type track width, wheelbase and
footprint information for subsections
537.7(c)(4)(xvi)(B)(3), (4) and (5).
NHTSA believes that these
manufacturers may have reported the
information this way because the track
widths, wheelbase and footprint are
essentially the same for each vehicle
configuration within each model type. A
third group of manufacturers submitted
model type information only,
presumably because each model type
contains only one vehicle configuration.
NHTSA does not believe that this
variation in reporting methodology
presents an inherent problem, as long as
manufacturers follow the specifications
in Part 537 for reporting format, and as
long as pre-model year reports provide
information that is accurate and
represents each vehicle configuration
within a model type. The report may,
but need not, be similar to what
manufacturers submit to EPA as their
end-of-model year report. However,
NHTSA seeks comment on any potential
benefits or drawbacks to requiring a
more standardized reporting
methodology. If commenters
recommend increasing standardization,
NHTSA requests that they provide
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
specific examples of what information
should be required and how NHTSA
should require it to be provided.
J. Other Near-Term Rulemakings
Mandated by EISA
1. Commercial Medium- and HeavyDuty On-Highway Vehicles and Work
Trucks
EISA added a new provision to 49
U.S.C. 32902 requiring DOT, in
consultation with DOE and EPA, to
examine the fuel efficiency of
commercial medium- and heavy-duty
on-highway vehicles 635 and work
trucks 636 and determine the appropriate
test procedures and methodologies for
measuring their fuel efficiency, as well
as the appropriate metric for measuring
and expressing their fuel efficiency
performance and the range of factors
that affect their fuel efficiency. Work on
developing these standards is on-going.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
2. Consumer Information
EISA also added a new provision to
49 U.S.C. 32908 requiring DOT, in
consultation with DOE and EPA, to
develop and implement by rule a
program to require manufacturers to
label new automobiles sold in the
United States with:
(1) Information reflecting an
automobile’s performance on the basis
of criteria that EPA shall develop, not
later than 18 months after the date of the
enactment of EISA, to reflect fuel
economy and greenhouse gas and other
emissions over the useful life of the
automobile; and
(2) A rating system that would make
it easy for consumers to compare the
fuel economy and greenhouse gas and
other emissions of automobiles at the
point of purchase, including a
designation of automobiles with the
lowest greenhouse gas emissions over
the useful life of the vehicles; and with
the highest fuel economy.
DOT must also develop and
implement by rule a program to require
manufacturers to include in the owner’s
manual for vehicles capable of operating
on alternative fuels information that
describes that capability and the
benefits of using alternative fuels,
including the renewable nature and
environmental benefits of using
alternative fuels.
EISA further requires DOT, in
consultation with DOE and EPA, to
635 Defined as an on-highway vehicle with a gross
vehicle weight rating of 10,000 pounds or more.
636 Defined as a vehicle that is both rated at
between 8,500 and 10,000 pounds gross vehicle
weight; and also is not a medium-duty passenger
vehicle (as defined in 40 CFR 86.1803–01, as in
effect on the date of EISA’s enactment.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
• Develop and implement by rule a
consumer education program to
improve consumer understanding of
automobile performance described [by
the label to be developed] and to inform
consumers of the benefits of using
alternative fuel in automobiles and the
location of stations with alternative fuel
capacity;
• Establish a consumer education
campaign on the fuel savings that would
be recognized from the purchase of
vehicles equipped with thermal
management technologies, including
energy efficient air conditioning systems
and glass; and
• By rule require a label to be
attached to the fuel compartment of
vehicles capable of operating on
alternative fuels, with the form of
alternative fuel stated on the label.
49 U.S.C. 32908(g)(2) and (3). DOT has
42 months from the date of EISA’s
enactment (by the end of 2011) to issue
final rules under this subsection. Work
on developing these standards is also
on-going.
Additionally, in preparation for this
future rulemaking, NHTSA will
consider appropriate metrics for
presenting fuel economy-related
information on labels. Based on the nonlinear relationship between mpg and
fuel costs as well as emissions,
inclusion of the ‘‘gallons per 100 miles’’
metric on fuel economy labels may be
appropriate going forward, although the
mpg information is currently required
by law. A cost/distance metric may also
be useful, as could a CO2e grams per
mile metric to facilitate comparisons
between conventional vehicles and
alternative fuel vehicles and to
incorporate information about air
conditioning-related emissions. NHTSA
seeks comment on these options.
K. Regulatory Notices and Analyses
1. Executive Order 12866 and DOT
Regulatory Policies and Procedures
Executive Order 12866, ‘‘Regulatory
Planning and Review’’ (58 FR 51735,
Oct. 4, 1993), provides for making
determinations whether a regulatory
action is ‘‘significant’’ and therefore
subject to OMB review and to the
requirements of the Executive Order.
The Order defines a ‘‘significant
regulatory action’’ as one that is likely
to result in a rule that may:
(1) Have an annual effect on the
economy of $100 million or more or
adversely affect in a material way the
economy, a sector of the economy,
productivity, competition, jobs, the
environment, public health or safety, or
State, local or Tribal governments or
communities;
PO 00000
Frm 00287
Fmt 4701
Sfmt 4700
49739
(2) Create a serious inconsistency or
otherwise interfere with an action taken
or planned by another agency;
(3) Materially alter the budgetary
impact of entitlements, grants, user fees,
or loan programs or the rights and
obligations of recipients thereof; or
(4) Raise novel legal or policy issues
arising out of legal mandates, the
President’s priorities, or the principles
set forth in the Executive Order.
The rulemaking proposed in this
NPRM will be economically significant
if adopted. Accordingly, OMB reviewed
it under Executive Order 12866. The
rule, if adopted, would also be
significant within the meaning of the
Department of Transportation’s
Regulatory Policies and Procedures.
The benefits and costs of this proposal
are described above. Because the
proposed rule would, if adopted, be
economically significant under both the
Department of Transportation’s
procedures and OMB guidelines, the
agency has prepared a Preliminary
Regulatory Impact Analysis (PRIA) and
placed it in the docket and on the
agency’s Web site. Further, pursuant to
OMB Circular A–4, we have prepared a
formal probabilistic uncertainty analysis
for this proposal. The circular requires
such an analysis for complex rules
where there are large, multiple
uncertainties whose analysis raises
technical challenges or where effects
cascade and where the impacts of the
rule exceed $1 billion. This proposal
meets these criteria on all counts.
2. National Environmental Policy Act
NHTSA has initiated the
Environmental Impact Statement (EIS)
process under the National
Environmental Policy Act (NEPA), 42
U.S.C. 4321–4347, and implementing
regulations issued by the Council on
Environmental Quality (CEQ), 40 CFR
part 1500, and NHTSA, 49 CFR part
520. On April 1, 2009, NHTSA
published a notice of intent to prepare
an EIS for this rulemaking and
requested scoping comments. (74 FR
14857) The notice invites Federal, State,
and local agencies, Indian tribes, and
the public to participate in the scoping
process and to help identify the
environmental issues and reasonable
alternatives to be examined in the EIS.
The scoping notice also provides
information about the proposed
standards, the alternatives NHTSA
expects to consider in its NEPA
analysis, and the scoping process.
Concurrently with this NPRM,
NHTSA is releasing a Draft
Environmental Impact Statement (DEIS).
NHTSA prepared the DEIS to analyze
and disclose the potential
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49740
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
environmental impacts of the proposed
MY 2012–2016 CAFE standards for the
total fleet of passenger cars and light
trucks and reasonable alternative
standards for the NHTSA CAFE Program
pursuant to the Council on
Environmental Quality (CEQ)
regulations implementing NEPA, DOT
Order 5610.1C, and NHTSA
regulations.637 The DEIS compares the
potential environmental impacts of
alternative mile per gallon (mpg) levels
that will be considered by NHTSA for
the final rule. It also analyzes direct,
indirect, and cumulative impacts and
analyzes impacts in proportion to their
significance.
The DEIS also describes potential
environmental impacts to a variety of
resources. Resources that may be
affected by the proposed action and
alternatives include water resources,
biological resources, land use and
development, safety, hazardous
materials and regulated wastes, noise,
socioeconomics, and environmental
justice. These resource areas were
assessed qualitatively in the DEIS.
Throughout the DEIS, NHTSA has
relied extensively on findings of the
United Nations Intergovernmental Panel
on Climate Change (IPCC), the U.S.
Climate Change Science Program
(CCSP), and EPA. Our discussion relies
heavily on the most recent, thoroughly
peer-reviewed, and credible assessments
of global and U.S. climate change: the
IPCC Fourth Assessment Report
(Climate Change 2007), EPA’s proposed
Endangerment and Cause or Contribute
Findings for Greenhouse Gases under
Section 202(a) of the Clean Air Act and
the accompanying Technical Support
Document (TSD), and CCSP and
National Science and Technology
Council reports that include the
Scientific Assessment of the Effects of
Global Change on the United States and
Synthesis and Assessment Products.
The DEIS cites these sources and the
studies they review frequently.
Because of the link between the
transportation sector and GHG
emissions, NHTSA recognizes the need
to consider the possible impacts on
climate and global climate change in the
analysis of the effects of these fuel
economy standards. NHTSA also
recognizes the difficulties and
uncertainties involved in such an
impact analysis. Accordingly, consistent
with CEQ regulations on addressing
incomplete or unavailable information
in environmental impact analyses,
637 NEPA is codified at 42 U.S.C. 4321–4347. CEQ
NEPA implementing regulations are codified at 40
Code of Federal Regulations (CFR) Parts 1500–1508.
NHTSA NEPA implementing regulations are
codified at 49 CFR Part 520.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
NHTSA has reviewed existing credible
scientific evidence that is relevant to
this analysis and summarized it in the
DEIS. NHTSA has also employed and
summarized the results of research
models generally accepted in the
scientific community.
Although the alternatives have the
potential to decrease GHG emissions
substantially, they do not prevent
climate change, but only result in
reductions in the anticipated increases
in CO2 concentrations, temperature,
precipitation, and sea level. They would
also, to a small degree, delay the point
at which certain temperature increases
and other physical effects stemming
from increased GHG emissions would
occur. As discussed below, NHTSA
presumes that these reductions in
climate effects will be reflected in
reduced impacts on affected resources.
NHTSA consulted with various
Federal agencies in the development of
the DEIS, including EPA, Bureau of
Land Management, Centers for Disease
Control and Prevention, Minerals
Management Service, National Park
Service, U.S. Army Corps of Engineers,
U.S. Forest Service, and Advisory
Council on Historic Preservation.
NHTSA is also exploring its obligations
under Section 7 of the Endangered
Species Act with the U.S. Fish and
Wildlife Service and the National
Oceanic and Atmospheric
Administration Fisheries Service.
The main direct and indirect effects
resulting from the different alternatives
analyzed in the DEIS are as follows:
Fuel consumption: For passenger cars,
fuel consumption under the No Action
Alternative is 171 billion gallons in
2060. Fuel consumption ranges from
156.1 billion gallons under Alternative
2 (3-Percent Alternative) to 133.7 billion
gallons under Alternative 9 (TCTB).
Fuel consumption is 149.3 billion
gallons under the Preferred Alternative.
For light trucks, fuel consumption
under the No Action Alternative is
105.4 billion gallons in 2060. Fuel
consumption ranges from 97.1 billion
gallons under Alternative 2 (3-Percent
Alternative) to 83.8 billion gallons
under Alternative 9 (TCTB). Fuel
consumption is 92.2 billion gallons
under the Preferred Alternative
(Alternative 4).
Air quality: Emissions of criteria
pollutants change very little between
the No Action Alternative and
Alternatives 2 through 4. In the case of
particulate matter (PM2.5), sulfur oxides
(SOX), nitrogen oxides (NOX), and
volatile organic compounds (VOCs), the
No Action Alternative results in the
highest emissions, and emissions
generally decline as fuel economy
PO 00000
Frm 00288
Fmt 4701
Sfmt 4700
standards increase across alternatives.
There are some increases from
Alternative 6 through Alternative 9, but
emissions remain below the levels
under the No Action Alternative. In the
case of carbon monoxide (CO),
emissions under Alternatives 2 through
4 are slightly higher than under the No
Action Alternative. Emissions of CO
decline as fuel economy standards
increase across Alternatives 5 through 9.
The trend for toxic air pollutant
emissions across the alternatives is
mixed. Emissions of nearly all toxic air
pollutants are highest under the No
Action Alternative, except for those of
acrolein, which increases with each
successive alternative and are highest
under Alternative 9. The acrolein
emissions are an upper-bound estimate
and actual emissions might be less.
Emissions of acetaldehyde, benzene,
and DPM in 2030 decrease with
successive alternatives from Alternative
1 to Alternative 9. Emissions of 1,3butadiene increase slightly from
Alternative 3 (4-Percent Alternative) to
Alternative 4 (Preferred), and emissions
of formaldehyde increase slightly from
Alternative 8 (7-Percent Alternative) to
Alternative 9 (TCTB) in 2030.
The reductions in emissions are
expected to lead to reductions in
adverse health effects. There would be
reductions in adverse health effects
nationwide under Alternatives 2 (3Percent Alternative) through 9 (TCTB)
compared to the No Action Alternative.
These reductions primarily reflect the
projected PM2.5 reductions, and
secondarily the reductions in SO2. The
economic value of health impacts would
vary proportionally with changes in
health outcomes.
Climate: The DEIS uses a climate
model to estimate the changes in CO2
concentrations, global mean surface
temperature, and changes in sea level
for each alternative CAFE standard.
NHTSA used the publicly available
modeling software, Model for
Assessment of Greenhouse Gas-induced
Climate Change (MAGICC) version
5.3.v2 to estimate changes in key direct
and indirect effects. The application of
MAGICC version 5.3.v2 uses the
emissions estimates for CO2, CH4, N2O,
CO, NOX, SO2, and VOCs from the
Volpe model. A sensitivity analysis was
completed to examine the relationship
among selected CAFE alternatives and
likely climate sensitivities, and the
associated direct and indirect effects for
each combination. These relationships
can be used to infer the effect of
emissions associated with the regulatory
alternatives on direct and indirect
climate effects.
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
For the analysis using MAGICC,
NHTSA has assumed that global
emissions consistent with the No Action
Alternative (Alternative 1) follow the
trajectory provided by the
Representative Concentration Pathway
(RCP) 4.5 MiniCAM (Mini Climate
Assessment Model) reference
scenario.638 The SAP 2.1 global
emissions scenarios were created as part
of CCSP’s effort to develop a set of longterm (2000 to 2100) global emissions
scenarios that incorporate an update of
economic and technology data and
utilize improved scenario development
tools compared to the IPCC Special
Report on Emissions Scenarios (SRES)
developed more than a decade ago.
The results rely primarily on the RCP
4.5 MiniCAM reference scenario to
represent an emissions scenario, that is,
future global emissions assuming no
additional climate policy. Each
alternative was simulated by calculating
the difference in annual GHG emissions
in relation to the No Action Alternative
and subtracting this change from the
RCP 4.5 MiniCAM reference scenario to
generate modified global-scale
emissions scenarios, which each show
the effect of the various regulatory
alternatives on the global emissions
path.
To estimate changes in global
precipitation, this EIS uses increases in
global mean surface temperature
combined with a scaling approach and
coefficients from the IPCC Fourth
Assessment Report.
For all of the climate change analysis,
the approaches focus on marginal
changes in emissions that affect climate.
Thus, the approaches result in a
reasonable characterization of climate
change for a given set of emissions
reductions, regardless of the underlying
details associated with those emissions
reductions. The climate sensitivity
analysis provides a basis for
determining climate responses to
varying climate sensitivities under the
No Action Alternative (Alternative 1)
and the Preferred Alternative
(Alternative 4). Some responses of the
climate system are believed to be nonlinear; by using a range of emissions
cases and climate sensitivities, the
effects of the alternatives in relation to
different scenarios and sensitivities can
be estimated.
638 The reference scenario for global emissions
assumes the absence of significant global GHG
control policies. It is based on the Climate Change
Science Program’s (CCSP) Synthesis and
Assessment Product (SAP) 2.1 MiniCAM reference
scenario, and has been revised by the Joint Global
Change Research Institute to update emission
estimates of non-CO2 gases.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
GHG emissions: Although GHG
emissions from new passenger cars and
light trucks will continue to rise over
2012 through 2100 (absent other
reduction efforts), the effect of the
alternatives is to slow this increase by
varying amounts. Emissions for the
period range from 196,341 million
metric tons of CO2 (MMTCO2) for the
TCTB Alternative (Alternative 9) to
244,821 MMTCO2 for the No Action
Alternative (Alternative 1). Compared to
the No Action Alternative, projections
of emissions reductions over the period
2012 to 2100 due to the MY 2012–2016
CAFE standards range from 19,169 to
48,480 MMTCO2. Compared to
cumulative global emissions of
5,293,896 MMTCO2 over this period
(projected by the RCP 4.5 MiniCAM
reference scenario), this rulemaking is
expected to reduce global CO2 emissions
by about 0.4 to 0.9 percent.
To get a sense of the relative impact
of these reductions, it can be helpful to
consider the relative importance of
emissions from passenger cars and light
trucks as a whole and to compare them
against emissions projections from the
transportation sector. As mentioned
earlier, U.S. passenger cars and light
trucks currently account for significant
CO2 emissions in the United States.
With the action alternatives reducing
U.S. passenger car and light truck CO2
emissions by 7.8 to 19.8 percent, the
CAFE alternatives would have a
noticeable impact on total U.S. CO2
emissions. Compared to total U.S. CO2
emissions in 2100 projected by the
MiniCAM reference scenario of 7,886
MMTCO2, the action alternatives would
reduce annual U.S. CO2 emissions by
3.5 to 8.9 percent in 2100.
CO2 concentration, global mean
surface temperature, sea-level rise, and
precipitation: Estimated CO2
concentrations for 2100 range from
778.4 ppm under the most stringent
alternative (TCTB) to 783.0 ppm under
the No Action Alternative. For 2030 and
2050, the range is even smaller. Because
CO2 concentration is the key driver of
other climate effects (which in turn act
as drivers on resource impacts), this
leads to small differences in these
effects. For the No Action alternative,
the temperature increase from 1990 is
0.92 °C for 2030, 1.56 °C for 2050, and
3.14 °C for 2100. The differences among
alternatives are small. For 2100, the
reduction in temperature increase, in
relation to the No Action Alternative,
ranges from 0.007 °C to 0.018 °C. Given
that all the action alternatives reduce
temperature increases slightly in
relation to the No Action Alternative,
they also slightly reduce predicted
increases in precipitation.
PO 00000
Frm 00289
Fmt 4701
Sfmt 4700
49741
In summary, the impacts of the
proposed action and alternatives on
global mean surface temperature,
precipitation, or sea-level rise are small
in absolute terms. This is because the
action alternatives have a small
proportional change in the emissions
trajectories in the RCP 4.5 MiniCAM
reference scenario.639 This is due
primarily to the global and multisectoral nature of the climate change
issues.
Under CEQ regulations, NHTSA must
also analyze cumulative impacts,
defined as ‘‘the impact on the
environment which results from the
incremental impact of the action when
added to other past, present, and
reasonably foreseeable future actions
regardless of what agency or person
undertakes such other actions.’’ 40 CFR
1508.7. Following is a description of the
cumulative effects of the proposed
action and alternatives on energy, air
quality, and climate.
The methodology for evaluating
cumulative effects includes the
reasonably foreseeable future actions of
projected average annual passenger-car
and light-truck mpg estimates from 2016
through 2030 that differ from mpg
estimates reflected in the analysis of the
direct and indirect impacts of MY 2012
through MY 2016 fuel economy
requirements under each of the action
alternatives, assuming no further
increases in average new passenger-car
or light-truck mpg after 2016. The
evaluation of cumulative effects projects
ongoing gains in average new passengercar and light-truck mpg consistent with
further increases in CAFE standards to
an EISA-mandated minimum level of 35
mpg combined for passenger cars and
light trucks by the year 2020, along with
AEO April 2009 (updated) Reference
Case projections of annual percentage
gains of 0.51 percent in passenger-car
mpg and 0.86 percent in light-truck mpg
through 2030.640 AEO Reference Case
639 These conclusions are not meant to be
interpreted as expressing NHTSA’s views that
impacts on global mean surface temperature,
precipitation, or sea-level rise are not areas of
concern for policymakers. Under NEPA, the agency
is obligated to discuss the environmental impact[s]
of the proposed action. 42 U.S.C. 4332(2)(C)(i)
(emphasis added). This analysis fulfills NHTSA’s
obligations in this regard.
640 NHTSA considers these AEO projected mpg
increases to be reasonably foreseeable future actions
under NEPA because the AEO projections reflect
future consumer and industry actions that result in
ongoing mpg gains through 2030. The AEO
projections of fuel economy gains beyond the EISA
requirement of combined achieved 35 mpg by 2020
result from a future forecasted increase in consumer
demand for fuel economy resulting from projected
fuel price increases. Since the AEO forecasts do not
extend beyond the year 2030, the mpg estimates for
MY 2030 through MY 2060 remain constant.
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49742
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
projections are regarded as the official
U.S. government energy projections by
both the public and private sector.
The assumption that all action
alternatives reach the EISA 35 mpg
target by 2020, with mpg growth at the
AEO forecast rate from 2020 to 2030,
results in estimated cumulative impacts
for Alternatives 2, 3, and 4 that are
substantially equivalent, with any minor
variation in cumulative impacts across
these Alternatives due to the specific
modeling assumptions used to ensure
that each Alternative achieves at least
35 mpg by 2020. Therefore, the
cumulative impacts analysis adds
substantively to the analysis of direct
and indirect impacts when comparing
cumulative impacts between
Alternatives 4 through 9, but not when
comparing cumulative impacts between
Alternatives 2 through 4. Another
important difference in the methodology
for evaluating cumulative effects is that
the No Action Alternative (Alternative
1) also reflects the AEO Reference Case
projected annual percentage gains of
0.51 percent in car mpg and 0.86
percent in light truck mpg for the period
2016 through 2030, whereas the direct
and indirect impacts analysis assumed
no increases in average new passengercar or light-truck mpg after 2016 under
any alternative, including the No Action
Alternative. NHTSA also considered
other reasonably foreseeable actions that
would affect greenhouse gas emissions,
such as regional, national, and
international initiatives and programs to
reduce GHG emissions.
Fuel consumption: The nine
alternatives examined in the DEIS will
result in different future levels of fuel
use, total energy, and petroleum
consumption, which will in turn have
an impact on emissions of GHG and
criteria air pollutants. For passenger
cars, by 2060, fuel consumption reaches
160.4 billion gallons under the No
Action Alternative (Alternative 1).
Consumption falls across the
alternatives, from 139.4 billion gallons
under the Preferred Alternative
(Alternative 4) to 125.7 billion gallons
under the TCTB Alternative (Alternative
9) representing a fuel savings of 21.0 to
34.7 billion gallons in 2060, as
compared to fuel consumption projected
under the No Action Alternative. For
light trucks, fuel consumption by 2060
reaches 94.8 billion gallons under the
No Action Alternative (Alternative 1).
Consumption declines across the
alternatives, from 83.3 billion gallons
under the 3-Percent Alternative
(Alternative 2) to 75.7 billion gallons
under the TCTB Alternative (Alternative
9). This represents a fuel savings of 11.5
to 19.1 billion gallons in 2060, as
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
compared to fuel consumption projected
under the No Action Alternative.
Air quality: In the case of PM2.5, SOX,
NOX, and VOCs, the No Action
Alternative results in the highest
emissions, and emissions generally
decline as fuel economy standards
increase across alternatives. Exceptions
to this declining trend are NOX under
the Preferred Alternative (Alternative 4);
PM2.5 under Alternatives 3 and 4, and
Alternatives 8 and 9; SOX under
Alternatives 3 (4-Percent Alternative)
and 4 (Preferred Alternative); and VOCs
under Alternative 4. Despite these
individual increases, emissions of
PM2.5, SOX, NOX, and VOCs remain
below the levels under the No Action
Alternative (Alternative 1). In the case
of CO, emissions under Alternatives 2
through 4 are slightly higher than under
the No Action Alternative. Emissions of
CO decline as fuel economy standards
increase across Alternatives 5 through 9.
As with criteria pollutants, emissions
of most toxic air pollutants would
decrease from one alternative to the next
more stringent alternative. The
exceptions are acetaldehyde emissions,
which would increase under Alternative
4; acrolein emissions, which increase
under each of the alternatives; benzene
emissions, which would increase under
Alternative 4; 1,3-butadiene, which
would increase under Alternatives 2
and 4; diesel particulate matter (DPM),
which would increase under
Alternatives 3 and 4; and formaldehyde,
which would increase under
Alternatives 3, 5, 6, 8, and 9. The
changes in toxic air pollutant emissions,
whether positive or negative, generally
would be small relative to Alternative 1
emissions levels.641 The exceptions are
acetaldehyde emissions, which would
decrease by more than 10 percent under
Alternative 9; acrolein emissions, which
would increase across successive
alternatives (as noted above, the
acrolein emissions are an upper-bound
estimate and actual emissions might be
less); benzene emissions, which would
decrease by more than 10 percent under
Alternatives 8 and 9; and DPM
emissions, which would decrease by
more than 10 percent under all action
alternatives.
Cumulative emissions generally
would be less than noncumulative
emissions for the same combination of
pollutant, year, and alternative because
641 These conclusions are not meant to be
interpreted as expressing NHTSA’s views that
impacts on air quality is not an area of concern for
policymakers. Under NEPA, the agency is obligated
to discuss the environmental impact[s] of the
proposed action. 42 U.S.C. 4332(2)(C)(i) (emphasis
added). This analysis fulfills NHTSA’s obligations
in this regard.
PO 00000
Frm 00290
Fmt 4701
Sfmt 4700
of differing changes in VMT and fuel
consumption under the cumulative case
compared to the noncumulative case.
The exceptions are acrolein for all
alternatives except Alternative 9, and
1,3-butadiene for all alternatives except
Alternative 2 (3-Percent Alternative).
The reductions in emissions are
expected to lead to reductions in
cumulative adverse health effects. There
would be reductions in adverse health
effects nationwide under Alternatives 2
(3-Percent Alternative) through 9
(TCTB) compared to the No Action
Alternative. Reductions in adverse
health effects decrease from Alternative
2 (3-Percent Alternative) through
Alternative 4 (Preferred Alternative),
and then increase under Alternatives 5
(5-Percent Alternative through
Alternative 9 (TCTB). These reductions
primarily reflect the projected PM2.5
reductions, and secondarily the
reductions in SO2. The economic value
of health impacts would vary
proportionally with changes in health
outcomes.
Climate change: As with the analysis
of the direct and indirect effects of the
proposed action and alternatives on
climate change, for the cumulative
impacts analysis this EIS uses MAGICC
version 5.3.v2 to estimate the changes in
CO2 concentrations, global mean surface
temperature, and changes in sea level
for each alternative CAFE standard. To
estimate changes in global precipitation,
NHTSA uses increases in global mean
surface temperature combined with a
scaling approach and coefficients from
the IPCC Fourth Assessment Report. A
sensitivity analysis was completed to
examine the relationship among the
alternatives and likely climate
sensitivities, and the associated direct
and indirect effects for each
combination. These relationships can be
used to infer the effect of emissions
associated with the regulatory
alternatives on direct and indirect
climate effects.
One of the key categories of inputs to
MAGICC is a time series of global GHG
emissions. In assessing the cumulative
effects on climate, NHTSA used the
CCSP SAP 2.1 MiniCAM Level 3
scenario to represent a Reference Case
global emission scenario, that is, future
global emissions assuming significant
global actions to address climate
change. This Reference Case global
emission scenario serves as a baseline
against which the climate benefits of the
various alternatives can be measured.
The Reference Case global emissions
scenario used in the cumulative impacts
analysis (and described in Chapter 4 of
this EIS) differs from the global
emissions scenario used for the climate
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
change modeling presented in Chapter
3. In Chapter 4, the Reference Case
global emission scenario reflects
reasonably foreseeable actions in global
climate change policy; in Chapter 3, the
global emissions scenario used for the
analysis assumes that there are no
significant global controls. Given that
the climate system is non-linear, the
choice of a global emissions scenario
could produce different estimates of the
benefits of the proposed action and
alternatives, if the emission reductions
of the alternatives were held constant.
The SAP 2.1 MiniCAM Level 3
scenario assumes a moderate level of
global GHG reductions, resulting in a
global atmospheric CO2 concentration of
roughly 650 parts per million by volume
(ppmv) as of 2100. The following
regional, national, and international
initiatives and programs are reasonably
foreseeable actions to reduce GHG
emissions: Regional Greenhouse Gas
Initiative (RGGI); Western Climate
Initiative (WCI); Midwestern
Greenhouse Gas Reduction Accord;
EPA’s Proposed GHG Emissions
Standards; H.R. 2454: American Clean
Energy and Security Act (‘‘WaxmanMarkey Bill’’); Renewable Fuel Standard
(RFS2); Program Activities of DOE’s
Office of Fossil Energy; Program
Activities of DOE’s Office of Nuclear
Energy; United Nation’s Framework
Convention on Climate Change
(UNFCCC)—The Kyoto Protocol and
upcoming Conference of the Parties
(COP) 15 in Copenhagen, Denmark; G8
Declaration—Summit 2009; and the
Asia Pacific Partnership on Clean
Development and Climate.642 The SAP
2.1 MiniCAM Level 3 scenario provides
a global context for emissions of a full
suite of GHGs and ozone precursors for
a Reference Case harmonious with
implementation of the above policies
and initiatives. Each of the action
alternatives was simulated by
calculating the difference in annual
GHG emissions in relation to the No
Action Alternative, and subtracting this
change in the MiniCAM Level 3
scenario to generate modified globalscale emissions scenarios, which each
show the effect of the various regulatory
mstockstill on DSKH9S0YB1PROD with PROPOSALS
642 The
regional, national, and international
initiatives and programs discussed above are those
which NHTSA has tentatively concluded are
reasonably foreseeable past, current, or future
actions to reduce GHG emissions. Although some
of the actions, policies, or programs listed are not
associated with precise GHG reduction
commitments, collectively they illustrate a current
and continuing trend of U.S. and global awareness,
emphasis, and efforts towards significant GHG
reductions. Together they imply that future
commitments for reductions are probable and,
therefore, reasonably foreseeable under NEPA.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
alternatives on the global emissions
path.
NHTSA used the MiniCAM Level 3
scenario as the primary global emissions
scenario for evaluating climate effects,
and used the MiniCAM Level 2 scenario
and the RCP 4.5 MiniCAM reference
emissions scenario to evaluate the
sensitivity of the results to alternative
emission scenarios. The sensitivity
analysis provides a basis for
determining climate responses to
varying levels of climate sensitivities
and global emissions and under the No
Action Alternative (Alternative 1) and
the Preferred Alternative (Alternative 4).
Some responses of the climate system
are believed to be non-linear; by using
a range of emissions cases and climate
sensitivities, it is possible to estimate
the effects of the alternatives in relation
to different reference cases.
Cumulative GHG emissions:
Projections of GHG emissions
reductions over the 2012 to 2100 period
due to the MY 2012–2016 CAFE
standards and other reasonably
foreseeable future actions ranged from
27,164 to 44,626 MMTCO2. Compared to
global emissions of 3,919,462 MMTCO2
over this period (projected by the SAP
2.1 MiniCAM Level 3 scenario), the
incremental impact of this rulemaking is
expected to reduce global CO2 emissions
by about 0.7 to 1.1 percent from their
projected levels under the No Action
Alternative.
CO2 concentration, global mean
surface temperature, sea-level rise, and
precipitation: For the mid-range results
of MAGICC model simulations for the
No Action Alternative and the eight
action alternatives in terms of CO2
concentrations and increase in global
mean surface temperature in 2030, 2050,
and 2100, the impact on the growth in
CO2 concentrations and temperature is
just a fraction of the total growth in CO2
concentrations and global mean surface
temperature. However, the relative
impact of the action alternatives is
illustrated by the reduction in growth of
both CO2 concentrations and
temperature in the TCTB Alternative
(Alternative 9).
There is a fairly narrow band of
estimated CO2 concentrations as of
2100, from 653.5 ppm for the TCTB
Alternative (Alternative 9) to 657.5 ppm
for the No Action Alternative
(Alternative 1). For 2030 and 2050, the
range is even smaller. Because CO2
concentrations are the key driver of all
other climate effects, this leads to small
differences in these effects.
The MAGICC simulations of mean
global surface air temperature increases
are also shown in Table S–18. For all
alternatives, the cumulative global mean
PO 00000
Frm 00291
Fmt 4701
Sfmt 4700
49743
surface temperature increase is about
0.80 °C to 0.81 °C as of 2030; 1.32 to
1.33 °C as of 2050; and 2.59 to 2.61 °C
as of 2100.643 The differences among
alternatives are small. For 2100, the
reduction in temperature increase for
the action alternatives in relation to the
No Action Alternative is about 0.01 to
0.02 °C.
The impact on sea-level rise in 2100
ranges from 32.84 centimeters under the
No Action Alternative (Alternative 1) to
32.68 centimeters under the TCTB
Alternative (Alternative 9), for a
maximum reduction of 0.16 centimeter
by 2100 from the action alternatives.
Given that the action alternatives
would reduce temperature increases
slightly in relation to the No Action
Alternative (Alternative 1), they also
would reduce predicted increases in
precipitation slightly. In summary, the
impacts of the proposed action and
alternatives and other reasonably
foreseeable future actions on global
mean surface temperature, sea-level rise,
and precipitation are relatively small in
the context of the expected changes
associated with the emissions
trajectories in the SRES scenarios.644
This is due primarily to the global and
multi-sectoral nature of the climate
problem.
NHTSA examined the sensitivity of
climate effects on key assumptions used
in the analysis. The two variables for
which assumptions were varied were
climate sensitivity and global emissions.
Climate sensitivities used included
2.0, 3.0, and 4.5 °C for a doubling of CO2
concentrations in the atmosphere.
Global emissions scenarios used
included the SAP 2.1 MiniCAM Level 3
(650 ppm as of 2100), the SAP 2.1
MiniCAM Level 2 (550 ppm as of 2100),
and RCP 4.5 MiniCAM reference
scenario (783 ppm as of 2100). The
sensitivity analysis is based on the
results provided for two alternatives—
the No Action Alternative (Alternative
1) and the Preferred Alternative
(Alternative 4). The sensitivity analysis
was conducted only for two alternatives,
as this was deemed sufficient to assess
the effect of various climate sensitivities
on the results.
643 Because the actual increase in global mean
surface temperature lags the commitment to
warming, the impact on global mean surface
temperature increase is less than the long-term
commitment to warming.
644 These conclusions are not meant to be
interpreted as expressing NHTSA’s views that
impacts on global mean surface temperature,
precipitation, or sea-level rise are not areas of
concern for policymakers. Under NEPA, the agency
is obligated to discuss the environmental impact[s]
of the proposed action. 42 U.S.C. 4332(2)(C)(i)
(emphasis added). This analysis fulfills NHTSA’s
obligations in this regard.
E:\FR\FM\28SEP2.SGM
28SEP2
49744
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
The results of these simulations
illustrate the uncertainty due to factors
influencing future global emissions of
GHGs (factors other than the CAFE
rulemaking). The use of different
climate sensitivities 645 (the equilibrium
warming that occurs at a doubling of
CO2 from pre-industrial levels) can
affect not only warming but also
indirectly affect sea-level rise and CO2
concentration. The use of alternative
global emissions scenarios can influence
the results in several ways. Emissions
reductions can lead to larger reductions
in the CO2 concentrations in later years
because more anthropogenic emissions
can be expected to stay in the
atmosphere.
NHTSA’s analysis indicates that the
sensitivity of the simulated CO2
emissions in 2030, 2050, and 2100 to
assumptions of global emissions and
climate sensitivity is low; stated simply,
CO2 emissions do not change much with
changes in global emissions and climate
sensitivity. For 2030 and 2050, the
choice of global emissions scenario has
little impact on the results. By 2100, the
Preferred Alternative (Alternative 4) has
the greatest impact in the global
emissions scenario with the highest CO2
emissions (MiniCAM Reference) and the
least impact in the scenario with the
lowest CO2 emissions (MiniCAM Level
2). The total range of the impact of the
Preferred Alternative on CO2
concentrations in 2100 is from 2.2 to 2.6
ppm. The Reference Case using the
MiniCAM Level 3 scenario and a 3.0 °C
climate sensitivity has an impact of 2.4
ppm.
The sensitivity of the simulated global
mean surface temperatures for 2030 is
also low due primarily to the slow rate
at which the global mean surface
temperature increases in response to
increases in radiative forcing. The
relatively slow response in the climate
system explains the observation that
even by 2100, when CO2 concentrations
more than double in comparison to preindustrial levels, the temperature
increase is below the equilibrium
sensitivity levels, i.e., the climate
system has not had enough time to
equilibrate to the new CO2
645 Equilibrium climate sensitivity (or climate
sensitivity) is the projected responsiveness of
Earth’s global climate system to forcing from GHG
drivers, and is often expressed in terms of changes
to global surface temperature resulting from a
doubling of CO2 in relation to pre-industrial
atmospheric concentrations. According to IPCC,
using a likely emissions scenario that results in a
doubling of the concentration of atmospheric CO2,
there is a 66- to 90-percent probability of an
increase in surface warming of 2.5 to 4.0 °C by the
end of the century (relative to 1990 average global
temperatures), with 3 °C as the single most likely
surface temperature increase.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
concentrations. Nonetheless, as of 2100
there is a larger range in temperatures
across the different values of climate
sensitivity: The reduction in global
mean surface temperature from the No
Action Alternative to the Preferred
Alternative ranges from 0.008 °C for the
2.0 °C climate sensitivity to 0.012 °C for
the 4.5 °C climate sensitivity, for the
MiniCAM Level 3 emissions scenario.
The impact on global mean surface
temperature due to assumptions
concerning global emissions of GHGs is
also important. The scenario with the
higher global emissions of GHGs (viz.,
the MiniCAM Reference) has a slightly
lower reduction in global mean surface
temperature, and the scenario with
lower global emissions (viz., the
MiniCAM Level 2) has a slightly higher
reduction. This is in large part due to
the non-linear and near-logarithmic
relationship between radiative forcing
and CO2 concentrations. At high
emissions levels, CO2 concentrations are
higher and, as a result, a fixed reduction
in emissions yields a lower reduction in
radiative forcing and global mean
surface temperature.
The sensitivity of the simulated sealevel rise to changes in climate
sensitivity and global GHG emissions
mirrors that of global temperature.
Scenarios with lower climate
sensitivities have lower increases in sealevel rise. The greater the climate
sensitivity, the greater the decrement in
sea-level rise for the Preferred
Alternative as compared to the No
Action Alternative.
Resource impacts of climate change:
The effects of the alternatives on
climate—CO2 concentrations,
temperature, precipitation, and sea-level
rise—can translate into impacts on key
resources including terrestrial and
freshwater ecosystems; marine, coastal
systems, and low-lying areas; food,
fiber, and forest products; industries,
settlements, and society; and human
health. Although the alternatives have
the potential to substantially decrease
GHG emissions, they would not alone
prevent climate change from occurring.
The magnitude of the changes in climate
effects that the alternatives would
produce—two to five parts per million
of CO2, a few hundredths of a degree
Celsius difference in temperature, a
small percentage change in the rate of
precipitation increase, and 1 or 2
millimeters of sea-level rise—are too
small to address quantitatively in terms
of their impacts on resources. Given the
enormous resource values at stake, these
distinctions could be important—very
small percentages of huge numbers can
still yield substantial results—but they
are too small for current quantitative
PO 00000
Frm 00292
Fmt 4701
Sfmt 4700
techniques to resolve. Consequently, the
discussion of resource impacts does not
distinguish among the CAFE
alternatives; rather, it provides a
qualitative review of the benefits of
reducing GHG emissions and the
magnitude of the risks involved in
climate change.646
NHTSA examined the impacts
resulting from global climate change
due to all global emissions on the U.S.
and global scale. Impacts to freshwater
resources could include changes in
precipitation patterns, decreasing
aquifer recharge in some locations,
changes in snowpack and timing of
snowmelt, salt-water intrusion from sealevel changes, changes in weather
patterns resulting in flooding or drought
in certain regions, increased water
temperature, and numerous other
changes to freshwater systems that
disrupt human use and natural aquatic
habitats. Impacts to terrestrial
ecosystems could include shifts in
species range and migration patterns,
potential extinctions of sensitive species
unable to adapt to changing conditions,
increases in the occurrence of forest
fires and pest infestation, and changes
in habitat productivity because of
increased atmospheric CO2. Impacts to
coastal ecosystems, primarily from
predicted sea-level rise, could include
the loss of coastal areas due to
submersion and erosion, additional
impacts from severe weather and storm
surges, and increased salinization of
estuaries and freshwater aquifers (for
example, one impact could be
reductions in manatee habitat in the
Florida coastal areas). Impacts to land
use and several key economic sectors
could include flooding and severeweather impacts to coastal, floodplain,
and island settlements; extreme heat
and cold waves; increases in drought in
some locations; and weather- or sealevel related disruptions of the service,
agricultural, and transportation sectors.
Impacts to human health could include
increased mortality and morbidity due
to excessive heat, increases in
respiratory conditions due to poor air
quality, increases in water and food646 See 42 U.S.C. 4332 (requiring Federal agencies
to ‘‘identify and develop methods and procedures
* * * which will insure that presently
unquantified environmental amenities and values
may be given appropriate consideration’’); 40 CFR
1502.23 (requiring an EIS to discuss the
relationship between a cost-benefit analysis and any
analyses of unquantified environmental impacts,
values, and amenities); CEQ, Considering
Cumulative Effects Under the National
Environmental Policy Act (1984), available at
https://ceq.hss.doe.gov/nepa/ccenepa/ccenepa.htm
(recognizing that agencies are sometimes ‘‘limited
to qualitative evaluations of effects because causeand-effect relationships are poorly understood’’ or
cannot be quantified).
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
borne diseases, changes to the seasonal
patterns of vector-borne diseases, and
increases in malnutrition.
Non-climate cumulative impacts of
CO2 emissions: In addition to its role as
a GHG in the atmosphere, CO2 is
transferred from the atmosphere to
water, plants, and soil. In water, CO2
combines with water molecules to form
carbonic acid. When CO2 dissolves in
seawater, a series of well-known
chemical reactions begin that increase
the concentration of hydrogen ions and
make seawater more acidic, which has
adverse effects on corals and some other
marine life.
Increased concentrations of CO2 in the
atmosphere can also stimulate plant
growth to some degree, a phenomenon
known as the CO2 fertilization effect.
This effect could have positive
ramifications for agricultural
productivity and forest growth. The
available evidence indicates that
different plants respond in different
ways to enhanced CO2 concentrations.
As with the climate effects of CO2, the
changes in non-climate impacts
associated with the alternatives are
difficult to assess quantitatively.
Whether the distinction in
concentrations is substantial across
alternatives is not clear because the
damage functions and potential
existence of thresholds for CO2
concentration are not known. However,
what is clear is that a reduction in the
rate of increase in atmospheric CO2,
which all the action alternatives would
provide to some extent, would reduce
the ocean acidification effect and the
CO2 fertilization effect.
For much more information on
NHTSA’s NEPA analysis, please see the
DEIS.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
3. Regulatory Flexibility Act
Pursuant to the Regulatory Flexibility
Act (5 U.S.C. 601 et seq., as amended by
the Small Business Regulatory
Enforcement Fairness Act (SBREFA) of
1996), whenever an agency is required
to publish a notice of rulemaking for
any proposed or final rule, it must
prepare and make available for public
comment a regulatory flexibility
analysis that describes the effect of the
rule on small entities (i.e., small
businesses, small organizations, and
small governmental jurisdictions). The
Small Business Administration’s
regulations at 13 CFR part 121 define a
small business, in part, as a business
entity ‘‘which operates primarily within
the United States.’’ 13 CFR 121.105(a).
No regulatory flexibility analysis is
required if the head of an agency
certifies the rule will not have a
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
significant economic impact on a
substantial number of small entities.
I certify that the proposed rule would
not have a significant economic impact
on a substantial number of small
entities. The following is NHTSA’s
statement providing the factual basis for
the certification (5 U.S.C. 605(b)).
If adopted, the proposal would
directly affect twenty-one large single
stage motor vehicle manufacturers.647
The proposal would also affect two
small domestic single stage motor
vehicle manufacturers, Saleen and
Tesla.648 According to the Small
Business Administration’s small
business size standards (see 13 CFR
121.201), a single stage automobile or
light truck manufacturer (NAICS code
336111, Automobile Manufacturing;
336112, Light Truck and Utility Vehicle
Manufacturing) must have 1,000 or
fewer employees to qualify as a small
business. Both Saleen and Tesla have
less than 1,000 employees and make
less than 1,000 vehicles per year. We
believe that the rulemaking would not
have a significant economic impact on
these small vehicle manufacturers
because under Part 525, passenger car
manufacturers making less than 10,000
vehicles per year can petition NHTSA to
have alternative standards set for those
manufacturers. Tesla produces only
electric vehicles with fuel economy
values far beyond those proposed today,
so we would not expect them to need
to petition for relief. Saleen modifies a
very small number of vehicles produced
by one of the 21 large single-stage
manufacturers, and currently does not
meet the 27.5 mpg passenger car
standard, nor is it anticipated to be able
to meet the standards proposed today.
However, Saleen already petitions the
agency for relief. If the standard is
raised, it has no meaningful impact on
Saleen, because it must still go through
the same process to petition for relief.
Given that there already is a mechanism
for handling small businesses, which is
the purpose of the Regulatory Flexibility
Act, a regulatory flexibility analysis was
not prepared.
4. Executive Order 13132 (Federalism)
Executive Order 13132 requires
NHTSA to develop an accountable
process to ensure ‘‘meaningful and
timely input by State and local officials
647 BMW, Daimler (Mercedes), Chrysler, Ferrari,
Ford, Subaru, General Motors, Honda, Hyundai,
Kia, Lotus, Maserati, Mazda, Mitsubishi, Nissan,
Porsche, Subaru, Suzuki, Tata, Toyota, and
Volkswagen.
648 The Regulatory Flexibility Act only requires
analysis of small domestic manufacturers. There are
two passenger car manufacturers that we know of,
Saleen and Tesla, and no light truck manufacturers.
PO 00000
Frm 00293
Fmt 4701
Sfmt 4700
49745
in the development of regulatory
policies that have federalism
implications.’’ The Order defines the
term ‘‘Policies that have federalism
implications’’ to include regulations
that have ‘‘substantial direct effects on
the States, on the relationship between
the national government and the States,
or on the distribution of power and
responsibilities among the various
levels of government.’’ Under the Order,
NHTSA may not issue a regulation that
has federalism implications, that
imposes substantial direct compliance
costs, and that is not required by statute,
unless the Federal government provides
the funds necessary to pay the direct
compliance costs incurred by State and
local governments, or NHTSA consults
with State and local officials early in the
process of developing the proposed
regulation.
NHTSA solicits comment on this
proposed action from State and local
officials. In his January 26
memorandum, the President requested
NHTSA to ‘‘consider whether any
provisions regarding preemption are
consistent with the EISA, the Supreme
Court’s decision in Massachusetts v.
EPA and other relevant provisions of
law and the policies underlying them.’’
NHTSA is deferring consideration of the
preemption issue. The agency believes
that it is unnecessary to address the
issue further at this time because of the
consistent and coordinated Federal
standards that would apply nationally
under the proposed National Program.
5. Executive Order 12988 (Civil Justice
Reform)
Pursuant to Executive Order 12988,
‘‘Civil Justice Reform,’’ 649 NHTSA has
considered whether this rulemaking
would have any retroactive effect. This
proposed rule does not have any
retroactive effect.
6. Unfunded Mandates Reform Act
Section 202 of the Unfunded
Mandates Reform Act of 1995 (UMRA)
requires Federal agencies to prepare a
written assessment of the costs, benefits,
and other effects of a proposed or final
rule that includes a Federal mandate
likely to result in the expenditure by
State, local, or tribal governments, in the
aggregate, or by the private sector, of
more than $100 million in any one year
(adjusted for inflation with base year of
1995). Adjusting this amount by the
implicit gross domestic product price
deflator for 2006 results in $126 million
(116.043/92.106=1.26). Before
promulgating a rule for which a written
statement is needed, section 205 of
649 61
E:\FR\FM\28SEP2.SGM
FR 4729 (Feb. 7, 1996).
28SEP2
49746
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
UMRA generally requires NHTSA to
identify and consider a reasonable
number of regulatory alternatives and
adopt the least costly, most costeffective, or least burdensome
alternative that achieves the objectives
of the rule. The provisions of section
205 do not apply when they are
inconsistent with applicable law.
Moreover, section 205 allows NHTSA to
adopt an alternative other than the least
costly, most cost-effective, or least
burdensome alternative if the agency
publishes with the final rule an
explanation why that alternative was
not adopted.
This proposed rule will not result in
the expenditure by State, local, or tribal
governments, in the aggregate, of more
than $126 million annually, but it will
result in the expenditure of that
magnitude by vehicle manufacturers
and/or their suppliers. In promulgating
this proposal, NHTSA considered a
variety of alternative average fuel
economy standards lower and higher
than those proposed. NHTSA is
statutorily required to set standards at
the maximum feasible level achievable
by manufacturers based on its
consideration and balancing of relevant
factors and has tentatively concluded
that the proposed fuel economy
standards are the maximum feasible
standards for the passenger car and light
truck fleets for MYs 2012–2016 in light
of the statutory considerations.
7. Paperwork Reduction Act
Under the procedures established by
the Paperwork Reduction Act of 1995, a
person is not required to respond to a
collection of information by a Federal
agency unless the collection displays a
valid OMB control number. This section
describes a request for clearance for a
collection of information associated
with product plan information to assist
the agency in developing final corporate
average fuel economy standards for MY
2012 through 2016 passenger cars and
light trucks. The establishment of those
standards is required by the Energy
Policy and Conservation Act, as
amended by the Energy Independence
and Security Act (EISA) of 2007, Pub. L.
110–140. In compliance with the PRA,
this notice requests comment on the
Information Collection Request (ICR)
abstracted below. The ICR describes the
nature of the information collection and
its expected burden. This is a request for
an extension of an existing collection.
Agency: National Highway Traffic
Safety Administration (NHTSA).
Title: 49 CFR parts 531 and 533
Passenger Car Average Fuel Economy
Standards—Model Years 2008–2020;
Light Truck Average Fuel Economy
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
Standards—Model Years 2008–2020;
Production Plan Data
Type of Request: Extension of existing
collection.
OMB Clearance Number: 2127–0655.
Form Number: This collection of
information will not use any standard
forms.
Summary of the Collection of
Information
In this collection of information,
NHTSA is requesting any updates to
previously-submitted future product
plans from vehicle manufacturers, as
well as production data through the
recent past, including data about
engines and transmissions for model
year (MY) 2008 through MY 2020
passenger cars and light trucks and the
assumptions underlying those plans. If
manufacturers have not previously
submitted product plan information to
NHTSA and wish to do so, NHTSA also
requests such information from them.
NHTSA requests information for MYs
2008–2020 to supplement other
information used by NHTSA in
developing a realistic forecast of the MY
2012–2016 vehicle market, and in
evaluating what technologies may
feasibly be applied by manufacturers to
achieve compliance with the MY 2012–
2016 standards. Information regarding
earlier model years may help the agency
to better account for cumulative effects
such as volume- and time-based
reductions in costs, and also may help
to reveal product mix and technology
application trends during model years
for which the agency is currently
receiving actual corporate average fuel
economy (CAFE) compliance data.
Information regarding later model years
may help the agency gain a better
understanding of how manufacturers’
plans through MY 2016 relate to their
longer-term expectations regarding
Energy Independence and Security Act
requirements, market trends, and
prospects for more advanced
technologies.
NHTSA will also consider
information from model years before
and after MYs 2012–2016 when
reviewing manufacturers’ planned
schedules for redesigning and
freshening their products, in order to
examine how manufacturers anticipate
tying technology introduction to
product design schedules and to
consider how the agency should
account for those schedules in its
analysis for the final rule. In addition,
the agency is requesting information
regarding manufacturers’ estimates of
the future vehicle population, and fuel
economy improvements and
PO 00000
Frm 00294
Fmt 4701
Sfmt 4700
incremental costs attributed to this
notice.
Description of the Need for the
Information and Use of the Information
NHTSA needs the information
described above to aid in assessing what
CAFE standards should be established
for MY 2012 through 2016 passenger
cars and light trucks.
Description of the Likely Respondents
(Including Estimated Number, and
Proposed Frequency of Response to the
Collection of Information)
It is estimated that this collection
affects approximately 22 motor vehicle
manufacturers. The information that is
the subject of this collection of
information is collected whenever
NHTSA publishes a notice of proposed
rulemaking for the purpose of setting
CAFE standards.
Estimate of the Total Annual Reporting
and Recordkeeping Burden Resulting
From the Collection of Information
It is estimated that this collection
affects approximately 22 vehicle
manufacturers. One major manufacturer
(General Motors) estimated their burden
to be approximately 4,300 hours. The
burden to other manufacturers was
estimated using sales weights relative to
General Motor’s total sales (e.g., if a
manufacturer produces 50 percent as
many vehicles as General Motors, their
burden is estimated to be 4,300 * 0.5 =
2,150 hours). Therefore the burden to
each manufacturer depends on the
number of vehicles that manufacturer
produces. The total estimated burden is
16,000 hours annually.
Number of Affected Vehicle
Manufacturers.
Annual Labor Hours for Each
Manufacturer To Prepare
and Submit Required Information.
Total Annual Information
Collection Burden.
22
Variable
16,000 Hours
The monetized cost associated with this
information collection is determined by
multiplying the total labor hours by an
appropriate labor rate. For this
information collection, we believe
vehicle manufacturers will use
mechanical engineers to prepare and
submit the data. Therefore, we are
applying a labor rate of $36.02 per hour
which is the median national wage for
mechanical engineers.650 Thus, the
650 The national median hourly rate for
mechanical engineers, May 2008, according to the
Bureau of Labor Statistics, is $36.02. See https://
www.bls.gov/oes/2008/may/oes_nat.htm#b17-0000
(last accessed August 26, 2009).
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
estimated monetized annual cost is
16,000 hours × $36.02 per hour =
$576,320.
Comments are specifically sought on
the following issues:
• Whether the collection of
information is necessary for the proper
performance of the functions of the
Department, including whether the
information will have practical utility.
• Whether the Department’s estimate
for the burden of the information
collection is accurate.
• Ways to minimize the burden of the
collection of information on
respondents, including the use of
automated collection techniques or
other forms of information technology.
Please send comments to the docket
number cited in the heading of this
notice. PRA comments are due within
60 days following publication of this
document in the Federal Register. The
agency recognizes that the amendment
to the existing collection of information
may be subject to revision in response
to public comments and the OMB
review.
For further information on this
proposal to extend the collection of
information, please contact Ken Katz,
Fuel Economy Division, Office of
International Policy, Fuel Economy, and
Consumer Programs, National Highway
Traffic Safety Administration, 1200 New
Jersey Avenue, SE., Washington, DC
20590. You may also contact him by
phone at (202) 366–0846 or by fax at
(202) 493–2290.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
8. Regulation Identifier Number
The Department of Transportation
assigns a regulation identifier number
(RIN) to each regulatory action listed in
the Unified Agenda of Federal
Regulations. The Regulatory Information
Service Center publishes the Unified
Agenda in April and October of each
year. You may use the RIN contained in
the heading at the beginning of this
document to find this action in the
Unified Agenda.
9. Executive Order 13045
Executive Order 13045 651 applies to
any rule that: (1) Is determined to be
economically significant as defined
under E.O. 12866, and (2) concerns an
environmental, health, or safety risk that
NHTSA has reason to believe may have
a disproportionate effect on children. If
the regulatory action meets both criteria,
we must evaluate the environmental
health or safety effects of the proposed
rule on children, and explain why the
proposed regulation is preferable to
other potentially effective and
651 62
FR 19885 (Apr. 23, 1997).
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
reasonably foreseeable alternatives
considered by us.
Chapter 4 of NHTSA’s DEIS notes that
breathing PM can cause respiratory
ailments, heart attack, and arrhythmias
(Dockery et al. 1993, Samet et al. 2000,
Pope et al. 1995, 2002, 2004, Pope and
Dockery 2006, Dominici et al. 2006,
Laden et al. 2006, all in Ebi et al. 2008).
Populations at greatest risk could
include children, the elderly, and those
with heart and lung disease, diabetes
(Ebi et al. 2008), and high blood
¨
pressure (Kunzli et al. 2005, in Ebi et al.
2008). Chronic exposure to PM could
decrease lifespan by 1 to 3 years (Pope
2000, in American Lung Association
2008). Increasing PM concentrations are
expected to have a measurable adverse
impact on human health (Confalonieri
et al. 2007).
Additionally, the DEIS notes that
substantial morbidity and childhood
mortality has been linked to water- and
food-borne diseases. Climate change is
projected to alter temperature and the
hydrologic cycle through changes in
precipitation, evaporation,
transpiration, and water storage. These
changes, in turn, potentially affect
water-borne and food-borne diseases,
such as salmonellosis, campylobacter,
leptospirosis, and pathogenic species of
vibrio. They also have a direct impact
on surface water availability and water
quality. It has been estimated that more
than 1 billion people in 2002 did not
have access to adequate clean water
(McMichael et al. 2003, in Epstein et al.
2006). Increased temperatures, greater
evaporation, and heavy rain events have
been associated with adverse impacts on
drinking water through increased
waterborne diseases, algal blooms, and
toxins (Chorus and Bartram 1999, Levin
et al. 2002, Johnson and Murphy 2004,
all in Epstein et al. 2006). A seasonal
signature has been associated with
waterborne disease outbreaks (EPA
2009b). In the United States, 68 percent
of all waterborne diseases between 1948
and 1994 were observed after heavy
rainfall events (Curriero et al. 2001a, in
Epstein et al. 2006).
Climate change could further impact
a pathogen by directly affecting its life
cycle (Ebi et al. 2008). The global
increase in the frequency, intensity, and
duration of red tides could be linked to
local impacts already associated with
climate change (Harvell et al. 1999, in
Epstein et al. 2006); toxins associated
with red tide directly affect the nervous
system (Epstein et al. 2006).
Many people do not report or seek
medical attention for their ailments of
water-borne or food-borne diseases;
hence, the number of actual cases with
these diseases is greater than clinical
PO 00000
Frm 00295
Fmt 4701
Sfmt 4700
49747
records demonstrate (Mead et al. 1999,
in Ebi et al. 2008). Many of the
gastrointestinal diseases associated with
water-borne and food-borne diseases
can be self-limiting; however,
vulnerable populations include young
children, those with a compromised
immune system, and the elderly.
Thus, as detailed in the DEIS, NHTSA
has evaluated the environmental health
and safety effects of the proposed rule
on children. The DEIS also explains
why the proposed regulation is
preferable to other potentially effective
and reasonably foreseeable alternatives
considered by the agency.
10. National Technology Transfer and
Advancement Act
Section 12(d) of the National
Technology Transfer and Advancement
Act (NTTAA) requires NHTA to
evaluate and use existing voluntary
consensus standards in its regulatory
activities unless doing so would be
inconsistent with applicable law (e.g.,
the statutory provisions regarding
NHTSA’s vehicle safety authority) or
otherwise impractical.
Voluntary consensus standards are
technical standards developed or
adopted by voluntary consensus
standards bodies. Technical standards
are defined by the NTTAA as
‘‘performance-base or design-specific
technical specification and related
management systems practices.’’ They
pertain to ‘‘products and processes,
such as size, strength, or technical
performance of a product, process or
material.’’
Examples of organizations generally
regarded as voluntary consensus
standards bodies include the American
Society for Testing and Materials
(ASTM), the Society of Automotive
Engineers (SAE), and the American
National Standards Institute (ANSI). If
NHTSA does not use available and
potentially applicable voluntary
consensus standards, we are required by
the Act to provide Congress, through
OMB, an explanation of the reasons for
not using such standards.
There are currently no voluntary
consensus standards relevant to today’s
proposed CAFE standards.
11. Executive Order 13211
Executive Order 13211 652 applies to
any rule that: (1) Is determined to be
economically significant as defined
under E.O. 12866, and is likely to have
a significant adverse effect on the
supply, distribution, or use of energy; or
(2) that is designated by the
Administrator of the Office of
652 66
E:\FR\FM\28SEP2.SGM
FR 28355 (May 18, 2001).
28SEP2
49748
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
information, Labeling, Motor vehicle
pollution, Reporting and recordkeeping
requirements.
12. Department of Energy Review
In accordance with 49 U.S.C.
32902(j)(1), we submitted this proposed
rule to the Department of Energy for
review. That Department did not make
any comments that we have not
addressed.
49 CFR Part 538
13. Plain Language
Executive Order 12866 requires each
agency to write all rules in plain
language. Application of the principles
of plain language includes consideration
of the following questions:
• Have we organized the material to
suit the public’s needs?
• Are the requirements in the rule
clearly stated?
• Does the rule contain technical
language or jargon that isn’t clear?
• Would a different format (grouping
and order of sections, use of headings,
paragraphing) make the rule easier to
understand?
• Would more (but shorter) sections
be better?
• Could we improve clarity by adding
tables, lists, or diagrams?
• What else could we do to make the
rule easier to understand?
If you have any responses to these
questions, please include them in your
comments on this proposal.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Information and Regulatory Affairs as a
significant energy action. If the
regulatory action meets either criterion,
we must evaluate the adverse energy
effects of the proposed rule and explain
why the proposed regulation is
preferable to other potentially effective
and reasonably feasible alternatives
considered by us.
The proposed rule seeks to establish
passenger car and light truck fuel
economy standards that will reduce the
consumption of petroleum and will not
have any adverse energy effects.
Accordingly, this proposed rulemaking
action is not designated as a significant
energy action.
40 CFR Chapter I
40 CFR Part 600
Administrative practice and
procedure, Electric power, Fuel
economy, Incorporation by reference,
Labeling, Reporting and recordkeeping
requirements.
49 CFR Part 531 and 533
Fuel economy.
49 CFR Part 537
Fuel economy, Reporting and
recordkeeping requirements.
Administrative practice and
procedure, Fuel economy, Motor
vehicles, Reporting and recordkeeping
requirements.
Environmental Protection Agency
For the reasons set forth in the
preamble, the Environmental Protection
Agency proposes to amend parts 86 and
600 of title 40, Chapter I of the Code of
Federal Regulations as follows:
PART 86—CONTROL OF EMISSIONS
FROM NEW AND IN-USE HIGHWAY
VEHICLES AND ENGINES
1. The authority citation for part 86
continues to read as follows:
Authority: 42 U.S.C. 7401–7671q.
2. Section 86.1 is amended by adding
paragraphs (b)(2)(xxxix) through (xxxxi)
to read as follows:
§ 86.1
Reference materials.
14. Privacy Act
Anyone is able to search the
electronic form of all comments
received into any of our dockets by the
name of the individual submitting the
comment (or signing the comment, if
submitted on behalf of an organization,
business, labor union, etc.). You may
review DOT’s complete Privacy Act
statement in the Federal Register (65 FR
19477–78, April 11, 2000) or you may
visit https://www.dot.gov/privacy.html.
*
*
*
*
(b) * * *
(2) * * *
(xxxix) SAE J2064, December 2005,
R134a Refrigerant Automotive AirConditioned Hose, IBR approved for
§ 86.166–12.
(xxxx) SAE J2727, revised August
2008, HFC–134a Mobile Air
Conditioning System Refrigerant
Emission Chart, IBR approved for
§ 86.166–12.
(xxxxi) SAE J2765, October, 2008,
Procedure for Measuring System COP
[Coefficient of Performance] of a Mobile
Air Conditioning System on a Test
Bench, IBR approved for § 86.1866–12.
*
*
*
*
*
List of Subjects
Subpart B—[Amended]
40 CFR Part 86
Administrative practice and
procedure, Confidential business
3. Section 86.111–94 is amended by
revising paragraph (b) introductory text
to read as follows:
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
*
PO 00000
Frm 00296
Fmt 4701
Sfmt 4700
§ 86.111–94
system.
Exhaust gas analytical
*
*
*
*
*
(b) Major component description. The
exhaust gas analytical system, Figure
B94–7, consists of a flame ionization
detector (FID) (heated, 235 ° ± 15 °F
(113 ° ± 8 °C) for methanol-fueled
vehicles) for the determination of THC,
a methane analyzer (consisting of a gas
chromatograph combined with a FID)
for the determination of CH4, nondispersive infrared analyzers (NDIR) for
the determination of CO and CO2, a
chemiluminescence analyzer (CL) for
the determination of NOX, and an
analyzer meeting the requirements
specified in § 86.167–12 for the
determination of N2O for 2012 and later
model year vehicles. A heated flame
ionization detector (HFID) is used for
the continuous determination of THC
from petroleum-fueled diesel-cycle
vehicles (may also be used with
methanol-fueled diesel-cycle vehicles),
Figure B94–5 (or B94–6). The analytical
system for methanol consists of a gas
chromatograph (GC) equipped with a
flame ionization detector. The analysis
for formaldehyde is performed using
high-pressure liquid chromatography
(HPLC) of 2,4-dinitrophenylhydrazine
(DNPH) derivatives using ultraviolet
(UV) detection. The exhaust gas
analytical system shall conform to the
following requirements:
*
*
*
*
*
4. Section 86.127–00 is amended as
follows:
a. By revising the introductory text.
b. By revising paragraph (a)
introductory text.
c. By revising paragraph (a)(1),
d. By revising paragraph (b).
e. By revising paragraph (c).
f. By revising paragraphs (d) and (e).
§ 86.127–00
Test procedures; overview.
Applicability. The procedures
described in this subpart are used to
determine the conformity of vehicles
with the standards set forth in subpart
A or S of this part (as applicable) for
light-duty vehicles, light-duty trucks,
and medium-duty passenger vehicles.
Except where noted, the procedures of
paragraphs (a) through (b) of this
section, § 86.127–96 (c) and (d), and the
contents of §§ 86.135–94, 86.136–90,
86.137–96, 86.140–94, 86.142–90, and
86.144–94 are applicable for
determining emission results for vehicle
exhaust emission systems designed to
comply with the FTP emission
standards, or the FTP emission element
required for determining compliance
with composite SFTP standards.
Paragraphs (f) and (g) of this section
discuss the additional test elements of
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
aggressive driving (US06) and air
conditioning (SC03) that comprise the
exhaust emission components of the
SFTP. Section 86.127–96(e) discusses
fuel spitback emissions and paragraphs
(h) and (i) of this section are applicable
to all vehicle emission test procedures.
Section 86.127–00 includes text that
specifies requirements that differ from
§ 86.127–96. Where a paragraph in
§ 86.127–96 is identical and applicable
to § 86.127–00, this may be indicated by
specifying the corresponding paragraph
and the statement ‘‘[Reserved]. For
guidance see § 86.127–96.’’
(a) The overall test consists of
prescribed sequences of fueling,
parking, and operating test conditions.
Vehicles are tested for any or all of the
following emissions, depending upon
the specific test requirements and the
vehicle fuel type:
(1) Gaseous exhaust THC, NMHC, CO,
NOX, CO2, N2O, CH4, CH3OH, C2H5OH,
C2H4O, and HCHO.
*
*
*
*
*
(b) The FTP Otto-cycle exhaust
emission test is designed to determine
gaseous THC, CO, CO2, CH4, NOX, N2O,
and particulate mass emissions from
gasoline-fueled, methanol-fueled and
gaseous-fueled Otto-cycle vehicles as
well as methanol and formaldehyde
from methanol-fueled Otto-cycle
vehicles, as well as methanol, ethanol,
acetaldehyde, and formaldehyde from
ethanol-fueled vehicles while
simulating an average trip in an urban
area of 11 miles (18 kilometers). The test
consists of engine start-ups and vehicle
operation on a chassis dynamometer
through a specified driving schedule
(see paragraph (a) of appendix I to this
part for the Urban Dynamometer Driving
Schedule). A proportional part of the
diluted exhaust is collected
continuously for subsequent analysis,
using a constant volume (variable
dilution) sampler or critical flow venturi
sampler.
(c) The diesel-cycle exhaust emission
test is designed to determine particulate
and gaseous mass emissions during a
test similar to the test in § 86.127(b). For
petroleum-fueled diesel-cycle vehicles,
diluted exhaust is continuously
analyzed for THC using a heated sample
line and analyzer; the other gaseous
emissions (CH4, CO, CO2, N2O, and
NOX) are collected continuously for
analysis as in § 86.127(b). For methanoland ethanol-fueled vehicles, THC,
methanol, formaldehyde, CO, CO2, CH4,
N2O, and NOX are collected
continuously for analysis as in
§ 86.127(b). Additionally, for ethanolfueled vehicles, ethanol and
acetaldehyde are collected continuously
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
for analysis as in § 86.127(b). THC,
methanol, ethanol, acetaldehyde, and
formaldehyde are collected using heated
sample lines, and a heated FID is used
for THC analyses. Simultaneous with
the gaseous exhaust collection and
analysis, particulates from a
proportional part of the diluted exhaust
are collected continuously on a filter.
The mass of particulate is determined
by the procedure described in § 86.139.
This testing requires a dilution tunnel as
well as the constant volume sampler.
(d)–(e) [Reserved]. For guidance see
§ 86.127–96.
*
*
*
*
*
5. Section 86.135–00 is amended by
revising paragraph (a) to read as follows:
§ 86.135–12
Dynamometer procedure.
*
*
*
*
*
(a) Overview. The dynamometer run
consists of two tests, a ‘‘cold’’ start test,
after a minimum 12-hour and a
maximum 36-hour soak according to the
provisions of §§ 86.132 and 86.133, and
a ‘‘hot’’ start test following the ‘‘cold’’
start by 10 minutes. Engine startup
(with all accessories turned off),
operation over the UDDS and engine
shutdown make a complete cold start
test. Engine startup and operation over
the first 505 seconds of the driving
schedule complete the hot start test. The
exhaust emissions are diluted with
ambient air in the dilution tunnel as
shown in Figure B94–5 and Figure B94–
6. A dilution tunnel is not required for
testing vehicles waived from the
requirement to measure particulates. Six
particulate samples are collected on
filters for weighing; the first sample plus
backup is collected during the first 505
seconds of the cold start test; the second
sample plus backup is collected during
the remainder of the cold start test
(including shutdown); the third sample
plus backup is collected during the hot
start test. Continuous proportional
samples of gaseous emissions are
collected for analysis during each test
phase. For gasoline-fueled, natural gasfueled and liquefied petroleum gasfueled Otto-cycle vehicles, the
composite samples collected in bags are
analyzed for THC, CO, CO2, CH4, NOX,
and, for 2012 and later model year
vehicles, N2O. For petroleum-fueled
diesel-cycle vehicles (optional for
natural gas-fueled, liquefied petroleum
gas-fueled and methanol-fueled dieselcycle vehicles), THC is sampled and
analyzed continuously according to the
provisions of § 86.110. Parallel samples
of the dilution air are similarly analyzed
for THC, CO, CO2, CH4, NOX, and, for
2012 and later model year vehicles,
N2O. For natural gas-fueled, liquefied
petroleum gas-fueled and methanol-
PO 00000
Frm 00297
Fmt 4701
Sfmt 4700
49749
fueled vehicles, bag samples are
collected and analyzed for THC (if not
sampled continuously), CO, CO2, CH4,
NOX, and, for 2012 and later model year
vehicles, N2O. For methanol-fueled
vehicles, methanol and formaldehyde
samples are taken for both exhaust
emissions and dilution air (a single
dilution air formaldehyde sample,
covering the total test period may be
collected). For ethanol-fueled vehicles,
methanol, ethanol, acetaldehyde, and
formaldehyde samples are taken for
both exhaust emissions and dilution air
(a single dilution air formaldehyde
sample, covering the total test period
may be collected). Parallel bag samples
of dilution air are analyzed for THC, CO,
CO2, CH4, NOX, and, for 2012 and later
model year vehicles, N2O. Methanol and
formaldehyde samples may be omitted
for 1990 through 1994 model years
when a FID calibrated on methanol is
used.
*
*
*
*
*
6. A new § 86.165–12 is added to
subpart B to read as follows:
§ 86.165–12
procedure.
Air conditioning idle test
(a) Applicability. This section
describes procedures for determining air
conditioning-related CO2 emissions
from 2014 and later model year lightduty vehicles, light-duty trucks, and
medium-duty passenger vehicles. The
results of this test are used to qualify for
air conditioning efficiency CO2 credits
according to § 86.1866–12(c).
(b) Overview. The test consists of a
brief period to stabilize the vehicle at
idle, followed by a ten-minute period at
idle when CO2 emissions are measured
without any air conditioning systems
operating, followed by a ten-minute
period at idle when CO2 emissions are
measured with the air conditioning
system operating. This test is designed
to determine the air conditioningrelated CO2 emission value, in grams
per minute. If engine stalling occurs
during cycle operation, follow the
provisions of § 86.136–90 to restart the
test. Measurement instruments must
meet the specifications described in this
subpart.
(c) Test cell ambient conditions.
(1) Ambient humidity within the test
cell during all phases of the test
sequence shall be controlled to an
average of 50 ± 5 grains of water/pound
of dry air.
(2) Ambient air temperature within
the test cell during all phases of the test
sequence shall be controlled to 75 ±
2 °F on average and 75 ± 5 °F as an
instantaneous measurement. Air
temperature shall be recorded
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49750
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
continuously at a minimum of 30
second intervals.
(d) Test sequence.
(1) Connect the vehicle exhaust
system to the raw sampling location or
dilution stage according to the
provisions of this subpart. For dilution
systems, dilute the exhaust as described
in this subpart. Continuous sampling
systems must meet the specifications
provided in this subpart.
(2) Test the vehicle in a fully warmedup condition. If the vehicle has soaked
for two hours or less since the last
exhaust test element, preconditioning
may consist of a 505 Cycle, 866 Cycle,
US06, or SC03, as these terms are
defined in § 86.1803–01, or a highway
fuel economy test procedure, as defined
in § 600.002–08 of this chapter. For
longer soak periods, precondition the
vehicle using one full Urban
Dynamometer Driving Schedule. Ensure
that the vehicle has stabilized at test cell
ambient conditions such that the
vehicle interior temperature is not
substantially different from the external
test cell temperature. Windows may be
opened during preconditioning to
achieve this stabilization.
(3) Immediately after the
preconditioning, turn off any cooling
fans, if present, close the vehicle’s hood,
fully close all the vehicle’s windows,
ensure that all the vehicle’s air
conditioning systems are set to full off,
start the CO2 sampling system, and then
idle the vehicle for not less than 1
minute and not more than 5 minutes to
achieve normal and stable idle
operation.
(4) Measure and record the
continuous CO2 concentration for 600
seconds. Measure the CO2 concentration
continuously using raw or dilute
sampling procedures. Multiply this
concentration by the continuous (raw or
dilute) flow rate at the emission
sampling location to determine the CO2
flow rate. Calculate the CO2 cumulative
flow rate continuously over the test
interval. This cumulative value is the
total mass of the emitted CO2.
(5) Within 60 seconds after
completing the measurement described
in paragraph (d)(4) of this section, turn
on the vehicle’s air conditioning system.
Set automatic air conditioning systems
to a temperature 9 °F (5 °C) below the
ambient temperature of the test cell. Set
manual air conditioning systems to
maximum cooling with recirculation
turned off, except that recirculation
shall be enabled if the air conditioning
system automatically defaults to a
recirculation mode when set to
maximum cooling. Continue idling the
vehicle while measuring and recording
the continuous CO2 concentration for
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
600 seconds as described in paragraph
(d)(4) of this section. Air conditioning
systems with automatic temperature
controls are finished with the test.
Manually controlled air conditioning
systems must complete one additional
idle period described in paragraph (d)(6)
of this section.
(6) This paragraph (d)(6) applies only
to manually controlled air conditioning
systems. Within 60 seconds after
completing the measurement described
in paragraph (d)(5) of this section, leave
the vehicle’s air conditioning system on
and set as described in paragraph (d)(5)
of this section but set the fan speed to
the lowest setting that continues to
provide air flow. Recirculation shall be
turned off except that if the system
defaults to a recirculation mode when
set to maximum cooling and maintains
recirculation with the low fan speed,
then recirculation shall continue to be
enabled. After the fan speed has been
set, continue idling the vehicle while
measuring and recording the continuous
CO2 concentration for a total of 600
seconds as described in paragraph (d)(4)
of this section.
(e) Calculations. (1) For the
measurement with no air conditioning,
calculate the CO2 emissions (in grams
per minute) by dividing the total mass
of CO2 from paragraph (d)(4) of this
section by 10.0 (the duration in minutes
for which CO2 is measured). Round this
result to the nearest whole gram per
minute.
(2)(i) For the measurement with air
conditioning in operation for automatic
air conditioning systems, calculate the
CO2 emissions (in grams per minute) by
dividing the total mass of CO2 from
paragraph (d)(5) of this section by 10.0.
Round this result to the nearest whole
gram per minute.
(ii) For the measurement with air
conditioning in operation for manually
controlled air conditioning systems,
calculate the CO2 emissions (in grams
per minute) by summing the total mass
of CO2 from paragraphs (d)(5) and (d)(6)
of this section and dividing by 20.0.
Round this result to the nearest whole
gram per minute.
(3) Calculate the increased CO2
emissions due to air conditioning (in
grams per minute) by subtracting the
results of paragraph (e)(1) of this section
from the results of paragraph (e)(2)(i) or
(ii) of this section, whichever is
applicable.
7. A new § 86.166–12 is added to
subpart B to read as follows:
§ 86.166–12 Method for calculating
emissions due to air conditioning leakage.
This section describes procedures
used to determine a refrigerant leakage
PO 00000
Frm 00298
Fmt 4701
Sfmt 4700
rate from vehicle-based air conditioning
units. The results of this test are used to
determine air conditioning leakage
credits according to § 86.1866–12(b).
(a) Emission totals. Calculate an
annual rate of refrigerant leakage from
an air conditioning system using the
following equation:
Grams/YRTOT = Grams/YRRP + Grams/
YRSP + Grams/YRFH + Grams/YRMC +
Grams/YRC ¥ Grams/YRCREDIT
Where:
Grams/YRTOT = Total air conditioning system
emission rate in grams per year and
rounded to the nearest tenth of a gram
per year.
Grams/YRRP = Emission rate for rigid pipe
connections as described in paragraph
(b) of this section.
Grams/YRSP = Emission rate for service ports
and refrigerant control devices as
described in paragraph (c) of this section.
Grams/YRFH = Emission rate for flexible
hoses as described in paragraph (d) of
this section.
Grams/YRMC = Emission rate for heat
exchangers, mufflers, receiver/driers,
and accumulators as described in
paragraph (e) of this section.
Grams/YRC = Emission rate for compressors
as described in paragraph (f) of this
section.
Grams/YRCREDIT = Leakage monitoring credit,
as applicable, from paragraph (g) of this
section.
(b) Fittings. Determine the grams per
year emission rate for rigid pipe
connections using the following
equation:
Grams/YRRP = 0.00522 · [(125 · SO) +
(75 · SCO) + (50 · MO) + (10 · SW)
+ (5 · SWO) + (MG)]
Where:
Grams/YRRP = Total emission rate for rigid
pipe connections in grams per year.
SO = The number of single O-ring
connections.
SCO = The number of single captured O-ring
connections.
MO = The number of multiple O-ring
connections.
SW = The number of seal washer
connections.
SWO = The number of seal washer with Oring connections.
MG = The number of metal gasket
connections.
(c) Service ports and refrigerant
control devices. Determine the grams
per year emission rate for service ports
and refrigerant control devices using the
following equation:
Grams/YRSP = (0.3 · HSSP · 0.522) + (0.2
· LSSP · 0.522) + (0.2 · STV · 0.522)
+ (0.2 · TXV · 0.522)
Where:
Grams/YRSP = The emission rate for service
ports and refrigerant control devices, in
grams per year.
HSSP = The number of high side service
ports.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
LSSP = The number of low side service ports.
STV = The total number of switches,
transducers, and pressure relief valves.
TXV = The number of TXV refrigerant
control devices.
using the following equation, and then
sum the values for each hose in the
system to calculate a total emission rate
for the system:
(d) Flexible hoses. Determine the
permeation emission rate in grams per
year for each segment of flexible hose
Grams/YRFH = 0.00522 · (3.14159 · ID ·
L · ER)
Where:
49751
Grams/YRFH = Emission rate for a segment of
flexible hose in grams per year.
ID = Inner diameter of hose, in millimeters.
L = Length of hose, in millimeters.
ER = Emission rate per unit internal surface
area of the hose, in g/mm2. Select the
appropriate value from the following
table:
ER
Material/configuration
High-pressure side
All rubber hose ....................................................................................................................................
Standard barrier or veneer hose .........................................................................................................
Ultra-low permeation barrier or veneer hose ......................................................................................
(e) Heat exchangers, mufflers,
receiver/driers, and accumulators. Use
an emission rate of 0.261 grams per year
as a combined value for all heat
exchangers, mufflers, receiver/driers,
and accumulators (Grams/YRMC).
(f) Compressors. Determine the
emission rate for compressors using the
following equation, except that the final
term in the equation (‘‘1500/SSL’’) is not
applicable to electric (or semi-hermetic)
compressors:
Grams/YRC = 0.00522 · [(300 · OHS) +
(200 · MHS) + (150 · FAP) + (100
· GHS) + (1500/SSL)]
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Where:
Grams/YRC = The emission rate for the
compressors in the air conditioning
system, in grams per year.
OHS = The number of O-ring housing seals.
MHS = The number of molded housing seals.
FAP = The number of fitting adapter plates.
GHS = The number of gasket housing seals.
SSL = The number of lips on shaft seal (for
belt-driven compressors only).
(g) Leakage monitoring credits.
Electronic monitoring systems that
provide indication of a refrigerant loss
to the operator through an interior
driver information display or an air
conditioning-specific malfunction
indicator when the air conditioning
system has lost 40 percent of its charge
capacity shall use a credit of 1 g/yr.
(h) Definitions. The following
definitions apply to this section:
(1) All rubber hose means a Type A
or Type B hose as defined by SAE J2064
with a permeation rate not greater than
15 kg/m2/year when tested according to
SAE J2064. SAE J2064 is incorporated
by reference; see § 86.1.
(2) Standard barrier or veneer hose
means a Type C, D, E, or F hose as
defined by SAE J2064 with a permeation
rate not greater than 5 kg/m2/year when
tested according to SAE J2064. SAE
J2064 is incorporated by reference; see
§ 86.1.
(3) Ultra-low permeation barrier or
veneer hose means a hose with a
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
permeation rate not greater than 1.5 kg/
m2/year when tested according to SAE
J2064. SAE J2064 is incorporated by
reference; see § 86.1.
8. A new § 86.167–12 is added to
subpart B to read as follows:
§ 86.167–12
N2O measurement devices.
(a) General component requirements.
We recommend that you use an analyzer
that meets the specifications in Table 1
of 40 CFR 1065.205. Note that your
system must meet the linearity
verification in 40 CFR 1065.307.
(b) Instrument types. You may use any
of the following analyzers to measure
N2O:
(1) Nondispersive infra-red (NDIR)
analyzer. You may use an NDIR
analyzer that has compensation
algorithms that are functions of other
gaseous measurements and the engine’s
known or assumed fuel properties. The
target value for any compensation
algorithm is 0.0% (that is, no bias high
and no bias low), regardless of the
uncompensated signal’s bias.
(2) Fourier transform infra-red (FTIR)
analyzer. You may use an FTIR analyzer
that has compensation algorithms that
are functions of other gaseous
measurements and the engine’s known
or assumed fuel properties. The target
value for any compensation algorithm is
0.0% (that is, no bias high and no bias
low), regardless of the uncompensated
signal’s bias. Use EPA Test Method 320
‘‘Measurement of Vapor Phase Organic
and Inorganic Emissions by Extractive
Fourier Transform Infrared (FTIR)
Spectroscopy’’ for spectral
interpretation (see 40 CFR part 63
appendix A).
(3) Photoacoustic analyzer. You may
use a photoacoustic analyzer that has
compensation algorithms that are
functions of other gaseous
measurements. The target value for any
compensation algorithm is 0.0% (that is,
no bias high and no bias low), regardless
of the uncompensated signal’s bias. Use
an optical wheel configuration that
PO 00000
Frm 00299
Fmt 4701
Sfmt 4700
0.0216
0.0054
0.00225
Low-pressure side
0.0144
0.0036
0.00167
gives analytical priority to measurement
of the least stable components in the
sample. Select a sample integration time
of at least 5 seconds. Take into account
sample chamber and sample line
volumes when determining flush times
for your instrument.
(4) Gas chromatograph (GC) analyzer.
You may use a gas chromatograph with
Electron Capture Detector (ECD) to
measure N2O concentrations of diluted
exhaust for batch sampling. You may
use a packed or porous layer open
tubular (PLOT) column phase of
suitable polarity and length to achieve
adequate resolution of the N2O peak for
analysis. Examples of acceptable
columns are a PLOT column consisting
of bonded polystyrene-divinylbenzene
or a Porapack Q packed column. Take
the column temperature profile and
carrier gas selection into consideration
when setting up your method to achieve
adequate N2O peak resolution.
(c) Interference validation. Perform
interference validation for NDIR, FTIR,
and Photoacoustic analyzers using the
procedures of § 86.168–12 as follows:
(1) Certain interference gases can
positively interfere with these analyzers
by causing a response similar to N2O as
follows:
(i) The interference gases for NDIR
analyzers are CO, CO2, H2O, CH4 and
SO2. Note that interference species, with
the exception of H2O, are dependent on
the N2O infrared absorption band
chosen by the instrument manufacturer
and should be determined
independently for each analyzer.
(ii) Use good engineering judgment to
determine interference gases for FTIR.
Note that interference species, with the
exception of H2O, are dependent on the
N2O infrared absorption band chosen by
the instrument manufacturer and should
be determined independently for each
analyzer.
(iii) The interference gases for
photoacoustic analyzers are CO, CO2,
and H2O.
E:\FR\FM\28SEP2.SGM
28SEP2
49752
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
(2) Analyzers must have combined
interference that is within (0.0 ± 1.0)
mol/mol. We strongly recommend a
lower interference that is within (0.0 ±
0.5) mol/.
9. A new § 86.168–12 is added to
subpart B to read as follows:
mstockstill on DSKH9S0YB1PROD with PROPOSALS
§ 86.168–12 Interference verification for
N2O analyzers.
(a) Scope and frequency. See 40 CFR
1065.275 to determine whether you
need to verify the amount of
interference after initial analyzer
installation and after major
maintenance.
(b) Measurement principles.
Interference gasses can positively
interfere with certain analyzers by
causing a response similar to N2O. If the
analyzer uses compensation algorithms
that utilize measurements of other gases
to meet this interference verification,
simultaneously conduct these other
measurements to test the compensation
algorithms during the analyzer
interference verification.
(c) System requirements. See 40 CFR
1065.275 for system requirements
related to allowable interference levels.
(d) Procedure. Perform the
interference verification as follows:
(1) Start, operate, zero, and span the
N2O FTIR analyzer as you would before
an emission test. If the sample is passed
through a dryer during emission testing,
you may run this verification test with
the dryer if it meets the requirements of
40 CFR 1065.342. Operate the dryer at
the same conditions as you will for an
emission test. You may also run this
verification test without the sample
dryer.
(2) Create a humidified test gas by
bubbling a multi component span gas
that incorporates the target interference
species and meets the specifications in
40 CFR 1065.750 through distilled water
in a sealed vessel. If the sample is not
passed through a dryer during emission
testing, control the vessel temperature to
generate an H2O level at least as high as
the maximum expected during emission
testing. If the sample is passed through
a dryer during emission testing, control
the vessel temperature to generate an
H2O level at least as high as the level
determined in 40 CFR 1065.145(e)(2) for
that dryer. Use interference span gas
concentrations that are at least as high
as the maximum expected during
testing.
(3) Introduce the humidified
interference test gas into the sample
system. You may introduce it
downstream of any sample dryer, if one
is used during testing.
(4) If the sample is not passed through
a dryer during this verification test,
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
measure the water mole fraction, xH2O,
of the humidified interference test gas as
close as possible to the inlet of the
analyzer. For example, measure
dewpoint, Tdew, and absolute pressure,
ptotal, to calculate xH2O. Verify that the
water content meets the requirement in
paragraph (d)(2) of this section. If the
sample is passed through a dryer during
this verification test, you must verify
that the water content of the humidified
test gas downstream of the vessel meets
the requirement in paragraph (d)(2) of
this section based on either direct
measurement of the water content (e.g.,
dewpoint and pressure) or an estimate
based on the vessel pressure and
temperature. Use good engineering
judgment to estimate the water content.
For example, you may use previous
direct measurements of water content to
verify the vessel’s level of saturation.
(5) If a sample dryer is not used in this
verification test, use good engineering
judgment to prevent condensation in the
transfer lines, fittings, or valves from the
point where xH2O is measured to the
analyzer. We recommend that you
design your system so that the wall
temperatures in the transfer lines,
fittings, and valves from the point where
xH2O is measured to the analyzer are at
least 5 °C above the local sample gas
dewpoint.
(6) Allow time for the analyzer
response to stabilize. Stabilization time
may include time to purge the transfer
line and to account for analyzer
response.
(7) While the analyzer measures the
sample’s concentration, record its
output for 30 seconds. Calculate the
arithmetic mean of this data.
(8) The analyzer meets the
interference verification if the result of
paragraph (d)(7) of this section meets
the tolerance in 40 CFR 1065.275.
(9) You may also run interference
procedures separately for individual
interference gases. If the interference gas
levels used are higher than the
maximum levels expected during
testing, you may scale down each
observed interference value by
multiplying the observed interference
by the ratio of the maximum expected
concentration value to the actual value
used during this procedure. You may
run separate interference concentrations
of H2O (down to 0.025 mol/mol H2O
content) that are lower than the
maximum levels expected during
testing, but you must scale up the
observed H2O interference by
multiplying the observed interference
by the ratio of the maximum expected
H2O concentration value to the actual
value used during this procedure. The
sum of the scaled interference values
PO 00000
Frm 00300
Fmt 4701
Sfmt 4700
must meet the tolerance specified in 40
CFR 1065.275.
Subpart S—[Amended]
10. A new § 86.1801–12 is added to
read as follows:
§ 86.1801–12
Applicability.
(a) Applicability. Except as otherwise
indicated, the provisions of this subpart
apply to new light-duty vehicles, lightduty trucks, medium-duty passenger
vehicles, and Otto-cycle complete
heavy-duty vehicles, including multifueled, alternative fueled, hybrid
electric, plug-in hybrid electric, and
electric vehicles. These provisions also
apply to new incomplete light-duty
trucks below 8,500 Gross Vehicle
Weight Rating. In cases where a
provision applies only to a certain
vehicle group based on its model year,
vehicle class, motor fuel, engine type, or
other distinguishing characteristics, the
limited applicability is cited in the
appropriate section of this subpart.
(b) Aftermarket conversions. The
provisions of this subpart apply to
aftermarket conversion systems,
aftermarket conversion installers, and
aftermarket conversion certifiers, as
those terms are defined in 40 CFR
85.502, of all model year light-duty
vehicles, light-duty trucks, mediumduty passenger vehicles, and complete
Otto-cycle heavy-duty vehicles.
(c) Optional applicability.
(1) [Reserved]
(2) A manufacturer may request to
certify any incomplete Otto-cycle heavyduty vehicle of 14,000 pounds Gross
Vehicle Weight Rating or less in
accordance with the provisions for
complete heavy-duty vehicles. Heavyduty engine or heavy-duty vehicle
provisions of subpart A of this part do
not apply to such a vehicle.
(3) [Reserved]
(4) Upon preapproval by the
Administrator, a manufacturer may
optionally certify an aftermarket
conversion of a complete heavy-duty
vehicle greater than 10,000 pounds
Gross Vehicle Weight Rating and of
14,000 pounds Gross Vehicle Weight
Rating or less under the heavy-duty
engine or heavy-duty vehicle provisions
of subpart A of this part. Such
preapproval will be granted only upon
demonstration that chassis-based
certification would be infeasible or
unreasonable for the manufacturer to
perform.
(5) A manufacturer may optionally
certify an aftermarket conversion of a
complete heavy-duty vehicle greater
than 10,000 pounds Gross Vehicle
Weight Rating and of 14,000 pounds
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
Gross Vehicle Weight Rating or less
under the heavy-duty engine or heavyduty vehicle provisions of subpart A of
this part without advance approval from
the Administrator if the vehicle was
originally certified to the heavy-duty
engine or heavy-duty vehicle provisions
of subpart A of this part.
(d) Small volume manufacturers.
Special certification procedures are
available for any manufacturer whose
projected or actual combined sales in all
States and territories of the United
States of light-duty vehicles, light-duty
trucks, heavy-duty vehicles, and heavyduty engines in its product line
(including all vehicles and engines
imported under the provisions of 40
CFR 85.1505 and 85.1509) are fewer
than 15,000 units for the model year in
which the manufacturer seeks
certification. The small volume
manufacturer’s light-duty vehicle and
light-duty truck certification procedures
and described in § 86.1838–01.
(e)–(g) [Reserved]
(h) Applicability of provisions of this
subpart to light-duty vehicles, light-duty
trucks, medium-duty passenger
vehicles, and heavy-duty vehicles.
Numerous sections in this subpart
provide requirements or procedures
applicable to a ‘‘vehicle’’ or ‘‘vehicles.’’
Unless otherwise specified or otherwise
determined by the Administrator, the
term ‘‘vehicle’’ or ‘‘vehicles’’ in those
provisions apply equally to light-duty
vehicles (LDVs), light-duty trucks
(LDTs), medium-duty passenger
vehicles (MDPVs), and heavy-duty
vehicles (HDVs), as those terms are
defined in § 86.1803–01.
(i) Applicability of provisions of this
subpart to exhaust CO2 emissions.
Numerous sections in this subpart refer
to requirements relating to ‘‘exhaust
emissions.’’ Unless otherwise specified
or otherwise determined by the
Administrator, the term ‘‘exhaust
emissions’’ refers at a minimum to
emissions of all pollutants described by
emission standards in this subpart,
including carbon dioxide (CO2) starting
with the 2012 model year.
(j) Conditional exemption from
greenhouse gas emission standards for
small businesses. Businesses meeting
the Small Business Administration size
standard defining a small business as
described in 13 CFR 121.201 are eligible
for exemption from the greenhouse gas
emission standards specified in
§ 86.1818–12 and associated provisions.
To be exempted from these provisions,
businesses must submit a declaration to
EPA containing a detailed written
description of how the business
qualifies as a small business under the
provisions of 13 CFR 121.201. This
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
declaration must be signed by a chief
officer of the company, and must be
made prior to each model year for
which the small business status is
requested. The declaration must be
submitted to EPA at least 30 days prior
to the introduction into commerce of
any vehicles for each model year for
which the small business status is
requested, but not later than December
of the calendar year prior to the model
year for which exemption is requested.
Exemption will be granted when EPA
approves the small business declaration.
The declaration of small business status
must be sent to the Environmental
Protection Agency at the following
address: Director, Certification and
Innovative Strategies Division, U.S.
Environmental Protection Agency, 2000
Traverwood Drive, Ann Arbor,
Michigan 48105.
(1) The following categories of
businesses (with their associated NAICS
codes) may apply for exemption based
on the Small Business Administration
size standards in 13 CFR 121.201.
(i) Vehicle manufacturers (NAICS
code 336111).
(ii) Independent commercial
importers (NAICS codes 811111,
811112, 811198, 423110, 424990, and
441120).
(iii) Alternate fuel vehicle converters
(NAICS codes 335312, 336312, 336322,
336399, 454312, 485310, and 811198).
(2) For purposes of determining the
number of employees or annual sales
revenue for small entities, the entity
shall include the employees or annual
sales revenue of any subsidiary
companies, any parent company,
subsidiaries of the parent company in
which the parent has a controlling
interest, and any joint ventures.
(3) An entity may use the provisions
of this paragraph (j) only if it has
primary responsibility for designing and
assembling, converting, or modifying
the subject vehicles.
(4) An entity may import vehicles
under this paragraph (j) only if that
entity has primary responsibility for
designing and assembling, converting or
modifying the subject vehicles.
11. Section 86.1803–01 is amended as
follows:
a. By adding the definition for ‘‘Air
conditioning idle test.’’
b. By adding the definition for ‘‘Air
conditioning system.’’
c. By revising the definition for
‘‘Banking.’’
d. By adding the definition for ‘‘Base
level.’’
e. By adding the definition for ‘‘Base
tire.’’
f. By adding the definition for ‘‘Base
vehicle.’’
PO 00000
Frm 00301
Fmt 4701
Sfmt 4700
49753
g. By revising the definition for ‘‘Basic
engine.’’
h. By adding the definition for
‘‘Battery electric vehicle.’’
i. By adding the definition for
‘‘Carbon-related exhaust emissions.’’
j. By adding the definition for
‘‘Combined CO2.’’
k. By adding the definition for
‘‘Electric vehicle.’’
l. By revising the definition for
‘‘Engine code.’’
m. By adding the definition for
‘‘Ethanol fueled vehicle.’’
n. By revising the definition for
‘‘Flexible fuel vehicle.’’
o. By adding the definition for
‘‘Footprint.’’
p. By adding the definition for ‘‘Fuel
cell.’’
q. By adding the definition for ‘‘Fuel
cell electric vehicle.’’
r. By adding the definition for
‘‘Highway fuel economy test
procedure.’’
s. By adding the definition for
‘‘Hybrid electric vehicle.’’
t. By adding the definition for
‘‘Interior volume index.’’
u. By adding the definition for ‘‘Motor
vehicle.’’
v. By adding the definition for ‘‘Multifuel vehicle.’’
w. By adding the definition for
‘‘Petroleum equivalency factor.’’
x. By adding the definition for
‘‘Petroleum-equivalent fuel economy.’’
y. By adding the definition for
‘‘Petroleum powered accessory.’’
z. By adding the definition for ‘‘Plugin hybrid electric vehicle.’’
aa. By adding the definition for
‘‘Production volume.’’
bb. By revising the definition for
‘‘Round, rounded, or rounding.’’
cc. By adding the definition for
‘‘Subconfiguration.’’
dd. By adding the definition for
‘‘Track width.’’
ee. By revising the definition for
‘‘Transmission class.’’
ff. By revising the definition for
‘‘Transmission configuration.’’
gg. By adding the definition for
‘‘Wheelbase.’’
§ 86.1803–01
*
Definitions.
*
*
*
*
Air Conditioning Idle Test means the
test procedure specified in § 86.165–12.
Air conditioning system means a
unique combination of air conditioning
and climate control components,
including: compressor type (e.g., belt,
gear, or electric-driven, or a
combination of compressor drive
mechanisms); compressor refrigerant
capacity; the number and type of rigid
pipe and flexible hose connections; the
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49754
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
number of high side service ports; the
number of low side service ports; the
number of switches, transducers, and
expansion valves; the number of TXV
refrigerant control devices; the number
and type of heat exchangers, mufflers,
receiver/dryers, and accumulators; and
the type of flexible hose (e.g., rubber,
standard barrier or veneer, ultra-low
permeation).
*
*
*
*
*
Banking means one of the following:
(1) The retention of NOX emission
credits for complete heavy-duty vehicles
by the manufacturer generating the
emission credits, for use in future model
year certification programs as permitted
by regulation.
(2) The retention of cold temperature
non-methane hydrocarbon (NMHC)
emission credits for light-duty vehicles,
light-duty trucks, and medium-duty
passenger vehicles by the manufacturer
generating the emission credits, for use
in future model year certification
programs as permitted by regulation.
(3) The retention of NOX emission
credits for light-duty vehicles, light-duty
trucks, and medium-duty passenger
vehicles for use in future model year
certification programs as permitted by
regulation.
(4) The retention of CO2 emission
credits for light-duty vehicles, light-duty
trucks, and medium-duty passenger
vehicles for use in future model year
certification programs as permitted by
regulation.
Base level has the meaning given in
§ 600.002–08 of this chapter.
Base tire has the meaning given in
§ 600.002–08 of this chapter.
Base vehicle has the meaning given in
§ 600.002–08 of this chapter.
Basic engine has the meaning given in
§ 600.002–08 of this chapter.
Battery electric vehicle means a motor
vehicle propelled solely by an electric
motor where energy for the motor is
supplied by a battery.
*
*
*
*
*
Carbon-related exhaust emissions
means the summation of the carboncontaining constituents of the exhaust
emissions, with each constituent
adjusted by a coefficient representing
the carbon weight fraction of each
constituent, as specified in § 600.113–
08.
*
*
*
*
*
Combined CO2 means the CO2 value
determined for a vehicle (or vehicles) by
averaging the city and highway fuel
economy values, weighted 0.55 and 0.45
respectively.
*
*
*
*
*
Electric vehicle means a motor vehicle
that is powered solely by an electric
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
motor drawing current from a
rechargeable energy storage system,
such as from storage batteries or other
portable electrical energy storage
devices, including hydrogen fuel cells,
provided that:
(1) Recharge energy must be drawn
from a source off the vehicle, such as
residential electric service; and
(2) The vehicle must be certified to
the emission standards of Bin #1 of
Table S04–1 in § 86.1811–09(c)(6).
*
*
*
*
*
Engine code means a unique
combination within a test group of
displacement, fuel injection (or
carburetor) calibration, choke
calibration, distributor calibration,
auxiliary emission control devices, and
other engine and emission control
system components specified by the
Administrator. For electric vehicles,
engine code means a unique
combination of manufacturer, electric
traction motor, motor configuration,
motor controller, and energy storage
device.
*
*
*
*
*
Ethanol-fueled vehicle means any
motor vehicle or motor vehicle engine
that is engineered and designed to be
operated using ethanol fuel (i.e., a fuel
that contains at least 50 percent ethanol
(C2H5OH) by volume) as fuel.
*
*
*
*
*
Flexible fuel vehicle means any motor
vehicle engineered and designed to be
operated on a petroleum fuel, a
methanol or ethanol fuel, or any mixture
of the two. Methanol-fueled and
ethanol-fueled vehicles that are only
marginally functional when using
gasoline (e.g., the engine has a drop in
rated horsepower of more than 80
percent) are not flexible fuel vehicles.
Footprint is the product of track width
(measured in inches, calculated as the
average of front and rear track widths,
and rounded to the nearest tenth of an
inch) and wheelbase (measured in
inches and rounded to the nearest tenth
of an inch), divided by 144 and then
rounded to the nearest tenth of a square
foot.
Fuel cell means an electrochemical
cell that produces electricity via the
reaction of a consumable fuel on the
anode with an oxidant on the cathode
in the presence of an electrolyte.
Fuel cell electric vehicle means a
motor vehicle propelled solely by an
electric motor where energy for the
motor is supplied by a fuel cell.
*
*
*
*
*
Highway Fuel Economy Test
Procedure (HFET) has the meaning
given in § 600.002–08 of this chapter.
*
*
*
*
*
PO 00000
Frm 00302
Fmt 4701
Sfmt 4700
Hybrid electric vehicle (HEV) means a
motor vehicle which draws propulsion
energy from onboard sources of stored
energy that are both an internal
combustion engine or heat engine using
consumable fuel, and a rechargeable
energy storage system such as a battery,
capacitor, hydraulic accumulator, or
flywheel.
*
*
*
*
*
Interior volume index has the
meaning given in § 600.315–08 of this
chapter.
*
*
*
*
*
Motor vehicle has the meaning given
in 40 CFR 85.1703.
*
*
*
*
*
Multi-fuel vehicle means any motor
vehicle capable of operating on two or
more different fuel types, either
separately or simultaneously.
*
*
*
*
*
Petroleum equivalency factor means
the value specified in 10 CFR 474.3(b),
which incorporates the parameters
listed in 49 U.S.C. 32904(a)(2)(B) and is
used to calculate petroleum-equivalent
fuel economy.
Petroleum-equivalent fuel economy
means the value, expressed in miles per
gallon, that is calculated for an electric
vehicle in accordance with 10 CFR
474.3(a), and reported to the
Administrator of the Environmental
Protection Agency for use in
determining the vehicle manufacturer’s
corporate average fuel economy.
*
*
*
*
*
Petroleum-powered accessory means a
vehicle accessory (e.g., a cabin heater,
defroster, and/or air conditioner) that:
(1) Uses gasoline or diesel fuel as its
primary energy source; and
(2) Meets the requirements for fuel,
operation, and emissions in 40 CFR part
88.104–94(g).
Plug-in hybrid electric vehicle (PHEV)
means a hybrid electric vehicle that:
(1) Has the capability to charge the
battery from an off-vehicle electric
source, such that the off-vehicle source
cannot be connected to the vehicle
while the vehicle is in motion, and
(2) Has an equivalent all-electric range
of no less than 10 miles.
*
*
*
*
*
Production volume has the meaning
given in § 600.002–08 of this chapter.
*
*
*
*
*
Round, rounded or rounding means,
unless otherwise specified, that
numbers will be rounded according to
ASTM–E29–93a, which is incorporated
by reference in this part pursuant to
§ 86.1.
*
*
*
*
*
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
Subconfiguration has the meaning
given in § 600.002–08 of this chapter.
*
*
*
*
*
Track width is the lateral distance
between the centerlines of the base tires
at ground, including the camber angle.
*
*
*
*
*
Transmission class has the meaning
given in § 600.002–08 of this chapter.
Transmission configuration has the
meaning given in § 600.002–08 of this
chapter.
*
*
*
*
*
Wheelbase is the longitudinal
distance between front and rear wheel
centerlines.
*
*
*
*
*
12. A new section 86.1805–12 is
added to read as follows:
mstockstill on DSKH9S0YB1PROD with PROPOSALS
§ 86.1805–12
Useful life.
(a) Except as permitted under
paragraph (b) of this section or required
under paragraphs (c) and (d) of this
section, the full useful life for all LDVs
and LLDTs is a period of use of 10 years
or 120,000 miles, whichever occurs first.
The full useful life for all HLDTs,
MDPVs, and complete heavy-duty
vehicles is a period of 11 years or
120,000 miles, whichever occurs first.
These full useful life values apply to all
exhaust, evaporative and refueling
emission requirements except for
standards which are specified to only be
applicable at the time of certification.
These full useful life requirements also
apply to all air conditioning leakage
credits, air conditioning efficiency
credits, and other credit programs used
by the manufacturer to comply with
fleet average CO2 emission standards.
(b) Manufacturers may elect to
optionally certify a test group to the Tier
2 exhaust emission standards for
150,000 miles to gain additional NOX
credits, as permitted in § 86.1860–04(g),
or to opt out of intermediate life
standards as permitted in § 86.1811–
04(c). In such cases, useful life is a
period of use of 15 years or 150,000
miles, whichever occurs first, for all
exhaust, evaporative and refueling
emission requirements except for cold
CO standards and standards which are
applicable only at the time of
certification.
(c) Where intermediate useful life
exhaust emission standards are
applicable, such standards are
applicable for five years or 50,000 miles,
whichever occurs first.
(d) Where cold CO standards are
applicable, the useful life requirement
for compliance with the cold CO
standard only, is 5 years or 50,000
miles, whichever occurs first.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
13. Section 86.1806–05 is amended by
revising paragraph (a)(1) to read as
follows:
§ 86.1806–05 On-board diagnostics for
vehicles less than or equal to 14,000
pounds GVWR.
(a) * * *
(1) Except as provided by paragraph
(a)(2) of this section, all light-duty
vehicles, light-duty trucks and complete
heavy-duty vehicles weighing 14,000
pounds GVWR or less (including
MDPVs) must be equipped with an
onboard diagnostic (OBD) system
capable of monitoring all emissionrelated powertrain systems or
components during the applicable
useful life of the vehicle. All systems
and components required to be
monitored by these regulations must be
evaluated periodically, but no less
frequently than once per applicable
certification test cycle as defined in
paragraphs (a) and (d) of Appendix I of
this part, or similar trip as approved by
the Administrator. Emissions of CO2 are
not required to be monitored by the
OBD system.
*
*
*
*
*
14. Section 86.1809–10 is amended by
revising paragraphs (d)(1) and (e) to read
as follows:
§ 86.1809–10
Prohibition of defeat devices.
*
*
*
*
*
(d) * * *
(1) The manufacturer must show to
the satisfaction of the Administrator that
the vehicle design does not incorporate
strategies that unnecessarily reduce
emission control effectiveness exhibited
during the Federal Test Procedure or
Supplemental Federal Test Procedure
(FTP or SFTP), or, for 2012 and later
model years, the Highway Fuel
Economy Test Procedure or the Air
Conditioning Idle Test, when the
vehicle is operated under conditions
that may reasonably be expected to be
encountered in normal operation and
use.
*
*
*
*
*
(e) For each test group the
manufacturer must submit, with the Part
II certification application, an
engineering evaluation demonstrating to
the satisfaction of the Administrator that
a discontinuity in emissions of nonmethane organic gases, carbon
monoxide, carbon dioxide, oxides of
nitrogen and formaldehyde measured on
the Federal Test Procedure (subpart B of
this part) does not occur in the
temperature range of 20 to 86 °F. For
diesel vehicles, the engineering
evaluation must also include particulate
emissions.
PO 00000
Frm 00303
Fmt 4701
Sfmt 4700
49755
15. Section 86.1810–09 is amended by
revising paragraph (f) to read as follows:
§ 86.1810–09 General standards; increase
in emissions; unsafe condition; waivers.
*
*
*
*
*
(f) Altitude requirements. (1) All
emission standards apply at low altitude
conditions and at high altitude
conditions, except for the following
standards, which apply only at low
altitude conditions:
(i) The supplemental exhaust
emission standards as described in
§ 86.1811–04(f);
(ii) The cold temperature NMHC
emission standards as described in
§ 86.1811–10(g);
(iii) The evaporative emission
standards as described in § 86.1811–
09(e).
(2) For vehicles that comply with the
cold temperature NMHC standards
described in § 86.1811–10(g) and the
CO2, N2O, and CH4 exhaust emission
standards described in § 86.1818–12,
manufacturers must submit an
engineering evaluation indicating that
common calibration approaches are
utilized at high altitudes. Any deviation
from low altitude emission control
practices must be included in the
auxiliary emission control device
(AECD) descriptions submitted at
certification. Any AECD specific to high
altitude must require engineering
emission data for EPA evaluation to
quantify any emission impact and
validity of the AECD.
*
*
*
*
*
16. A new § 86.1818–12 is added to
read as follows:
§ 86.1818–12 Greenhouse gas emission
standards for light-duty vehicles, light-duty
trucks, and medium-duty passenger
vehicles.
(a) Applicability. This section
contains regulations implementing
greenhouse gas emission standards for
CO2, N2O, and CH4 applicable to all
LDVs, LDTs and MDPVs. This section
applies to 2012 and later model year
LDVs, LDTs and MDPVs, including
multi-fuel vehicles, vehicles fueled with
alternative fuels, hybrid electric
vehicles, plug-in hybrid electric
vehicles, electric vehicles, and fuel cell
electric vehicles. Unless otherwise
specified, multi-fuel vehicles must
comply with all requirements
established for each consumed fuel. The
provisions of this section also apply to
aftermarket conversion systems,
aftermarket conversion installers, and
aftermarket conversion certifiers, as
those terms are defined in 40 CFR
85.502, of all model year light-duty
vehicles, light-duty trucks, and
E:\FR\FM\28SEP2.SGM
28SEP2
49756
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
medium-duty passenger vehicles.
Manufacturers meeting the requirements
of § 86.1801–12(j) are exempted from
the requirements of this section.
(b) Definitions. For the purposes of
this section, the following definitions
shall apply:
(1) Passenger automobile means a
motor vehicle that is a passenger
automobile as that term is defined in 49
CFR 523.4.
(2) Light truck means a motor vehicle
that is a non-passenger automobile as
that term is defined by the Department
of Transportation in 49 CFR 523.5.
(c) Fleet average CO2 standards for
passenger automobiles and light trucks.
(1) For a given individual model year’s
production of vehicles, manufacturers
must comply with a fleet average CO2
standard calculated according to the
provisions of this paragraph (c).
Manufacturers must calculate separate
fleet average CO2 standards for their
passenger automobile and the light
truck fleets, as those terms are defined
in this section. Each manufacturer’s
fleet average CO2 standards determined
in this paragraph (c) shall be expressed
in whole grams per mile, in the model
year specified as applicable.
Manufacturers eligible for and choosing
to participate in the optional interim
fleet average CO2 standards for
qualifying manufacturers specified in
paragraph (e) of this section shall not
include vehicles subject to the optional
interim fleet average CO2 standards in
the calculations of their primary
passenger automobile or light truck
standards determined in this paragraph
(c). Manufacturers shall demonstrate
compliance with the applicable
standards according to the provisions of
§ 86.1865–12.
(2) Passenger automobiles.
(i) Calculation of CO2 target values for
passenger automobiles. A CO2 target
value shall be determined for each
passenger automobile as follows:
(A) For passenger automobiles with a
footprint of less than or equal to 41
square feet, the gram/mile CO2 target
value shall be selected for the
appropriate model year from the
following table:
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Model year
2012
2013
2014
2015
2016
CO2 target value
(grams/mile)
................................
................................
................................
................................
and later ................
242
234
227
215
204
(B) For passenger automobiles with a
footprint of greater than 56 square feet,
the gram/mile CO2 target value shall be
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
selected for the appropriate model year
from the following table:
CO2 target value
(grams/mile)
Model year
2012
2013
2014
2015
2016
................................
................................
................................
................................
and later ................
313
305
297
286
275
(C) For passenger automobiles with a
footprint that is greater than 41 square
feet and less than or equal to 56 square
feet, the gram/mile CO2 target value
shall be calculated using the following
equation:
TargetCO2 = [4.72 × f] + b
Where:
f is the vehicle footprint, as defined in
§ 86.1803; and
b is selected from the following table for the
appropriate model year:
Model year
2012
2013
2014
2015
2016
b
................................
................................
................................
................................
and later ................
48.8
40.8
33.2
22.0
10.9
(ii) Calculation of the fleet average
CO2 standard for passenger
automobiles. In each model year
manufacturers must comply with the
CO2 exhaust emission standard for their
passenger automobile fleet, calculated
for that model year as follows:
(A) A CO2 target value shall be
determined according to paragraph
(c)(2)(i) of this section for each unique
combination of model type and
footprint value.
(B) Each CO2 target value, determined
for each unique combination of model
type and footprint value, shall be
multiplied by the total production of
that model type/footprint combination
for the appropriate model year.
(C) The resulting products shall be
summed, and that sum shall be divided
by the total production of passenger
automobiles in that model year. The
result shall be rounded to the nearest
whole gram per mile. This result shall
be the applicable fleet average CO2
standard for the manufacturer’s
passenger automobile fleet.
(3) Light trucks.
(i) Calculation of CO2 target values for
light trucks. A CO2 target value shall be
determined for each light truck as
follows:
(A) For light trucks with a footprint of
less than or equal to 41 square feet, the
gram/mile CO2 target value shall be
selected for the appropriate model year
from the following table:
PO 00000
Frm 00304
Fmt 4701
Sfmt 4700
Model year
2012
2013
2014
2015
2016
CO2 target value
(grams/mile)
................................
................................
................................
................................
and later ................
298
287
276
261
246
(B) For light trucks with a footprint of
greater than 66 square feet, the gram/
mile CO2 target value shall be selected
for the appropriate model year from the
following table:
Model year
2012
2013
2014
2015
2016
CO2 target value
(grams/mile)
................................
................................
................................
................................
and later ................
399
388
377
362
347
(C) For light trucks with a footprint
that is greater than 41 square feet and
less than or equal to 66 square feet, the
gram/mile CO2 target value shall be
calculated using the following equation:
CO2TargetValue = (4.04 × f) + b
Where:
f is the footprint, as defined in § 86.1803; and
b is selected from the following table for the
appropriate model year:
Model year
2012
2013
2014
2015
2016
................................
................................
................................
................................
and later ................
b
132.6
121.6
110.3
95.2
80.4
(ii) Calculation of fleet average CO2
standards for light trucks. In each model
year manufacturers must comply with
the CO2 exhaust emission standard for
their light truck fleet, calculated for that
model year as follows:
(A) A CO2 target value shall be
determined according to paragraph
(c)(2)(i) of this section for each unique
combination of model type and
footprint value.
(B) Each CO2 target value, which
represents a unique combination of
model type and footprint value, shall be
multiplied by the total production of
that model type/footprint combination
for the appropriate model year.
(C) The resulting products shall be
summed, and that sum shall be divided
by the total production of light trucks in
that model year. The result shall be
rounded to the nearest whole gram per
mile. This result shall be the applicable
fleet average CO2 standard for the
manufacturer’s light truck fleet.
(d) In-use CO2 exhaust emission
standards. The in-use exhaust CO2
emission standard for each model type
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
shall be the combined city/highway
carbon-related exhaust emission value
calculated according to the provisions of
40 CFR 600.208–08 (except that total
model year production data shall be
used instead of sales projections)
multiplied by 1.1 and rounded to the
nearest whole gram per mile. These
standards apply to in-use testing
performed by the manufacturer
pursuant to regulations at § 86.1845–04
and 86.1846–01 and to in-use testing
performed by EPA. For any model type
that is not covered by vehicle testing
conducted according to 40 CFR
600.208–08 the applicable in-use
standard shall be the CO2-equivalent
value submitted at certification
according to the provisions of § 86.1841
multiplied by 1.1 and rounded to the
nearest whole gram per mile.
(e) Optional interim fleet average CO2
standards for qualifying manufacturers.
(1) The interim fleet average CO2
standards in this paragraph (e) are
optionally applicable to each qualifying
manufacturer as follows:
(i) A qualifying manufacturer is a
manufacturer with sales of 2009 model
year combined passenger automobiles
and light trucks in the United States of
less than 400,000 vehicles, except that
manufacturers with no U.S. sales in the
2009 model year do not qualify for the
optional interim standards.
(ii) For the purposes of making the
determination in paragraph (e)(1)(i) of
this section, ‘‘manufacturer’’ shall mean
that term as defined at 49 CFR 531.4 and
as that definition was applied to the
2009 model year for the purpose of
determining compliance with the 2009
corporate average fuel economy
standards at 49 CFR parts 531 and 533.
(iii) Only 2012 through 2015 model
year passenger automobiles and light
trucks are eligible for these standards.
All model year 2016 and later passenger
automobiles and light trucks are subject
to the fleet average standards described
in paragraph (c) of this section.
(iv) A qualifying manufacturer may
select any combination of 2012 through
2015 model year passenger automobiles
and/or light trucks to comply with these
optional standards up to a cumulative
total of 100,000 vehicles. Vehicles
selected to comply with these standards
shall not be included in the calculations
of the manufacturer’s fleet average
standards under paragraph (c) of this
section.
(v) A qualifying manufacturer may not
use these optional interim fleet average
CO2 standards until they have used all
available banked CO2 credits and/or CO2
credits available for transfer. A
qualifying manufacturer with a net
positive credit balance in any model
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
year after considering all available
credits generated, carried forward from
a prior model year, transferred from
other averaging sets, or obtained from
other manufacturers, may not use these
optional interim fleet average CO2
standards in such model year.
(2) To calculate an optional interim
fleet average CO2 standard, qualifying
manufacturers shall determine the fleet
average standard separately for the
passenger automobiles and light trucks
selected by the manufacturer to be
subject to the interim fleet average CO2
standard, subject to the limitations
expressed in paragraphs (e)(1)(iii) and
(iv) of this section.
(i) The interim fleet average CO2
standard applicable to qualified
passenger automobiles shall be the
standard calculated using the provisions
of paragraph (c)(2)(ii) of this section for
the appropriate model year multiplied
by 1.25 and rounded to the nearest
whole gram per mile. For the purposes
of applying paragraph (c)(2)(ii) of this
section to determine the standard, the
passenger automobile fleet shall be
limited to those passenger automobiles
subject to the interim fleet average CO2
standard.
(ii) The interim fleet average CO2
standard applicable to qualified light
trucks shall be the standard calculated
using the provisions of paragraph
(c)(3)(ii) of this section for the
appropriate model year multiplied by
1.25 and rounded to the nearest whole
gram per mile. For the purposes of
applying paragraph (c)(3)(ii) of this
section to determine the standard, the
light truck fleet shall be limited to those
light trucks subject to the interim fleet
average CO2 standard.
(3) Manufacturers choosing to
optionally apply these standards are
subject to the restrictions on credit
banking and trading specified in
§ 86.1865–12.
(f) N2O standards for light-duty
vehicles, light-duty trucks, and mediumduty passenger vehicles. Exhaust
emissions of nitrous oxide (N2O) shall
not exceed 0.010 grams per mile at full
useful life, as measured according to the
Federal Test Procedure (FTP) described
in subpart B of this part.
(g) Methane standards for light-duty
vehicles, light-duty trucks, and mediumduty passenger vehicles. Exhaust
emissions of methane (CH4) shall not
exceed 0.030 grams per mile at full
useful life, as measured according to the
Federal Test Procedure (FTP) described
in subpart B of this part.
17. Section 86.1823–08 is amended by
adding paragraph (m) to read as follows:
PO 00000
Frm 00305
Fmt 4701
Sfmt 4700
49757
§ 86.1823–08 Durability demonstration
procedures for exhaust emissions.
*
*
*
*
*
(m) Durability demonstration
procedures for vehicles subject to the
greenhouse gas exhaust emission
standards specified in 86.1818–12.
(1) CO2. (i) Unless otherwise specified
under paragraph (m)(1)(ii) of this
section, manufacturers may use a
multiplicative CO2 deterioration factor
of one or an additive deterioration factor
of zero.
(ii) Based on an analysis of industrywide data, EPA may periodically
establish and/or update the
deterioration factor for CO2 emissions
including air conditioning and other
credit related emissions. Deterioration
factors established and/or updated
under this paragraph (m)(1)(ii) will
provide adequate lead time for
manufacturers to plan for the change.
(iii) Alternatively, manufacturers may
use the whole-vehicle mileage
accumulation procedures in § 86.1823–
08 paragraphs (c) or (d)(1) to determine
CO2 deterioration factors. In this case,
each FTP test performed on the
durability data vehicle selected under
§ 86.1822–01 of this part must also be
accompanied by an HFET test, and
combined FTP/HFET CO2 results
determined by averaging the city (FTP)
and highway (HFET) CO2 values,
weighted 0.55 and 0.45 respectively.
The deterioration factor will be
determined for this combined CO2
value. Calculated multiplicative
deterioration factors that are less than
one shall be set to equal one, and
calculated additive deterioration factors
that are less than zero shall be set to
zero.
(iv) If, in the good engineering
judgment of the manufacturer, the
deterioration factors determined
according to paragraphs (m)(1)(i),
(m)(1)(ii), or (m)(1)(iii) of this section do
not adequately account for the expected
CO2 emission deterioration over the
vehicle’s useful life, the manufacturer
may petition EPA to request a more
appropriate deterioration factor.
(2) N2O and CH4. Deterioration factors
for N2O and CH4 shall be determined
according to the provisions of
§ 86.1823–08.
(3) Air Conditioning leakage and
efficiency or other emission credit
requirements to comply with exhaust
CO2 standards. Manufactures will attest
to the durability of components and
systems used to meet the CO2 standards.
Manufacturers may submit engineering
data to provide durability
demonstration.
E:\FR\FM\28SEP2.SGM
28SEP2
49758
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
18. Section 86.1827–01 is amended by
revising paragraph (a)(5) and by adding
paragraph (f) to read as follows:
§ 86.1827–01
Test group determination.
*
*
*
*
*
(a) * * *
(5) Subject to the same emission
standards (except for CO2), or FEL in the
case of cold temperature NMHC
standards, except that a manufacturer
may request to group vehicles into the
same test group as vehicles subject to
more stringent standards, so long as all
the vehicles within the test group are
certified to the most stringent standards
applicable to any vehicle within that
test group. Light-duty trucks and lightduty vehicles may be included in the
same test group if all vehicles in the test
group are subject to the same emission
standards, with the exception of the CO2
standard, the light-duty truck idle CO
standard, and/or the total HC standard.
*
*
*
*
*
(f) Unless otherwise approved by the
Administrator, a manufacturer of
electric vehicles must create separate
test groups based on the type of battery
technology, the capacity and voltage of
the battery, and the type and size of the
electric motor.
19. Section 86.1829–01 is amended by
revising paragraph (b)(1)(i) and by
adding paragraph (b)(1)(iii)(G) to read as
follows:
§ 86.1829–01 Durability and emission
testing requirements; waivers.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
*
*
*
*
*
(b) * * *
(1) * * *
(i) Testing at low altitude. One EDV
shall be tested in each test group for
exhaust emissions using the FTP and
SFTP test procedures of subpart B of
this part and the HFET test procedure of
subpart B of part 600 of this chapter.
The configuration of the EDV will be
determined under the provisions of
§ 86.1828–01 of this subpart.
*
*
*
*
*
(iii) * * *
(G) For the 2012 model year only, in
lieu of testing a vehicle for N2O
emissions, a manufacturer may provide
a statement in its application for
certification that such vehicles comply
with the applicable standards. Such a
statement must be based on previous
emission tests, development tests, or
other appropriate information and good
engineering judgment.
*
*
*
*
*
20. Section 86.1835–01 is amended as
follows:
a. By revising paragraph (a)(4).
b. By revising paragraph (b)(1)
introductory text.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
c. By adding paragraph (b)(1)(vi).
d. By revising paragraph (b)(3).
e. By revising paragraph (c)(1)(ii).
§ 86.1835–01
testing.
Confirmatory certification
(a) * * *
(4) Retesting for fuel economy reasons
or for compliance with applicable
exhaust CO2 emission standards may be
conducted under the provisions of 40
CFR 600.008–01.
(b) * * *
(1) If the Administrator determines
not to conduct a confirmatory test under
the provisions of paragraph (a) of this
section, manufacturers of light-duty
vehicles, light-duty trucks, and/or
medium-duty passenger vehicles will
conduct a confirmatory test at their
facility after submitting the original test
data to the Administrator whenever any
of the conditions listed in paragraphs
(b)(1)(i) through (vi) of this section exist,
and complete heavy-duty vehicles
manufacturers will conduct a
confirmatory test at their facility after
submitting the original test data to the
Administrator whenever the conditions
listed in paragraph (b)(1)(i) or (b)(1)(ii)
of this section exist, as follows:
*
*
*
*
*
(vi) The exhaust CO2 emissions of the
test as measured in accordance with the
procedures in 40 CFR Part 600 are lower
than expected based on procedures
approved by the Administrator.
*
*
*
*
*
(3) For light-duty vehicles, light-duty
trucks, and medium-duty passenger
vehicles the manufacturer shall conduct
a retest of the FTP or highway test if the
difference between the fuel economy or
carbon-related exhaust emissions of the
confirmatory test and the original
manufacturer’s test equals or exceeds
three percent (or such lower percentage
to be applied consistently to all
manufacturer conducted confirmatory
testing as requested by the manufacturer
and approved by the Administrator).
(i) For use in the fuel economy and
CO2 fleet averaging program described
in 40 CFR parts 86 and 600, the
manufacturer may, in lieu of conducting
a retest, accept as official the lower of
the original and confirmatory test fuel
economy results, and the higher of the
original and confirmatory test CO2
results.
(ii) The manufacturer shall conduct a
second retest of the FTP or highway test
if the fuel economy or CO2 emissions
difference between the second
confirmatory test and the original
manufacturer test equals or exceeds
three percent (or such lower percentage
as requested by the manufacturer and
approved by the Administrator) and the
PO 00000
Frm 00306
Fmt 4701
Sfmt 4700
fuel economy or CO2 emissions
difference between the second
confirmatory test and the first
confirmatory test equals or exceeds
three percent (or such lower percentage
as requested by the manufacturer and
approved by the Administrator). In lieu
of conducting a second retest, the
manufacturer may accept as official (for
use in the fuel economy program and
the CO2 fleet averaging program) the
lowest fuel economy and highest CO2
emissions of the original test, the first
confirmatory test, and the second
confirmatory test fuel economy results.
(c) * * *
(1) * * *
(ii) Official test results for fuel
economy and exhaust CO2 emission
purposes are determined in accordance
with the provisions of 40 CFR 600.008–
01.
*
*
*
*
*
21. Section 86.1841–01 is amended by
adding paragraph (a)(3) and revising
paragraph (b) to read as follows:
§ 86.1841–01 Compliance with emission
standards for the purpose of certification.
(a) * * *
(3) Compliance with CO2 exhaust
emission standards shall be
demonstrated at certification by the
certification levels on the FTP and
HFET tests for carbon-related exhaust
emissions determined according to
§ 600.113–08 of this chapter.
*
*
*
*
*
(b) To be considered in compliance
with the standards for the purposes of
certification, the certification levels for
the test vehicle calculated in paragraph
(a) of this section shall be less than or
equal to the standards for all emission
constituents to which the test group is
subject, at both full and intermediate
useful life as appropriate for that test
group.
*
*
*
*
*
22. Section 86.1845–04 is amended as
follows:
a. By revising paragraph (a)(1).
b. By revising paragraph (b)(5)(i).
c. By revising paragraph (c)(5)(i).
§ 86.1845–04 Manufacturer in-use
verification testing requirements.
(a) * * *
(1) A manufacturer of LDVs, LDTs,
MDPVs and/or complete HDVs must
test, or cause to have tested, a specified
number of LDVs, LDTs, MDPVs and
complete HDVs. Such testing must be
conducted in accordance with the
provisions of this section. For purposes
of this section, the term vehicle includes
light-duty vehicles, light-duty trucks
and medium-duty passenger vehicles.
*
*
*
*
*
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
(b) * * *
(5) * * *
(i) Each test vehicle of a test group
shall be tested in accordance with the
Federal Test Procedure and the US06
portion of the Supplemental Federal
Test Procedure as described in subpart
B of this part, when such test vehicle is
tested for compliance with applicable
exhaust emission standards under this
subpart. Test vehicles subject to
applicable exhaust CO2 emission
standards under this subpart shall also
be tested in accordance with the
highway fuel economy test as described
in subpart B of 40 CFR part 600.
*
*
*
*
*
(c) * * *
(5) * * *
(i) Each test vehicle shall be tested in
accordance with the Federal Test
Procedure and the US06 portion of the
Supplemental Federal Test Procedure as
described in subpart B of this part when
such test vehicle is tested for
compliance with applicable exhaust
emission standards under this subpart.
Test vehicles subject to applicable
exhaust CO2 emission standards under
this subpart shall also be tested in
accordance with the highway fuel
economy test as described in subpart B
of 40 CFR part 600. The US06 portion
of the SFTP is not required to be
performed on vehicles certified in
accordance with the National LEV
provisions of subpart R of this part. One
test vehicle from each test group shall
receive a Federal Test Procedure at high
altitude. The test vehicle tested at high
altitude is not required to be one of the
same test vehicles tested at low altitude.
The test vehicle tested at high altitude
is counted when determining the
compliance with the requirements
shown in Table S04–06 and Table S04–
07 in paragraph (b)(3) of this section or
the expanded sample size as provided
for in this paragraph (c).
*
*
*
*
*
23. Section 86.1846–01 is amended by
revising paragraphs (a)(1) and (b)
introductory text to read as follows:
mstockstill on DSKH9S0YB1PROD with PROPOSALS
§ 86.1846–01 Manufacturer in-use
confirmatory testing requirements.
(a) * * *
(1) A manufacturer of LDVs, LDTs
and/or MDPVs must test, or cause
testing to be conducted, under this
section when the emission levels shown
by a test group sample from testing
under §§ 86.1845–01 or 86.1845–04, as
applicable, exceeds the criteria specified
in paragraph (b) of this section. The
testing required under this section
applies separately to each test group and
at each test point (low and high mileage)
that meets the specified criteria. The
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
testing requirements apply separately
for each model year starting with model
year 2001. These provisions do not
apply to heavy-duty vehicles or heavyduty engines prior to the 2007 model
year. These provisions do not apply to
emissions of CO2, CH4, and N2O.
*
*
*
*
*
(b) Criteria for additional testing. A
manufacturer shall test a test group or
a subset of a test group as described in
paragraph (j) of this section when the
results from testing conducted under
§§ 86.1845–01 and 86.1845–04, as
applicable, show mean emissions for
that test group of any pollutant(s)
(except CO2, CH4, and N2O) to be equal
to or greater than 1.30 times the
applicable in-use standard and a failure
rate, among the test group vehicles, for
the corresponding pollutant(s) of fifty
percent or greater.
*
*
*
*
*
24. Section 86.1848–10 is amended by
adding paragraph (c)(9) to read as
follows:
§ 86.1848–10
Certification.
*
*
*
*
*
(c) * * *
(9) For 2012 and later model year
LDVs, LDTs, and MDPVs, all certificates
of conformity issued are conditional
upon compliance with all provisions of
§§ 86.1818–12 and 86.1865–12 both
during and after model year production.
The manufacturer bears the burden of
establishing to the satisfaction of the
Administrator that the terms and
conditions upon which the certificate(s)
was (were) issued were satisfied. For
recall and warranty purposes, vehicles
not covered by a certificate of
conformity will continue to be held to
the standards stated or referenced in the
certificate that otherwise would have
applied to the vehicles.
(i) Failure to meet the fleet average
CO2 requirements will be considered a
failure to satisfy the terms and
conditions upon which the certificate(s)
was (were) issued and the vehicles sold
in violation of the fleet average CO2
standard will not be covered by the
certificate(s). The vehicles sold in
violation will be determined according
to § 86.1865–12(k)(7).
(ii) Failure to comply fully with the
prohibition against selling credits that
are not generated or that are not
available, as specified in § 86.1865–12,
will be considered a failure to satisfy the
terms and conditions upon which the
certificate(s) was (were) issued and the
vehicles sold in violation of this
prohibition will not be covered by the
certificate(s).
*
*
*
*
*
PO 00000
Frm 00307
Fmt 4701
Sfmt 4700
49759
25. A new § 86.1854–12 is added to
read as follows:
§ 86.1854–12
Prohibited acts.
(a) The following acts and the causing
thereof are prohibited:
(1) In the case of a manufacturer, as
defined by § 86.1803, of new motor
vehicles or new motor vehicle engines
for distribution in commerce, the sale,
or the offering for sale, or the
introduction, or delivery for
introduction, into commerce, or (in the
case of any person, except as provided
by regulation of the Administrator), the
importation into the United States of
any new motor vehicle or new motor
vehicle engine subject to this subpart,
unless such vehicle or engine is covered
by a certificate of conformity issued
(and in effect) under regulations found
in this subpart (except as provided in
Section 203(b) of the Clean Air Act (42
U.S.C. 7522(b)) or regulations
promulgated thereunder).
(2)(i) For any person to fail or refuse
to permit access to or copying of records
or to fail to make reports or provide
information required under Section 208
of the Clean Air Act (42 U.S.C. 7542)
with regard to vehicles.
(ii) For a person to fail or refuse to
permit entry, testing, or inspection
authorized under Section 206(c) (42
U.S.C. 7525(c)) or Section 208 of the
Clean Air Act (42 U.S.C. 7542) with
regard to vehicles.
(iii) For a person to fail or refuse to
perform tests, or to have tests performed
as required under Section 208 of the
Clean Air Act (42 U.S.C. 7542) with
regard to vehicles.
(iv) For a person to fail to establish or
maintain records as required under
§§ 86.1844, 86.1862, 86.1864, and
86.1865 with regard to vehicles.
(v) For any manufacturer to fail to
make information available as provided
by regulation under Section 202(m)(5) of
the Clean Air Act (42 U.S.C. 7521(m)(5))
with regard to vehicles.
(3)(i) For any person to remove or
render inoperative any device or
element of design installed on or in a
vehicle or engine in compliance with
regulations under this subpart prior to
its sale and delivery to the ultimate
purchaser, or for any person knowingly
to remove or render inoperative any
such device or element of design after
such sale and delivery to the ultimate
purchaser.
(ii) For any person to manufacture,
sell or offer to sell, or install, any part
or component intended for use with, or
as part of, any vehicle or engine, where
a principal effect of the part or
component is to bypass, defeat, or
render inoperative any device or
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49760
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
element of design installed on or in a
vehicle or engine in compliance with
regulations issued under this subpart,
and where the person knows or should
know that the part or component is
being offered for sale or installed for this
use or put to such use.
(4) For any manufacturer of a vehicle
or engine subject to standards
prescribed under this subpart:
(i) To sell, offer for sale, introduce or
deliver into commerce, or lease any
such vehicle or engine unless the
manufacturer has complied with the
requirements of Section 207 (a) and (b)
of the Clean Air Act (42 U.S.C. 7541 (a),
(b)) with respect to such vehicle or
engine, and unless a label or tag is
affixed to such vehicle or engine in
accordance with Section 207(c)(3) of the
Clean Air Act (42 U.S.C. 7541(c)(3)).
(ii) To fail or refuse to comply with
the requirements of Section 207 (c) or
(e) of the Clean Air Act (42 U.S.C. 7541
(c) or (e)).
(iii) Except as provided in Section
207(c)(3) of the Clean Air Act (42 U.S.C.
7541(c)(3)), to provide directly or
indirectly in any communication to the
ultimate purchaser or any subsequent
purchaser that the coverage of a
warranty under the Clean Air Act is
conditioned upon use of any part,
component, or system manufactured by
the manufacturer or a person acting for
the manufacturer or under its control, or
conditioned upon service performed by
such persons.
(iv) To fail or refuse to comply with
the terms and conditions of the
warranty under Section 207 (a) or (b) of
the Clean Air Act (42 U.S.C. 7541 (a) or
(b)).
(b) For the purposes of enforcement of
this subpart, the following apply:
(1) No action with respect to any
element of design referred to in
paragraph (a)(3) of this section
(including any adjustment or alteration
of such element) shall be treated as a
prohibited act under paragraph (a)(3) of
this section if such action is in
accordance with Section 215 of the
Clean Air Act (42 U.S.C. 7549);
(2) Nothing in paragraph (a)(3) of this
section is to be construed to require the
use of manufacturer parts in
maintaining or repairing a vehicle or
engine. For the purposes of the
preceding sentence, the term
‘‘manufacturer parts’’ means, with
respect to a motor vehicle engine, parts
produced or sold by the manufacturer of
the motor vehicle or motor vehicle
engine;
(3) Actions for the purpose of repair
or replacement of a device or element of
design or any other item are not
considered prohibited acts under
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
paragraph (a)(3) of this section if the
action is a necessary and temporary
procedure, the device or element is
replaced upon completion of the
procedure, and the action results in the
proper functioning of the device or
element of design;
(4) Actions for the purpose of a
conversion of a motor vehicle or motor
vehicle engine for use of a clean
alternative fuel (as defined in title II of
the Clean Air Act) are not considered
prohibited acts under paragraph (a) of
this section if:
(i) The vehicle complies with the
applicable standard when operating on
the alternative fuel; and
(ii) In the case of engines converted to
dual fuel or flexible use, the device or
element is replaced upon completion of
the conversion procedure, and the
action results in proper functioning of
the device or element when the motor
vehicle operates on conventional fuel.
26. A new § 86.1865–12 is added to
subpart S to read as follows:
§ 86.1865–12 How to comply with the fleet
average CO2 standards.
(a) Applicability. (1) Unless otherwise
exempted under the provisions of
§ 86.1801–12(j), CO2 fleet average
exhaust emission standards apply to:
(i) 2012 and later model year
passenger automobiles and light trucks.
(ii) Aftermarket conversion systems as
defined in 40 CFR 85.502.
(iii) Vehicles imported by ICIs as
defined in 40 CFR 85.1502.
(2) The terms ‘‘passenger automobile’’
and ‘‘light truck’’ as used in this section
have the meanings as defined in
§ 86.1818–12.
(b) Useful life requirements. Full
useful life requirements for CO2
standards are defined in § 86.1818–12.
There is not an intermediate useful life
standard for CO2 standards.
(c) Altitude. Altitude requirements for
CO2 standards are provided in
§ 86.1810–12(f).
(d) Small volume manufacturer
certification procedures. Certification
procedures for small volume
manufacturers are provided in
§ 86.1838–01. Small businesses meeting
certain criteria may be exempted from
the fleet average CO2 standards under
§ 86.1801–12(j).
(e) CO2 fleet average exhaust emission
standards. The fleet average standards
referred to in this section are the
corporate fleet average CO2 standards
for passenger automobiles and light
trucks set forth in 86.1818–12(c) and (e).
The fleet average CO2 standards
applicable in a given model year are
calculated separately for passenger
automobiles and light trucks for each
PO 00000
Frm 00308
Fmt 4701
Sfmt 4700
manufacturer and each model year
according to the provisions in
§ 86.1818–12. Each manufacturer must
comply with the applicable CO2 fleet
average standard on a productionweighted average basis, for each
separate averaging set, at the end of each
model year, using the procedure
described in paragraph (c) of this
section.
(f) In-use CO2 standards. In-use CO2
exhaust emission standards applicable
to each model type are provided in
§ 86.1818–12(d).
(g) Durability procedures and method
of determining deterioration factors
(DFs). Deterioration factors for CO2
exhaust emission standards are
provided in § 86.1823–08(m).
(h) Vehicle test procedures. (1) The
test procedures for demonstrating
compliance with CO2 exhaust emission
standards are contained in subpart B of
this part and subpart B of part 600 of
this chapter.
(2) Testing of all passenger
automobiles and light trucks to
determine compliance with CO2 exhaust
emission standards set forth in this
section must be on a loaded vehicle
weight (LVW) basis, as defined in
§ 86.1803–01.
(3) Testing for the purpose of
providing certification data is required
only at low altitude conditions. If
hardware and software emission control
strategies used during low altitude
condition testing are not used similarly
across all altitudes for in-use operation,
the manufacturer must include a
statement in the application for
certification, in accordance with
§§ 86.1844–01(d)(11) and 86.1810–12(f),
stating what the different strategies are
and why they are used.
(i) Calculating the fleet average
carbon-related exhaust emissions. (1)
Manufacturers must compute separate
production-weighted fleet average
carbon-related exhaust emissions at the
end of the model year for passenger
automobiles and light trucks, using
actual production, where production
means vehicles produced and delivered
for sale, and certifying model types to
standards as defined in § 86.1818–12.
The model type carbon-related exhaust
emission results determined according
to 40 CFR 600 subpart F become the
certification standard for each model
type.
(2) Manufacturers must separately
calculate production-weighted fleet
average carbon-related exhaust
emissions levels for the following
averaging sets according to the
provisions of part 600 subpart F of this
chapter:
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
(i) Passenger automobiles subject to
the fleet average CO2 standards
specified in § 86.1818–12(c)(2);
(ii) Light trucks subject to the fleet
average CO2 standards specified in
§ 86.1818–12(c)(3);
(iii) Passenger automobiles subject to
the optional interim fleet average CO2
standards specified in § 86.1818–12(e),
if applicable; and
(iv) Light trucks subject to the
optional interim fleet average CO2
standards specified in § 86.1818–12(e),
if applicable.
(j) Certification compliance and
enforcement requirements for CO2
exhaust emission standards. (1)
Compliance and enforcement
requirements are provided in § 86.1864–
10 and § 86.1848–10(c)(8).
(2) The certificate issued for each test
group requires all model types within
that test group to meet the emission
standard to which each model type is
certified.
(3) Each manufacturer must comply
with the applicable CO2 fleet average
standard on a production-weighted
average basis, at the end of each model
year, using the procedure described in
paragraph (i) of this section.
(4) Manufacturers must compute
separate CO2 fleet averages for passenger
automobiles and light trucks. The
production-weighted CO2 fleet averages
must be compared with the applicable
fleet average standard.
(5) Each manufacturer must comply
on an annual basis with the fleet average
standards as follows:
(i) Manufacturers must report in their
annual reports to the Agency that they
met the relevant corporate average
standard by showing that their
production-weighted average CO2
emissions levels of passenger
automobiles and light trucks, as
applicable, are at or below the
applicable fleet average standard; or
(ii) If the production-weighted average
is above the applicable fleet average
standard, manufacturers must obtain
and apply sufficient CO2 credits as
authorized under paragraph (k)(7) of
this section. A manufacturer must show
that they have offset any exceedence of
the corporate average standard via the
use of credits. Manufacturers must also
include their credit balances or deficits
in their annual report to the Agency.
(iii) If a manufacturer fails to meet the
corporate average CO2 standard for four
consecutive years, the vehicles causing
the corporate average exceedence will
be considered not covered by the
certificate of conformity (see paragraph
(k)(7) of this section). A manufacturer
will be subject to penalties on an
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
individual-vehicle basis for sale of
vehicles not covered by a certificate.
(iv) EPA will review each
manufacturer’s production to designate
the vehicles that caused the exceedence
of the corporate average standard. EPA
will designate as nonconforming those
vehicles in test groups with the highest
certification emission values first,
continuing until reaching a number of
vehicles equal to the calculated number
of noncomplying vehicles as determined
in paragraph (k)(7) of this section. In a
group where only a portion of vehicles
would be deemed nonconforming, EPA
will determine the actual
nonconforming vehicles by counting
backwards from the last vehicle
produced in that test group.
Manufacturers will be liable for
penalties for each vehicle sold that is
not covered by a certificate.
(k) Requirements for the CO2
averaging, banking and trading (ABT)
program. (1) A manufacturer whose CO2
fleet average emissions exceed the
applicable standard must complete the
calculation in paragraph (k)(4) of this
section to determine the size of its CO2
deficit. A manufacturer whose CO2 fleet
average emissions are less than the
applicable standard must complete the
calculation in paragraph (k)(4) of this
section to generate CO2 credits. In either
case, the number of credits or debits
must be rounded to the nearest whole
number.
(2) There are no property rights
associated with CO2 credits generated
under this subpart. Credits are a limited
authorization to emit the designated
amount of emissions. Nothing in this
part or any other provision of law
should be construed to limit EPA’s
authority to terminate or limit this
authorization through a rulemaking.
(3) Each manufacturer must comply
with the reporting and recordkeeping
requirements of paragraph (l) of this
section for CO2 credits, including early
credits. The averaging, banking and
trading program is enforceable through
the certificate of conformity that allows
the manufacturer to introduce any
regulated vehicles into commerce.
(4) Credits are earned on the last day
of the model year. Manufacturers must
calculate, for a given model year, the
number of credits or debits it has
generated according to the following
equation, rounded to the nearest
megagram:
CO2 Credits or Debits (Mg) = [(CO2
Standard—Manufacturer’s
Production-Weighted Fleet Average
CO2 Emissions) × (Total Number of
Vehicles Produced) × (Vehicle
Lifetime Miles)] ÷ 1,000,000
PO 00000
Frm 00309
Fmt 4701
Sfmt 4700
49761
Where:
CO2 Standard = the applicable standard for
the model year as determined by
§ 86.1818–12;
Manufacturer’s Production-Weighted Fleet
Average CO2 Emissions = average
calculated according to paragraph (i) of
this section;
Total Number of Vehicles Produced = The
number of vehicles domestically
produced plus those imported as defined
in 40 CFR 600.511–80; and
Vehicle Lifetime Miles is 190,971 for
passenger automobiles and 221,199 for
light trucks.
(5) Total credits or debits generated in
a model year, maintained and reported
separately for passenger automobiles
and light trucks, shall be the sum of the
credits or debits calculated in paragraph
(k)(4) of this section and any of the
following credits, if applicable:
(i) Air conditioning leakage credits
earned according to the provisions of
86.1866–12(b);
(ii) Air conditioning efficiency credits
earned according to the provisions of
86.1866–12(c);
(iii) Off-cycle technology credits
earned according to the provisions of
86.1866–12(d).
(6) Unused CO2 credits shall retain
their full value through the five
subsequent model years after the model
year in which they were generated.
Credits available at the end of the fifth
model year after the year in which they
were generated shall expire.
(7) Credits may be used as follows:
(i) Credits generated and calculated
according to the method in paragraph
(k)(4) of this section may not be used to
offset deficits other than those deficits
accrued with respect to the standard in
§ 86.1818–12. Credits may be banked
and used in a future model year in
which a manufacturer’s average CO2
level exceeds the applicable standard.
Credits may be exchanged between the
passenger automobile and light truck
fleets of a given manufacturer. Credits
may also be traded to another
manufacturer according to the
provisions in paragraph (k)(8) of this
section. Before trading or carrying over
credits to the next model year, a
manufacturer must apply available
credits to offset any deficit, where the
deadline to offset that credit deficit has
not yet passed.
(ii) The use of credits shall not change
Selective Enforcement Auditing or inuse testing failures from a failure to a
non-failure. The enforcement of the
averaging standard occurs through the
vehicle’s certificate of conformity. A
manufacturer’s certificate of conformity
is conditioned upon compliance with
the averaging provisions. The certificate
will be void ab initio if a manufacturer
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49762
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
fails to meet the corporate average
standard and does not obtain
appropriate credits to cover its shortfalls
in that model year or subsequent model
years (see deficit carry-forward
provisions in paragraph (k)(7) of this
section). Manufacturers must track their
certification levels and production
unless they produce only vehicles
certified to CO2 levels below the
standard and do not plan to bank
credits.
(iii) Special provisions for
manufacturers using the optional
interim fleet average CO2 standards. (A)
Credits generated by vehicles subject to
the fleet average CO2 standards
specified in § 86.1818–12(c) may only
be used to offset a deficit generated by
vehicles subject to the optional interim
fleet average CO2 standards specified in
§ 86.1818–12(e).
(B) Credits generated by a passenger
automobile or light truck averaging set
subject to the optional interim fleet
average CO2 standards specified in
§ 86.1818–12(e)(2)(i) or (ii) of this
section may be used to offset a deficit
generated by an averaging set subject to
the optional interim fleet average CO2
standards through the 2015 model year.
(C) Credits generated by an averaging
set subject to the optional interim fleet
average CO2 standards specified in
§ 86.1818–12(e)(2)(i) or (ii) of this
section may not be used to offset a
deficit generated by an averaging set
subject to the fleet average CO2
standards specified in § 86.1818–
12(c)(2) or (3) or otherwise transferred to
an averaging set subject to the fleet
average CO2 standards specified in
§ 86.1818–12(c)(2) or (3).
(D) Credits generated by vehicles
subject to the optional interim fleet
average CO2 standards specified in
§ 86.1818–12(e)(2)(i) or (ii) may be
banked for use in a future model year,
except that all such credits shall expire
at the end of the 2015 model year.
(E) A manufacturer with any vehicles
subject to the optional interim fleet
average CO2 standards specified in
§ 86.1818–12(e)(2)(i) or (ii) of this
section in a model year in which that
manufacturer also generates credits with
vehicles subject to the fleet average CO2
standards specified in § 86.1818–12(c)
may not trade those credits or bank
those credits earned against the fleet
average standards in § 86.1818–12(c) for
use in a future model year.
(8) The following provisions apply if
debits are accrued:
(i) If a manufacturer calculates that it
has negative credits (also called
‘‘debits’’ or a ‘‘credit deficit’’) for a given
model year, it may carry that deficit
forward into the next three model years.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
Such a carry-forward may only occur
after the manufacturer exhausts any
supply of banked credits. At the end of
the third model year, the deficit must be
covered with an appropriate number of
credits that the manufacturer generates
or purchases. Any remaining deficit is
subject to a voiding of the certificate ab
initio, as described in this paragraph
(k)(8). Manufacturers are not permitted
to have a credit deficit for four
consecutive years.
(ii) If debits are not offset within the
specified time period, the number of
vehicles not meeting the fleet average
CO2 standards (and therefore not
covered by the certificate) must be
calculated.
(A) Determine the gram per mile
quantity of debits for the noncompliant
vehicle category by multiplying the total
megagram deficit by 1,000,000 and then
dividing by the vehicle lifetime miles
for the vehicle category (passenger
automobile or light truck) specified in
paragraph (k)(4) of this section.
(B) Divide the result by the fleet
average standard applicable to the
model year in which the deficit failed to
be offset and round to the nearest whole
number to determine the number of
vehicles not meeting the fleet average
CO2 standards.
(iii) EPA will determine the vehicles
not covered by a certificate because the
condition on the certificate was not
satisfied by designating vehicles in
those test groups with the highest CO2
emission values first and continuing
until reaching a number of vehicles
equal to the calculated number of
noncomplying vehicles as determined
in paragraph (k)(7) of this section. If this
calculation determines that only a
portion of vehicles in a test group
contribute to the debit situation, then
EPA will designate actual vehicles in
that test group as not covered by the
certificate, starting with the last vehicle
produced and counting backwards.
(iv)(A) If a manufacturer ceases
production of passenger cars and light
trucks, the manufacturer continues to be
responsible for offsetting any debits
outstanding within the required time
period. Any failure to offset the debits
will be considered a violation of
paragraph (k)(7)(i) of this section and
may subject the manufacturer to an
enforcement action for sale of vehicles
not covered by a certificate, pursuant to
paragraphs (k)(7)(ii) and (iii) of this
section.
(B) If a manufacturer is purchased by,
merges with, or otherwise combines
with another manufacturer, the
controlling entity is responsible for
offsetting any debits outstanding within
the required time period. Any failure to
PO 00000
Frm 00310
Fmt 4701
Sfmt 4700
offset the debits will be considered a
violation of paragraph (k)(7)(i) of this
section and may subject the
manufacturer to an enforcement action
for sale of vehicles not covered by a
certificate, pursuant to paragraphs
(k)(7)(ii) and (iii) of this section.
(v) For purposes of calculating the
statute of limitations, a violation of the
requirements of paragraph (k)(7)(i) of
this section, a failure to satisfy the
conditions upon which a certificate(s)
was issued and hence a sale of vehicles
not covered by the certificate, all occur
upon the expiration of the deadline for
offsetting debits specified in paragraph
(k)(7)(i) of this section.
(9) The following provisions apply to
CO2 credit trading:
(i) EPA may reject CO2 credit trades
if the involved manufacturers fail to
submit the credit trade notification in
the annual report.
(ii) A manufacturer may not sell
credits that are not available for sale
pursuant to the provisions in paragraph
(k)(6)(i) of this section.
(iii) In the event of a negative credit
balance resulting from a transaction,
both the buyer and seller are liable. EPA
may void ab initio the certificates of
conformity of all test groups
participating in such a trade.
(iv) (A) If a manufacturer trades a
credit that it has not generated pursuant
to paragraph (k) of this section or
acquired from another party, the
manufacturer will be considered to have
generated a debit in the model year that
the manufacturer traded the credit. The
manufacturer must offset such debits by
the deadline for the annual report for
that same model year.
(B) Failure to offset the debits within
the required time period will be
considered a failure to satisfy the
conditions upon which the certificate(s)
was issued and will be addressed
pursuant to paragraph (k)(7) of this
section.
(v) A manufacturer may only trade
credits that it has generated pursuant to
paragraph (k)(4) of this section or
acquired from another party.
(l) Maintenance of records and
submittal of information relevant to
compliance with fleet average CO2
standards—(1) Maintenance of records.
(i) Manufacturers producing any lightduty vehicles, light-duty trucks, or
medium-duty passenger vehicles subject
to the provisions in this subpart must
establish, maintain, and retain all the
following information in adequately
organized records for each model year:
(A) Model year.
(B) Applicable fleet average CO2
standards for each averaging set as
defined in paragraph (i) of this section.
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
(C) The calculated fleet average CO2
value for each averaging set as defined
in paragraph (i) of this section.
(D) All values used in calculating the
fleet average CO2 values.
(ii) Manufacturers producing any
passenger cars or light trucks subject to
the provisions in this subpart must
establish, maintain, and retain all the
following information in adequately
organized records for each passenger car
or light truck subject to this subpart:
(A) Model year.
(B) Applicable fleet average CO2
standard.
(C) EPA test group.
(D) Assembly plant.
(E) Vehicle identification number.
(F) Carbon-related exhaust emission
standard to which the passenger car or
light truck is certified.
(G) In-use carbon-related exhaust
emission standard.
(H) Information on the point of first
sale, including the purchaser, city, and
State.
(iii) Manufacturers must retain all
required records for a period of eight
years from the due date for the annual
report. Records may be stored in any
format and on any media, as long as
manufacturers can promptly send EPA
organized written records in English if
we ask for them. Manufacturers must
keep records readily available as EPA
may review them at any time.
(iv) The Administrator may require
the manufacturer to retain additional
records or submit information not
specifically required by this section.
(v) Pursuant to a request made by the
Administrator, the manufacturer must
submit to the Administrator the
information that the manufacturer is
required to retain.
(vi) EPA may void ab initio a
certificate of conformity for vehicles
certified to emission standards as set
forth or otherwise referenced in this
subpart for which the manufacturer fails
to retain the records required in this
section or to provide such information
to the Administrator upon request, or to
submit the reports required in this
section in the specified time period.
(2) Reporting. (i) Each manufacturer
must submit an annual report. The
annual report must contain for each
applicable CO2 standard, the calculated
fleet average CO2 value, all values
required to calculate the CO2 emissions
value, the number of credits generated
or debits incurred, all the values
required to calculate the credits or
debits, and the resulting balance of
credits or debits.
(ii) For each applicable fleet average
CO2 standard, the annual report must
also include documentation on all credit
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
transactions the manufacturer has
engaged in since those included in the
last report. Information for each
transaction must include all of the
following:
(A) Name of credit provider.
(B) Name of credit recipient.
(C) Date the trade occurred.
(D) Quantity of credits traded in
megagrams.
(E) Model year in which the credits
were earned.
(iii) Manufacturers calculating early
air conditioning leakage and/or
efficiency credits under paragraph (b) of
this section shall report the following
information for each model year
separately for passenger automobiles
and light trucks and for each air
conditioning system used to generate
credits:
(A) A description of the air
conditioning system.
(B) The leakage credit value and all
the information required to determine
this value.
(C) The total credits earned for each
averaging set, model year, and region, as
applicable.
(iv) Manufacturers calculating early
advanced technology vehicle credits
under paragraph (c) of this section shall
report, for each model year and
separately for passenger automobiles
and light trucks, the following
information:
(A) The number of each model type of
eligible vehicle sold.
(B) The carbon-related exhaust
emission value by model type and
model year.
(v) Manufacturers calculating early
off-cycle technology credits under
paragraph (d) of this section shall
report, for each model year and
separately for passenger automobiles
and light trucks, all test results and data
required for calculating such credits.
(vi) Unless a manufacturer reports the
data required by this section in the
annual production report required
under § 86.1844–01(e) or the annual
report required under § 600.512–12, a
manufacturer must submit an annual
report for each model year after
production ends for all affected vehicles
produced by the manufacturer subject to
the provisions of this subpart and no
later than May 1 of the calendar year
following the given model year. Annual
reports must be submitted to: Director,
Compliance and Innovative Strategies
Division, U.S. Environmental Protection
Agency, 2000 Traverwood, Ann Arbor,
Michigan 48105.
(vii) Failure by a manufacturer to
submit the annual report in the
specified time period for all vehicles
subject to the provisions in this section
PO 00000
Frm 00311
Fmt 4701
Sfmt 4700
49763
is a violation of section 203(a)(1) of the
Clean Air Act (42 U.S.C. 7522 (a)(1)) for
each applicable vehicle produced by
that manufacturer.
(viii) If EPA or the manufacturer
determines that a reporting error
occurred on an annual report previously
submitted to EPA, the manufacturer’s
credit or debit calculations will be
recalculated. EPA may void erroneous
credits, unless traded, and will adjust
erroneous debits. In the case of traded
erroneous credits, EPA must adjust the
selling manufacturer’s credit balance to
reflect the sale of such credits and any
resulting credit deficit.
(3) Notice of opportunity for hearing.
Any revoking of the certificate under
paragraph (l)(1)(vi) of this section will
be made only after EPA has offered the
affected manufacturer an opportunity
for a hearing conducted in accordance
with § 86.614–84 for light-duty vehicles
or § 86.1014–84 for light-duty trucks
and, if a manufacturer requests such a
hearing, will be made only after an
initial decision by the Presiding Officer.
27. A new section 86.1866–12 is
added to subpart S to read as follows:
§ 86.1866–12
programs.
CO2 fleet average credit
(a) Additional credits for certification
of advanced technology vehicles. A
manufacturer may generate additional
credits by certifying and producing
electric vehicles, plug-in hybrid electric
vehicles, or fuel cell electric vehicles, as
those terms are defined in § 86.1803–01,
in the 2012 through 2016 model years.
When calculating the fleet average CO2
emissions according to the provisions of
part 600 subpart F of this chapter, the
manufacturer may multiply the number
of advanced technology vehicles
produced by [1.2–2.0]. This multiplier
may be used if the following conditions
are met:
(1) Documentation of the use of this
multiplier and the number of credits
generated by its use shall be included in
the annual report to the Administrator;
(2) Vehicles must be certified to Tier
2 Bin No. 5 or a more stringent set of
emissions standards in § 86.1811–
04(c)(6);
(3) These multipliers may not be used
after the 2016 model year;
(b) Credits for reduction of air
conditioning refrigerant leakage.
Manufacturers may generate credits
applicable to the CO2 fleet average
program described in § 86.1865–12 by
implementing specific air conditioning
system technologies designed to reduce
air conditioning refrigerant leakage over
the useful life of their passenger cars
and/or light trucks. Credits shall be
calculated according to this paragraph
E:\FR\FM\28SEP2.SGM
28SEP2
49764
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
(b) for each air conditioning system that
the manufacturer is using to generate
CO2 credits.
(1) The manufacturer shall calculate
an annual rate of refrigerant leakage
from an air conditioning system in
grams per year according to the
provisions of § 86.166–12.
(2) The CO2-equivalent gram per mile
leakage reduction to be used to calculate
the total credits generated by the air
conditioning system shall be
determined according to the following
formulae, rounded to the nearest tenth
of a gram per mile:
(i) Passenger automobiles:
⎡ ⎛ Leakage ⎞ ⎛ GWPNEW ⎞ ⎤
Leakage credit = MaxCredit × ⎢1 − ⎜
⎟⎥
⎟×⎜
⎥
⎢
⎣ ⎝ 16.6 ⎠ ⎝ GWPHFC134a ⎠ ⎦
provisions of § 86.166–12(a), except if
the calculated rate is less than 8.3 grams
per year the rate for the purpose of this
formula shall be 8.3 grams per year;
GWPNEW means the global warming potential
of the refrigerant, if such refrigerant is
not R134a, as determined by the
Administrator;
GWPHFC134a means the global warming
potential of HFC 134a, which shall be
equal to 1430 unless determined
otherwise by the Administrator.
(ii) Light trucks:
Where:
MaxCredit is 15.6 for air conditioning
systems using HFC 134a, and 17.2 for air
conditioning systems using a refrigerant with
a lower global warming potential.
Leakage means the annual refrigerant
leakage rate determined according to the
provisions of § 86.166–12(a), except if the
calculated rate is less than 10.4 grams per
year the rate for the purpose of this formula
shall be 10.4 grams per year;
GWPNEW means the global warming potential
of the refrigerant, if such refrigerant is
not HFC 134a, as determined by the
Administrator;
GWPR134a means the global warming
potential of HFC 134a, which shall be
equal to 1430 unless determined
otherwise by the Administrator.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
(3) The total leakage reduction credits
generated by the air conditioning system
shall be calculated separately for
passenger cars and light trucks
according to the following formula:
Total Credits (megagrams) = (Leakage ×
Production × VLM) ÷ 1,000,000
Where:
Leakage = the CO2-equivalent leakage credit
value in grams per mile determined in
paragraph (b)(2) of this section.
Production = The total number of passenger
cars or light trucks, whichever is
applicable, produced with the air
conditioning system to which to the
leakage credit value from paragraph
(b)(2) of this section applies.
VLM = vehicle lifetime miles, which for
passenger cars shall be 190,971 and for
light trucks shall be 221,199.
(4) The results of paragraph (b)(3) of
this section, rounded to the nearest
whole number, shall be included in the
manufacturer’s credit/debit totals
calculated in § 86.1865–12(k)(5).
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
(c) Credits for improving air
conditioning system efficiency.
Manufacturers may generate credits
applicable to the CO2 fleet average
program described in § 86.1865–12 by
implementing specific air conditioning
system technologies designed to reduce
air conditioning-related CO2 emissions
over the useful life of their passenger
cars and/or light trucks. Credits shall be
calculated according to this paragraph
(c) for each air conditioning system that
the manufacturer is using to generate
CO2 credits. Manufacturers may also
generate early air conditioning
efficiency credits under this paragraph
(b) for the 2009 through 2011 model
years according to the provisions of
§ 86.1867–12(c). For model years 2012
and 2013 the manufacturer may
determine air conditioning efficiency
credits using the requirements in
paragraphs (c)(1) through (4) of this
section. For model years 2014 and later
the eligibility requirements specified in
paragraph (c)(5) of this section must be
met before an air conditioning system is
allowed to generate credits.
(1) Air conditioning efficiency credits
are available for the following
technologies in the gram per mile
amounts indicated:
(i) Reduced reheat, with externallycontrolled, variable-displacement
compressor: 1.7 g/mi.
(ii) Reduced reheat, with externallycontrolled, fixed-displacement or
pneumatic variable displacement
compressor: 1.1 g/mi.
(iii) Default to recirculated air mode
whenever the air conditioning system is
PO 00000
Frm 00312
Fmt 4701
Sfmt 4700
⎞⎤
⎟⎥
⎠⎥
⎦
being used to reduce cabin air
temperature and the outside air
temperature is greater than 75 °F: 1.7 g/
mi.
(iv) Blower motor and cooling fan
controls which limit waste energy (e.g.
pulsewidth modulated power
controller): 0.9 g/mi.
(v) Electronic expansion valve: 1.1 g/
mi.
(vi) Improved evaporators and
condensers (with system analysis on
each component indicating a coefficient
of performance improvement greater
than 10%, when compared to previous
design): 1.1 g/mi.
(vii) Oil separator: 0.6 g/mi.
(2) Air conditioning efficiency credits
are determined on an air conditioning
system basis. For each air conditioning
system that is eligible for a credit based
on the use of one or more of the items
listed in paragraph (c)(1) of this section,
the total credit value is the sum of the
gram per mile values listed in paragraph
(c)(1) of this section for each item that
applies to the air conditioning system.
If the sum of those values for an air
conditioning system is greater than 5.7
grams per mile, the total credit value is
deemed to be 5.7 grams per mile.
(3) The total efficiency credits
generated by an air conditioning system
shall be calculated separately for
passenger cars and light trucks
according to the following formula:
Total Credits (Megagrams) = (Credit ×
Production × VLM) ÷ 1,000,000
Where:
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.057</MATH>
⎡ ⎛ Leakage ⎞ ⎛ GWPNEW
Leakage credit = MaxCredit × ⎢1 − ⎜
⎟×⎜
⎢ ⎝ 20.7 ⎠ ⎝ GWPHFC134a
⎣
EP28SE09.056</MATH>
Where:
MaxCredit is 12.6 for air conditioning
systems using HFC 134a, and 13.8 for air
conditioning systems using a refrigerant
with a lower global warming potential.
Leakage means the annual refrigerant leakage
rate determined according to the
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Credit = the CO2 efficiency credit value in
grams per mile determined in paragraph
(c)(2) of this section.
Production = The total number of passenger
cars or light trucks, whichever is
applicable, produced with the air
conditioning system to which the
efficiency credit value from paragraph
(c)(2) of this section applies.
VLM = vehicle lifetime miles, which for
passenger cars shall be 190,971 and for
light trucks shall be 221,199.
(4) The results of paragraph (c)(3) of
this section, rounded to the nearest
whole number, shall be included in the
manufacturer’s credit/debit totals
calculated in § 86.1865–12(k)(5).
(5) Use of the Air Conditioning Idle
Test Procedure is required after the 2013
model year as specified in this
paragraph (c)(5).
(i) After the 2013 model year, for each
air conditioning system selected by the
manufacturer to generate air
conditioning efficiency credits, the
manufacturer shall perform the Air
Conditioning Idle Test Procedure
specified in § 86.165–14 of this part.
(ii) Using good engineering judgment,
the manufacturer must select the vehicle
configuration to be tested that is
expected to result in the greatest
increased CO2 emissions as a result of
the operation of the air conditioning
system for which efficiency credits are
being sought. If the air conditioning
system is being installed in passenger
automobiles and light trucks, a separate
determination of the quantity of credits
for passenger automobiles and light
trucks must be made, but only one test
vehicle is required to represent the air
conditioning system, provided it
represents the worst-case impact of the
system on CO2 emissions.
(iii) For an air conditioning system to
be eligible to generate credits in the
2014 and later model years, the
increased CO2 emissions as a result of
the operation of that air conditioning
system determined according to the Idle
Test Procedure in § 86.165–14 must be
less than 14.9 grams per minute.
(iv) Air conditioning systems with
compressors that are solely powered by
electricity shall submit Air Conditioning
Idle Test Procedure data to be eligible to
generate credits in the 2014 and later
model years, but such systems are not
required to meet a specific threshold to
be eligible to generate such credits, as
long as the engine remains off for a
period of at least 2 minutes during the
air conditioning on portion of the Idle
Test Procedure in § 86.165–12 (d).
(6) The following definitions apply to
this paragraph (c):
(i) Reduced reheat, with externallycontrolled, variable displacement
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
compressor means a system in which
compressor displacement is controlled
via an electronic signal, based on input
from sensors (e.g. position or setpoint of
interior temperature control, interior
temperature, evaporator outlet air
temperature, or refrigerant temperature)
and air temperature at the outlet of the
evaporator can be controlled to a level
at 41 °F, or higher.
(ii) Reduced reheat, with externallycontrolled, fixed-displacement or
pneumatic variable displacement
compressor means a system in which
the output of either compressor is
controlled by cycling the compressor
clutch off-and-on via an electronic
signal, based on input from sensors (e.g.
position or setpoint of interior
temperature control, interior
temperature, evaporator outlet air
temperature, or refrigerant temperature)
and air temperature at the outlet of the
evaporator can be controlled to a level
at 41 °F, or higher.
(iii) Default to recirculated air mode
means that the default position of the
mechanism which controls the source of
air supplied to the air conditioning
system shall change from outside air to
recirculated air when the operator or the
automatic climate control system has
engaged the air conditioning system (i.e.
evaporator is removing heat), except
under those conditions where
dehumidification is required for
visibility (i.e. defogger mode). In
vehicles equipped with interior air
quality sensors (e.g. humidity sensor, or
carbon dioxide sensor), the controls may
determine proper blend of air supply
sources to maintain freshness of the
cabin air while continuing to maximize
the use of recirculated air. At any time,
the vehicle operator may manually
select the non-recirculated air setting
during vehicle operation but the system
must default to recirculated air mode on
subsequent vehicle operations (i.e. next
vehicle start). The climate control
system may delay switching to
recirculation mode until the interior air
temperature is less than the outside air
temperature, at which time the system
must switch to recirculated air mode.
(iv) Blower motor and cooling fan
controls which limit waste energy means
a method of controlling fan and blower
speeds which does not use resistive
elements to decrease the voltage
supplied to the motor.
(v) Electronic expansion valve means
a valve which throttles the expansion of
the refrigerant where the position of the
valve (and flow of refrigerant) is
controlled via an electronic signal,
based on input from sensors (e.g.
position or setpoint of interior
temperature control, interior
PO 00000
Frm 00313
Fmt 4701
Sfmt 4700
49765
temperature, evaporator outlet air
temperature, or refrigerant temperature).
(vi) Improved evaporators and
condensers means that the coefficient of
performance (COP) of air conditioning
system using improved evaporator and
condenser designs is 10 percent higher,
as determined using the bench test
procedures described in SAE J2765
‘‘Procedure for Measuring System COP
of a Mobile Air Conditioning System on
a Test Bench,’’ when compared to a
system using standard, or prior model
year, component designs. SAE J2765 is
incorporated by reference; see § 86.1.
(vii) Oil separator means a
mechanism which removes at least 50
percent of the oil entrained in the oil/
refrigerant mixture exiting the
compressor and returns it to the
compressor housing or compressor inlet,
or a compressor design which does not
rely on the circulation of an oil/
refrigerant mixture for lubrication.
(d) Credits for CO2-reducing
technologies where the CO2 reduction is
not captured on the Federal Test
Procedure or the Highway Fuel
Economy Test. Manufacturers may
optionally generate credits applicable to
the CO2 fleet average program described
in § 86.1865–12 by implementing
innovative technologies that have a
measurable, demonstrable, and
verifiable real-world CO2 reduction.
These optional credits are referred to as
‘‘off-cycle’’ credits and may be earned
through the 2016 model year.
(1) Qualification criteria. To qualify
for this credit, the following must be
true:
(i) The technology must be an
innovative and novel vehicle- or enginebased approach to reducing greenhouse
gas emissions, and not in widespread
use.
(ii) The CO2-reducing impact of the
technology must not be significantly
measurable over the Federal Test
Procedure and the Highway Fuel
Economy Test. The technology must
improve CO2 emissions beyond the
driving conditions of those tests.
(iii) The technology must be able to be
demonstrated to be effective for the full
useful life of the vehicle. Unless the
manufacturer demonstrates that the
technology is not subject to in-use
deterioration, the manufacturer must
account for the deterioration in their
analysis.
(2) Quantifying the CO2 reductions of
an off-cycle technology. The
manufacturer may use one of the two
options specified in this paragraph
(d)(2) to measure the CO2-reducing
potential of an innovative off-cycle
technology. The option described in
paragraph (d)(2)(ii) of this section may
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49766
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
be used only with EPA approval, and to
use that option the manufacturer must
be able to justify to the Administrator
why the 5-cycle option described in
paragraph (d)(2)(i) of this section
insufficiently characterizes the
effectiveness of the off-cycle technology.
The manufacturer should notify EPA in
their pre-model year report of their
intention to generate any credits under
paragraph (d) of this section.
(i) Technology demonstration using
EPA 5-cycle methodology. To
demonstrate an off-cycle technology and
to determine a CO2 credit using the EPA
5-cycle methodology, the manufacturer
shall determine 5-cycle city/highway
combined carbon-related exhaust
emissions both with the technology
installed and operating and without the
technology installed and/or operating.
The manufacturer shall conduct the
following steps, both with the off-cycle
technology installed and operating and
without the technology operating or
installed.
(A) Determine carbon-related exhaust
emissions over the FTP, the HFET, the
US06, the SC03, and the cold
temperature FTP test procedures
according to the test procedure
provisions specified in 40 CFR part 600
subpart B and using the calculation
procedures specified in § 600.113–08 of
this chapter.
(B) Calculate 5-cycle city and highway
carbon-related exhaust emissions using
data determined in paragraph
(d)(2)(i)(A) of this section according to
the calculation procedures in
paragraphs (d) through (f) of 40 CFR
600.114–08.
(C) Calculate a 5-cycle city/highway
combined carbon-related exhaust
emission value using the city and
highway values determined in
paragraph (d)(2)(i)(B) of this section.
(D) Subtract the 5-cycle city/highway
combined carbon-related exhaust
emission value determined with the offcycle technology operating from the 5cycle city/highway combined carbonrelated exhaust emission value
determined with the off-cycle
technology not operating. The result is
the gram per mile credit amount
assigned to the technology.
(ii) Technology demonstration using
alternative EPA-approved methodology.
In cases where the EPA 5-cycle
methodology described in paragraph
(d)(2)(i) of this section cannot
adequately measure the emission
reduction attributable to an innovative
off-cycle technology, the manufacturer
may develop an alternative approach.
Prior to a model year in which a
manufacturer intends to seek these
credits, the manufacturer must submit a
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
detailed analytical plan to EPA. EPA
will work with the manufacturer to
ensure that an analytical plan will result
in appropriate data for the purposes of
generating these credits. The alternative
demonstration program must be
approved in advance by the
Administrator and should:
(A) Use modeling, on-road testing, onroad data collection, or other approved
analytical or engineering methods;
(B) Be robust, verifiable, and capable
of demonstrating the real-world
emissions benefit with strong statistical
significance;
(C) Result in a demonstration of
baseline and controlled emissions over
a wide range of driving conditions and
number of vehicles such that issues of
data uncertainty are minimized;
(D) Result in data on a model type
basis unless the manufacturer
demonstrates that another basis is
appropriate and adequate.
(iii) Calculation of total off-cycle
credits. Total off-cycle credits in
Megagrams of CO2 shall be calculated
separately for passenger automobiles
and light trucks according to the
following formula:
Total Credits (Megagrams) = (Credit ×
Production × VLM) ÷ 1,000,000
Where:
Credit = the 5-cycle credit value in grams per
mile determined in paragraph (d)(2)(i)(D)
or (d)(2)(ii) of this section.
Production = The total number of passenger
cars or light trucks, whichever is
applicable, produced with the off-cycle
technology to which to the credit value
determined in paragraph (d)(2)(i)(D) or
(d)(2)(ii) of this section applies.
VLM = vehicle lifetime miles, which for
passenger cars shall be 190,971 and for
light trucks shall be 221,199.
28. A new § 86.1867–12 is added to
subpart S to read as follows:
§ 86.1867–12
programs.
Optional early CO2 credit
Manufacturers may optionally
generate CO2 credits in the 2009 through
2011 model years for use in the 2012
and later model years subject to the
provisions of this section.
Manufacturers may generate early fleet
average credits, air conditioning leakage
credits, air conditioning efficiency
credits, early advanced technology
credits, and early off-cycle technology
credits. Manufacturers generating any
credits under this section must submit
an early credits report to the
Administrator as required in this
section.
(a) Early fleet average CO2 reduction
credits. Manufacturers may optionally
generate credits for reductions in their
fleet average CO2 emissions achieved in
PO 00000
Frm 00314
Fmt 4701
Sfmt 4700
the 2009 through 2011 model years. To
generate early fleet average CO2
reduction credits, manufacturers must
select one of the four pathways
described in paragraphs (a)(1) through
(4) of this section. The manufacturer
may select only one pathway, and that
pathway must remain in effect for the
2009 through 2011 model years. Fleet
average credits (or debits) must be
calculated and reported to EPA for each
model year under each selected
pathway. Early credits are subject to five
year carry-forward restrictions based on
the model year in which the credits are
generated.
(1) Pathway 1. To earn credits under
this pathway, the manufacturer shall
calculate an average carbon-related
exhaust emission value to the nearest
one gram per mile for the classes of
motor vehicles identified in this
paragraph (a)(1), and the results of such
calculations will be reported to the
Administrator for use in determining
compliance with the applicable CO2
early credit threshold values.
(i) An average carbon-related exhaust
emission value calculation will be made
for the combined LDV/LDT1 averaging
set.
(ii) An average carbon-related exhaust
emission value calculation will be made
for the combined LDT2/HLDT/MDPV
averaging set.
(iii) Average carbon-related exhaust
emission values shall be determined
according to the provisions of 40 CFR
600.510–12, except that:
(A) Total U.S. model year sales data
will be used, instead of production data;
(B) The average carbon-related
exhaust emissions for alcohol fueled
model types shall be calculated
according to the provisions of 40 CFR
600.510–12(j)(2)(ii)(B), without the use
of the 0.15 multiplicative factor.
(C) The average carbon-related
exhaust emissions for natural gas fueled
model types shall be calculated
according to the provisions of 40 CFR
600.510–12(j)(2)(iii)(B), without the use
of the 0.15 multiplicative factor.
(D) The average carbon-related
exhaust emissions for alcohol dual
fueled model types shall be calculated
according to the provisions of 40 CFR
600.510–12(j)(2)(vi), without the use of
the 0.15 multiplicative factor and with
F=0. For the 2010 and 2011 model years
only, if the California Air Resources
Board has approved a manufacturer’s
request to use a non-zero value of F, the
manufacturer may use such an approved
value.
(E) The average carbon-related
exhaust emissions for natural gas dual
fueled model types shall be calculated
according to the provisions of 40 CFR
E:\FR\FM\28SEP2.SGM
28SEP2
49767
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
600.510–12(j)(2)(vii), without the use of
the 0.15 multiplicative factor and with
F=0. For the 2010 and 2011 model years
only, if the California Air Resources
Board has approved a manufacturer’s
request to use a non-zero value of F, the
manufacturer may use such an approved
value.
(F) 40 CFR 600.510–12(j)(3) shall not
apply. Electric, fuel cell electric, and
plug-in hybrid electric model type
carbon-related exhaust emission values
shall be included in the fleet average
determined under paragraph (a)(1) of
this section only to the extent that such
vehicles are not being used to generate
early advanced technology vehicle
credits under paragraph (c) of this
section.
(iv) Fleet average CO2 credit threshold
values.
LDT2/HLDT/
MDPV
Model year
LDV/LDT1
2009 ...........................................................................................
2010 ...........................................................................................
2011 ...........................................................................................
321 ............................................................................................
299 ............................................................................................
265 ............................................................................................
(v) Credits are earned on the last day
of the model year. Manufacturers must
calculate, for a given model year, the
number of credits or debits it has
generated according to the following
equation, rounded to the nearest
megagram:
CO2 Credits or Debits (Mg) = [(CO2
Credit Threshold ¥ Manufacturer’s
Sales Weighted Fleet Average CO2
Emissions) × (Total Number of
Vehicles Sold) × (Vehicle Lifetime
Miles)] ÷ 1,000,000
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Where:
CO2 Credit Threshold = the applicable credit
threshold value for the model year and
vehicle averaging set as determined by
paragraph (a)(1)(iv) of this section;
Manufacturer’s Sales Weighted Fleet Average
CO2 Emissions = average calculated
according to paragraph (a)(1)(iii) of this
section;
Total Number of Vehicles Sold = The number
of vehicles domestically sold as defined
in 40 CFR 600.511–80; and
Vehicle Lifetime Miles is 190,971 for the
LDV/LDT1 averaging set and 221,199 for
the LDT2/HLDT/MDPV averaging set.
(vi) Deficits generated against the
applicable CO2 credit threshold values
in paragraph (a)(1)(iv) of this section in
any averaging set for any of the 2009–
2011 model years must be offset using
credits accumulated by any averaging
set in any of the 2009–2011 model years
before determining the number of
credits that may be carried forward to
the 2012. Deficit carry forward and
credit banking provisions of § 86.1865–
12 apply to early credits earned under
this paragraph (a)(1), except that deficits
may not be carried forward from any of
the 2009–2011 model years into the
2012 model year.
(2) Pathway 2. To earn credits under
this pathway, manufacturers shall
calculate an average carbon-related
exhaust emission value to the nearest
one gram per mile for the classes of
motor vehicles identified in paragraph
(a)(1) of this section, and the results of
such calculations will be reported to the
Administrator for use in determining
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
compliance with the applicable CO2
early credit threshold values.
(i) Credits under this pathway shall be
calculated according to the provisions of
paragraph (a)(1) of this section, except
credits may only be generated by
vehicles sold in a model year in States
with a section 177 program in effect in
that model year. For the purposes of this
section, ‘‘section 177 program’’ means
State regulations or other laws that
apply to any of the following categories
of motor vehicles: Passenger cars, lightduty trucks up through 6,000 pounds
GVWR, and medium-duty vehicles from
6,001 to 14,000 pounds GVWR, as these
categories of motor vehicles are defined
in the California Code of Regulations,
Title 13, Division 3, Chapter 1, Article
1, Section 1900.
(ii) A deficit in any averaging set for
any of the 2009–2011 model years must
be offset using credits accumulated by
any averaging set in any of the 2009–
2011 model years before determining
the number of credits that may be
carried forward to the 2012 model year.
Deficit carry forward and credit banking
provisions of § 86.1865–12 apply to
early credits earned under this
paragraph (a)(1), except that deficits
may not be carried forward from any of
the 2009–2011 model years into the
2012 model year.
(3) Pathway 3. Pathway 3 credits are
those credits earned under Pathway 2 as
described in paragraph (a)(2) of this
section and in the section 177 States
determined in paragraph (a)(2)(i) of this
section, combined with additional
credits earned in the set of states that
does not include the section 177 States
determined in paragraph (a)(2)(i) of this
section and calculated according to this
paragraph (a)(3).
(i) Manufacturers shall earn
additional credits under Pathway 3 by
calculating an average carbon-related
exhaust emission value to the nearest
one gram per mile for the classes of
motor vehicles identified in this
paragraph (a)(3). The results of such
PO 00000
Frm 00315
Fmt 4701
Sfmt 4700
437
418
388
calculations will be reported to the
Administrator for use in determining
compliance with the applicable CO2
early credit threshold values.
(ii) Credits may only be generated by
vehicles sold in the States not included
in the section 177 States determined in
paragraph (a)(2)(i) of this section.
(iii) An average carbon-related
exhaust emission value calculation will
be made for the passenger automobile
averaging set. The term ‘‘passenger
automobile’’ shall have the meaning
given by the Department of
Transportation at 49 CFR 523.4 for the
specific model year for which the
calculation is being made.
(iv) An average carbon-related exhaust
emission value calculation will be made
for the light truck averaging set. The
term ‘‘light truck’’ shall have the
meaning given by the Department of
Transportation at 49 CFR 523.5 for the
specific model year for which the
calculation is being made.
(v) Average carbon-related exhaust
emission values shall be determined
according to the provisions of 40 CFR
600.510–12, except that:
(A) Total model year sales data will be
used, instead of production data, except
that vehicles sold in the section 177
States determined in paragraph (a)(2)(i)
of this section shall not be included;
(B) The average carbon-related
exhaust emissions for alcohol fueled
model types shall be calculated
according to the provisions of 40 CFR
600.510–12(j)(2)(ii)(B), without the use
of the 0.15 multiplicative factor.
(C) The average carbon-related
exhaust emissions for natural gas fueled
model types shall be calculated
according to the provisions of 40 CFR
600.510–12(j)(2)(iii)(B), without the use
of the 0.15 multiplicative factor.
(D) The average carbon-related
exhaust emissions for alcohol dual
fueled model types shall be calculated
according to the provisions of 40 CFR
600.510–12(j)(2)(vi), without the use of
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49768
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
the 0.15 multiplicative factor and with
F=0.
(E) The average carbon-related
exhaust emissions for natural gas dual
fueled model types shall be calculated
according to the provisions of 40 CFR
600.510–12(j)(2)(vii), without the use of
the 0.15 multiplicative factor and with
F=0.
(F) 40 CFR 600.510–12(j)(3) shall not
apply. Electric, fuel cell electric, and
plug-in hybrid electric model type
carbon-related exhaust emission values
shall be included in the fleet average
determined under paragraph (a)(1) of
this section only to the extent that such
vehicles are not being used to generate
early advanced technology vehicle
credits under paragraph (c) of this
section.
(vi) Pathway 3 fleet average CO2 credit
threshold values.
(A) For 2009 and 2010 model year
passenger automobiles, the fleet average
CO2 credit threshold value is 323 grams/
mile.
(B) For 2009 model year light trucks
the fleet average CO2 credit threshold
value is 381 grams/mile, or, if the
manufacturer chose to optionally meet
an alternative manufacturer-specific
light truck fuel economy standard
calculated under 49 CFR 533.5 for the
2009 model year, the gram per mile fleet
average CO2 credit threshold shall be
the CO2 value determined by dividing
8887 by that alternative manufacturerspecific fuel economy standard and
rounding to the nearest whole gram per
mile.
(C) For 2010 model year light trucks
the fleet average CO2 credit threshold
value is 376 grams/mile, or, if the
manufacturer chose to optionally meet
an alternative manufacturer-specific
light truck fuel economy standard
calculated under 49 CFR 533.5 for the
2010 model year, the gram per mile fleet
average CO2 credit threshold shall be
the CO2 value determined by dividing
8887 by that alternative manufacturerspecific fuel economy standard and
rounding to the nearest whole gram per
mile.
(D) For 2011 model year passenger
automobiles the fleet average CO2 credit
threshold value is the value determined
by dividing 8887 by the manufacturerspecific passenger automobile fuel
economy standard for the 2011 model
year determined under 49 CFR 531.5
and rounding to the nearest whole gram
per mile.
(E) For 2011 model year light trucks
the fleet average CO2 credit threshold
value is the value determined by
dividing 8887 by the manufacturerspecific light truck fuel economy
standard for the 2011 model year
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
determined under 49 CFR 533.5 and
rounding to the nearest whole gram per
mile.
(vii) Credits are earned on the last day
of the model year. Manufacturers must
calculate, for a given model year, the
number of credits or debits it has
generated according to the following
equation, rounded to the nearest
megagram:
CO2 Credits or Debits (Mg) = [(CO2
Credit Threshold ¥ Manufacturer’s
Sales Weighted Fleet Average CO2
Emissions) × (Total Number of
Vehicles Sold) × (Vehicle Lifetime
Miles)] ÷ 1,000,000
Where:
CO2 Credit Threshold = the applicable credit
threshold value for the model year and
vehicle averaging set as determined by
paragraph (a)(3)(vii) of this section;
Manufacturer’s Sales Weighted Fleet Average
CO2 Emissions = average calculated
according to paragraph (a)(3)(vi) of this
section;
Total Number of Vehicles Sold = The number
of vehicles domestically sold as defined
in 40 CFR 600.511–80 except that
vehicles sold in the section 177 States
determined in paragraph (a)(2)(i) of this
section shall not be included; and
Vehicle Lifetime Miles is 190,971 for the
LDV/LDT1 averaging set and 221,199 for
the LDT2/HLDT/MDPV averaging set.
(viii) Deficits in any averaging set for
any of the 2009–2011 model years must
be offset using credits accumulated by
any averaging set in any of the 2009–
2011 model years before determining
the number of credits that may be
carried forward to the 2012. Deficit
carry forward and credit banking
provisions of 86.1865–12 apply to early
credits earned under this paragraph
(a)(3), except that deficits may not be
carried forward from any of the 2009–
2011 model years into the 2012 model
year.
(4) Pathway 4. Pathway 4 credits are
those credits earned under Pathway 3 as
described in paragraph (a)(3) of this
section in the set of states that does not
include the section 177 States
determined in paragraph (a)(2)(i) of this
section and calculated according to
paragraph (a)(3) of this section. Credits
may only be generated by vehicles sold
in the set of states that does not include
the section 177 States determined in
paragraph (a)(2)(i) of this section.
(b) Early air conditioning leakage and
efficiency credits. (1) Manufacturers
may optionally generate air
conditioning refrigerant leakage credits
according to the provisions of paragraph
(b) of § 86.1866–12 and/or air
conditioning efficiency credits
according to the provisions of
§ 86.1866–12(c) in model years 2009
PO 00000
Frm 00316
Fmt 4701
Sfmt 4700
through 2011. The early credits are
subject to five year carry forward limits
based on the model year in which the
credits are generated. Credits must be
tracked by model type and model year.
(2) Manufacturers that select Pathway
4 described in paragraph (a)(4) of this
section may not generate early air
conditioning credits for vehicles sold in
the section 177 States as determined in
paragraph (a)(2)(i) of this section.
(c) Early advanced technology vehicle
credits. Vehicles eligible for this credit
are electric vehicles, fuel cell electric
vehicles, and plug-in hybrid electric
vehicles, as those terms are defined in
§ 86.1803–01. If a manufacturer chooses
to not include electric vehicles, fuel cell
electric vehicles, and plug-in hybrid
electric vehicles in their fleet averages
calculated under any of the options
described in paragraph (a) of this
section, the manufacturer may generate
early advanced technology vehicle
credits pursuant to this paragraph (c).
(1) The manufacturer shall record the
sales and carbon-related exhaust
emission values of eligible vehicles by
model type and model year for model
years 2009 through 2011 and report
these values to the Administrator under
paragraph (e) of this section.
(2) Manufacturers may use the 2009
through 2011 eligible vehicles in their
fleet average calculations starting with
the 2012 model year, subject to a fiveyear carry-forward limitation.
(i) Eligible 2009 model year vehicles
may be used in the calculation of a
manufacturer’s fleet average carbonrelated exhaust emissions in the 2012
through 2014 model years.
(ii) Eligible 2010 model year vehicles
may be used in the calculation of a
manufacturer’s fleet average carbonrelated exhaust emissions in the 2012
through 2015 model years.
(iii) Eligible 2011 model year vehicles
may be used in the calculation of a
manufacturer’s fleet average carbonrelated exhaust emissions in the 2012
through 2016 model years.
(3) (i) To use advanced technology
vehicle credits, the manufacturer will
apply the 2009, 2010, and/or 2011
model type sales volumes and their
model type emission levels to a
manufacturer’s fleet average calculation
using the credit multiplier specified in
§ 86.1866–12(a).
(ii) Early advanced technology vehicle
credits must be used to offset a deficit
in one of the 2012 through 2016 model
years, as appropriate under paragraph
(c)(2) of this section.
(iii) The advanced technology vehicle
sales and emission values may be
included in a fleet average calculation
for passenger automobiles or light
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
trucks, but may not be used to generate
credits in the model year in which they
are included or in the averaging set in
which they are used. Use of early
advanced technology vehicle credits is
limited to offsetting a deficit that would
otherwise be generated without the use
of those credits. Manufacturers shall
report the use of such credits in their
model year report for the model year in
which the credits are used.
(d) Early off-cycle technology credits.
Manufacturers may optionally generate
credits for the implementation of certain
CO2-reducing technologies according to
the provisions of § 86.1866–12(d).
(e) Early credit reporting
requirements. Each manufacturer shall
submit a report to the Administrator,
known as the early credits report, that
reports the credits earned in the 2009
through 2011 model years under this
section.
(1) The report shall contain all
information necessary for the
calculation of the manufacturer’s early
credits in each of the 2009 through 2011
model years.
(2) The early credits report shall be in
writing, signed by the authorized
representative of the manufacturer and
shall be submitted no later than 90 days
after the end of the 2011 model year.
(3) Manufacturers using one of the
optional early fleet average CO2
reduction credit pathways described in
paragraph (a) of this section shall report
the following information separately for
the LDV/LDT1 and LDT2/HLDT/MDPV
averaging sets:
(i) The pathway that they have
selected (1, 2, 3, or 4).
(ii) A carbon-related exhaust emission
value for each model type of the
manufacturer’s product line calculated
according to paragraph (a) of this
section.
(iii) The manufacturer’s average
carbon-related exhaust emission value
calculated according to paragraph (a) of
this section for the applicable averaging
set and region and all data required to
complete this calculation.
(iv) The credits earned for each
averaging set, model year, and region, as
applicable.
(4) Manufacturers calculating early air
conditioning leakage and/or efficiency
credits under paragraph (b) of this
section shall report the following
information for each model year
separately for passenger automobiles
and light trucks and for each air
conditioning system used to generate
credits:
(i) A description of the air
conditioning system.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
(ii) The leakage credit value and all
the information required to determine
this value.
(iii) The total credits earned for each
averaging set, model year, and region, as
applicable.
(5) Manufacturers calculating early
advanced technology vehicle credits
under paragraph (c) of this section shall
report, for each model year and
separately for passenger automobiles
and light trucks, the following
information:
(i) The number of each model type of
eligible vehicle sold.
(ii) The carbon-related exhaust
emission value by model type and
model year.
(6) Manufacturers calculating early
off-cycle technology credits under
paragraph (d) of this section shall
report, for each model year and
separately for passenger automobiles
and light trucks, all test results and data
required for calculating such credits.
PART 600—FUEL ECONOMY AND
CARBON-RELATED EXHAUST
EMISSIONS OF MOTOR VEHICLES
29. The authority citation for part 600
continues to read as follows:
Authority: 49 U.S.C. 32901–23919q, Pub.
L. 109–58.
30. The heading for Part 600 is revised
as set forth above.
Subpart A—Fuel Economy and
Carbon-Related Exhaust Emission
Regulations for 1977 and Later Model
Year Automobiles—General Provisions
31. The heading for subpart A is
revised as set forth above.
32. A new § 600.001–12 is added to
subpart A to read as follows:
§ 600.001–12
General applicability.
(a) The provisions of this subpart are
applicable to 2012 and later model year
automobiles and to the manufacturers of
2012 and later model year automobiles.
(b) Fuel economy and related
emissions data. Unless stated otherwise,
references to fuel economy or fuel
economy data in this subpart shall also
be interpreted to mean the related
exhaust emissions of CO2, HC, and CO,
and where applicable for alternative fuel
vehicles, CH3OH, C2H5OH, C2H4O,
HCHO, NMHC and CH4. References to
average fuel economy shall be
interpreted to also mean average carbonrelated exhaust emissions. References to
fuel economy data vehicles shall also be
meant to refer to vehicles tested for
carbon-related exhaust emissions for the
purpose of demonstrating compliance
with fleet average CO2 standards in 40
CFR 86.1818–12.
PO 00000
Frm 00317
Fmt 4701
Sfmt 4700
49769
33. Section 600.002–08 is amended as
follows:
a. By adding the definition for ‘‘Base
tire.’’
b. By adding the definition for
‘‘Carbon-related exhaust emissions.’’
c. By adding the definition for
‘‘Electric vehicle.’’
d. By adding the definition for
‘‘Footprint.’’
e. By adding the definition for ‘‘Fuel
cell.’’
f. By adding the definition for ‘‘Fuel
cell electric vehicle.’’
g. By adding the definition for
‘‘Hybrid electric vehicle.’’
h. By revising the definition for ‘‘Nonpassenger automobile.’’
i. By revising the definition for
‘‘Passenger automobile.’’
j. By adding the definition for ‘‘Plugin hybrid electric vehicle.’’
§ 600.002–08
*
Definitions.
*
*
*
*
Base tire means the tire specified as
standard equipment by the
manufacturer.
*
*
*
*
*
Carbon-related exhaust emissions
means the summation of the carboncontaining constituents of the exhaust
emissions, with each constituent
adjusted by a coefficient representing
the carbon weight fraction of each
constituent, as specified in § 600.113–
08.
*
*
*
*
*
Electric vehicle means a vehicle that
is powered solely by an electric motor
drawing current from a rechargeable
energy storage system, such as from
storage batteries or other portable
electrical energy storage devices,
including hydrogen fuel cells, provided
that:
(1) Recharge energy must be drawn
from a source off the vehicle, such as
residential electric service; and
(2) The vehicle must be certified to
the emission standards of Bin #1 of
Table S04–1 in paragraph (c)(6) of
§ 86.1811 of this chapter.
*
*
*
*
*
Footprint is the product of track width
(measured in inches, calculated as the
average of front and rear track widths,
and rounded to the nearest tenth of an
inch) times wheelbase (measured in
inches and rounded to the nearest tenth
of an inch), divided by 144 and then
rounded to the nearest tenth of a square
foot. For purposes of this definition,
track width is the lateral distance
between the centerlines of the base tires
at ground, including the camber angle.
For purposes of this definition,
wheelbase is the longitudinal distance
E:\FR\FM\28SEP2.SGM
28SEP2
49770
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
between front and rear wheel
centerlines.
*
*
*
*
*
Fuel cell means an electrochemical
cell that produced electricity via the
reaction of a consumable fuel on the
anode with an oxidant on the cathode
in the presence of an electrolyte.
Fuel cell electric vehicle means a
motor vehicle propelled solely by an
electric motor where energy for the
motor is supplied by a fuel cell.
*
*
*
*
*
Hybrid electric vehicle (HEV) means a
motor vehicle which draws propulsion
energy from onboard sources or stored
energy that are both an internal
combustion engine or heat engine using
consumable fuel, and a rechargeable
energy storage system such as a battery,
capacitor, or flywheel.
*
*
*
*
*
Non-passenger automobile has the
meaning given by the Department of
Transportation at 49 CFR 523.5. This
term is synonymous with ‘‘light truck.’’
*
*
*
*
*
Passenger automobile has the
meaning given by the Department of
Transportation at 49 CFR 523.4.
*
*
*
*
*
Plug-in hybrid electric vehicle (PHEV)
means a hybrid electric vehicle that:
(1) Has the capability to charge the
battery from an off-vehicle electric
source, such that the off-vehicle source
cannot be connected to the vehicle
while the vehicle is in motion, and
(2) Has an equivalent all-electric range
of no less than 10 miles.
*
*
*
*
*
34. Section 600.006–08 is amended as
follows:
a. By revising the heading.
b. By revising paragraph (b)(2)(ii).
c. By revising paragraph (b)(2)(iv).
d. By adding paragraph (c)(5).
e. By revising paragraph (e).
f. By revising paragraph (g)(3).
§ 600.006–08 Data and information
requirements for fuel economy data
vehicles.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
*
*
*
*
*
(b) * * *
(2) * * *
(ii) In the case of electric vehicles,
plug-in hybrid electric vehicles, and
hybrid electric vehicles, a description of
all maintenance to electric motor, motor
controller, battery configuration, or
other components performed within
2,000 miles prior to fuel economy
testing.
*
*
*
*
*
(iv) In the case of electric vehicles,
plug-in hybrid electric vehicles, and
hybrid electric vehicles, a copy of
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
calibrations for the electric motor, motor
controller, battery configuration, or
other components on the test vehicle as
well as the design tolerances.
*
*
*
*
*
(c) * * *
(5) Starting with the 2012 model year,
the data submitted according to
paragraphs (c)(1) through (c)(4) of this
section shall include total HC, CO, CO2,
and, where applicable for alternative
fuel vehicles, CH3OH, C2H5OH, C2H4O,
HCHO, NMHC and CH4. The fuel
economy and CO2 emission test results
shall be adjusted in accordance with
paragraph (g) of this section. Round the
test results as follows:
*
*
*
*
*
(e) In lieu of submitting actual data
from a test vehicle, a manufacturer may
provide fuel economy values derived
from a previously tested vehicle, where
the fuel economy and carbon-related
exhaust emissions are expected to be
equivalent (or less fuel-efficient and
with higher carbon-related exhaust
emissions). Additionally, in lieu of
submitting actual data from a test
vehicle, a manufacturer may provide
fuel economy and carbon-related
exhaust emission values derived from
an analytical expression, e.g., regression
analysis. In order for fuel economy
values derived from analytical methods
to be accepted, the expression (form and
coefficients) must have been approved
by the Administrator.
*
*
*
*
*
(g) * * *
(3)(i) The manufacturer shall adjust
all fuel economy test data generated by
vehicles with engine-drive system
combinations with more than 6,200
miles by using the following equation:
FE4,000mi = FET[0.979 + 5.25 ×
10¥6(mi)]¥1
Where:
FE4,000mi = Fuel economy data adjusted to
4,000-mile test point rounded to the
nearest 0.1 mpg.
FET = Tested fuel economy value rounded to
the nearest 0.1 mpg.
mi = System miles accumulated at the start
of the test rounded to the nearest whole
mile.
(ii)(A) The manufacturer shall adjust
all CO2 exhaust emission test data
generated by vehicles with engine-drive
system combinations with more than
6,200 miles by using the following
equation:
CO24,000mi= CO2T[0.979 + 5.25 ×
10¥6(mi)]
Where:
CO24,000mi = CO2 emission data adjusted to
4,000-mile test point.
CO2T = Tested emissions value of CO2 in
grams per mile.
PO 00000
Frm 00318
Fmt 4701
Sfmt 4700
mi = System miles accumulated at the start
of the test rounded to the nearest whole
mile.
(B) Emissions test values and results
used and determined in the calculations
in paragraph (g)(3)(ii) of this section
shall be rounded in accordance with 40
CFR 86.1837–01 as applicable. CO2
values shall be rounded to the nearest
gram per mile.
*
*
*
*
*
35. Section 600.007–08 is amended as
follows:
a. By revising paragraph (b)(4)
through (6).
b. By revising paragraph (c).
c. By revising paragraph (f)
introductory text.
§ 600.007–08
*
Vehicle acceptability.
*
*
*
*
(b) * * *
(4) Each fuel economy data vehicle
must meet the same exhaust emission
standards as certification vehicles of the
respective engine-system combination
during the test in which the city fuel
economy test results are generated. This
may be demonstrated using one of the
following methods:
(i) The deterioration factors
established for the respective enginesystem combination per § 86.1841–01 of
this chapter as applicable will be used;
or
(ii) The fuel economy data vehicle
will be equipped with aged emission
control components according to the
provisions of 86.1823–01 of this
chapter.
(5) The calibration information
submitted under § 600.006(b) must be
representative of the vehicle
configuration for which the fuel
economy and carbon-related exhaust
emissions data were submitted.
(6) Any vehicle tested for fuel
economy or carbon-related exhaust
emissions purposes must be
representative of a vehicle which the
manufacturer intends to produce under
the provisions of a certificate of
conformity.
*
*
*
*
*
(c) If, based on review of the
information submitted under
§ 600.006(b), the Administrator
determines that a fuel economy data
vehicle meets the requirements of this
section, the fuel economy data vehicle
will be judged to be acceptable and fuel
economy and carbon-related exhaust
emissions data from that fuel economy
data vehicle will be reviewed pursuant
to § 600.008.
*
*
*
*
*
(f) All vehicles used to generate fuel
economy and carbon-related exhaust
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
emissions data, and for which emission
standards apply, must be covered by a
certificate of conformity under part 86
of this chapter before:
*
*
*
*
*
36. Section 600.008–08 is amended by
revising the heading and paragraph
(a)(1) to read as follows:
§ 600.008–08 Review of fuel economy and
carbon-related exhaust emission data,
testing by the Administrator.
(a) Testing by the Administrator. (1)
(i) The Administrator may require that
any one or more of the test vehicles be
submitted to the Agency, at such place
or places as the Agency may designate,
for the purposes of conducting fuel
economy tests. The Administrator may
specify that such testing be conducted at
the manufacturer’s facility, in which
case instrumentation and equipment
specified by the Administrator shall be
made available by the manufacturer for
test operations. The tests to be
performed may comprise the FTP,
highway fuel economy test, US06, SC03,
or Cold temperature FTP or any
combination of those tests. Any testing
conducted at a manufacturer’s facility
pursuant to this paragraph shall be
scheduled by the manufacturer as
promptly as possible.
(ii) Starting with the 2012 model year,
evaluations, testing, and test data
described in this section pertaining to
fuel economy shall also be performed
for carbon-related exhaust emissions,
except that carbon-related exhaust
emissions shall be arithmetically
averaged instead of harmonically
averaged, and in cases where the
manufacturer selects the lowest of
several fuel economy results to
represent the vehicle, the manufacturer
shall select the highest of the carbonrelated exhaust emissions test results to
represent the vehicle.
*
*
*
*
*
Subpart B—[Amended]
37. A new § 600.101–12 is added to
subpart B to read as follows:
mstockstill on DSKH9S0YB1PROD with PROPOSALS
§ 600.101–12
General applicability.
(a) The provisions of this subpart are
applicable to 2012 and later model year
automobiles and to the manufacturers of
2012 and later model year automobiles.
(b) Fuel economy and carbon-related
emissions data. Unless stated otherwise,
references to fuel economy or fuel
economy data in this subpart shall also
be interpreted to mean the related
exhaust emissions of CO2, HC, and CO,
and where applicable for alternative fuel
vehicles, CH3OH, C2H5OH, C2H4O,
HCHO, NMHC and CH4. References to
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
average fuel economy shall be
interpreted to also mean average carbonrelated exhaust emissions.
38. Section 600.113–08 is amended as
follows:
a. By revising the introductory text.
b. By revising paragraph (a)(1).
c. By revising paragraph (b)(1) and (2).
d. By revising paragraph (c)(1).
e. By revising paragraph (d)(1) and (2).
f. By revising paragraph (e).
g. By adding paragraph (f)(4).
h. By revising paragraphs (g) through
(l).
i. By adding paragraph (m).
§ 600.113–08 Fuel economy calculations
for FTP, HFET, US06, SC03 and cold
temperature FTP tests.
The Administrator will use the
calculation procedure set forth in this
paragraph for all official EPA testing of
vehicles fueled with gasoline, diesel,
alcohol-based or natural gas fuel. The
calculations of the weighted fuel
economy values require input of the
weighted grams/mile values for total
hydrocarbons (HC), carbon monoxide
(CO), and carbon dioxide (CO2); and,
additionally for methanol-fueled
automobiles, methanol (CH3OH) and
formaldehyde (HCHO); and,
additionally for ethanol-fueled
automobiles, methanol (CH3OH),
ethanol (C2H5OH), acetaldehyde
(C2H4O), and formaldehyde (HCHO);
and additionally for natural gas-fueled
vehicles non-methane hydrocarbons
(NMHC) and methane (CH4) for the FTP,
HFET, US06, SC03 and cold
temperature FTP tests. Additionally, the
specific gravity, carbon weight fraction
and net heating value of the test fuel
must be determined. The FTP, HFET,
US06, SC03 and cold temperature FTP
fuel economy and carbon-related
exhaust emission values shall be
calculated as specified in this section.
An example fuel economy calculation
appears in Appendix II of this part.
(a) * * *
(1) Calculate the weighted grams/mile
values for the FTP test for CO2, HC, and
CO, and where applicable, CH3OH,
C2H5OH, C2H4O, HCHO, NMHC and
CH4 as specified in § 86.144(b) of this
chapter. Measure and record the test
fuel’s properties as specified in
paragraph (f) of this section.
*
*
*
*
*
(b) * * *
(1) Calculate the mass values for the
highway fuel economy test for HC, CO
and CO2, and where applicable, CH3OH,
C2H5OH, C2H4O, HCHO, NMHC and
CH4 as specified in § 86.144(b) of this
chapter. Measure and record the test
fuel’s properties as specified in
paragraph (f) of this section.
PO 00000
Frm 00319
Fmt 4701
Sfmt 4700
49771
(2) Calculate the grams/mile values
for the highway fuel economy test for
HC, CO and CO2, and where applicable
CH3OH, C2H5OH, C2H4O, HCHO, NMHC
and CH4 by dividing the mass values
obtained in paragraph (b)(1) of this
section, by the actual distance traveled,
measured in miles, as specified in
§ 86.135(h) of this chapter.
*
*
*
*
*
(c) * * *
(1) Calculate the weighted grams/mile
values for the cold temperature FTP test
for HC, CO and CO2, and where
applicable, CH3OH, C2H5OH, C2H4O,
HCHO, NMHC and CH4 as specified in
§ 86.144(b) of this chapter. For 2008
through 2010 diesel-fueled vehicles, HC
measurement is optional.
*
*
*
*
*
(d) * * *
(1) Calculate the total grams/mile
values for the US06 test for HC, CO and
CO2, and where applicable, CH3OH,
C2H5OH, C2H4O, HCHO, NMHC and
CH4 as specified in § 86.144(b) of this
chapter.
(2) Calculate separately the grams/
mile values for HC, CO and CO2, and
where applicable, CH3OH, C2H5OH,
C2H4O, HCHO, NMHC and CH4, for both
the US06 City phase and the US06
Highway phase of the US06 test as
specified in § 86.164 of this chapter. In
lieu of directly measuring the emissions
of the separate city and highway phases
of the US06 test according to the
provisions of § 86.159 of this chapter,
the manufacturer may, with the advance
approval of the Administrator and using
good engineering judgment, optionally
analytically determine the grams/mile
values for the city and highway phases
of the US06 test. To analytically
determine US06 City and US06
Highway phase emission results, the
manufacturer shall multiply the US06
total grams/mile values determined in
paragraph (d)(1) of this section by the
estimated proportion of fuel use for the
city and highway phases relative to the
total US06 fuel use. The manufacturer
may estimate the proportion of fuel use
for the US06 City and US06 Highway
phases by using modal CO2, HC, and CO
emissions data, or by using appropriate
OBD data (e.g., fuel flow rate in grams
of fuel per second), or another method
approved by the Administrator.
*
*
*
*
*
(e) Calculate the SC03 fuel economy.
(1) Calculate the grams/mile values
for the SC03 test for HC, CO and CO2,
and where applicable, CH3OH, C2H5OH,
C2H4O, HCHO, NMHC and CH4 as
specified in § 86.144(b) of this chapter.
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49772
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
(2) Measure and record the test fuel’s
properties as specified in paragraph (f)
of this section.
(f) * * *
(4) Ethanol test fuel shall be analyzed
to determine the following fuel
properties:
(i) Specific gravity using either:
(A) ASTM D 1298–85 (Reapproved
1990) ‘‘Standard Practice for Density,
Relative Density (Specific Gravity), or
API Gravity of Crude Petroleum and
Liquid Petroleum Products by
Hydrometer Method’’ for the blend. This
incorporation by reference was
approved by the Director of the Federal
Register in accordance with 5 U.S.C.
552(a) and 1 CFR part 51. Copies may
be obtained from the American Society
for Testing and Materials, 100 Barr
Harbor Drive, P.O. Box C700, West
Conshohocken, PA 19428–2959. Copies
may be inspected at U.S. EPA
Headquarters Library, EPA West
Building, Constitution Avenue and 14th
Street, NW., Room 3340, Washington,
DC, or at the National Archives and
Records Administration (NARA). For
information on the availability of this
material at NARA, call 202–741–6030,
or go to: https://www.archives.gov/
federal_register/
code_of_federal_regulations/
ibr_locations.html or:
(B) ASTM D 1298–85 (Reapproved
1990) ‘‘Standard Practice for Density,
Relative Density (Specific Gravity), or
API Gravity of Crude Petroleum and
Liquid Petroleum Products by
Hydrometer Method’’ for the gasoline
fuel component and also for the
methanol fuel component and
combining as follows. This
incorporation by reference was
approved by the Director of the Federal
Register in accordance with 5 U.S.C.
552(a) and 1 CFR part 51. Copies may
be obtained from the American Society
for Testing and Materials, 100 Barr
Harbor Drive, P.O. Box C700, West
Conshohocken, PA 19428–2959. Copies
may be inspected at U.S. EPA
Headquarters Library, EPA West
Building, Constitution Avenue and 14th
Street, NW., Room 3340, Washington,
DC, or at the National Archives and
Records Administration (NARA). For
information on the availability of this
material at NARA, call 202–741–6030,
or go to: https://www.archives.gov/
federal_register/
code_of_federal_regulations/
ibr_locations.html.
SG = SGg × volume fraction gasoline +
SGm × volume fraction ethanol.
(ii)(A) Carbon weight fraction using
the following equation:
CWF = CWFg × MFg+ 0.375 × MFe
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
Where:
CWFg = Carbon weight fraction of gasoline
portion of blend per ASTM D 3343–90
‘‘Standard Test Method for Estimation of
Hydrogen Content of Aviation Fuels.’’
This incorporation by reference was
approved by the Director of the Federal
Register in accordance with 5 U.S.C.
552(a) and 1 CFR part 51. Copies may be
obtained from the American Society for
Testing and Materials, 100 Barr Harbor
Drive, P.O. Box C700, West
Conshohocken, PA 19428–2959. Copies
may be inspected at U.S. EPA
Headquarters Library, EPA West
Building, Constitution Avenue and 14th
Street, NW., Room 3340, Washington,
DC, or at the National Archives and
Records Administration (NARA). For
information on the availability of this
material at NARA, call 202–741–6030, or
go to: https://www.archives.gov/
federal_register/
code_of_federal_regulations/
ibr_locations.html.
MFg = Mass fraction gasoline = (G ×
SGg)/(G × SGg + E × SGm)
MFe = Mass fraction methanol = (E ×
SGm)/(G × SGg + E × SGm)
Where:
G = Volume fraction gasoline.
E = Volume fraction ethanol.
SGg = Specific gravity of gasoline as
measured by ASTM D 1298–85
(Reapproved 1990) ‘‘Standard Practice
for Density, Relative Density (Specific
Gravity), or API Gravity of Crude
Petroleum and Liquid Petroleum
Products by Hydrometer Method.’’ This
incorporation by reference was approved
by the Director of the Federal Register in
accordance with 5 U.S.C. 552(a) and 1
CFR part 51. Copies may be obtained
from the American Society for Testing
and Materials, 100 Barr Harbor Drive,
P.O. Box C700, West Conshohocken, PA
19428–2959. Copies may be inspected at
U.S. EPA Headquarters Library, EPA
West Building, Constitution Avenue and
14th Street, NW, Room 3340,
Washington DC, or at the National
Archives and Records Administration
(NARA). For information on the
availability of this material at NARA, call
202–741–6030, or go to: https://
www.archives.gov/federal_register/
code_of_federal_regulations/
ibr_locations.html.
SGm = Specific gravity of methanol as
measured by ASTM D 1298–85
(Reapproved 1990) ‘‘Standard Practice
for Density, Relative Density (Specific
Gravity), or API Gravity of Crude
Petroleum and Liquid Petroleum
Products by Hydrometer Method.’’ This
incorporation by reference was approved
by the Director of the Federal Register in
accordance with 5 U.S.C. 552(a) and 1
CFR part 51. Copies may be obtained
from the American Society for Testing
and Materials, 100 Barr Harbor Drive,
P.O. Box C700, West Conshohocken, PA
19428–2959. Copies may be inspected at
U.S. EPA Headquarters Library, EPA
PO 00000
Frm 00320
Fmt 4701
Sfmt 4700
West Building, Constitution Avenue and
14th Street, NW, Room 3340,
Washington DC, or at the National
Archives and Records Administration
(NARA). For information on the
availability of this material at NARA, call
202–741–6030, or go to: https://
www.archives.gov/federal_register/
code_of_federal_regulations/
ibr_locations.html.
(B) Upon the approval of the
Administrator, other procedures to
measure the carbon weight fraction of
the fuel blend may be used if the
manufacturer can show that the
procedures are superior to or equally as
accurate as those specified in this
paragraph (f)(2)(ii).
(iii) Net heating value (BTU/lb) per
ASTM D 240–92 ‘‘Standard Test Method
for Heat of Combustion of Liquid
Hydrocarbon Fuels by Bomb
Calorimeter.’’ This incorporation by
reference was approved by the Director
of the Federal Register in accordance
with 5 U.S.C. 552(a) and 1 CFR part 51.
Copies may be obtained from the
American Society for Testing and
Materials, 100 Barr Harbor Drive, P.O.
Box C700, West Conshohocken, PA
19428–2959. Copies may be inspected at
U.S. EPA Headquarters Library, EPA
West Building, Constitution Avenue and
14th Street, NW, Room 3340,
Washington DC, or at the National
Archives and Records Administration
(NARA). For information on the
availability of this material at NARA,
call 202–741–6030, or go to: https://
www.archives.gov/federal_register/
code_of_federal_regulations/
ibr_locations.html.
*
*
*
*
*
(g) Calculate separate FTP, highway,
US06, SC03 and Cold temperature FTP
fuel economy from the grams/mile
values for total HC, CO, CO2 and, where
applicable, CH3OH, C2H5OH, C2H4O,
HCHO, NMHC and CH4, and the test
fuel’s specific gravity, carbon weight
fraction, net heating value, and
additionally for natural gas, the test
fuel’s composition.
(1) If the emission values (obtained
per paragraph (a) through (e) of this
section, as applicable) were obtained
from testing with aged exhaust emission
control components as allowed under
86.1823–01, then these test values shall
be used in the calculations of this
section.
(2) If the emission values (obtained
per paragraph (a) through (e) of this
section, as applicable) were not
obtained from testing with aged exhaust
emission control components as
allowed under 86.1823–01, then these
test values shall be adjusted by the
appropriate deterioration factor
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
determined according to 86.1823–01
before being used in the calculations of
this section.
(3) The emission values determined in
paragraph (g)(1) or (2) of this section
shall be rounded in accordance with
§ 86.094–26(a)(6)(iii) or § 86.1837–01 of
this chapter as applicable. The CO2
values (obtained per this section, as
applicable) used in each calculation of
this section shall be rounded to the
nearest gram/mile. The specific gravity
and the carbon weight fraction (obtained
per paragraph (f) of this section) shall be
recorded using three places to the right
of the decimal point. The net heating
value (obtained per paragraph (f) of this
section) shall be recorded to the nearest
whole Btu/lb.
(h)(1) For gasoline-fueled automobiles
tested on test fuel specified in § 86.113–
04(a), the fuel economy in miles per
gallon is to be calculated using the
following equation and rounded to the
nearest 0.1 miles per gallon:
mpg = (5174 × 104 × CWF × SG)/[((CWF
× HC) + (0.429 × CO) + (0.273 ×
CO2)) × ((0.6 × SG × NHV) + 5471)]
Where:
HC = Grams/mile HC as obtained in
paragraph (g) of this section.
CO = Grams/mile CO as obtained in
paragraph (g) of this section.
CO2 = Grams/mile CO2 as obtained in
paragraph (g) of this section.
CWF = Carbon weight fraction of test fuel as
obtained in paragraph (g) of this section.
NHV = Net heating value by mass of test fuel
as obtained in paragraph (g) of this
section.
SG = Specific gravity of test fuel as obtained
in paragraph (g) of this section.
(2) For 2012 and later model year
gasoline-fueled automobiles tested on
test fuel specified in § 86.113–04(a), the
carbon-related exhaust emissions in
grams per mile is to be calculated using
the following equation and rounded to
the nearest 1 gram per mile:
CREE = CWF*HC + 1.571*CO + CO2
Where:
CREE means the carbon-related exhaust
emissions as defined in § 600.002–08.
23:31 Sep 25, 2009
Where:
CREE means the carbon-related exhaust
emissions as defined in § 600.002–08.
HC = Grams/mile HC as obtained in
paragraph (g) of this section.
CO = Grams/mile CO as obtained in
paragraph (g) of this section.
CO2 = Grams/mile CO2 as obtained in
paragraph (g) of this section.
(j)(1) For methanol-fueled
automobiles and automobiles designed
to operate on mixtures of gasoline and
methanol, the fuel economy in miles per
gallon is to be calculated using the
following equation:
mpg = (CWF × SG × 3781.8)/((CWFexHC
× HC) + (0.429 × CO) + (0.273 ×
CO2) + (0.375 × CH3OH) + (0.400 ×
HCHO))
Where:
(2) For 2012 and later model year
methanol-fueled automobiles and
automobiles designed to operate on
mixtures of gasoline and methanol, the
carbon-related exhaust emissions in
grams per mile is to be calculated using
the following equation and rounded to
the nearest 1 gram per mile:
CREE = (CWFexHC × HC) + (1.571 × CO)
+ (1.374 × CH3OH) + (1.466 ×
HCHO) + CO2
Where:
CREE means the carbon-related exhaust
emission value as defined in § 600.002–
08.
CWFexHC = Carbon weight fraction of exhaust
hydrocarbons = CWFg as determined in
(f)(2)(ii) of this section (for M100 fuel,
CWFexHC = 0.866).
HC = Grams/mile HC as obtained in
paragraph (g) of this section.
CO = Grams/mile CO as obtained in
paragraph (g) of this section.
CO2 = Grams/mile CO2 as obtained in
paragraph (g) of this section.
CH3OH = Grams/mile CH3OH (methanol) as
obtained in paragraph (d) of this section.
HCHO = Grams/mile HCHO (formaldehyde)
as obtained in paragraph (g) of this
section.
(k)(1) For automobiles fueled with
natural gas, the fuel economy in miles
per gallon of natural gas is to be
calculated using the following equation:
CWFHC/NG × DNG × 121.5
O
( 0.749 × CH 4 ) + ( CWFNMHC × NMHC ) + (0.429 × CO) + ( 0.273 × ( CO2 − CO2 NG ) )
Where:
mpge = miles per equivalent gallon of natural
gas.
CWFHC/NG = carbon weight fraction based on
the hydrocarbon constituents in the
natural gas fuel as obtained in paragraph
(g) of this section.
VerDate Nov<24>2008
(i)(1) For diesel-fueled automobiles,
calculate the fuel economy in miles per
gallon of diesel fuel by dividing 2778 by
the sum of three terms and rounding the
quotient to the nearest 0.1 mile per
gallon:
(i)(A) 0.866 multiplied by HC (in
grams/miles as obtained in paragraph (g)
of this section), or
(B) Zero, in the case of cold FTP
diesel tests for which HC was not
collected, as permitted in § 600.113–
08(c);
(ii) 0.429 multiplied by CO (in grams/
mile as obtained in paragraph (g) of this
section); and
(iii) 0.273 multiplied by CO2 (in
grams/mile as obtained in paragraph (g)
of this section).
(2) For 2012 and later model year
diesel-fueled automobiles, the carbonrelated exhaust emissions in grams per
mile is to be calculated using the
following equation and rounded to the
nearest 1 gram per mile:
CREE = 0.866*HC + 1.571*CO + CO2
CWF = Carbon weight fraction of the fuel as
determined in paragraph (f)(2)(ii) of this
section.
SG = Specific gravity of the fuel as
determined in paragraph (f)(2)(i) of this
section.
CWFexHC = Carbon weight fraction of exhaust
hydrocarbons = CWFg as determined in
(f)(2)(ii) of this section (for M100 fuel,
CWFexHC= 0.866).
HC = Grams/mile HC as obtained in
paragraph (g) of this section.
CO = Grams/mile CO as obtained in
paragraph (g) of this section.
CO2 = Grams/mile CO2 as obtained in
paragraph (g) of this section.
CH3OH = Grams/mile CH3OH (methanol) as
obtained in paragraph (d) of this section.
HCHO = Grams/mile HCHO (formaldehyde)
as obtained in paragraph (g) of this
section.
Jkt 217001
DNG = density of the natural gas fuel [grams/
ft 3 at 68 °F (20 °C) and 760 mm Hg
(101.3 kPa)] pressure as obtained in
paragraph (g) of this section.
CH4, NMHC, CO, and CO2 = weighted mass
exhaust emissions [grams/mile] for
methane, non-methane HC, carbon
PO 00000
Frm 00321
Fmt 4701
Sfmt 4700
monoxide, and carbon dioxide as
calculated in § 600.113.
CWFNMHC = carbon weight fraction of the
non-methane HC constituents in the fuel
as determined from the speciated fuel
composition per paragraph (f)(3) of this
section.
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.058</MATH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
mpg e =
HC = Grams/mile HC as obtained in
paragraph (g) of this section.
CO = Grams/mile CO as obtained in
paragraph (g) of this section.
CO2 = Grams/mile CO2 as obtained in
paragraph (g) of this section.
CWF = Carbon weight fraction of test fuel as
obtained in paragraph (g) of this section.
49773
49774
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
CO2NG = FCNG × DNG × WFCO2
Where:
Where:
CWFNG = the carbon weight fraction of the
natural gas fuel as calculated in
paragraph (f) of this section.
WFCO2 = weight fraction carbon dioxide of
the natural gas fuel calculated using the
mole fractions and molecular weights of
the natural gas fuel constituents per
ASTM D 1945–91 ‘‘Standard Test
Method for Analysis of Natural Gas by
Gas Chromatography.’’ This
incorporation by reference was approved
by the Director of the Federal Register in
accordance with 5 U.S.C. 552(a) and 1
CFR part 51. Copies may be obtained
from the American Society for Testing
and Materials, 100 Barr Harbor Drive,
P.O. Box C700, West Conshohocken, PA
19428–2959. Copies may be inspected at
U.S. EPA Headquarters Library, EPA
West Building, Constitution Avenue and
14th Street, NW., Room 3340,
Washington, DC, or at the National
Archives and Records Administration
(NARA). For information on the
availability of this material at NARA, call
202–741–6030, or go to: https://
www.archives.gov/federal_register/
code_of_federal_regulations/
ibr_locations.html.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
(2) For automobiles fueled with
natural gas, the carbon-related exhaust
emissions in grams per mile is to be
calculated for 2012 and later model year
vehicles using the following equation
and rounded to the nearest 1 gram per
mile:
CREE = 10.916 × CH4 + CWFNMHC ×
NMHC + 1.571 × CO + CO2
Where:
CREE means the carbon-related exhaust
emission value as defined in § 600.002–
08.
CH4 = Grams/mile CH4 as obtained in
paragraph (g) of this section.
NMHC = Grams/mile NMHC as obtained in
paragraph (g) of this section.
CO = Grams/mile CO as obtained in
paragraph (g) of this section.
CO2 = Grams/mile CO2 as obtained in
paragraph (g) of this section.
CWFNMHC = carbon weight fraction of the
non-methane HC constituents in the fuel
as determined from the speciated fuel
composition per paragraph (f)(3) of this
section.
(l)(1) For ethanol-fueled automobiles
and automobiles designed to operate on
( 0.749 • CH 4 ) + ( CWFNMHC • NMHC ) + (0.429 • CO) + ( 0.273 • CO2 )
CWFNG • D NG
mixtures of gasoline and ethanol, the
fuel economy in miles per gallon is to
be calculated using the following
equation:
mpg = (CWF × SG × 3781.8)/((CWFexHC
× HC) + (0.429 × CO) + (0.273 ×
CO2) + (0.375 × CH3OH) + (0.400 ×
HCHO) + (0.521 × C2H5OH) + (0.545
× C2H4O))
Where:
CWF = Carbon weight fraction of the fuel as
determined in paragraph (f)(4) of this
section.
SG = Specific gravity of the fuel as
determined in paragraph (f)(4) of this
section.
CWFexHC = Carbon weight fraction of exhaust
hydrocarbons = CWFg as determined in
(f)(4) of this section.
HC = Grams/mile HC as obtained in
paragraph (g) of this section.
CO = Grams/mile CO as obtained in
paragraph (g) of this section.
CO2 = Grams/mile CO2 as obtained in
paragraph (g) of this section.
CH3OH = Grams/mile CH3OH (methanol) as
obtained in paragraph (d) of this section.
HCHO = Grams/mile HCHO (formaldehyde)
as obtained in paragraph (g) of this
section.
C2H5OH = Grams/mile CH3OH (ethanol) as
obtained in paragraph (d) of this section.
C2H4O = Grams/mile C2H4O (acetaldehyde)
as obtained in paragraph (d) of this
section.
(2) For 2012 and later model year
ethanol-fueled automobiles and
automobiles designed to operate on
mixtures of gasoline and ethanol, the
carbon-related exhaust emissions in
grams per mile is to be calculated using
the following equation and rounded to
the nearest 1 gram per mile:
CREE = (CWFexHC × HC) + (1.571 × CO)
+ (1.374 × CH3OH) + (1.466 ×
HCHO) + (0.955 × C2H5OH) + (0.999
× C2H4O) + CO2
Where:
CREE means the carbon-related exhaust
emission value as defined in § 600.002–
08.
CWFexHC= Carbon weight fraction of exhaust
hydrocarbons = CWFg as determined in
(f)(4) of this section.
HC = Grams/mile HC as obtained in
paragraph (g) of this section.
CO = Grams/mile CO as obtained in
paragraph (g) of this section.
CO2= Grams/mile CO2as obtained in
paragraph (g) of this section.
CH3OH = Grams/mile CH3OH (methanol) as
obtained in paragraph (d) of this section.
HCHO = Grams/mile HCHO (formaldehyde)
as obtained in paragraph (g) of this
section.
C2H5OH = Grams/mile CH3OH (ethanol) as
obtained in paragraph (d) of this section.
C2H4O = Grams/mile C2H4O (acetaldehyde)
as obtained in paragraph (d) of this
section.
(m) Equations for fuels other than
those specified in paragraphs (h)
through (l) of this section may be used
with advance EPA approval. Alternate
calculation methods may be used if
shown to yield equivalent or superior
results and if approved in advance by
the Administrator.
39. Section 600.114–08 is amended as
follows:
a. By revising the heading.
b. By revising the introductory text.
c. By adding paragraphs (d) through
(f).
§ 600.114–08 Vehicle-specific 5-cycle fuel
economy and carbon-related exhaust
emission calculations.
Paragraphs (a) through (c) of this
section apply to data used for fuel
economy labeling under Subpart D of
this part. Paragraphs (d) through (f) of
this section are used to calculate 5-cycle
carbon-related exhaust emissions values
for the purpose of determining optional
technology-based CO2 emissions credits
under the provisions of paragraph (d) of
§ 86.1866–12 of this title.
*
*
*
*
*
(d) City carbon-related exhaust
emission value. For each vehicle tested,
determine the 5-cycle city carbonrelated exhaust emissions using the
following equation:
(1) CityCREE = 0.905 × (StartCREE +
RunningCREE)
Where:
(i) StartCREE =
⎛ ( 0.76 × StartCREE 75 + 0.24 × StartCREE 20 ) ⎞
0.33 × ⎜
⎟
4.1
⎝
⎠
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00322
Fmt 4701
Sfmt 4725
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.060</MATH>
FC NG = cubic feet of natural gas fuel consumed per mile =
EP28SE09.059</MATH>
CO2NG = grams of carbon dioxide in the
natural gas fuel consumed per mile of
travel.
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
Where:
StartCREE× = 3.6 × (Bag1CREE× ¥
Bag3CREE×)
Where:
Bag Y CREE× = the carbon-related exhaust
emissions in grams per mile during the
specified bag of the FTP test conducted
at an ambient temperature of 75 °F or 20
°F.
(ii) Running CREE=
0.82 × [(0.48 × Bag275CREE) + (0.41 ×
Bag375CREE) + 0.11 × US06CityCREE)] +
0.18 × [(0.5 × Bag220CREE) + (0.5 ×
Bag320CREE)] + 0.144 × [SC03CREE ¥
((0.61 × Bag375CREE) + (0.39 ×
Bag275CREE))]
Where:
BagYXCREE = carbon-related exhaust
emissions in grams per mile over Bag Y
at temperature X.
US06 City CREE = carbon-related exhaust
emissions in grams per mile over the
‘‘city’’ portion of the US06 test.
SC03 CREE = carbon-related exhaust
emissions in grams per mile over the
SC03 test.
49775
(e) Highway carbon-related exhaust
emissions. (1) For each vehicle tested,
determine the 5-cycle highway carbonrelated exhaust emissions using the
following equation:
HighwayCREE = 0.905 × (StartCREE +
RunningCREE)
Where:
(1) StartCREE =
⎛ ( 0.76 × StartCREE 75 + 0.24 × StartCREE 20 ) ⎞
= 0.33 × ⎜
⎟
60
⎠
⎝
Where:
StartCREE× = 3.6 × (Bag1CREE× ¥
Bag3CREE×)
SC03 CREE = carbon-related exhaust
emissions in grams per mile over the
SC03 test.
(ii) Running CREE =
1.007 × [(0.79 × US06 Highway CREE) +
(0.21 × HFET CREE)] + 0.045 ×
[SC03CREE ¥ ((0.61 × Bag375CREE)
+ (0.39 × Bag275CREE))]
(f) Carbon-related exhaust emissions
calculations for hybrid electric vehicles.
Hybrid electric vehicles shall be tested
according to California test methods
which require FTP emission sampling
for the 75 °F FTP test over four phases
(bags) of the UDDS (cold-start, transient,
warm-start, transient). Optionally, these
four phases may be combined into two
phases (phases 1 + 2 and phases 3 + 4).
Calculations for these sampling methods
follow.
(1) Four-bag FTP equations. If the 4bag sampling method is used,
manufacturers may use the equations in
Where:
BagYXCREE =carbon-related exhaust
emissions in grams per mile over Bag Y
at temperature X,
US06 Highway CREE = carbon-related
exhaust emissions in grams per mile over
the highway portion of the US06 test,
HFET CREE = carbon-related exhaust
emissions in grams per mile over the
HFET test,
paragraphs (a) and (b) of this section to
determine city and highway carbonrelated exhaust emissions values. If this
method is chosen, it must be used to
determine both city and highway
carbon-related exhaust emissions.
Optionally, the following calculations
may be used, provided that they are
used to determine both city and
highway carbon-related exhaust
emissions values:
(i) City carbon-related exhaust
emissions.
CityCREE = 0.905 × (StartCREE +
RunningCREE)
Where:
(A) StartCREE =
⎛ ( 0.76 × StartCREE 75 + 0.24 × StartCREE 20 ) ⎞
0.33 × ⎜
⎟
4.1
⎝
⎠
(ii) Highway carbon-related exhaust
emissions.
HighwayCREE = 0.905 × (StartCREE +
RunningCREE)
Where:
(A) StartCREE =
EP28SE09.063</MATH>
Where:
US06 Highway CREE = carbon-related
exhaust emissions in grams per mile over
the city portion of the US06 test.
US06 Highway CREE = carbon-related
exhaust emissions in miles per gallon
over the Highway portion of the US06
test.
HFET CREE = carbon-related exhaust
emissions in grams per mile over the
HFET test.
SC03 CREE = carbon-related exhaust
emissions in grams per mile over the
SC03 test.
⎛ ( 0.76 × StartCREE 75 + 0.24 × StartCREE 20 ) ⎞
= 0.33 × ⎜
⎟
60
⎠
⎝
Where:
StartCREE75 = 3.6 × (Bag1CREE75 ¥
Bag3CREE75) + 3.9 × (Bag2CREE75 ¥
Bag4CREE75)
and
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
StartCREE20 = 3.6 × (Bag1CREE20 ¥
Bag3CREE20)
(B) RunningCREE =
PO 00000
Frm 00323
Fmt 4701
Sfmt 4700
1.007 × [(0.79 × US06 HighwayCREE) +
(0.21 × HFET CREE)] + 0.045 ×
[SC03CREE = ((0.61 × Bag375CREE)
+ (0.39 × Bag475CREE))]
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.062</MATH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
(B) RunningCREE =
0.82 × [(0.48 × Bag475CREE) + (0.41 ×
Bag375CREE) + (0.11 ×
US06CityCREE)] + 0.18 × [(0.5 ×
Bag220 CREE) + (0.5 × Bag375
CREE)] + 0.144 × [(SC03CREE ¥
((0.61 × Bag375 CREE) + (0.39 ×
Bag475 CREE))]
EP28SE09.061</MATH>
Where:
(1) StartCREE75 =
3.6 × (Bag1CREE75 ¥ Bag3CREE75) + 3.9 ×
(Bag2CREE75 - Bag4CREE75)
and
(2) StartCREE20 =
= 3.6 × (Bag1CREE20 ¥ Bag3CREE20)
49776
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
Where:
US06 Highway CREE = carbon-related
exhaust emissions in grams per mile over
the Highway portion of the US06 test,
HFET CREE = carbon-related exhaust
emissions in grams per mile over the
HFET test,
SC03 CREE = carbon-related exhaust
emissions in grams per mile over the
SC03 test.
(2) Two-bag FTP equations. If the 2-bag
sampling method is used for the 75
°F FTP test, it must be used to
determine both city and highway
carbon-related exhaust emissions.
The following calculations must be
used to determine both city and
highway carbon-related exhaust
emissions:
(i) City carbon-related exhaust
emissions.
CityCREE = 0.905 × (StartCREE +
RunningCREE)
Where:
(A) StartCREE =
⎛ ( 0.76 × StartCREE 75 + 0.24 × StartCREE 20 ) ⎞
= 0.33 × ⎜
⎟
4.1
⎝
⎠
conducted at an ambient temperature of
75 °F.
Where:
StartCREE75 = 3.6 × (Bag1⁄2CREE75 ¥
Bag3⁄4CREE75)
and
StartCREE20 = 3.6 × (Bag1CREE20 ¥
Bag3CREE20)
Where:
Bag Y FE20= the carbon-related exhaust
emissions in grams per mile of fuel
during Bag 1 or Bag 3 of the 20 °F FTP
test, and
Bag X/Y FE75 = carbon-related exhaust
emissions in grams per mile of fuel
during combined phases 1 and 2 or
phrases 3 and 4 of the FTP test
(B) RunningCREE =
0.82 × [(0.90 × Bag3/475CREE) + (0.10 ×
US06CityCREE)] + (0.18 × [(0.5 ×
Bag220 CREE) + (0.5 × Bag320 CREE)]
+ 0.144 × [(SC03CREE ¥ ((Bag3⁄475
CREE)]
Where:
US06 City CREE = carbon-related exhaust
emissions in grams per mile over the city
portion of the US06 test, and
SC03 CREE = carbon-related exhaust
emissions in grams per mile over the
SC03 test, and
Bag X/Y FE75 = carbon-related exhaust
emissions in grams per mile of fuel
during combined phases 1 and 2 or
phrases 3 and 4 of the FTP test
conducted at an ambient temperature of
75 °F.
(ii) Highway carbon-related exhaust
emissions.
HighwayCREE = 0.905 × (StartCREE +
RunningCREE)
Where:
(A) StartCREE =
⎛ ( 0.76 × StartCREE 75 + 0.24 × StartCREE 20 ) ⎞
0.33 × ⎜
⎟
60
⎝
⎠
mstockstill on DSKH9S0YB1PROD with PROPOSALS
(B) RunningCREE =
1.007 × [(0.79 × US06 HighwayCREE) +
(0.21 × HFET CREE)] + 0.045 ×
[SC03CREE ¥ Bag3/475CREE)
Where:
US06 City CREE = carbon-related exhaust
emissions in grams per mile over the city
portion of the US06 test, and
SC03 CREE = carbon-related exhaust
emissions in grams per mile over the
SC03 test, and
Bag Y FE20 = the carbon-related exhaust
emissions in grams per mile of fuel
during Bag 1 or 3 of the 20 °F FTP test,
and
Bag X/Y FE75 = carbon-related exhaust
emissions in grams per mile of fuel during
phases 1 and 2 or phases 3 and 4 of the FTP
test conducted at an ambient temperature of
75 °F.
40. Section 600.115–08 is amended by
revising the introductory text to read as
follows:
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
This section provides the criteria to
determine if the derived 5-cycle method
for determining fuel economy label
values, as specified in § 600.210–08
(a)(2) or (b)(2), as applicable, may be
used to determine label values for 2011
and later model year vehicles. Separate
criteria apply to city and highway fuel
economy for each test group. The
provisions of this section are optional.
If this option is not chosen, or if the
criteria provided in this section are not
met, fuel economy label values for 2011
and later model year vehicles must be
determined according to the vehiclespecific 5-cycle method specified in
§ 600.210–08(a)(1) or (b)(1), as
applicable. However, dedicated
alternative-fuel vehicles, dual fuel
vehicles when operating on alternative
fuel, and MDPVs may use the derived 5cycle method for determining fuel
economy labels for 2011 and later model
years whether or not the criteria
provided in this section are met.
*
*
*
*
*
PO 00000
Frm 00324
Fmt 4701
Sfmt 4700
Subpart C—Procedures for Calculating
Fuel Economy and Carbon-related
Exhaust Emission Values for 1977 and
Later Model Year Automobiles
41. The heading for subpart C is
revised as set forth above.
42. A new § 600.201–12 is added to
subpart C to read as follows:
§ 600.201–12
General applicability.
The provisions of this subpart are
applicable to 2012 and later model year
automobiles and to the manufacturers of
2012 and later model year automobiles.
43. A new § 600.206–12 is added to
subpart C to read as follows:
§ 600.206–12 Calculation and use of FTPbased and HFET-based fuel economy and
carbon-related exhaust emission values for
vehicle configurations.
(a) Fuel economy and carbon-related
exhaust emissions values determined
for each vehicle under § 600.113(a) and
(b) and as approved in § 600.008–08 (c),
are used to determine FTP-based city,
HFET-based highway, and combined
FTP/Highway-based fuel economy and
carbon-related exhaust emission values
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.065</MATH>
§ 600.115–08 Criteria for determining the
fuel economy label calculation method for
2011 and later model year vehicles.
EP28SE09.064</MATH>
Where:
StartCREE75 = 7.5 × (Bag1⁄2CREE75 ¥
Bag3⁄4CREE75)
and
StartCREE20 = 3.6 × (Bag1CREE20 ¥
Bag3CREE20)
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
for each vehicle configuration for which
data are available.
(1) If only one set of FTP-based city
and HFET-based highway fuel economy
values is accepted for a vehicle
configuration, these values, rounded to
the nearest tenth of a mile per gallon,
comprise the city and highway fuel
economy values for that configuration. If
only one set of FTP-based city and
HFET-based highway carbon-related
exhaust emission values is accepted for
a vehicle configuration, these values,
rounded to the nearest gram per mile,
comprise the city and highway carbonrelated exhaust emission values for that
configuration.
(2) If more than one set of FTP-based
city and HFET-based highway fuel
economy and/or carbon-related exhaust
emission values are accepted for a
vehicle configuration:
(i) All data shall be grouped according
to the subconfiguration for which the
data were generated using sales
projections supplied in accordance with
§ 600.208(a)(3).
(ii) Within each group of data, all fuel
economy values are harmonically
averaged and rounded to the nearest
0.0001 of a mile per gallon and all
carbon-related exhaust emission values
are arithmetically averaged and rounded
to the nearest tenth of a gram per mile
in order to determine FTP-based city
and HFET-based highway fuel economy
and carbon-related exhaust emission
values for each subconfiguration at
which the vehicle configuration was
tested.
(iii) All FTP-based city fuel economy
and carbon-related exhaust emission
values and all HFET-based highway fuel
economy and carbon-related exhaust
emission values calculated in paragraph
(a)(2)(ii) of this section are (separately
for city and highway) averaged in
proportion to the sales fraction (rounded
to the nearest 0.0001) within the vehicle
configuration (as provided to the
Administrator by the manufacturer) of
vehicles of each tested subconfiguration.
Fuel economy values shall be
harmonically averaged and carbonrelated exhaust emission values shall be
arithmetically averaged. The resultant
fuel economy values, rounded to the
nearest 0.0001 mile per gallon, are the
FTP-based city and HFET-based
highway fuel economy values for the
vehicle configuration. The resultant
carbon-related exhaust emission values,
rounded to the nearest tenth of a gram
per mile, are the FTP-based city and
HFET-based highway carbon-related
exhaust emission values for the vehicle
configuration.
(3)(i) For the purpose of determining
average fuel economy under § 600.510–
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
08, the combined fuel economy value
for a vehicle configuration is calculated
by harmonically averaging the FTPbased city and HFET-based highway
fuel economy values, as determined in
§ 600.206(a)(1) or (2) of this section,
weighted 0.55 and 0.45 respectively,
and rounded to the nearest 0.0001 mile
per gallon. A sample of this calculation
appears in Appendix II of this part.
(ii) For the purpose of determining
average carbon-related exhaust
emissions under § 600.510–08, the
combined carbon-related exhaust
emission value for a vehicle
configuration is calculated by
arithmetically averaging the FTP-based
city and HFET-based highway carbonrelated exhaust emission values, as
determined in § 600.206(a)(1) or (2) of
this section, weighted 0.55 and 0.45
respectively, and rounded to the nearest
tenth of gram per mile.
(4) For alcohol dual fuel automobiles
and natural gas dual fuel automobiles
the procedures of paragraphs (a)(1) or
(2) of this section, as applicable, shall be
used to calculate two separate sets of
FTP-based city, HFET-based highway,
and combined fuel economy and
carbon-related exhaust emission values
for each configuration.
(i) Calculate the city, highway, and
combined fuel economy and carbonrelated exhaust emission values from
the tests performed using gasoline or
diesel test fuel.
(ii) Calculate the city, highway, and
combined fuel economy and carbonrelated exhaust emission values from
the tests performed using alcohol or
natural gas test fuel.
(b) If only one equivalent petroleumbased fuel economy value exists for an
electric vehicle configuration, that
value, rounded to the nearest tenth of a
mile per gallon, will comprise the
petroleum-based fuel economy for that
configuration. The carbon-related
exhaust emission value for that
configuration shall be 0 grams per mile.
(c) If more than one equivalent
petroleum-based fuel economy value
exists for an electric vehicle
configuration, all values for that vehicle
configuration are harmonically averaged
and rounded to the nearest 0.0001 mile
per gallon for that configuration. The
carbon-related exhaust emission value
for that configuration shall be 0 grams
per mile.
44. A new § 600.208–12 is added to
subpart C to read as follows:
PO 00000
Frm 00325
Fmt 4701
Sfmt 4700
49777
§ 600.208–12 Calculation of FTP-based
and HFET-based fuel economy and carbonrelated exhaust emission values for a model
type.
(a) Fuel economy and carbon-related
exhaust emission values for a base level
are calculated from vehicle
configuration fuel economy and carbonrelated exhaust emission values as
determined in § 600.206–08(a), (b), or (c)
as applicable, for low-altitude tests.
(1) If the Administrator determines
that automobiles intended for sale in the
State of California are likely to exhibit
significant differences in fuel economy
and carbon-related exhaust emission
values from those intended for sale in
other states, she will calculate fuel
economy and carbon-related exhaust
emission values for each base level for
vehicles intended for sale in California
and for each base level for vehicles
intended for sale in the rest of the
States.
(2) In order to highlight the fuel
efficiency and carbon-related exhaust
emission values of certain designs
otherwise included within a model
type, a manufacturer may wish to
subdivide a model type into one or more
additional model types. This is
accomplished by separating
subconfigurations from an existing base
level and placing them into a new base
level. The new base level is identical to
the existing base level except that it
shall be considered, for the purposes of
this paragraph, as containing a new
basic engine. The manufacturer will be
permitted to designate such new basic
engines and base level(s) if:
(i) Each additional model type
resulting from division of another model
type has a unique car line name and that
name appears on the label and on the
vehicle bearing that label;
(ii) The subconfigurations included in
the new base levels are not included in
any other base level which differs only
by basic engine (i.e., they are not
included in the calculation of the
original base level fuel economy values);
and
(iii) All subconfigurations within the
new base level are represented by test
data in accordance with § 600.010–
08(c)(1)(ii).
(3) The manufacturer shall supply
total model year sales projections for
each car line/vehicle subconfiguration
combination.
(i) Sales projections must be supplied
separately for each car line-vehicle
subconfiguration intended for sale in
California and each car line/vehicle
subconfiguration intended for sale in
the rest of the States if required by the
Administrator under paragraph (a)(1) of
this section.
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49778
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
(ii) Manufacturers shall update sales
projections at the time any model type
value is calculated for a label value.
(iii) The provisions of paragraph (a)(3)
of this section may be satisfied by
providing an amended application for
certification, as described in § 86.1844–
01.
(4) Vehicle configuration fuel
economy and carbon-related exhaust
emission values, as determined in
§ 600.206–08 (a), (b) or (c), as
applicable, are grouped according to
base level.
(i) If only one vehicle configuration
within a base level has been tested, the
fuel economy and carbon-related
exhaust emission values from that
vehicle configuration will constitute the
fuel economy and carbon-related
exhaust emission values for that base
level.
(ii) If more than one vehicle
configuration within a base level has
been tested, the vehicle configuration
fuel economy values are harmonically
averaged in proportion to the respective
sales fraction (rounded to the nearest
0.0001) of each vehicle configuration
and the resultant fuel economy value
rounded to the nearest 0.0001 mile per
gallon; and the vehicle configuration
carbon-related exhaust emission values
are arithmetically averaged in
proportion to the respective sales
fraction (rounded to the nearest 0.0001)
of each vehicle configuration and the
resultant carbon-related exhaust
emission value rounded to the nearest
gram per mile.
(5) The procedure specified in
paragraph (a)(1) through (4) of this
section will be repeated for each base
level, thus establishing city, highway,
and combined fuel economy and
carbon-related exhaust emission values
for each base level.
(6) For the purposes of calculating a
base level fuel economy or carbonrelated exhaust emission value, if the
only vehicle configuration(s) within the
base level are vehicle configuration(s)
which are intended for sale at high
altitude, the Administrator may use fuel
economy and carbon-related exhaust
emission data from tests conducted on
these vehicle configuration(s) at high
altitude to calculate the fuel economy or
carbon-related exhaust emission value
for the base level.
(7) For alcohol dual fuel automobiles
and natural gas dual fuel automobiles,
the procedures of paragraphs (a)(1)
through (6) of this section shall be used
to calculate two separate sets of city,
highway, and combined fuel economy
and carbon-related exhaust emission
values for each base level.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
(i) Calculate the city, highway, and
combined fuel economy and carbonrelated exhaust emission values from
the tests performed using gasoline or
diesel test fuel.
(ii) Calculate the city, highway, and
combined fuel economy and carbonrelated exhaust emission values from
the tests performed using alcohol or
natural gas test fuel.
(b) For each model type, as
determined by the Administrator, a city,
highway, and combined fuel economy
value and a carbon-related exhaust
emission value will be calculated by
using the projected sales and fuel
economy and carbon-related exhaust
emission values for each base level
within the model type. Separate model
type calculations will be done based on
the vehicle configuration fuel economy
and carbon-related exhaust emission
values as determined in § 600.206–08
(a), (b) or (c), as applicable.
(1) If the Administrator determines
that automobiles intended for sale in the
State of California are likely to exhibit
significant differences in fuel economy
and carbon-related exhaust emission
values from those intended for sale in
other States, she will calculate fuel
economy and carbon-related exhaust
emission values for each model type for
vehicles intended for sale in California
and for each model type for vehicles
intended for sale in the rest of the
States.
(2) The sales fraction for each base
level is calculated by dividing the
projected sales of the base level within
the model type by the projected sales of
the model type and rounding the
quotient to the nearest 0.0001.
(3)(i) The FTP-based city fuel
economy values of the model type
(calculated to the nearest 0.0001 mpg)
are determined by dividing one by a
sum of terms, each of which
corresponds to a base level and which
is a fraction determined by dividing:
(A) The sales fraction of a base level;
by
(B) The FTP-based city fuel economy
value for the respective base level.
(ii) The FTP-based city carbon-related
exhaust emission value of the model
type (calculated to the nearest gram per
mile) are determined by a sum of terms,
each of which corresponds to a base
level and which is a product determined
by multiplying:
(A) The sales fraction of a base level;
by
(B) The FTP-based city carbon-related
exhaust emission value for the
respective base level.
(4) The procedure specified in
paragraph (b)(3) of this section is
repeated in an analogous manner to
PO 00000
Frm 00326
Fmt 4701
Sfmt 4700
determine the highway and combined
fuel economy and carbon-related
exhaust emission values for the model
type.
(5) For alcohol dual fuel automobiles
and natural gas dual fuel automobiles,
the procedures of paragraphs (b)(1)
through (4) of this section shall be used
to calculate two separate sets of city,
highway, and combined fuel economy
values and two separate sets of city,
highway, and combined carbon-related
exhaust emission values for each model
type.
(i) Calculate the city, highway, and
combined fuel economy and carbonrelated exhaust emission values from
the tests performed using gasoline or
diesel test fuel.
(ii) Calculate the city, highway, and
combined fuel economy and carbonrelated exhaust emission values from
the tests performed using alcohol or
natural gas test fuel.
Subpart D—Fuel Economy Regulations
for 1977 and Later Model Year
Automobiles—Labeling
45. A new § 600.301–12 is added to
subpart D to read as follows:
§ 600.301–12
General applicability.
(a) Unless otherwise specified, the
provisions of this subpart are applicable
to 2012 and later model year
automobiles.
(b) [Reserved]
Subpart F—Fuel Economy Regulations
for Model Year 1978 Passenger
Automobiles and for 1979 and Later
Model Year Automobiles (Light Trucks
and Passenger Automobiles)—
Procedures for Determining
Manufacturer’s Average Fuel Economy
and Manufacturer’s Average Carbonrelated Exhaust Emissions
46. The heading for subpart F is
revised as set forth above.
47. A new § 600.501–12 is added to
subpart F to read as follows:
§ 600.501–12
General applicability.
The provisions of this subpart are
applicable to 2012 and later model year
passenger automobiles and light trucks
and to the manufacturers of 2012 and
later model year passenger automobiles
and light trucks.
48. A new § 600.507–12 is added to
subpart F to read as follows:
§ 600.507–12 Running change data
requirements.
(a) Except as specified in paragraph
(d) of this section, the manufacturer
shall submit additional running change
fuel economy and carbon-related
exhaust emissions data as specified in
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
paragraph (b) of this section for any
running change approved or
implemented under §§ 86.079–32,
86.079–33, or 86.082–34 or 86.1842–01
as applicable, which:
(1) Creates a new base level or,
(2) Affects an existing base level by:
(i) Adding an axle ratio which is at
least 10 percent larger (or, optionally, 10
percent smaller) than the largest axle
ratio tested.
(ii) Increasing (or, optionally,
decreasing) the road-load horsepower
for a subconfiguration by 10 percent or
more for the individual running change
or, when considered cumulatively, since
original certification (for each
cumulative 10 percent increase using
the originally certified road-load
horsepower as a base).
(iii) Adding a new subconfiguration
by increasing (or, optionally,
decreasing) the equivalent test weight
for any previously tested
subconfiguration in the base level.
(iv) Revising the calibration of an
electric vehicle, fuel cell electric
vehicle, hybrid electric vehicle, plug-in
hybrid electric vehicle or other
advanced technology vehicle in such a
way that the city or highway fuel
economy of the vehicle (or the energy
consumption of the vehicle, as may be
applicable) is expected to become less
fuel efficient (or optionally, more fuel
efficient) by 4.0 percent or more as
compared to the original fuel economy
label values for fuel economy and/or
energy consumption, as applicable.
(b)(1) The additional running change
fuel economy and carbon-related
exhaust emissions data requirement in
paragraph (a) of this section will be
determined based on the sales of the
vehicle configurations in the created or
affected base level(s) as updated at the
time of running change approval.
(2) Within each newly created base
level as specified in paragraph (a)(1) of
this section, the manufacturer shall
submit data from the highest projected
total model year sales subconfiguration
within the highest projected total model
year sales configuration in the base
level.
(3) Within each base level affected by
a running change as specified in
paragraph (a)(2) of this section, fuel
economy and carbon-related exhaust
emissions data shall be submitted for
the vehicle configuration created or
affected by the running change which
has the highest total model year
projected sales. The test vehicle shall be
of the subconfiguration created by the
running change which has the highest
projected total model year sales within
the applicable vehicle configuration.
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
(c) The manufacturer shall submit the
fuel economy data required by this
section to the Administrator in
accordance with § 600.314(b).
(d) For those model types created
under § 600.208–08(a)(2), the
manufacturer shall submit fuel economy
and carbon-related exhaust emissions
data for each subconfiguration added by
a running change.
49. A new § 600.509–12 is added to
subpart F to read as follows:
§ 600.509–12 Voluntary submission of
additional data.
(a) The manufacturer may optionally
submit data in addition to the data
required by the Administrator.
(b) Additional fuel economy and
carbon-related exhaust emissions data
may be submitted by the manufacturer
for any vehicle configuration which is to
be tested as required in § 600.507 or for
which fuel economy and carbon-related
exhaust emissions data were previously
submitted under paragraph (c) of this
section.
(c) Within a base level, additional fuel
economy and carbon-related exhaust
emissions data may be submitted by the
manufacturer for any vehicle
configuration which is not required to
be tested by § 600.507.
50. A new § 600.510–12 is added to
subpart F to read as follows:
§ 600.510–12 Calculation of average fuel
economy and average carbon-related
exhaust emissions.
(a)(1) Average fuel economy will be
calculated to the nearest 0.1 mpg for the
classes of automobiles identified in this
section, and the results of such
calculations will be reported to the
Secretary of Transportation for use in
determining compliance with the
applicable fuel economy standards.
(i) An average fuel economy
calculation will be made for the
category of passenger automobiles that
is domestically manufactured as defined
in § 600.511(d)(1).
(ii) An average fuel economy
calculation will be made for the
category of passenger automobiles that
is not domestically manufactured as
defined in § 600.511(d)(2).
(iii) An average fuel economy
calculation will be made for the
category of light trucks that is
domestically manufactured as defined
in § 600.511(e)(1).
(iv) An average fuel economy
calculation will be made for the
category of light trucks that is not
domestically manufactured as defined
in § 600.511(e)(2).
(2) Average carbon-related exhaust
emissions will be calculated to the
PO 00000
Frm 00327
Fmt 4701
Sfmt 4700
49779
nearest one gram per mile for the classes
of automobiles identified in this section,
and the results of such calculations will
be reported to the Administrator for use
in determining compliance with the
applicable CO2 emission standards.
(i) An average carbon-related exhaust
emissions calculation will be made for
passenger automobiles.
(ii) An average carbon-related exhaust
emissions calculation will be made for
light trucks.
(b) For the purpose of calculating
average fuel economy under paragraph
(c) of this section and for the purpose of
calculating average carbon-related
exhaust emissions under paragraph (j) of
this section:
(1) All fuel economy and carbonrelated exhaust emissions data
submitted in accordance with
§ 600.006(e) or § 600.512(c) shall be
used.
(2) The combined city/highway fuel
economy and carbon-related exhaust
emission values will be calculated for
each model type in accordance with
§ 600.208–08 of this section except that:
(i) Separate fuel economy values will
be calculated for model types and base
levels associated with car lines that are:
(A) Domestically produced; and
(B) Nondomestically produced and
imported;
(ii) Total model year production data,
as required by this subpart, will be used
instead of sales projections;
(iii) [Reserved]
(iv) The fuel economy value will be
rounded to the nearest 0.1 mpg;
(v) The carbon-related exhaust
emission value will be rounded to the
nearest gram per mile; and
(vi) At the manufacturer’s option,
those vehicle configurations that are
self-compensating to altitude changes
may be separated by sales into highaltitude sales categories and lowaltitude sales categories. These separate
sales categories may then be treated
(only for the purpose of this section) as
separate configurations in accordance
with the procedure of § 600.208–
08(a)(4)(ii).
(3) The fuel economy and carbonrelated exhaust emission values for each
vehicle configuration are the combined
fuel economy and carbon-related
exhaust emissions calculated according
to § 600.206–08(a)(3) except that:
(i) Separate fuel economy values will
be calculated for vehicle configurations
associated with car lines that are:
(A) Domestically produced; and
(B) Nondomestically produced and
imported;
(ii) Total model year production data,
as required by this subpart will be used
instead of sales projections; and
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49780
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
(iii) The fuel economy value of dieselpowered model types will be multiplied
by the factor 1.0 to convert gallons of
diesel fuel to equivalent gallons of
gasoline.
(c) Except as permitted in paragraph
(d) of this section, the average fuel
economy will be calculated individually
for each category identified in paragraph
(a) of this section as follows:
(1) Divide the total production
volume of that category of automobiles;
by
(2) A sum of terms, each of which
corresponds to a model type within that
category of automobiles and is a fraction
determined by dividing the number of
automobiles of that model type
produced by the manufacturer in the
model year; by
(i) For gasoline-fueled and dieselfueled model types, the fuel economy
calculated for that model type in
accordance with paragraph (b)(2) of this
section; or
(ii) For alcohol-fueled model types,
the fuel economy value calculated for
that model type in accordance with
paragraph (b)(2) of this section divided
by 0.15 and rounded to the nearest 0.1
mpg; or
(iii) For natural gas-fueled model
types, the fuel economy value
calculated for that model type in
accordance with paragraph (b)(2) of this
section divided by 0.15 and rounded to
the nearest 0.1 mpg; or
(iv) For alcohol dual fuel model types,
for model years 1993 through 2019, the
harmonic average of the following two
terms; the result rounded to the nearest
0.1 mpg:
(A) The combined model type fuel
economy value for operation on gasoline
or diesel fuel as determined in
§ 600.208(b)(5)(i); and
(B) The combined model type fuel
economy value for operation on alcohol
fuel as determined in § 600.208(b)(5)(ii)
divided by 0.15 provided the
requirements of § 600.510(g) are met; or
(v) For natural gas dual fuel model
types, for model years 1993 through
2019, the harmonic average of the
following two terms; the result rounded
to the nearest 0.1 mpg:
(A) The combined model type fuel
economy value for operation on gasoline
or diesel as determined in
§ 600.208(b)(5)(i); and
(B) The combined model type fuel
economy value for operation on natural
gas as determined in § 600.208(b)(5)(ii)
divided by 0.15 provided the
requirements of paragraph (g) of this
section are met.
(d) The Administrator may approve
alternative calculation methods if they
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
are part of an approved credit plan
under the provisions of 15 U.S.C. 2003.
(e) For passenger categories identified
in paragraphs (a)(1) and (2) of this
section, the average fuel economy
calculated in accordance with paragraph
(c) of this section shall be adjusted using
the following equation:
AFEadj = AFE[((0.55 × a × c) + (0.45 ×
c) + (0.5556 × a) + 0.4487)/((0.55 ×
a) + 0.45)] + IW
Where:
AFEadj = Adjusted average combined fuel
economy, rounded to the nearest 0.1
mpg;
AFE = Average combined fuel economy as
calculated in paragraph (c) of this
section, rounded to the nearest 0.0001
mpg;
a = Sales-weight average (rounded to the
nearest 0.0001 mpg) of all model type
highway fuel economy values (rounded
to the nearest 0.1 mpg) divided by the
sales-weighted average (rounded to the
nearest 0.0001 mpg) of all model type
city fuel economy values (rounded to the
nearest 0.1 mpg). The quotient shall be
rounded to 4 decimal places. These
average fuel economies shall be
determined using the methodology of
paragraph (c) of this section.
c = 0.0014;
IW = (9.2917 × 10 ¥3 × SF3IWC × FE3IWC) ¥
(3.5123 × 10 ¥3 × SF4ETW × FE4IWC).
Note: Any calculated value of IW less than
zero shall be set equal to zero.
SF3IWC = The 3000 lb. inertia weight class
sales divided by total sales. The quotient
shall be rounded to 4 decimal places.
SF4ETW = The 4000 lb. equivalent test weight
category sales divided by total sales. The
quotient shall be rounded to 4 decimal
places.
FE4IWC = The sales-weighted average
combined fuel economy of all 3000 lb.
inertia weight class base levels in the
compliance category. Round the result to
the nearest 0.0001 mpg.
FE4IWC = The sales-weighted average
combined fuel economy of all 4000 lb.
inertia weight class base levels in the
compliance category. Round the result to
the nearest 0.0001 mpg.
(f) The Administrator shall calculate
and apply additional average fuel
economy adjustments if, after notice and
opportunity for comment, the
Administrator determines that, as a
result of test procedure changes not
previously considered, such correction
is necessary to yield fuel economy test
results that are comparable to those
obtained under the 1975 test
procedures. In making such
determinations, the Administrator must
find that:
(1) A directional change in measured
fuel economy of an average vehicle can
be predicted from a revision to the test
procedures;
(2) The magnitude of the change in
measured fuel economy for any vehicle
PO 00000
Frm 00328
Fmt 4701
Sfmt 4700
or fleet of vehicles caused by a revision
to the test procedures is quantifiable
from theoretical calculations or best
available test data;
(3) The impact of a change on average
fuel economy is not due to eliminating
the ability of manufacturers to take
advantage of flexibility within the
existing test procedures to gain
measured improvements in fuel
economy which are not the result of
actual improvements in the fuel
economy of production vehicles;
(4) The impact of a change on average
fuel economy is not solely due to a
greater ability of manufacturers to
reflect in average fuel economy those
design changes expected to have
comparable effects on in-use fuel
economy;
(5) The test procedure change is
required by EPA or is a change initiated
by EPA in its laboratory and is not a
change implemented solely by a
manufacturer in its own laboratory.
(g)(1) Alcohol dual fuel automobiles
and natural gas dual fuel automobiles
must provide equal or greater energy
efficiency while operating on alcohol or
natural gas as while operating on
gasoline or diesel fuel to obtain the
CAFE credit determined in paragraphs
(c)(2)(iv) and (v) of this section or to
obtain the carbon-related exhaust
emissions credit determined in
paragraphs (j)(2)(ii) and (iii). The
following equation must hold true:
Ealt/Epet> or = 1
Where:
Ealt = [FEalt/(NHValt × Dalt)] × 106 = energy
efficiency while operating on alternative
fuel rounded to the nearest 0.01 miles/
million BTU.
Epet = [FEpet/(NHVpet × Dpet)] × 106 = energy
efficiency while operating on gasoline or
diesel (petroleum) fuel rounded to the
nearest 0.01 miles/million BTU.
FEalt is the fuel economy [miles/gallon for
liquid fuels or miles/100 standard cubic
feet for gaseous fuels] while operated on
the alternative fuel as determined in
§ 600.113–08(a) and (b);
FEpet is the fuel economy [miles/gallon] while
operated on petroleum fuel (gasoline or
diesel) as determined in § 600.113(a) and
(b);
NHValt is the net (lower) heating value [BTU/
lb] of the alternative fuel;
NHVpet is the net (lower) heating value [BTU/
lb] of the petroleum fuel;
Dalt is the density [lb/gallon for liquid fuels
or lb/100 standard cubic feet for gaseous
fuels] of the alternative fuel;
Dpet is the density [lb/gallon] of the
petroleum fuel.
(i) The equation must hold true for
both the FTP city and HFET highway
fuel economy values for each test of
each test vehicle.
(ii)(A) The net heating value for
alcohol fuels shall be determined per
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
ASTM D 240–92 ‘‘Standard Test Method
for Heat of Combustion of Liquid
Hydrocarbon Fuels by Bomb
Calorimeter.’’ This incorporation by
reference was approved by the Director
of the Federal Register in accordance
with 5 U.S.C. 552(a) and 1 CFR part 51.
Copies may be obtained from the
American Society for Testing and
Materials, 100 Barr Harbor Drive, P.O.
Box C700, West Conshohocken, PA
19428–2959. Copies may be inspected at
U.S. EPA Headquarters Library, EPA
West Building, Constitution Avenue and
14th Street, NW., Room 3340,
Washington, DC, or at the National
Archives and Records Administration
(NARA). For information on the
availability of this material at NARA,
call 202–741–6030, or go to: https://
www.archives.gov/federal_register/
code_of_federal_regulations/
ibr_locations.html.
(B) The density for alcohol fuels shall
be determined per ASTM D 1298–85
(Reapproved 1990) ‘‘Standard Practice
for Density, Relative Density (Specific
Gravity), or API Gravity of Crude
Petroleum and Liquid Petroleum
Products by Hydrometer Method.’’ This
incorporation by reference was
approved by the Director of the Federal
Register in accordance with 5 U.S.C.
552(a) and 1 CFR part 51. Copies may
be obtained from the American Society
for Testing and Materials, 100 Barr
Harbor Drive, P.O. Box C700, West
Conshohocken, PA 19428–2959. Copies
may be inspected at U.S. EPA
Headquarters Library, EPA West
Building, Constitution Avenue and 14th
Street, NW., Room 3340, Washington,
DC, or at the National Archives and
Records Administration (NARA). For
information on the availability of this
material at NARA, call 202–741–6030,
or go to: https://www.archives.gov/
federal_register/
code_of_federal_regulations/
ibr_locations.html.
(iii) The net heating value and density
of gasoline are to be determined by the
manufacturer in accordance with
§ 600.113(f).
(2) [Reserved]
(3) Alcohol dual fuel passenger
automobiles and natural gas dual fuel
passenger automobiles manufactured
during model years 1993 through 2019
must meet the minimum driving range
requirements established by the
Secretary of Transportation (49 CFR part
538) to obtain the CAFE credit
determined in paragraphs (c)(2)(iv) and
(v) of this section.
(h) [Reserved]
(i) For model years 2012 through
2015, and for each category of
automobile identified in paragraph
(a)(2) of this section, the maximum
decrease in average carbon-related
exhaust emissions determined in
paragraph (c) of this section attributable
to alcohol dual fuel automobiles and
natural gas dual fuel automobiles shall
be as follows:
Maximum decrease—passenger automobiles
(g/mi)
Model year
mstockstill on DSKH9S0YB1PROD with PROPOSALS
2012
2013
2014
2015
.........................................................................................................................................................................
.........................................................................................................................................................................
.........................................................................................................................................................................
.........................................................................................................................................................................
(1) The Administrator shall calculate
the decrease in average carbon-related
exhaust emissions to determine if the
maximum decrease provided in
paragraph (i) of this section has been
reached. The Administrator shall
calculate the average carbon-related
exhaust emissions for each category of
automobiles specified in paragraph
(a)(2) of this section by subtracting the
average carbon-related exhaust emission
values determined in paragraphs
(b)(2)(vi), (b)(2)(vii), and (c) of this
section from the average carbon-related
exhaust emission values calculated in
accordance with this section by
assuming all alcohol dual fuel and
natural gas dual fuel automobiles are
operated exclusively on gasoline (or
diesel) fuel. The difference is limited to
the maximum decrease specified in
paragraph (i) of this section.
(2) [Reserved]
(j) The average carbon-related exhaust
emissions will be calculated
individually for each category identified
in paragraph (a)(2) of this section as
follows:
(1) Divide the total production
volume of that category of automobiles
into:
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
(2) A sum of terms, each of which
corresponds to a model type within that
category of automobiles and is a product
determined by multiplying the number
of automobiles of that model type
produced by the manufacturer in the
model year by:
(i) For gasoline-fueled and dieselfueled model types, the carbon-related
exhaust emissions value calculated for
that model type in accordance with
paragraph (b)(2) of this section; or
(ii)(A) For alcohol-fueled model types,
for model years 2012 through 2015, the
carbon-related exhaust emissions value
calculated for that model type in
accordance with paragraph (b)(2) of this
section multiplied by 0.15 and rounded
to the nearest gram per mile; or
(B) For alcohol-fueled model types,
for model years 2016 and later, the
carbon-related exhaust emissions value
calculated for that model type in
accordance with paragraph (b)(2) of this
section; or
(iii)(A) For natural gas-fueled model
types, for model years 2012 through
2015, the carbon-related exhaust
emissions value calculated for that
model type in accordance with
paragraph (b)(2) of this section
PO 00000
Frm 00329
49781
Fmt 4701
Sfmt 4700
Maximum decrease—light
trucks
(g/mi)
9.8
9.3
8.9
6.9
17.9
17.1
16.3
12.6
multiplied by 0.15 and rounded to the
nearest gram per mile; or
(B) For natural gas-fueled model
types, for model years 2016 and later,
the carbon-related exhaust emissions
value calculated for that model type in
accordance with paragraph (b)(2) of this
section; or
(iv) For alcohol dual fuel model types,
for model years 2012 through 2015, the
arithmetic average of the following two
terms, the result rounded to the nearest
gram per mile:
(A) The combined model type carbonrelated exhaust emissions value for
operation on gasoline or diesel fuel as
determined in § 600.208(b)(5)(i); and
(B) The combined model type carbonrelated exhaust emissions value for
operation on alcohol fuel as determined
in § 600.208(b)(5)(ii) multiplied by 0.15
provided the requirements of
§ 600.510(g) are met; or
(v) For natural gas dual fuel model
types, for model years 2012 through
2015, the arithmetic average of the
following two terms; the result rounded
to the nearest gram per mile:
(A) The combined model type carbonrelated exhaust emissions value for
E:\FR\FM\28SEP2.SGM
28SEP2
49782
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
operation on gasoline or diesel as
determined in § 600.208(b)(5)(i); and
(B) The combined model type carbonrelated exhaust emissions value for
operation on natural gas as determined
in § 600.208(b)(5)(ii) multiplied by 0.15
provided the requirements of paragraph
(g) of this section are met.
(vi) For alcohol dual fuel model types,
for model years 2016 and later, the
combined model type carbon-related
exhaust emissions value determined
according to the following formula and
rounded to the nearest gram per mile:
CREE = (F × CREEalt) + ((1¥F) ×
CREEgas)
Where:
F = 0.00 unless otherwise approved by the
Administrator according to the
provisions of paragraph (k) of this
section;
CREEalt = The combined model type carbonrelated exhaust emissions value for
operation on alcohol fuel as determined
in § 600.208(b)(5)(ii); and
CREEgas = The combined model type carbonrelated exhaust emissions value for
operation on gasoline or diesel fuel as
determined in § 600.208(b)(5)(i).
(vii) For natural gas dual fuel model
types, for model years 2016 and later,
the combined model type carbon-related
exhaust emissions value determined
according to the following formula and
rounded to the nearest gram per mile:
CREE = (F × CREEalt) + ((1¥F) ×
CREEgas)
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Where:
F = 0.00 unless otherwise approved by the
Administrator according to the
provisions of paragraph (k) of this
section;
CREEalt = The combined model type carbonrelated exhaust emissions value for
operation on natural gas as determined
in § 600.208(b)(5)(ii); and
CREEgas = The combined model type carbonrelated exhaust emissions value for
operation on gasoline or diesel fuel as
determined in § 600.208(b)(5)(i).
(3) The production volume of electric,
fuel cell electric and plug-in hybrid
electric model types for model years
2012 through 2016 may be adjusted by
the multiplier specified in 40 CFR
86.1866–12(a) and in accordance with
the provisions of 40 CFR 86.1866–12(a).
The adjusted production volumes shall
be accounted for both in the total
production volume specified in
paragraph (j)(1) of this section and in
the model type production volume
specified in paragraph (j)(2) of this
section.
(k) Alternative in-use weighting
factors for dual fuel model types. Using
one of the methods in either paragraph
(k)(1) or (2) of this section,
manufacturers may request the use of
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
alternative values for the weighting
factor F in the equations in paragraphs
(j)(2)(vi) and (vii) of this section. Unless
otherwise approved by the
Administrator, the manufacturer must
use the value of F that is in effect in
paragraphs (j)(2)(vi) and (vii) of this
section.
(1) Upon written request from a
manufacturer, the Administrator will
determine and publish by written
guidance an appropriate value of F for
each requested alternative fuel based on
the Administrator’s assessment of realworld use of the alternative fuel. Such
published values would be available for
any manufacturer to use. The
Administrator will periodically update
these values upon written request from
a manufacturer.
(2) The manufacturer may optionally
submit to the Administrator its own
demonstration regarding the real-world
use of the alternative fuel in their
vehicles and its own estimate of the
appropriate value of F in the equations
in paragraphs (j)(2)(vi) and (vii) of this
section. Depending on the nature of the
analytical approach, the manufacturer
could provide estimates of F that are
model type specific or that are generally
applicable to the manufacturer’s dual
fuel fleet. The manufacturer’s analysis
could include use of data gathered from
on-board sensors and computers, from
dual fuel vehicles in fleets that are
centrally fueled, or from other sources.
The analysis must be based on sound
statistical methodology and must
account for analytical uncertainty. Any
approval by the Administrator will
pertain to the use of values of F for the
model types specified by the
manufacturer.
51. A new § 600.512–12 is added to
subpart F to read as follows:
§ 600.512–12
Model year report.
(a) For each model year, the
manufacturer shall submit to the
Administrator a report, known as the
model year report, containing all
information necessary for the
calculation of the manufacturer’s
average fuel economy and all
information necessary for the
calculation of the manufacturer’s
average carbon-related exhaust
emissions.
(1) The results of the manufacturer
calculations and summary information
of model type fuel economy values
which are contained in the average fuel
economy calculation shall also be
submitted to the Secretary of the
Department of Transportation, National
Highway and Traffic Safety
Administration.
PO 00000
Frm 00330
Fmt 4701
Sfmt 4700
(2) The results of the manufacturer
calculations and summary information
of model type carbon-related exhaust
emission values which are contained in
the average calculation shall be
submitted to the Administrator.
(b)(1) The model year report shall be
in writing, signed by the authorized
representative of the manufacturer and
shall be submitted no later than 90 days
after the end of the model year.
(2) The Administrator may waive the
requirement that the model year report
be submitted no later than 90 days after
the end of the model year. Based upon
a request by the manufacturer, if the
Administrator determines that 90 days
is insufficient time for the manufacturer
to provide all additional data required
as determined in § 600.507, the
Administrator shall establish an
alternative date by which the model
year report must be submitted.
(3) Separate reports shall be submitted
for passenger automobiles and light
trucks (as identified in § 600.510).
(c) The model year report must
include the following information:
(1)(i) All fuel economy data used in
the FTP/HFET-based model type
calculations under § 600.208–12, and
subsequently required by the
Administrator in accordance with
§ 600.507;
(ii) All carbon-related exhaust
emission data used in the FTP/HFETbased model type calculations under
§ 600.208–12, and subsequently
required by the Administrator in
accordance with § 600.507;
(2)(i) All fuel economy data for
certification vehicles and for vehicles
tested for running changes approved
under § 86.1842–01 of this chapter;
(ii) All carbon-related exhaust
emission data for certification vehicles
and for vehicles tested for running
changes approved under § 86.1842–01
of this chapter;
(3) Any additional fuel economy and
carbon-related exhaust emission data
submitted by the manufacturer under
§ 600.509;
(4)(i) A fuel economy value for each
model type of the manufacturer’s
product line calculated according to
§ 600.510(b)(2);
(ii) A carbon-related exhaust emission
value for each model type of the
manufacturer’s product line calculated
according to § 600.510(b)(2);
(5)(i) The manufacturer’s average fuel
economy value calculated according to
§ 600.510(c);
(ii) The manufacturer’s average
carbon-related exhaust emission value
calculated according to § 600.510(j);
(6) A listing of both domestically and
nondomestically produced car lines as
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
determined in § 600.511 and the cost
information upon which the
determination was made; and
(7) The authenticity and accuracy of
production data must be attested to by
the corporation, and shall bear the
signature of an officer (a corporate
executive of at least the rank of vicepresident) designated by the
corporation. Such attestation shall
constitute a representation by the
manufacturer that the manufacturer has
established reasonable, prudent
procedures to ascertain and provide
production data that are accurate and
authentic in all material respects and
that these procedures have been
followed by employees of the
manufacturer involved in the reporting
process. The signature of the designated
officer shall constitute a representation
by the required attestation.
52. A new § 600.514–12 is added to
subpart F to read as follows:
mstockstill on DSKH9S0YB1PROD with PROPOSALS
§ 600.514–12 Reports to the Environmental
Protection Agency.
This section establishes requirements
for automobile manufacturers to submit
reports to the Environmental Protection
Agency regarding their efforts to reduce
automotive greenhouse gas emissions.
(a) General Requirements. (1) For each
current model year, each manufacturer
shall submit a pre-model year report,
and, as required by paragraph (d) of this
section, supplementary reports.
(2)(i) The pre-model year report
required by this section for each model
year must be submitted during the
month of December (e.g., the pre-model
year report for the 2012 model year
must be submitted during December,
2011).
(ii) Each supplementary report must
be submitted in accordance with
paragraph (e)(3) of this section.
(3) Each report required by this
section must:
(i) Identify the report as a pre-model
year report or supplementary report as
appropriate;
(ii) Identify the manufacturer
submitting the report;
(iii) State the full name, title, and
address of the official responsible for
preparing the report;
(iv) Be submitted to: Director,
Compliance and Innovative Strategies
Division, U.S. Environmental Protection
Agency, 2000 Traverwood, Ann Arbor,
Michigan 48105;
(v) Identify the current model year;
(vi) Be written in the English
language; and
(vii)(A) Specify any part of the
information or data in the report that the
manufacturer believes should be
withheld from public disclosure as trade
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
secret or other confidential business
information.
(B) With respect to each item of
information or data requested by the
manufacturer to be withheld, the
manufacturer shall:
(1) Show that disclosure of the item
would result in significant competitive
damage;
(2) Specify the period during which
the item must be withheld to avoid that
damage; and
(3) Show that earlier disclosure would
result in that damage.
(4) Each report required by this
section must be based upon all
information and data available to the
manufacturer 30 days before the report
is submitted to the Administrator.
(b) General content of reports. (1) Premodel year report. Except as provided
in paragraph (b)(3) of this section, each
pre-model year report for each model
year must contain the information
required by paragraph (c)(1) of this
section.
(2) Supplementary report. Each
supplementary report must contain the
information required by paragraph
(e)(2)(i), (ii), or (iii), as appropriate.
(3) Exceptions. (i) The pre-model year
report is not required to contain the
information specified in paragraphs
(c)(2), (c)(3)(i) and (i), or (c)(3)(iv)(N)
and (S) of this section if that report is
required to be submitted before the fifth
day after the date by which the
manufacturer must submit the
preliminary determination of its average
fuel economy for the current model year
to the Environmental Protection Agency
under 40 CFR 600.506, when such
determination is required. Each
manufacturer that does not include
information under the exception in the
immediately preceding sentence shall
indicate in its report the date by which
it must submit that preliminary
determination.
(ii) The pre-model year report
submitted by an incomplete automobile
manufacturer for any model year is not
required to contain the information
specified in paragraphs (c)(3)(iv)(O)
through (Q) and (c)(3)(v) of this section.
The information provided by the
incomplete automobile manufacturer
under (c)(3) shall be according to base
level instead of model type or carline.
(c) Pre-model year reports. (1) Provide
the information required by paragraphs
(c)(2) and (3) of this section for the
manufacturer’s passenger automobiles
and light trucks for the current model
year.
(2) Projected average and required
carbon-related exhaust emissions. (i)
State the projected average carbonrelated exhaust emissions for the
PO 00000
Frm 00331
Fmt 4701
Sfmt 4700
49783
manufacturer’s automobiles determined
in accordance with § 600.510–12 and
based upon the carbon-related exhaust
emission values and projected sales
figures provided under paragraph
(c)(3)(ii) of this section.
(ii) State the projected final average
carbon-related exhaust emissions value
that the manufacturer anticipates having
if changes implemented during the
model year will cause that average to be
different from the average carbonrelated exhaust emissions projected
under paragraph (c)(2)(i) of this section.
(iii) State the projected required
carbon-related exhaust emissions value
for the manufacturer’s passenger
automobiles and light trucks determined
in accordance with 40 CFR 86.1818–12
and based upon the projected sales
figures provided under paragraph
(c)(3)(ii) of this section.
(iv) State the projected final required
carbon-related exhaust emissions value
that the manufacturer anticipates having
if changes implemented during the
model year will cause the targets to be
different from the target carbon-related
exhaust emissions projected under
paragraph (c)(2)(iii) of this section.
(v) State whether the manufacturer
believes that the projections it provides
under paragraphs (c)(2)(ii) and (c)(2)(iv)
of this section, or if it does not provide
an average or target under those
paragraphs, the projections it provides
under paragraphs (c)(2)(i) and (c)(2)(iii)
of this section, sufficiently represent the
manufacturer’s average and target
carbon-related exhaust emissions for the
current model year. In the case of a
manufacturer that believes that the
projections are not sufficiently
representative for those purposes, state
the specific nature of any reason for the
insufficiency and the specific additional
testing or derivation of carbon-related
exhaust emission values by analytical
methods believed by the manufacturer
necessary to eliminate the insufficiency
and any plans of the manufacturer to
undertake that testing or derivation
voluntarily and submit the resulting
data to the Environmental Protection
Agency under 40 CFR 600.509.
(vi) State the number of credits, if any,
projected to be earned under the
provisions of § 86.1866–12 and the
sources and calculations of such credits.
(3) Model type and configuration fuel
economy and technical information. (i)
For each model type of the
manufacturer’s passenger cars and light
trucks, provide the information
specified in paragraph (c)(3)(ii) of this
section in tabular form. List the model
types in order of increasing average
inertia weight from top to bottom down
the left side of the table and list the
E:\FR\FM\28SEP2.SGM
28SEP2
mstockstill on DSKH9S0YB1PROD with PROPOSALS
49784
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
information categories in the order
specified in paragraph (c)(3)(ii) of this
section from left to right across the top
of the table.
(ii)(A) Combined carbon-related
exhaust emissions value; and
(B) Projected sales for the current
model year and total sales of all model
types.
(iii) For each vehicle configuration
whose carbon-related exhaust emission
value was used to calculate the carbonrelated exhaust emission values for a
model type under paragraph (c)(3)(ii) of
this section, provide the information
specified in paragraph (c)(3)(iv) of this
section in tabular form. If a tabular form
is used then list the vehicle
configurations, by model type in the
order listed under paragraph (c)(3)(ii) of
this section, from top to bottom down
the left of the table and list the
information categories across the top of
the table from left to right in the order
specified in paragraph (c)(3)(iv) of this
section. Other formats (such as copies of
EPA reports) which contain all the
required information in a readily
identifiable form are also acceptable.
(iv)(A) Loaded vehicle weight;
(B) Equivalent test weight;
(C) Engine displacement, liters;
(D) SAE net rated power, kilowatts;
(E) SAE net horsepower;
(F) Engine code;
(G) Fuel system (number of carburetor
barrels or, if fuel injection is used, so
indicate);
(H) Emission control system;
(I) Transmission class;
(J) Number of forward speeds;
(K) Existence of overdrive (indicate
yes or no);
(L) Total drive ratio (N/V);
(M) Axle ratio;
(N) Combined fuel economy;
(O) Projected sales for the current
model year;
(P) In the case of passenger
automobiles:
(1) Interior volume index, determined
in accordance with subpart D of 40 CFR
part 600,
(2) Body style,
(3) Beginning model year 2012, base
tire as defined in § 600.002–08,
(4) Beginning model year 2012, track
width as defined in § 600. 002–08,
(5) Beginning model year 2012,
wheelbase as defined in § 600. 002–08,
and
(6) Beginning model year 2012,
footprint as defined in § 600. 002–08.
(Q) In the case of light trucks:
(1) Passenger-carrying volume,
(2) Cargo-carrying volume,
(3) Beginning model year 2012, base
tire as defined in § 600.002–08,
(4) Beginning model year 2012, track
width as defined in § 600.002–08,
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
(5) Beginning model year 2012,
wheelbase as defined in § 600.002–08,
and
(6) Beginning model year 2012,
footprint as defined in § 600.002–08.
(R) Frontal area;
(S) Road load power at 50 miles per
hour, if determined by the manufacturer
for purposes other than compliance
with this part to differ from the road
load setting prescribed in 40 CFR
86.177–11(d);
(T) Optional equipment that the
manufacturer is required under 40 CFR
parts 86 and 600 to have actually
installed on the vehicle configuration,
or the weight of which must be included
in the curb weight computation for the
vehicle configuration, for fuel economy
and CO2 emission testing purposes.
(v) For each model type of automobile
which is classified as an automobile
capable of off-highway operation under
49 CFR 523, provide the following data:
(A) Approach angle;
(B) Departure angle;
(C) Breakover angle;
(D) Axle clearance;
(E) Minimum running clearance; and
(F) Existence of 4-wheel drive
(indicate yes or no).
(vi) The CO2 emission values
provided under paragraphs (c)(3)(ii) and
(iv) of this section shall be determined
in accordance with § 600.208–12.
(d) Supplementary reports. (1)(i)
Except as provided in paragraph (d)(4)
of this section, each manufacturer
whose most recently submitted report
contained an average carbon-related
exhaust emissions projection under
(c)(2)(ii) of this section, or, if no average
carbon-related exhaust emission value
was projected under that paragraph,
under paragraph (c)(2)(i), that was not
greater than the applicable average CO2
emissions standard and who now
projects an average carbon-related
exhaust emissions value which is
greater than the applicable standard
shall file a supplementary report
containing the information specified in
paragraph (d)(2)(i) of this section.
(ii) Except as provided in paragraph
(d)(4) of this section, each manufacturer
that determines that its average carbonrelated exhaust emissions for the
current model year as projected under
paragraph (c)(2)(ii) of this section or, if
no average carbon-related exhaust
emissions value was projected under
that paragraph, as projected under
paragraph (c)(2)(i) of this section, is less
representative than the manufacturer
previously reported it to be under
paragraph (c)(2)(iii) of this section, this
paragraph (d), or both, shall file a
supplementary report containing the
PO 00000
Frm 00332
Fmt 4701
Sfmt 4700
information specified in paragraph
(d)(2)(ii) of this section.
(iii) Each manufacturer whose premodel year report omits any of the
information specified in (c)(2), (c)(3)(i)
and (ii), or (c)(3)(iv)(P) and (Q) shall file
a supplementary report containing the
information specified in paragraph
(d)(2)(iii) of this section.
(2)(i) The supplementary report
required by paragraph (d)(1)(i) of this
section must contain:
(A) Such revisions of and additions to
the information previously submitted by
the manufacturer under this part
regarding the automobiles whose
projected average carbon-related
exhaust emissions value has increased
as specified in paragraph (d)(1)(i) of this
section as are necessary—
(1) To reflect the increase and its
cause;
(2) To indicate a new projected
average carbon-related exhaust
emissions value based upon these
additional measures.
(B) An explanation of the cause of the
increase in average carbon-related
exhaust emissions that led to the
manufacturer’s having to submit the
supplementary report required by
paragraph (d)(1)(i) of this section.
(ii) The supplementary report
required by paragraph (d)(1)(ii) of this
section must contain:
(A) A statement of the specific nature
of and reason for the insufficiency in the
representativeness of the projected
average carbon-related exhaust
emissions;
(B) A statement of specific additional
testing or derivation of carbon-related
exhaust emissions values by analytical
methods believed by the manufacturer
necessary to eliminate the insufficiency;
and
(C) A description of any plans of the
manufacturer to undertake that testing
or derivation voluntarily and submit the
resulting data to the Environmental
Protection Agency under 40 CFR
600.509.
(iii) The supplementary report
required by paragraph (d)(1)(iii) of this
section must contain:
(A) All of the information omitted
from the pre-model year report under
paragraph (b)(3)(ii); and
(B) Such revisions of and additions to
the information submitted by the
manufacturer in its pre-model year
report regarding the automobiles
produced during the current model year
as are necessary to reflect the
information provided under paragraph
(b)(3)(i) of this section.
(3)(i) Each report required by
paragraph (d)(1)(i) or (ii) of this section
must be submitted in accordance with
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
paragraph (a)(3) not more than 45 days
after the date on which the
manufacturer determined, or could
have, with reasonable diligence,
determined that a report is required
under paragraph (d)(1)(i) or (ii) of this
section.
(ii) Each report required by paragraph
(d)(1)(iii) of this section must be
submitted in accordance with paragraph
(a)(3) of this section not later than five
days after the day by which the
manufacturer is required to submit a
preliminary calculation of its average
fuel economy for the current model year
to the Environmental Protection Agency
under 40 CFR 600.506.
(4) A supplementary report is not
required to be submitted by the
manufacturer under paragraph (d)(1)(i)
or (ii) of this section:
(i) With respect to information
submitted under this part before the
most recent report submitted by the
manufacturer under this part, or
(ii) When the date specified in
paragraph (d)(3) of this section occurs
after the day by which the pre-model
year report for the model year
immediately following the current
model year must be submitted by the
manufacturer under this part.
(e) Determination of carbon-related
exhaust emission values and average
carbon-related exhaust emissions.
(1) Vehicle configuration carbonrelated exhaust emission values. (i) For
each vehicle configuration for which a
carbon-related exhaust emission value is
required under paragraph (e)(3) of this
section and has been determined and
approved under 40 CFR part 600, the
manufacturer shall submit that carbonrelated exhaust emission value.
(ii) For each vehicle configuration
specified in paragraph (e)(1)(i) of this
section for which a carbon-related
exhaust emissions value approved
under 40 CFR part 600, does not exist,
but for which a carbon-related exhaust
emissions value determined under that
part exists, the manufacturer shall
submit that carbon-related exhaust
emissions value.
(iii) For each vehicle configuration
specified in paragraph (e)(1)(i) of this
section for which a carbon-related
exhaust emissions value has been
neither determined nor approved under
40 CFR part 600, the manufacturer shall
submit a carbon-related exhaust
emissions value based on tests or
analyses comparable to those prescribed
or permitted under 40 CFR part 600 and
a description of the test procedures or
analytical methods used.
(2) Base level and model type carbonrelated exhaust emission values. For
each base level and model type, the
manufacturer shall submit a carbonrelated exhaust emission value based on
the values submitted under paragraph
(e)(1) of this section and calculated in
the same manner as base level and
model type carbon-related exhaust
emission values are calculated for use
under subpart F of 40 CFR part 600.
(3) Average carbon-related exhaust
emissions. Average carbon-related
exhaust emissions must be based upon
carbon-related exhaust emission values
calculated under paragraph (e)(2) of this
section for each model type and must be
calculated in accordance with 40 CFR
600.506, using the configurations
specified in 40 CFR 600.506(a)(2),
except that carbon-related exhaust
emission values for running changes
Figure 2 :
CAFErequired =
49785
and for new base levels are required
only for those changes made or base
levels added before the average carbonrelated exhaust emission value is
required to be submitted under this
section.
In consideration of the foregoing,
under the authority of 49 U.S.C. 32901,
32902, 32903, and 32907, and
delegation of authority at 49 CFR 1.50,
NHTSA proposes to amend 49 CFR
Chapter V as follows:
PART 531—PASSENGER
AUTOMOBILE AVERAGE FUEL
ECONOMY STANDARDS
1. The authority citation for part 531
continues to read as follows:
Authority: 49 U.S.C. 32902; delegation of
authority at 49 CFR 1.50.
2. Amend § 531.5 by redesignating
paragraph (d) as paragraph (e), revising
the introductory text of paragraph (a),
revising paragraph (c), and adding a
new paragraph (d) to read as follows:
§ 531.5
Fuel economy standards.
(a) Except as provided in paragraph
(e) of this section, each manufacturer of
passenger automobiles shall comply
with the average fuel economy
standards in Table I, expressed in miles
per gallon, in the model year specified
as applicable:
*
*
*
*
*
(c) For model years 2012–2016, a
manufacturer’s passenger automobile
fleet shall comply with the fuel
economy level calculated for that model
year according to Figure 2 and the
appropriate values in Table III.
∑ SALESi
i
SALES
i
∑ TARGET
i
i
Where:
TARGET is the fuel economy target (in mpg)
applicable to vehicles of a given
footprint (FOOTPRINT, in square feet),
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
TARGET =
1
1 ⎞ 1⎤
⎡
⎛
MIN ⎢ MAX ⎜ c × FOOTPRINT + d, ⎟ , ⎥
a ⎠ b⎦
⎝
⎣
Parameters a, b, c, and d are defined in Table
III, and
PO 00000
Frm 00333
equation shown in Figure 3 and based on
the footprint of model i),
and the summations in the numerator and
denominator are both performed over all
models in the fleet in question.
Fmt 4701
Sfmt 4700
The MIN and MAX functions take the
minimum and maximum, respectively of
the included values.
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.067</MATH>
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Figure 3 :
SALESi is the number of units of model i
produced for sale in the United States,
TARGETi is the fuel economy target
applicable to model i (according to the
EP28SE09.066</MATH>
Where:
CAFErequired is the required level for a given
fleet,
49786
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
TABLE III—PARAMETERS FOR THE PASSENGER AUTOMOBILE FUEL ECONOMY TARGETS
Parameters
Model year
a
2012
2013
2014
2015
2016
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
(d) In addition to the requirement of
paragraphs (b) and (c) of this section,
each manufacturer shall also meet the
minimum standard for domestically
manufactured passenger automobiles
expressed in Table IV:
b
36.23
37.15
38.08
39.55
41.38
28.12
28.67
29.22
30.08
31.12
d
0.0005308
0.0005308
0.0005308
0.0005308
0.0005308
0.005842
0.005153
0.004498
0.003520
0.002406
3. Add Appendix A to Part 531 to
read as follows:
TABLE IV
Minimum
standard
Model year
c
Appendix A to Part 531—Example of
Calculating Compliance Under § 531.5
Paragraph (b)
2011
2012
2013
2014
2015
2016
..........................
..........................
..........................
..........................
..........................
..........................
28.0
30.9
31.6
32.4
33.5
34.9
Assume a hypothetical manufacturer
(Manufacturer X) produces a fleet of
passenger automobiles in MY 2011 as
follows:
*
*
*
Appendix A, Table 1
*
*
Model
Carline
Desc
Eng/Trans
Drive
system
A .........................................
B .........................................
C .........................................
D .........................................
E1 .......................................
E2 .......................................
F .........................................
G1 ......................................
G2 ......................................
H .........................................
PC A ............
PC B ............
PC C ............
PC D ............
PC E ............
......................
PC F .............
PC G ............
......................
PC H ............
2DS ..............
2DS ..............
2DCv ............
2DCv ............
4DS ..............
SUV ..............
4DW .............
4DS ..............
SUV ..............
4DS ..............
1.8L, A5 .......
1.8L, M6 .......
1.8L, A5 .......
1.8L, M6 .......
2.5L, A6 .......
......................
2.5L, A6 .......
2.5L, A7 .......
......................
3.2L, A7 .......
Fuel econ
mpg
FWD .............
FWD .............
FWD .............
FWD .............
FWD .............
......................
AWD .............
FWD .............
......................
RWD ............
Production
volume
32.5
33.1
32.3
32.9
31.5
30.4
30.2
31.7
30.6
29.3
Footprint
(ft2)
1,500
2,000
2,000
1,000
3,000
1,000
8,000
2,000
5,000
5,000
30,500
39.2
39.2
39.1
39.1
47.1
47.1
48.4
48.4
Abbreviations: 2DS = two door sedan, 2DCv = two door convertible, SUV = sport utility vehicle, 4DW = four door station wagon, 1.8L = 1.8 liter
displacement engine, A5 = five speed automatic transmission, M6 = six speed manual transmission, FWD = front wheel drive, AWD = all wheel
drive, and RWD = rear wheel drive.
Note to Appendix A Table 1. Manufacturer
X’s required corporate average fuel economy
level under section 531.5(b) would first be
calculated by determining the fuel economy
targets applicable to each model type (A
through H) as illustrated in Appendix A,
Table 2.
Appendix A, Table 2
Manufacturer X calculates target fuel
economy values for each model.
Track width
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Model
Carline
Base tire
Wheel
base
(in)
Front
(in)
Rear
(in)
Avg
(in)
Foot
print
(ft2)
A ......................................
B ......................................
C ......................................
D ......................................
E1 ....................................
E2 ....................................
F ......................................
G1 ....................................
G2 ....................................
H ......................................
PC A ............
PC B ............
PC C ............
PC D ............
PC E ............
......................
PC F .............
PC G ............
......................
PC H ............
205/75R14 ...
215/70R15 ...
215/70R15 ...
235/60R15 ...
225/65R16 ...
......................
235/65R16 ...
235/65R17 ...
......................
265/55R18 ...
96.0
96.0
96.1
96.1
105.0
................
105.0
107.0
................
107.0
58.8
58.8
58.5
58.5
64.7
................
64.6
65.1
................
65.2
58.8
58.8
58.7
58.7
64.5
................
64.6
65.3
................
65.2
58.8
58.8
58.6
58.6
64.6
................
64.6
65.2
................
65.2
39.2
39.2
39.1
39.1
47.1
................
47.1
48.4
................
48.4
Note to Appendix A Table 2. Accordingly,
vehicle models A, B, C, D, E, F, G and H
would be compared to fuel economy values
of 31.19, 31.19, 31.19, 31.19, 30.52, 30.52,
29.34 and 29.34 mpg, respectively. With the
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
appropriate fuel economy targets calculated,
Manufacturer X’s required fuel economy
would be calculated as illustrated in
‘‘Appendix A Figure 1.’’
PO 00000
Frm 00334
Fmt 4701
Sfmt 4700
Prod
vol
1,500
2,000
2,000
1,000
3,000
1,000
8,000
2,000
5,000
5,000
30,500
Target
fuel econ
(mpg)
31.19
31.19
31.19
31.19
30.52
30.52
29.34
29.34
Appendix A, Figure 1
Calculation of Manufacturer X’s target fuel
economy standard.
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
49787
Manufacturer’s Passenger Automobile Production for Applicable Model Year
b
Volume A Volume B Volume C Volume D Volume E Volume F Volume G Volume H
+
+
+
+
+
+
+
Target A
Target B
Target C
Target D
Target E
Target F
Target G
Target H
30, 500
1, 500
31.19
+
2, 000
31.19
+
Manufacturer X’s passenger car fleet target
fuel economy standard = 30.2 mpg
2, 000
31.19
+
1, 000
31.19
4, 000
30.52
+
+
8, 000
30.52
7, 000
29.34
+
5, 000
29.34
+
Appendix A, Figure 2
Calculation of Manufacturer X’s actual fuel
economy.
Manufacturer’s Passenger Automobile Production for Applicable Model Year
b
Volume A Volume B Volume C Volume D Volume E Volume F Volume G Volume H
+
+
+
+
+
+
+
Mpg A
Mpg B
Mpg C
Mpg D
Mpg E
Mpg F
Mpg G
Mpg H
30, 500
1, 500
2, 000
2, 000
1, 000
3, 000
1, 000
8, 000
2, 000
5, 000
5, 000
+
+
+
+
+
+
+
+
+
32.5
33.1
32.3
32.9
31.5
30.4
30.2
31.7
30.6
29.3
4. The authority citation for part 533
continues to read as follows:
CAFErequired =
∑ SALES
i
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Where:
TARGET is the fuel economy target (in mpg)
applicable to vehicles of a given
footprint (FOOTPRINT, in square feet),
*
i
SALESi
i
SALESi is the number of units of model i
produced for sale in the United States,
TARGETi is the fuel economy target
applicable to model i (according to the
equation shown in Figure 3 and based on
the footprint of model i), and the
summations in the numerator and
denominator are both performed over all
models in the fleet in question.
1
1 ⎞ 1⎤
⎡
⎛
MIN ⎢ MAX ⎜ c × FOOTPRINT + d, ⎟ , ⎥
a ⎠ b⎦
⎝
⎣
Parameters a, b, c, and d are defined in Table
VI, and
EP28SE09.071</MATH>
TARGET =
*
∑ TARGET
i
Figure 3 :
Requirements.
(a) * * *
*
*
*
The MIN and MAX functions take the
minimum and maximum, respectively of
the included values.
TABLE VI—PARAMETERS FOR THE LIGHT TRUCK FUEL ECONOMY TARGETS
Parameters
Model year
A
2012 .................................................................................................................
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
PO 00000
Frm 00335
Fmt 4701
Sfmt 4700
b
29.44
E:\FR\FM\28SEP2.SGM
c
22.06
28SEP2
0.0004546
d
0.01533
EP28SE09.070</MATH>
Figure 2 :
Where:
CAFErequired is the required level for a given
fleet,
§ 533.5
Authority: 49 U.S.C. 32902; delegation of
authority at 49 CFR 1.50.
EP28SE09.069</MATH>
Note to Appendix A Figure 2. Since the
actual average fuel economy of Manufacturer
X’s fleet is 31.2 mpg, as compared to its
required fuel economy level of 30.2 mpg,
Manufacturer X complied with the CAFE
standard for MY 2011 as set forth in section
531.5(b).
5. Amend § 533.5 by adding Figures 2
and 3 and Table VI at the end of
paragraph (a), and adding paragraph (i),
to read as follows:
PART 533—LIGHT TRUCK FUEL
ECONOMY STANDARDS
EP28SE09.068</MATH>
Manufacturer X’s passenger car fleet actual
fuel economy performance = 31.2 mpg
49788
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
TABLE VI—PARAMETERS FOR THE LIGHT TRUCK FUEL ECONOMY TARGETS—Continued
Parameters
Model year
A
2013
2014
2015
2016
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
*
*
*
*
*
(i) For model years 2012–2016, a
manufacturer’s light truck fleet shall
comply with the fuel economy level
calculated for that model year according
to Figures 2 and 3 and the appropriate
values in Table VI.
b
30.32
31.30
32.70
34.38
6. Revise Appendix A to Part 533 to
read as follows:
c
22.55
23.09
23.84
24.72
Desc
Eng/Trans
Drive
system
A .........................................
B .........................................
C1 .......................................
C2 .......................................
C3 .......................................
D .........................................
E1 .......................................
E2 .......................................
F1 .......................................
F2 .......................................
F3 .......................................
G ........................................
H1 .......................................
H2 .......................................
PU A ............
PU B ............
PU C ............
RC, MB ........
RC, MB ........
RC, LB .........
EC,MB ..........
CC, SB .........
CC, SB .........
EC, LB .........
CC, MB ........
RC, LB .........
EC, MB ........
CC, SB .........
CC, SB .........
EC, LB .........
CC, MB ........
4.0L, A5 .......
4.0L, M5 .......
4.5L, A5 .......
Appendix A to Part 533—Example of
Calculating Compliance Under § 533.5
Paragraph (h)
2WD .............
2WD .............
2WD .............
4.5L, A6 .......
5.0L, A6 .......
2WD .............
2WD .............
4.5L, A5 .......
4WD .............
5.0L, A6 .......
5.0L, A6 .......
4WD .............
4WD .............
PU G ............
PU H ............
0.01434
0.01331
0.01194
0.01045
Appendix A, Table 1
Carline
PU F .............
0.0004546
0.0004546
0.0004546
0.0004546
Assume a hypothetical manufacturer
(Manufacturer X) produces a fleet of light
trucks in MY 2011 as follows:
Model
PU D ............
PU E ............
d
Fuel econ
mpg
Production
volume
27.1
27.6
23.9
23.7
23.5
23.6
22.7
22.5
22.5
22.3
22.2
22.3
22.2
22.1
Footprint
(ft2)
800
200
300
400
400
400
500
500
1,600
800
800
800
1,000
1,000
9,500
47.8
47.8
59.7
59.7
71.8
59.8
59.8
71.9
........................
Abbreviations: PU = pickup truck, RC = regular cab, EC = extended cab, CC = crew cab, SB = short cargo bed, MB = medium cargo bed, LB
= long cargo bed, 4.0L = 4.0 liter engine, A5 = five speed automatic transmission, M5 = five speed manual transmission, 2WD = two wheel drive,
4WD = four wheel drive.
Appendix A, Table 2
Manufacturer X calculates target fuel
economy values for each model.
Track width
mstockstill on DSKH9S0YB1PROD with PROPOSALS
Model
Carline
Base tire
Wheel
base
(in)
Front
(in)
Rear
(in)
Avg
(in)
Foot
print
(ft2)
A ......................................
B ......................................
C1 ....................................
C2 ....................................
C3 ....................................
D ......................................
E1 ....................................
E2 ....................................
F1 ....................................
F2 ....................................
F3 ....................................
G ......................................
H1 ....................................
H2 ....................................
PU A ............
PU B ............
......................
PU C ............
......................
PU D ............
PU E ............
......................
......................
PU F .............
......................
PU G ............
PU H ............
235/75R15 ...
235/75R15 ...
......................
255/70R17 ...
......................
255/70R17 ...
275/70R17 ...
......................
......................
255/70R17 ...
......................
255/70R17 ...
275/70R17 ...
100.0
100.0
................
125.0
................
125.0
150.0
................
................
125.0
................
125.0
150.0
68.6
68.6
................
68.7
................
68.7
68.9
................
................
69.0
................
69.0
68.9
69.0
69.0
................
68.9
................
68.9
68.9
................
................
68.8
................
68.8
69.1
68.8
68.8
................
68.8
................
68.8
68.9
................
................
68.9
................
68.9
69.0
47.8
47.8
................
59.7
................
59.7
71.8
................
................
59.8
................
59.8
71.9
Note to Appendix A Table 2. Accordingly,
vehicle models A, B, C, D, E, F, G and H
would be compared to fuel economy values
VerDate Nov<24>2008
23:31 Sep 25, 2009
Jkt 217001
of 30.26, 30.26, 24.09, 24.09, 24.00, 24.09,
24.09 and 24.00 mpg, respectively. With the
appropriate fuel economy targets calculated,
PO 00000
Frm 00336
Fmt 4701
Sfmt 4700
Prod
vol
800
200
300
400
400
400
500
500
1,600
800
800
800
1,000
1,000
9,500
Target
fuel econ
(mpg)
30.26
30.26
................
24.09
................
24.09
24.00
................
................
24.09
................
24.09
24.00
................
Manufacturer X’s required fuel economy
would be calculated as illustrated in
‘‘Appendix A Figure 1.’’
E:\FR\FM\28SEP2.SGM
28SEP2
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules
49789
Appendix A, Figure 1
Calculation of Manufacturer X’s target fuel
economy standard.
Manufacturer’s Light Truck Production for Applicable Model Year
Volume A Volume B Volume C Volume D Volume E Volume F Volume G Volume H
+
+
+
+
+
+
+
Target A
Target B
Target C
Target D
Target E
Target F
Target G
Target H
9, 500
800
30.26
+
200
20.26
+
Manufacturer X’s light truck fleet target
fuel economy standard = 24.6 mpg
1,100
24.09
0
+
400
24.09
+
1, 000
24.00
+
3, 200
24.09
+
800
24.09
+
2, 000
24.00
Appendix A, Figure 2
Calculation of Manufacturer X’s actual fuel
economy.
Manufacturer’s Light Truck Production for Applicable Model Year
Volume A Volume B Volume C Volume D Volume E Volume F Volume G Volume H
+
+
+
+
+
+
+
Mpg A
Mpg B
Mpg C
Mpg D
Mpg E
Mpg F
Mpg G
Mpg H
9, 500
800 200 300 400 400 400 500 500 1, 600 800 800 800 1, 000 1, 000
+
+
+
+
+
+
+
+
+
+
+
+
+
22.1
27.1 27.6 23.9 23.7 23.5 23.6 22.7 22.5 22.5 22.3 22.2 22.3 22.2
PART 537—AUTOMOTIVE FUEL
ECONOMY REPORTS
7. The authority citation for part 537
continues to read as follows:
Authority: 49 U.S.C. 32907, delegation of
authority at 49 CFR 1.50.
PART 538—MANUFACTURING
INCENTIVES FOR ALTERNATIVE FUEL
VEHICLES
8. Amend § 537.5 by revising
paragraph (c)(4) to read as follows:
10. The authority citation for part 538
continues to read as follows:
§ 537.5
Authority: 49 U.S.C. 32901, 32905, and
32906; delegation of authority at 49 CFR 1.50.
General requirements for reports.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
*
*
*
*
*
(c) * * *
(4) Be submitted in 5 copies to:
Administrator, National Highway
Traffic Safety Administration, 1200 New
Jersey Avenue, SE., Washington, DC
20590, or submitted electronically to the
following secure e-mail address:
cafe@dot.gov. Electronic submissions
should be provided in a pdf format.
*
*
*
*
*
9. Amend § 537.7 by revising
paragraphs (c)(4)(xvi)(A)(4) and
(c)(4)(xvi)(B)(4) to read as follows:
§ 537.7 Pre-model year and mid-model
year reports.
*
*
*
VerDate Nov<24>2008
*
*
23:31 Sep 25, 2009
Jkt 217001
11. Revise § 538.1 to read as follows:
§ 538.1
Scope.
This part establishes minimum
driving range criteria to aid in
identifying passenger automobiles that
are dual-fueled automobiles. It also
establishes gallon equivalent
measurements for gaseous fuels other
than natural gas.
12. Revise § 538.2 to read as follows:
§ 538.2
Purpose.
The purpose of this part is to specify
one of the criteria in 49 U.S.C. chapter
329 ‘‘Automobile Fuel Economy’’ for
identifying dual-fueled passenger
PO 00000
Frm 00337
Fmt 4701
Sfmt 4700
automobiles that are manufactured in
model years 1993 through 2019. The
fuel economy of a qualifying vehicle is
calculated in a special manner so as to
encourage its production as a way of
facilitating a manufacturer’s compliance
with the Corporate Average Fuel
Economy standards set forth in part 531
of this chapter. The purpose is also to
establish gallon equivalent
measurements for gaseous fuels other
than nautral gas.
13. Revise § 538.7(b)(1) to read as
follows:
§ 538.7 Petitions for reduction of minimum
driving range.
*
*
*
*
*
(b) * * *
(1) Be addressed to: Administrator,
National Highway Traffic Safety
Administration, 1200 New Jersey
Avenue, SE., Washington, DC 20590.
*
*
*
*
*
Dated: September 15, 2009.
Ray LaHood,
Secretary, Department of Transportation.
Dated: September 15, 2009.
Lisa P. Jackson,
Administrator, Environmental Protection
Agency.
[FR Doc. E9–22516 Filed 9–17–09; 4:15 pm]
BILLING CODE 4910–59–P; 6560–50–P
E:\FR\FM\28SEP2.SGM
28SEP2
EP28SE09.073</MATH>
Note to Appendix A Figure 2. Since the
actual average fuel economy of Manufacturer
X’s fleet is 23.0 mpg, as compared to its
required fuel economy level of 24.6 mpg,
Manufacturer X did not comply with the
CAFE standard for MY 2011 as set forth in
section 533.5(h).
(c) * * *
(4) * * *
(xvi)(A) * * *
(4) Beginning model year 2010, front
axle, rear axle and average track width
as defined in 49 CFR 523.2,
*
*
*
*
*
(B) * * *
(4) Beginning model year 2010, front
axle, rear axle and average track width
as defined in 49 CFR 523.2,
*
*
*
*
*
EP28SE09.072</MATH>
Manufacturer X’s light truck fleet actual
fuel economy performance = 23.0 mpg
]]>Agencies
[Federal Register Volume 74, Number 186 (Monday, September 28, 2009)]
[Proposed Rules]
[Pages 49454-49789]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-22516]
[[Page 49453]]
-----------------------------------------------------------------------
Part II
Environmental Protection Agency
-----------------------------------------------------------------------
40 CFR Parts 86 and 600
-----------------------------------------------------------------------
Department of Transportation
-----------------------------------------------------------------------
National Highway Traffic Safety Administration
-----------------------------------------------------------------------
49 CFR Parts 531, 533, 537, et al.
Proposed Rulemaking To Establish Light-Duty Vehicle Greenhouse Gas
Emission Standards and Corporate Average Fuel Economy Standards;
Proposed Rule
Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 /
Proposed Rules
[[Page 49454]]
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 86 and 600
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Parts 531, 533, 537, and 538
[EPA-HQ-OAR-2009-0472; FRL-8959-4; NHTSA-2009-0059]
RIN 2060-AP58; RIN 2127-AK90
Proposed Rulemaking To Establish Light-Duty Vehicle Greenhouse
Gas Emission Standards and Corporate Average Fuel Economy Standards
AGENCY: Environmental Protection Agency (EPA) and National Highway
Traffic Safety Administration (NHTSA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: EPA and NHTSA are issuing this joint proposal to establish a
National Program consisting of new standards for light-duty vehicles
that will reduce greenhouse gas emissions and improve fuel economy.
This joint proposed rulemaking is consistent with the National Fuel
Efficiency Policy announced by President Obama on May 19, 2009,
responding to the country's critical need to address global climate
change and to reduce oil consumption. EPA is proposing greenhouse gas
emissions standards under the Clean Air Act, and NHTSA is proposing
Corporate Average Fuel Economy standards under the Energy Policy and
Conservation Act, as amended. These standards apply to passenger cars,
light-duty trucks, and medium-duty passenger vehicles, covering model
years 2012 through 2016, and represent a harmonized and consistent
National Program. Under the National Program, automobile manufacturers
would be able to build a single light-duty national fleet that
satisfies all requirements under both programs while ensuring that
consumers still have a full range of vehicle choices.
FOR FURTHER INFORMATION CONTACT: Comments: Comments must be received on
or before November 27, 2009. Under the Paperwork Reduction Act,
comments on the information collection provisions must be received by
the Office of Management and Budget (OMB) on or before October 28,
2009. See the SUPPLEMENTARY INFORMATION section on ``Public
Participation'' for more information about written comments.
Hearings: NHTSA and EPA will jointly hold three public hearings on
the following dates: October 21, 2009 in Detroit, Michigan; October 23,
2009 in New York, New York; and October 27, 2009 in Los Angeles,
California. EPA and NHTSA will announce the addresses for each hearing
location in a supplemental Federal Register Notice. The hearings will
start at 9 a.m. local time and continue until everyone has had a chance
to speak. See the SUPPLEMENTARY INFORMATION section on ``Public
Participation'' for more information about the public hearings.
ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2009-0472 and/or NHTSA-2009-0059, by one of the following methods:
www.regulations.gov: Follow the on-line instructions for
submitting comments.
E-mail: a-and-r-Docket@epa.gov.
Fax: EPA: (202) 566-1741; NHTSA: (202) 493-2251.
Mail:
[cir] EPA: Environmental Protection Agency, EPA Docket Center (EPA/
DC), Air and Radiation Docket, Mail Code 2822T, 1200 Pennsylvania
Avenue, NW., Washington, DC 20460, Attention Docket ID No. EPA-HQ-OAR-
2009-0472. In addition, please mail a copy of your comments on the
information collection provisions to the Office of Information and
Regulatory Affairs, Office of Management and Budget (OMB), Attn: Desk
Officer for EPA, 725 17th St., NW., Washington, DC 20503.
[cir] NHTSA: Docket Management Facility, M-30, U.S. Department of
Transportation, West Building, Ground Floor, Rm. W12-140, 1200 New
Jersey Avenue, SE., Washington, DC 20590.
Hand Delivery:
[cir] EPA: Docket Center, (EPA/DC) EPA West, Room B102, 1301
Constitution Ave., NW., Washington, DC, Attention Docket ID No. EPA-HQ-
OAR-2009-0472. Such deliveries are only accepted during the Docket's
normal hours of operation, and special arrangements should be made for
deliveries of boxed information.
[cir] NHTSA: West Building, Ground Floor, Rm. W12-140, 1200 New
Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m.
Eastern Time, Monday through Friday, except Federal Holidays.
Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-
2009-0472 and/or NHTSA-2009-0059. See the SUPPLEMENTARY INFORMATION
section on ``Public Participation'' for more information about
submitting written comments.
Public Hearing: NHTSA and EPA will jointly hold three public
hearings on the following dates: October 21, 2009 in Detroit, Michigan;
October 23, 2009 in New York, New York; and October 27, 2009 in Los
Angeles, California. EPA and NHTSA will announce the addresses for each
hearing location in a supplemental Federal Register Notice. See the
SUPPLEMENTARY INFORMATION section on ``Public Participation'' for more
information about the public hearings.
Docket: All documents in the dockets are listed in the
www.regulations.gov index. Although listed in the index, some
information is not publicly available, e.g., confidential business
information (CBI) or other information whose disclosure is restricted
by statute. Certain other material, such as copyrighted material, will
be publicly available only in hard copy. Publicly available docket
materials are available either electronically in www.regulations.gov or
in hard copy at the following locations: EPA: EPA Docket Center, EPA/
DC, EPA West, Room 3334, 1301 Constitution Ave., NW., Washington, DC.
The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday
through Friday, excluding legal holidays. The telephone number for the
Public Reading Room is (202) 566-1744. NHTSA: Docket Management
Facility, M-30, U.S. Department of Transportation, West Building,
Ground Floor, Rm. W12-140, 1200 New Jersey Avenue, SE, Washington, DC
20590. The Docket Management Facility is open between 9 a.m. and 5 p.m.
Eastern Time, Monday through Friday, except Federal holidays.
FOR FURTHER INFORMATION CONTACT: EPA: Tad Wysor, Office of
Transportation and Air Quality, Assessment and Standards Division,
Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor MI
48105; telephone number: 734-214-4332; fax number: 734-214-4816; e-mail
address: wysor.tad@epa.gov, or Assessment and Standards Division
Hotline; telephone number (734) 214-4636; e-mail address
asdinfo@epa.gov. NHTSA: Rebecca Yoon, Office of Chief Counsel, National
Highway Traffic Safety Administration, 1200 New Jersey Avenue, SE.,
Washington, DC 20590. Telephone: (202) 366-2992.
SUPPLEMENTARY INFORMATION:
A. Does This Action Apply to Me?
This action affects companies that manufacture or sell new light-
duty vehicles, light-duty trucks, and medium-duty passenger vehicles,
as defined under EPA's CAA regulations,\1\
[[Page 49455]]
and passenger automobiles (passenger cars) and non-passenger
automobiles (light trucks) as defined under NHTSA's CAFE
regulations.\2\ Regulated categories and entities include:
---------------------------------------------------------------------------
\1\ ``Light-duty vehicle,'' ``light-duty truck,'' and ``medium-
duty passenger vehicle'' are defined in 40 CFR 86.1803-01.
Generally, the term ``light-duty vehicle'' means a passenger car,
the term ``light-duty truck'' means a pick-up truck, sport-utility
vehicle, or minivan of up to 8,500 lbs gross vehicle weight rating,
and ``medium-duty passenger vehicle'' means a sport-utility vehicle
or passenger van from 8,500 to 10,000 lbs gross vehicle weight
rating. Medium-duty passenger vehicles do not include pick-up
trucks.
\2\ ``Passenger car'' and ``light truck'' are defined in 49 CFR
part 523.
------------------------------------------------------------------------
NAICS Examples of potentially
Category codes \A\ regulated entities
------------------------------------------------------------------------
Industry............................ 336111 Motor vehicle
manufacturers.
336112
Industry............................ 811112 Commercial Importers of
Vehicles and Vehicle
Components.
811198
541514
------------------------------------------------------------------------
\A\ North American Industry Classification System (NAICS).
This list is not intended to be exhaustive, but rather provides a
guide regarding entities likely to be regulated by this action. To
determine whether particular activities may be regulated by this
action, you should carefully examine the regulations. You may direct
questions regarding the applicability of this action to the person
listed in FOR FURTHER INFORMATION CONTACT.
B. Public Participation
NHTSA and EPA request comment on all aspects of this joint proposed
rule. This section describes how you can participate in this process.
How Do I Prepare and Submit Comments?
In this joint proposal, there are many issues common to both EPA's
and NHTSA's proposals. For the convenience of all parties, comments
submitted to the EPA docket will be considered comments submitted to
the NHTSA docket, and vice versa. An exception is that comments
submitted to the NHTSA docket on the Draft Environmental Impact
Statement will not be considered submitted to the EPA docket.
Therefore, the public only needs to submit comments to either one of
the two agency dockets. Comments that are submitted for consideration
by one agency should be identified as such, and comments that are
submitted for consideration by both agencies should be identified as
such. Absent such identification, each agency will exercise its best
judgment to determine whether a comment is submitted on its proposal.
Further instructions for submitting comments to either the EPA or
NHTSA docket are described below.
EPA: Direct your comments to Docket ID No EPA-HQ-OAR-2009-0472.
EPA's policy is that all comments received will be included in the
public docket without change and may be made available online at
www.regulations.gov, including any personal information provided,
unless the comment includes information claimed to be Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Do not submit information that you consider to
be CBI or otherwise protected through www.regulations.gov or e-mail.
The www.regulations.gov Web site is an ``anonymous access'' system,
which means EPA will not know your identity or contact information
unless you provide it in the body of your comment. If you send an e-
mail comment directly to EPA without going through www.regulations.gov
your e-mail address will be automatically captured and included as part
of the comment that is placed in the public docket and made available
on the Internet. If you submit an electronic comment, EPA recommends
that you include your name and other contact information in the body of
your comment and with any disk or CD-ROM you submit. If EPA cannot read
your comment due to technical difficulties and cannot contact you for
clarification, EPA may not be able to consider your comment. Electronic
files should avoid the use of special characters, any form of
encryption, and be free of any defects or viruses. For additional
information about EPA's public docket visit the EPA Docket Center
homepage at https://www.epa.gov/epahome/dockets.htm.
NHTSA: Your comments must be written and in English. To ensure that
your comments are correctly filed in the Docket, please include the
Docket number NHTSA-2009-0059 in your comments. Your comments must not
be more than 15 pages long.\3\ NHTSA established this limit to
encourage you to write your primary comments in a concise fashion.
However, you may attach necessary additional documents to your
comments. There is no limit on the length of the attachments. If you
are submitting comments electronically as a PDF (Adobe) file, we ask
that the documents submitted be scanned using the Optical Character
Recognition (OCR) process, thus allowing the agencies to search and
copy certain portions of your submissions.\4\ Please note that pursuant
to the Data Quality Act, in order for the substantive data to be relied
upon and used by the agencies, it must meet the information quality
standards set forth in the OMB and Department of Transportation (DOT)
Data Quality Act guidelines. Accordingly, we encourage you to consult
the guidelines in preparing your comments. OMB's guidelines may be
accessed at https://www.whitehouse.gov/omb/fedreg/reproducible.html.
DOT's guidelines may be accessed at https://www.dot.gov/dataquality.htm.
---------------------------------------------------------------------------
\3\ See 49 CFR 553.21.
\4\ Optical character recognition (OCR) is the process of
converting an image of text, such as a scanned paper document or
electronic fax file, into computer-editable text.
---------------------------------------------------------------------------
Tips for Preparing Your Comments
When submitting comments, remember to:
Identify the rulemaking by docket number and other
identifying information (subject heading, Federal Register date and
page number).
Follow directions--The agency may ask you to respond to
specific questions or organize comments by referencing a Code of
Federal Regulations (CFR) part or section number.
Explain why you agree or disagree, suggest alternatives,
and substitute language for your requested changes.
Describe any assumptions and provide any technical
information and/or data that you used.
If you estimate potential costs or burdens, explain how
you arrived at your estimate in sufficient detail to allow for it to be
reproduced.
Provide specific examples to illustrate your concerns, and
suggest alternatives.
[[Page 49456]]
Explain your views as clearly as possible, avoiding the
use of profanity or personal threats.
Make sure to submit your comments by the comment period deadline
identified in the DATES section above.
How Can I Be Sure That My Comments Were Received?
NHTSA: If you submit your comments by mail and wish Docket
Management to notify you upon its receipt of your comments, enclose a
self-addressed, stamped postcard in the envelope containing your
comments. Upon receiving your comments, Docket Management will return
the postcard by mail.
How Do I Submit Confidential Business Information?
Any confidential business information (CBI) submitted to one of the
agencies will also be available to the other agency. However, as with
all public comments, any CBI information only needs to be submitted to
either one of the agencies' dockets and it will be available to the
other. Following are specific instructions for submitting CBI to either
agency.
EPA: Do not submit CBI to EPA through https://www.regulations.gov or
e-mail. Clearly mark the part or all of the information that you claim
to be CBI. For CBI information in a disk or CD-ROM that you mail to
EPA, mark the outside of the disk or CD-ROM as CBI and then identify
electronically within the disk or CD-ROM the specific information that
is claimed as CBI. In addition to one complete version of the comment
that includes information claimed as CBI, a copy of the comment that
does not contain the information claimed as CBI must be submitted for
inclusion in the public docket. Information so marked will not be
disclosed except in accordance with procedures set forth in 40 CFR part
2.
NHTSA: If you wish to submit any information under a claim of
confidentiality, you should submit three copies of your complete
submission, including the information you claim to be confidential
business information, to the Chief Counsel, NHTSA, at the address given
above under FOR FURTHER INFORMATION CONTACT. When you send a comment
containing confidential business information, you should include a
cover letter setting forth the information specified in our
confidential business information regulation.\5\
---------------------------------------------------------------------------
\5\ See 49 CFR part 512.
---------------------------------------------------------------------------
In addition, you should submit a copy from which you have deleted
the claimed confidential business information to the Docket by one of
the methods set forth above.
Will the Agencies Consider Late Comments?
NHTSA and EPA will consider all comments received before the close
of business on the comment closing date indicated above under DATES. To
the extent practicable, we will also consider comments received after
that date. If interested persons believe that any new information the
agency places in the docket affects their comments, they may submit
comments after the closing date concerning how the agency should
consider that information for the final rule. However, the agencies'
ability to consider any such late comments in this rulemaking will be
limited due to the time frame for issuing a final rule.
If a comment is received too late for us to practicably consider in
developing a final rule, we will consider that comment as an informal
suggestion for future rulemaking action.
How Can I Read the Comments Submitted by Other People?
You may read the materials placed in the docket for this document
(e.g., the comments submitted in response to this document by other
interested persons) at any time by going to https://www.regulations.gov.
Follow the online instructions for accessing the dockets. You may also
read the materials at the EPA Docket Center or NHTSA Docket Management
Facility by going to the street addresses given above under ADDRESSES.
How Do I Participate in the Public Hearings?
NHTSA and EPA will jointly host three public hearings on the dates
and locations described in the DATES and ADDRESSES sections above.
If you would like to present testimony at the public hearings, we
ask that you notify the EPA and NHTSA contact persons listed under FOR
FURTHER INFORMATION CONTACT at least ten days before the hearing. Once
EPA and NHTSA learn how many people have registered to speak at the
public hearing, we will allocate an appropriate amount of time to each
participant, allowing time for lunch and necessary breaks throughout
the day. For planning purposes, each speaker should anticipate speaking
for approximately ten minutes, although we may need to adjust the time
for each speaker if there is a large turnout. We suggest that you bring
copies of your statement or other material for the EPA and NHTSA panels
and the audience. It would also be helpful if you send us a copy of
your statement or other materials before the hearing. To accommodate as
many speakers as possible, we prefer that speakers not use
technological aids (e.g., audio-visuals, computer slideshows). However,
if you plan to do so, you must notify the contact persons in the FOR
FURTHER INFORMATION CONTACT section above. You also must make
arrangements to provide your presentation or any other aids to NHTSA
and EPA in advance of the hearing in order to facilitate set-up. In
addition, we will reserve a block of time for anyone else in the
audience who wants to give testimony.
The hearing will be held at a site accessible to individuals with
disabilities. Individuals who require accommodations such as sign
language interpreters should contact the persons listed under FOR
FURTHER INFORMATION CONTACT section above no later than ten days before
the date of the hearing.
NHTSA and EPA will conduct the hearing informally, and technical
rules of evidence will not apply. We will arrange for a written
transcript of the hearing and keep the official record of the hearing
open for 30 days to allow you to submit supplementary information. You
may make arrangements for copies of the transcript directly with the
court reporter.
Table of Contents
I. Overview of Joint EPA/NHTSA National Program
A. Introduction
1. Building Blocks of the National Program
2. Joint Proposal for a National Program
B. Summary of the Joint Proposal
C. Background and Comparison of NHTSA and EPA Statutory Authority
1. NHTSA Statutory Authority
2. EPA Statutory Authority
3. Comparing the Agencies' Authority
D. Summary of the Proposed Standards for the National Program
1. Joint Analytical Approach
2. Level of the Standards
3. Form of the Standards
E. Summary of Costs and Benefits for the Joint Proposal
1. Summary of Costs and Benefits of Proposed NHTSA CAFE
Standards
2. Summary of Costs and Benefits of Proposed EPA GHG Standards
F. Program Flexibilities for Achieving Compliance
1. CO2/CAFE Credits Generated Based on Fleet Average
Performance
2. Air Conditioning Credits
3. Flex-Fuel and Alternative Fuel Vehicle Credits
4. Temporary Lead-time Allowance Alternative Standards
5. Additional Credit Opportunities Under the CAA
G. Coordinated Compliance
H. Conclusion
[[Page 49457]]
II. Joint Technical Work Completed for This Proposal
A. Introduction
B. How Did NHTSA and EPA Develop the Baseline Market Forecast?
1. Why Do the Agencies Establish a Baseline Vehicle Fleet?
2. How Do the Agencies Develop the Baseline Vehicle Fleet?
3. How Is the Development of the Baseline Fleet for this
Proposal Different From NHTSA's Historical Approach, and Why is This
Approach Preferable?
4. How Does Manufacturer Product Plan Data Factor Into the
Baseline Used in This Proposal?
C. Development of Attribute-Based Curve Shapes
D. Relative Car-Truck Stringency
E. Joint Vehicle Technology Assumptions
1. What Technologies Do the Agencies Consider?
2. How Did the Agencies Determine the Costs and Effectiveness of
Each of These Technologies?
F. Joint Economic Assumptions
III. EPA Proposal for Greenhouse Gas Vehicle Standards
A. Executive Overview of EPA Proposal
1. Introduction
2. Why Is EPA Proposing This Rule?
3. What Is EPA Proposing?
4. Basis for the Proposed GHG Standards Under Section 202(a)
B. Proposed GHG Standards for Light-Duty Vehicles, Light-Duty
Trucks, and Medium-Duty Passenger Vehicles
1. What Fleet-Wide Emissions Levels Correspond to the
CO2 Standards?
2. What Are the CO2 Attribute-Based Standards?
3. Overview of How EPA's Proposed CO2 Standards Would
Be Implemented for Individual Manufacturers
4. Averaging, Banking, and Trading Provisions for CO2
Standards
5. CO2 Temporary Lead-Time Allowance Alternative
Standards
6. Proposed Nitrous Oxide and Methane Standards
7. Small Entity Deferment
C. Additional Credit Opportunities for CO2 Fleet Average
Program
1. Air Conditioning Related Credits
2. Flex Fuel and Alternative Fuel Vehicle Credits
3. Advanced Technology Vehicle Credits for Electric Vehicles,
Plug-in Hybrids, and Fuel Cells
4. Off-cycle Technology Credits
5. Early Credit Options
D. Feasibility of the Proposed CO2 Standards
1. How Did EPA Develop a Reference Vehicle Fleet for Evaluating
Further CO2 Reductions?
2. What Are the Effectiveness and Costs of CO2-
Reducing Technologies?
3. How Can Technologies Be Combined into ``Packages'' and What
Is the Cost and Effectiveness of Packages?
4. Manufacturer's Application of Technology
5. How Is EPA Projecting That a Manufacturer Would Decide
Between Options To Improve CO2 Performance To Meet a
Fleet Average Standard?
6. Why Are the Proposed CO2 Standards Feasible?
7. What Other Fleet-Wide CO2 Levels Were Considered?
E. Certification, Compliance, and Enforcement
1. Compliance Program Overview
2. Compliance With Fleet-Average CO2 Standards
3. Vehicle Certification
4. Useful Life Compliance
5. Credit Program Implementation
6. Enforcement
7. Prohibited Acts in the CAA
8. Other Certification Issues
9. Miscellaneous Revisions to Existing Regulations
10. Warranty, Defect Reporting, and Other Emission-related
Components Provisions
11. Light Vehicles and Fuel Economy Labeling
F. How Would This Proposal Reduce GHG Emissions and Their Associated
Effects?
1. Impact on GHG Emissions
2. Overview of Climate Change Impacts From GHG Emissions
3. Changes in Global Mean Temperature and Sea-Level Rise
Associated With the Proposal's GHG Emissions Reductions
4. Weight Reduction and Potential Safety Impacts
G. How Would the Proposal Impact Non-GHG Emissions and Their
Associated Effects?
1. Upstream Impacts of Program
2. Downstream Impacts of Program
3. Health Effects of Non-GHG Pollutants
4. Environmental Effects of Non-GHG Pollutants
5. Air Quality Impacts of Non-GHG Pollutants
H. What Are the Estimated Cost, Economic, and Other Impacts of the
Proposal?
1. Conceptual Framework for Evaluating Consumer Impacts
2. Costs Associated With the Vehicle Program
3. Cost per Ton of Emissions Reduced
4. Reduction in Fuel Consumption and Its Impacts
5. Impacts on U.S. Vehicle Sales and Payback Period
6. Benefits of Reducing GHG Emissions
7. Non-Greenhouse Gas Health and Environmental Impacts
8. Energy Security Impacts
9. Other Impacts
10. Summary of Costs and Benefits
I. Statutory and Executive Order Reviews
1. Executive Order 12866: Regulatory Planning and Review
2. Paperwork Reduction Act
3. Regulatory Flexibility Act
4. Unfunded Mandates Reform Act
5. Executive Order 13132 (Federalism)
6. Executive Order 13175 (Consultation and Coordination With
Indian Tribal Governments)
7. Executive Order 13045: ``Protection of Children From
Environmental Health Risks and Safety Risks''
8. Executive Order 13211 (Energy Effects)
9. National Technology Transfer Advancement Act
10. Executive Order 12898: Federal Actions to Address
Environmental Justice in Minority Populations and Low-Income
Populations
J. Statutory Provisions and Legal Authority
IV. NHTSA Proposal for Passenger Car and Light Truck CAFE Standards for
MYs 2012-2016
A. Executive Overview of NHTSA Proposal
1. Introduction
2. Role of Fuel Economy Improvements in Promoting Energy
Independence, Energy Security, and a Low Carbon Economy
3. The National Program
4. Review of CAFE Standard Setting Methodology Per the
President's January 26, 2009 Memorandum on CAFE Standards for MYs
2011 and Beyond
5. Summary of the Proposed MY 2012-2016 CAFE Standards
B. Background
1. Chronology of Events Since the National Academy of Sciences
Called for Reforming and Increasing CAFE Standards
2. NHTSA Issues Final Rule Establishing Attribute-Based CAFE
Standards for MY 2008-2011 Light Trucks (March 2006)
3. Ninth Circuit Issues Decision re Final Rule for MY 2008-2011
Light Trucks (November 2007)
4. Congress Enacts Energy Security and Independence Act of 2007
(December 2007)
5. NHTSA Proposes CAFE Standards for MYs 2011-2015 (April 2008)
6. Ninth Circuit Revises Its Decision re Final Rule for MY 2008-
2011 Light Trucks (August 2008)
7. NHTSA Releases Final Environmental Impact Statement (October
2008)
8. Department of Transportation Decides not to Issue MY 2011-
2015 final Rule (January 2009)
9. The President Requests NHTSA to Issue Final Rule for MY 2011
Only (January 2009)
10. NHTSA Issues Final Rule for MY 2011 (March 2009)
11. Energy Policy and Conservation Act, as Amended by the Energy
Independence and Security Act
C. Development and Feasibility of the Proposed Standards
1. How Was the Baseline Vehicle Fleet Developed?
2. How were the Technology Inputs Developed?
3. How Did NHTSA Develop the Economic Assumption Inputs?
4. How Does NHTSA Use the Assumptions in Its Modeling Analysis?
5. How Did NHTSA Develop the Shape of the Target Curves for the
Proposed Standards?
D. Statutory Requirements
1. EPCA, as Amended by EISA
2. Administrative Procedure Act
3. National Environmental Policy Act
E. What Are the Proposed CAFE Standards?
1. Form of the Standards
2. Passenger Car Standards for MYs 2012-2016
3. Minimum Domestic Passenger Car Standards
4. Light Truck Standards
F. How Do the Proposed Standards Fulfill NHTSA's Statutory
Obligations?
[[Page 49458]]
G. Impacts of the Proposed CAFE Standards
1. How Would These Proposed Standards Improve Fuel Economy and
Reduce GHG Emissions for MY 2012-2016 Vehicles?
2. How Would These Proposed Standards Improve Fleet-Wide Fuel
Economy and Reduce GHG Emissions Beyond MY 2016?
3. How Would These Proposed Standards Impact Non-GHG Emissions
and Their Associated Effects?
4. What Are the Estimated Costs and Benefits of These Proposed
Standards?
5. How Would These Proposed Standards Impact Vehicle Sales?
6. What Are the Consumer Welfare Impacts of These Proposed
Standards?
7. What Are the Estimated Safety Impacts of These Proposed
Standards?
8. What Other Impacts (Quantitative and Unquantifiable) Will
These Proposed Standards Have?
H. Vehicle Classification
I. Compliance and Enforcement
1. Overview
2. How Does NHTSA Determine Compliance?
3. What Compliance Flexibilities Are Available under the CAFE
Program and How Do Manufacturers Use Them?
4. Other CAFE Enforcement Issues--Variations in Footprint
J. Other Near-Term Rulemakings Mandated by EISA
1. Commercial Medium- and Heavy-Duty On-Highway Vehicles and
Work Trucks
2. Consumer Information
K. Regulatory Notices and Analyses
1. Executive Order 12866 and DOT Regulatory Policies and
Procedures
2. National Environmental Policy Act
3. Regulatory Flexibility Act
4. Executive Order 13132 (Federalism)
5. Executive Order 12988 (Civil Justice Reform)
6. Unfunded Mandates Reform Act
7. Paperwork Reduction Act
8. Regulation Identifier Number
9. Executive Order 13045
10. National Technology Transfer and Advancement Act
11. Executive Order 13211
12. Department of Energy Review
13. Plain Language
14. Privacy Act
I. Overview of Joint EPA/NHTSA National Program
A. Introduction
The National Highway Traffic Safety Administration (NHTSA) and the
Environmental Protection Agency (EPA) are each announcing proposed
rules whose benefits would address the urgent and closely intertwined
challenges of energy independence and security and global warming.
These proposed rules call for a strong and coordinated Federal
greenhouse gas and fuel economy program for passenger cars, light-duty-
trucks, and medium-duty passenger vehicles (hereafter light-duty
vehicles), referred to as the National Program. The proposed rules can
achieve substantial reductions of greenhouse gas (GHG) emissions and
improvements in fuel economy from the light-duty vehicle part of the
transportation sector, based on technology that is already being
commercially applied in most cases and that can be incorporated at a
reasonable cost.
This joint notice is consistent with the President's announcement
on May 19, 2009 of a National Fuel Efficiency Policy of establishing
consistent, harmonized, and streamlined requirements that would reduce
greenhouse gas emissions and improve fuel economy for all new cars and
light-duty trucks sold in the United States.\6\ The National Program
holds out the promise of delivering additional environmental and energy
benefits, cost savings, and administrative efficiencies on a nationwide
basis that might not be available under a less coordinated approach.
The proposed National Program also offers the prospect of regulatory
convergence by making it possible for the standards of two different
Federal agencies and the standards of California and other States to
act in a unified fashion in providing these benefits. This would allow
automakers to produce and sell a single fleet nationally. Thus, it may
also help to mitigate the additional costs that manufacturers would
otherwise face in having to comply with multiple sets of Federal and
State standards. This joint notice is also consistent with the Notice
of Upcoming Joint Rulemaking issued by DOT and EPA on May 19 \7\ and
responds to the President's January 26, 2009 memorandum on CAFE
standards for model years 2011 and beyond,\8\ the details of which can
be found in Section IV of this joint notice.
---------------------------------------------------------------------------
\6\ President Obama Announces National Fuel Efficiency Policy,
The White House, May 19, 2009. Available at: https://www.whitehouse.gov/the_press_office/President-Obama-Announces-National-Fuel-Efficiency-Policy/ (last accessed August 18, 2009).
Remarks by the President on National Fuel Efficiency Standards, The
White House, May 19, 2009. Available at: https://www.whitehouse.gov/the_press_office/Remarks-by-the-President-on-national-fuel-efficiency-standards/ (Last accessed August 18, 2009).
\7\ 74 FR 24007 (May 22, 2009).
\8\ Available at: https://www.whitehouse.gov/the_press_office/Presidential_Memorandum_Fuel_Economy/ (last accessed on August
18, 2009).
---------------------------------------------------------------------------
1. Building Blocks of the National Program
The National Program is both needed and possible because the
relationship between improving fuel economy and reducing CO2
tailpipe emissions is a very direct and close one. The amount of those
CO2 emissions is essentially constant per gallon combusted
of a given type of fuel. Thus, the more fuel efficient a vehicle is,
the less fuel it burns to travel a given distance. The less fuel it
burns, the less CO2 it emits in traveling that distance.\9\
While there are emission control technologies that reduce the
pollutants (e.g., carbon monoxide) produced by imperfect combustion of
fuel by capturing or destroying them, there is no such technology for
CO2. Further, while some of those pollutants can also be
reduced by achieving a more complete combustion of fuel, doing so only
increases the tailpipe emissions of CO2. Thus, there is a
single pool of technologies for addressing these twin problems, i.e.,
those that reduce fuel consumption and thereby reduce CO2
emissions as well.
---------------------------------------------------------------------------
\9\ Panel on Policy Implications of Greenhouse Warming, National
Academy of Sciences, National Academy of Engineering, Institute of
Medicine, ``Policy Implications of Greenhouse Warming: Mitigation,
Adaptation, and the Science Base,'' National Academies Press, 1992.
p. 287.
---------------------------------------------------------------------------
a. DOT's CAFE Program
In 1975, Congress enacted the Energy Policy and Conservation Act
(EPCA), mandating that NHTSA establish and implement a regulatory
program for motor vehicle fuel economy to meet the various facets of
the need to conserve energy, including ones having energy independence
and security, environmental and foreign policy implications. Fuel
economy gains since 1975, due both to the standards and market factors,
have resulted in saving billions of barrels of oil and avoiding
billions of metric tons of CO2 emissions. In December 2007,
Congress enacted the Energy Independence and Securities Act (EISA),
amending EPCA to require substantial, continuing increases in fuel
economy standards.
The CAFE standards address most, but not all, of the real world
CO2 emissions because EPCA requires the use of 1975
passenger car test procedures under which vehicle air conditioners are
not turned on during fuel economy testing.\10\ Fuel economy is
determined by measuring the amount of CO2 and other carbon
compounds emitted from the tailpipe, not by attempting to measure
directly the amount of fuel consumed during a vehicle test, a difficult
task to accomplish with precision. The carbon content of the test fuel
\11\ is then used to calculate the amount of fuel that had to be
consumed per mile in order to
[[Page 49459]]
produce that amount of CO2. Finally, that fuel consumption
figure is converted into a miles-per-gallon figure. CAFE standards also
do not address the 5-8 percent of GHG emissions that are not
CO2, i.e., nitrous oxide (N2O), and methane
(CH4) as well as emissions of CO2 and
hydrofluorocarbons (HFCs) related to operation of the air conditioning
system.
---------------------------------------------------------------------------
\10\ EPCA does not require the use of 1975 test procedures for
light trucks.
\11\ This is the method that EPA uses to determine compliance
with NHTSA's CAFE standards.
---------------------------------------------------------------------------
b. EPA's Greenhouse Gas Standards for Light-Duty Vehicles
Under the Clean Air Act EPA is responsible for addressing air
pollutants from motor vehicles. On April 2, 2007, the U.S. Supreme
Court issued its opinion in Massachusetts v. EPA,\12\ a case involving
a 2003 order of the Environmental Protection Agency (EPA) denying a
petition for rulemaking to regulate greenhouse gas emissions from motor
vehicles under section 202(a) of the Clean Air Act (CAA).\13\ The Court
held that greenhouse gases were air pollutants for purposes of the
Clean Air Act and further held that the Administrator must determine
whether or not emissions from new motor vehicles cause or contribute to
air pollution which may reasonably be anticipated to endanger public
health or welfare, or whether the science is too uncertain to make a
reasoned decision. The Court further ruled that, in making these
decisions, the EPA Administrator is required to follow the language of
section 202(a) of the CAA. The Court rejected the argument that EPA
cannot regulate CO2 from motor vehicles because to do so
would de facto tighten fuel economy standards, authority over which has
been assigned by Congress to DOT. The Court stated that ``[b]ut that
DOT sets mileage standards in no way licenses EPA to shirk its
environmental responsibilities. EPA has been charged with protecting
the public`s `health' and `welfare', a statutory obligation wholly
independent of DOT's mandate to promote energy efficiency.'' The Court
concluded that ``[t]he two obligations may overlap, but there is no
reason to think the two agencies cannot both administer their
obligations and yet avoid inconsistency.'' \14\ The Court remanded the
case back to the Agency for reconsideration in light of its
findings.\15\
---------------------------------------------------------------------------
\12\ 549 U.S. 497 (2007).
\13\ 68 FR 52922 (Sept. 8, 2003).
\14\ 549 U.S. at 531-32.
\15\ For further information on Massachusetts v. EPA see the
July 30, 2008 Advance Notice of Proposed Rulemaking, ``Regulating
Greenhouse Gas Emissions under the Clean Air Act'', 73 FR 44354 at
44397. There is a comprehensive discussion of the litigation's
history, the Supreme Court's findings, and subsequent actions
undertaken by the Bush Administration and the EPA from 2007-2008 in
response to the Supreme Court remand.
---------------------------------------------------------------------------
EPA has since proposed to find that emissions of GHGs from new
motor vehicles and motor vehicle engines cause or contribute to air
pollution that may reasonably be anticipated to endanger public health
and welfare.\16\ This proposal represents the second phase of EPA's
response to the Supreme Court's decision.
---------------------------------------------------------------------------
\16\ 74 FR 18886 (Apr. 24, 2009).
---------------------------------------------------------------------------
c. California Air Resources Board Greenhouse Gas Program
In 2004, the California Air Resources Board approved standards for
new light-duty vehicles, which regulate the emission of not only
CO2, but also other GHGs. Since then, thirteen States and
the District of Columbia, comprising approximately 40 percent of the
light-duty vehicle market, have adopted California's standards. These
standards apply to model years 2009 through 2016 and require
CO2 emissions for passenger cars and the smallest light
trucks of 323 g/mi in 2009 and 205 g/mi in 2016, and for the remaining
light trucks of 439 g/mi in 2009 and 332 g/mi in 2016. On June 30,
2009, EPA granted California's request for a waiver of preemption under
the CAA.\17\ The granting of the waiver permits California and the
other States to proceed with implementing the California emission
standards.
---------------------------------------------------------------------------
\17\ 74 FR 32744 (July 8, 2009).
---------------------------------------------------------------------------
2. Joint Proposal for a National Program
On May 19, 2009, the Department of Transportation and the
Environmental Protection Agency issued a Notice of Upcoming Joint
Rulemaking to propose a strong and coordinated fuel economy and
greenhouse gas National Program for Model Year (MY) 2012-2016 light
duty vehicles.
B. Summary of the Joint Proposal
In this joint rulemaking, EPA is proposing GHG emissions standards
under the Clean Air Act (CAA), and NHTSA is proposing Corporate Average
Fuel Economy (CAFE) standards under the Energy Policy and Conservation
Action of 1975 (EPCA), as amended by the Energy Independence and
Security Act of 2007 (EISA). The intention of this joint rulemaking
proposal is to set forth a carefully coordinated and harmonized
approach to implementing these two statutes, in accordance with all
substantive and procedural requirements imposed by law.
Climate change is widely viewed as the most significant long-term
threat to the global environment. According to the Intergovernmental
Panel on Climate Change, anthropogenic emissions of greenhouse gases
are very likely (90 to 99 percent probability) the cause of most of the
observed global warming over the last 50 years. The primary GHGs of
concern are carbon dioxide (CO2), methane, nitrous oxide,
hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride. Mobile
sources emitted 31.5 percent of all U.S. GHG in 2006, and have been the
fastest-growing source of U.S. GHG since 1990. Light-duty vehicles emit
four GHGs--CO2, methane, nitrous oxide, and
hydrofluorocarbons--and are responsible for nearly 60 percent of all
mobile source GHGs. For Light-duty vehicles, CO2 emissions
represent about 95 percent of all greenhouse emissions, and the
CO2 emissions measured over the EPA tests used for fuel
economy compliance represent over 90 percent of total light-duty
vehicle greenhouse gas emissions.
Improving energy security by reducing our dependence on foreign oil
has been a national objective since the first oil price shocks in the
1970s. Net petroleum imports now account for approximately 60 percent
of U.S. petroleum consumption. World crude oil production is highly
concentrated, exacerbating the risks of supply disruptions and price
shocks. Tight global oil markets led to prices over $100 per barrel in
2008, with gasoline reaching as high as $4 per gallon in many parts of
the U.S., causing financial hardship for many families. The export of
U.S. assets for oil imports continues to be an important component of
the U.S.' historically unprecedented trade deficits. Transportation
accounts for about two-thirds of U.S. petroleum consumption. Light-duty
vehicles account for about 60 percent of transportation oil use, which
means that they alone account for about 40 percent of all U.S. oil
consumption.
NHTSA and EPA have coordinated closely and worked jointly in
developing their respective proposals. This is reflected in many
aspects of this joint proposal. For example, the agencies have
developed a comprehensive joint Technical Support Document (TSD) that
provides a solid technical underpinning for each agency's modeling and
analysis used to support their proposed standards. Also, to the extent
allowed by law, the agencies have harmonized many elements of program
design, such as the form of the standard (the footprint-based attribute
curves), and the definitions used for cars and trucks. They have
developed the same or similar compliance flexibilities, to the extent
allowed and appropriate under their
[[Page 49460]]
respective statutes, such as averaging, banking, and trading of
credits, and have harmonized the compliance testing and test protocols
used for purposes of the fleet average standards each agency is
proposing. Finally, as discussed in Section I.C., under their
respective statutes each agency is called upon to exercise its judgment
and determine standards that are an appropriate balance of various
relevant statutory factors. Given the common technical issues before
each agency, the similarity of the factors each agency is to consider
and balance, and the authority of each agency to take into
consideration the standards of the other agency, both EPA and NHTSA are
proposing standards that result in a harmonized National Program.
This joint proposal covers passenger cars, light-duty-trucks, and
medium-duty passenger vehicles built in model years 2012 through 2016.
These vehicle categories are responsible for almost 60 percent of all
U.S. transportation-related GHG emissions. EPA and NHTSA expect that
automobile manufacturers will meet these proposed standards by
utilizing technologies that will reduce vehicle GHG emissions and
improve fuel economy. Although many of these technologies are available
today, the emissions reductions and fuel economy improvements proposed
would involve more widespread use of these technologies across the
light-duty vehicle fleet. These include improvements to engines,
transmissions, and tires, increased use of start-stop technology,
improvements in air conditioning systems (to the extent currently
allowed by law), increased use of hybrid and other advanced
technologies, and the initial commercialization of electric vehicles
and plug-in hybrids.
The proposed National Program would result in approximately 950
million metric tons of total carbon dioxide equivalent emissions
reductions and approximately 1.8 billion barrels of oil savings over
the lifetime of vehicles sold in model years 2012 through 2016. In
total, the combined EPA and NHTSA 2012-2016 standards would reduce GHG
emissions from the U.S. light-duty fleet by approximately 21 percent by
2030 over the level that would occur in the absence of the National
Program. These proposals also provide important energy security
benefits, as light-duty vehicles are about 95 percent dependent on oil-
based fuels. The benefits of the proposed National Program would total
about $250 billion at a 3% discount rate, or $195 billion at a 7%
discount rate. In the discussion that follows in Sections III and IV,
each agency explains the related benefits for their individual
standards.
Together, EPA and NHTSA estimate that the average cost increase for
a model year 2016 vehicle due to the proposed National Program is less
than $1,100. U.S. consumers who purchase their vehicle outright would
save enough in lower fuel costs over the first three years to offset
these higher vehicle costs. However, most U.S. consumers purchase a new
vehicle using credit rather than paying cash and the typical car loan
today is a five year, 60 month loan. These consumers would see
immediate savings due to their vehicle's lower fuel consumption in the
form of reduced monthly costs of $12-$14 per month throughout the
duration of the loan (that is, the fuel savings outweigh the increase
in loan payments by $12-$14 per month). Whether a consumer takes out a
loan or purchases a new vehicle outright, over the lifetime of a model
year 2016 vehicle, consumers would save more than $3,000 due to fuel
savings. The average 2016 MY vehicle will emit 16 fewer metric tons of
CO2 emissions during its lifetime.
This joint proposal also offers the prospect of important
regulatory convergence and certainty to automobile companies. Absent
this proposal, there would be three separate Federal and State regimes
independently regulating light-duty vehicles to reduce fuel consumption
and GHG emissions: NHTSA's CAFE standards, EPA's GHG standards, and the
GHG standards applicable in California and other States adopting the
California standards. This joint proposal would allow automakers to
meet both the NHTSA and EPA requirements with a single national fleet,
greatly simplifying the industry's technology, investment and
compliance strategies. In addition, in a letter dated May 18, 2009,
California stated that it ``recognizes the benefit for the country and
California of a National Program to address greenhouse gases and fuel
economy and the historic announcement of United States Environmental
Protection Agency (EPA) and National Highway Transportation Safety
Administration's (NHTSA) intent to jointly propose a rule to set
standards for both. California fully supports proposal and adoption of
such a National Program.'' To promote the National Program, California
announced its commitment to take several actions, including revising
its program for MYs 2012-2016 such that compliance with the Federal GHG
standards would be deemed to be compliance with California's GHG
standards. This would allow the single national fleet used by
automakers to meet the two Federal requirements and to meet California
requirements as well. This commitment was conditioned on several
points, including EPA GHG standards that are substantially similar to
those described in the May 19, 2009 Notice of Upcoming Joint
Rulemaking. Many automakers and trade associations also announced their
support for the National Program announced that day.\18\ The
manufacturers conditioned their support on EPA and NHTSA standards
substantially similar to those described in that Notice. NHTSA and EPA
met with many vehicle manufacturers to discuss the feasibility of the
National Program. EPA and NHTSA are confident that these proposed GHG
and CAFE standards, if finalized, would successfully harmonize both the
Federal and State programs for MYs 2012-2016 and would allow our
country to achieve the increased benefits of a single, nationwide
program to reduce light-duty vehicle GHG emissions and reduce the
country's dependence on fossil fuels by improving these vehicles' fuel
economy.
---------------------------------------------------------------------------
\18\ These letters are available at https://www.epa.gov/otaq/climate/regulations.htm.
---------------------------------------------------------------------------
A successful and sustainable automotive industry depends upon,
among other things, continuous technology innovation in general, and
low greenhouse gas emissions and high fuel economy vehicles in
particular. In this respect, this proposal would help spark the
investment in technology innovation necessary for automakers to
successfully compete in both domestic and export markets, and thereby
continue to support a strong economy.
While this proposal covers MYs 2012-2016, EPA and NHTSA anticipate
the importance of seeking a strong, coordinated national program for
light-duty vehicles in model years beyond 2016 in a future rulemaking.
Key elements of the proposal for a harmonized and coordinated
program are the level and form of the GHG and CAFE standards, the
available compliance mechanisms, and general implementation elements.
These elements are outlined in the following sections.
C. Background and Comparison of NHTSA and EPA Statutory Authority
This section provides the agencies' respective statutory
authorities under which CAFE and GHG standards are established.
1. NHTSA Statutory Authority
NHTSA establishes CAFE standards for passenger cars and light
trucks for each model year under EPCA, as
[[Page 49461]]
amended by EISA. EPCA mandates a motor vehicle fuel economy regulatory
program to meet the various facets of the need to conserve energy,
including ones having environmental and foreign policy implications.
EPCA allocates the responsibility for implementing the program between
NHTSA and EPA as follows: NHTSA sets CAFE standards for passenger cars
and light trucks; EPA establishes the procedures for testing, tests
vehicles, collects and analyzes manufacturers' data, and calculates the
average fuel economy of each manufacturer's passenger cars and light
trucks; and NHTSA enforces the standards based on EPA's calculations.
a. Standard Setting
We have summarized below the most important aspects of standard
setting under EPCA, as amended by EISA.
For each future model year, EPCA requires that NHTSA establish
standards at ``the maximum feasible average fuel economy level that it
decides the manufacturers can achieve in that model year,'' based on
the agency's consideration of four statutory factors: technological
feasibility, economic practicability, the effect of other standards of
the Government on fuel economy, and the need of the nation to conserve
energy. EPCA does not define these terms or specify what weight to give
each concern in balancing them; thus, NHTSA defines them and determines
the appropriate weighting based on the circumstances in each CAFE
standard rulemaking.\19\
---------------------------------------------------------------------------
\19\ See Center for Biological Diversity v. NHTSA, 538 F.3d.
1172, 1195 (9th Cir. 2008) (``The EPCA clearly requires the agency
to consider these four factors, but it gives NHTSA discretion to
decide how to balance the statutory factors--as long as NHTSA's
balancing does not undermine the fundamental purpose of the EPCA:
Energy conservation.'')
---------------------------------------------------------------------------
For MYs 2011-2020, EPCA further requires that separate standards
for passenger cars and for light trucks be set at levels high enough to
ensure that the CAFE of the industry-wide combined fleet of new
passenger cars and light trucks reaches at least 35 mpg not later than
MY 2020.
i. Factors That Must Be Considered in Deciding the Appropriate
Stringency of CAFE Standards
(1) Technological Feasibility
``Technological feasibility'' refers to whether a particular method
of improving fuel economy can be available for commercial application
in the model year for which a standard is being established. Thus, the
agency is not limited in determining the level of new standards to
technology that is already being commercially applied at the time of
the rulemaking. NHTSA has historically considered all types of
technologies that improve real-world fuel economy, except those whose
effects are not reflected in fuel economy testing. Principal among them
are technologies that improve air conditioner efficiency because the
air conditioners are not turned on during testing under existing test
procedures.
(2) Economic Practicability
``Economic practicability'' refers to whether a standard is one
``within the financial capability of the industry, but not so stringent
as to'' lead to ``adverse economic consequences, such as a significant
loss of jobs or the unreasonable elimination of consumer choice.'' \20\
This factor is especially important in the context of current events,
where the automobile industry is facing significantly adverse economic
conditions, as well as significant loss of jobs. In an attempt to
ensure the economic practicability of attribute-based standards, NHTSA
considers a variety of factors, including the annual rate at which
manufacturers can increase the percentage of its fleet that employs a
particular type of fuel-saving technology, and cost to consumers.
Consumer acceptability is also an element of economic practicability,
one which is particularly difficult to gauge during times of
frequently-changing fuel prices. NHTSA believes this approach is
reasonable for the MY 2012-2016 standards in view of the facts before
it at this time. NHTSA is aware, however, that facts relating to a
variety of key issues in CAFE rulemaking are steadily evolving and
seeks comments on the balancing of these factors in light of the facts
available during the comment period.
---------------------------------------------------------------------------
\20\ 67 FR 77015, 77021 (Dec. 16, 2002).
---------------------------------------------------------------------------
At the same time, the law does not preclude a CAFE standard that
poses considerable challenges to any individual manufacturer. The
Conference Report for EPCA, as enacted in 1975, makes clear, and the
case law affirms, ``a determination of maximum feasible average fuel
economy should not be keyed to the single manufacturer which might have
the most difficulty achieving a given level of average fuel economy.''
\21\ Instead, NHTSA is compelled ``to weigh the benefits to the nation
of a higher fuel economy standard against the difficulties of
individual automobile manufacturers.'' Id. The law permits CAFE
standards exceeding the projected capability of any particular
manufacturer as long as the standard is economically practicable for
the industry as a whole. Thus, while a particular CAFE standard may
pose difficulties for one manufacturer, it may also present
opportunities for another. The CAFE program is not necessarily intended
to maintain the competitive positioning of each particular company.
Rather, it is intended to enhance fuel economy of the vehicle fleet on
American roads, while protecting motor vehicle safety and being mindful
of the risk of harm to the overall United States economy.
---------------------------------------------------------------------------
\21\ CEI-I, 793 F.2d 1322, 1352 (D.C. Cir. 1986).
---------------------------------------------------------------------------
(3) The Effect of Other Motor Vehicle Standards of the Government on
Fuel Economy
``The effect of other motor vehicle standards of the Government on
fuel economy,'' involves an analysis of the effects of compliance with
emission,\22\ safety, noise, or damageability standards on fuel economy
capability and thus on average fuel economy. In previous CAFE
rulemakings, the agency has said that pursuant to this provision, it
considers the adverse effects of other motor vehicle standards on fuel
economy. It said so because, from the CAFE program's earliest years
\23\ until present, the effects of such compliance on fuel economy
capability over the history of the CAFE program have been negative
ones. For example, safety standards that have the effect of increasing
vehicle weight lower vehicle fuel economy capability and thus decrease
the level of average fuel economy that the agency can determine to be
feasible.
---------------------------------------------------------------------------
\22\ In the case of emission standards, this includes standards
adopted by the Federal government and can include standards adopted
by the States as well, since in certain circumstances the Clean Air
Act allows States to adopt and enforce State standards different
from the Federal ones.
\23\ 42 FR 63184, 63188 (Dec. 15, 1977). See also 42 FR 33534,
33537 (Jun. 30, 1977).
---------------------------------------------------------------------------
In the wake of Massachusetts v. EPA and of EPA's proposed
endangerment finding, granting of a waiver to California for its motor
vehicle GHG standards, and its own proposal of GHG standards, NHTSA is
confronted with the issue of how to treat those standards under the
``other motor vehicle standards'' provision. To the extent the GHG
standards result in increases in fuel economy, they would do so almost
exclusively as a result of inducing manufacturers to install the same
types of technologies used by manufacturers in complying with the CAFE
standards. The primary exception would involve increases in the
efficiency of air conditioners.
Comment is requested on whether and in what way the effects of the
California and EPA standards should be
[[Page 49462]]
considered under the ``other motor vehicle standards'' provision or
other provisions of EPCA in 49 U.S.C. 32902, consistent with NHTSA's
independent obligation under EPCA/EISA to issue CAFE standards. The
agency has already considered EPA's proposal and the harmonization
benefits of the National Program in developing its own proposal.
(4) The Need of the United States To Conserve Energy
``The need of the United States to conserve energy'' means ``the
consumer cost, national balance of payments, environmental, and foreign
policy implications of our need for large quantities of petroleum,
especially imported petroleum.'' \24\ Environmental implications
principally include reductions in emissions of criteria pollutants and
carbon dioxide. Prime examples of foreign policy implications are
energy independence and security concerns.
---------------------------------------------------------------------------
\24\ 42 FR 63184, 63188 (1977).
---------------------------------------------------------------------------
(a) Fuel Prices and the Value of Saving Fuel
Projected future fuel prices are a critical input into the
preliminary economic analysis of alternative CAFE standards, because
they determine the value of fuel savings both to new vehicle buyers and
to society. In this rule, NHTSA relies on fuel price projections from
the U.S. Energy Information Administration's (EIA) Annual Energy
Outlook (AEO) for this analysis. Federal government agencies generally
use EIA's projections in their assessments of future energy-related
policies.
(b) Petroleum Consumption and Import Externalities
U.S. consumption and imports of petroleum products impose costs on
the domestic economy that are not reflected in the market price for
crude petroleum, or in the prices paid by consumers of petroleum
products such as gasoline. These costs include (1) higher prices for
petroleum products resulting from the effect of U.S. oil import demand
on the world oil price; (2) the risk of disruptions to the U
