Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards; Final Rule, 25324-25728 [2010-8159]
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Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Parts 85, 86, and 600
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety
Administration
49 CFR Parts 531, 533, 536, 537 and
538
[EPA–HQ–OAR–2009–0472; FRL–9134–6;
NHTSA–2009–0059]
RIN 2060–AP58; RIN 2127–AK50
Light-Duty Vehicle Greenhouse Gas
Emission Standards and Corporate
Average Fuel Economy Standards;
Final Rule
AGENCY: Environmental Protection
Agency (EPA) and National Highway
Traffic Safety Administration (NHTSA).
ACTION: Final rule.
SUMMARY: EPA and NHTSA are issuing
this joint Final Rule 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
Final Rule 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 finalizing greenhouse gas
emissions standards under the Clean Air
Act, and NHTSA is finalizing 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 will 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. NHTSA’s final rule also
constitutes the agency’s Record of
Decision for purposes of its National
Environmental Policy Act (NEPA)
analysis.
DATES: This final rule is effective on July
6, 2010, sixty days after date of
publication in the Federal Register. The
incorporation by reference of certain
publications listed in this regulation is
approved by the Director of the Federal
Register as of July 6, 2010.
ADDRESSES: EPA and NHTSA have
established dockets for this action under
Docket ID No. EPA–HQ–OAR–2009–
0472 and NHTSA–2009–0059,
respectively. All documents in the
docket are listed on the https://
www.regulations.gov Web site. Although
listed in the index, some information is
not publicly available, e.g., CBI or other
information whose disclosure is
restricted by statute. Certain other
material, such as copyrighted material,
is not placed on the Internet and will be
publicly available only in hard copy
form. Publicly available docket
materials are available either
electronically through https://
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
Category
NAICS codes A
Industry ..............
Industry ..............
336111, 336112 ......................................
811112, 811198, 541514 ........................
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ANorth
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:
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
and passenger automobiles (passenger
cars) and non-passenger automobiles
(light trucks) as defined under NHTSA’s
CAFE regulations.2 Regulated categories
and entities include:
Examples of potentially regulated entities
Motor vehicle manufacturers.
Commercial Importers of Vehicles and Vehicle Components.
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.
Table of Contents
I. Overview of Joint EPA/NHTSA National
Program
A. Introduction
1. Building Blocks of the National Program
2. Public Participation
B. Summary of the Joint Final Rule and
Differences From the Proposal
1. Joint Analytical Approach
2. Level of the Standards
3. Form of the Standards
4. Program Flexibilities
5. Coordinated Compliance
C. Summary of Costs and Benefits of the
National Program
1. Summary of Costs and Benefits of
NHTSA’s CAFE Standards
2. Summary of Costs and Benefits of EPA’s
GHG Standards
D. Background and Comparison of NHTSA
and EPA Statutory Authority
II. Joint Technical Work Completed for This
Final Rule
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.
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Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
A. Introduction
B. Developing the Future Fleet for
Assessing Costs, Benefits, and Effects
1. Why did the agencies establish a
baseline and reference vehicle fleet?
2. How did the agencies develop the
baseline vehicle fleet?
3. How did the agencies develop the
projected MY 2011–2016 vehicle fleet?
4. How was the development of the
baseline and reference fleets for this
Final Rule different from NHTSA’s
historical approach?
5. How does manufacturer product plan
data factor into the baseline used in this
Final Rule?
C. Development of Attribute-Based Curve
Shapes
D. Relative Car-Truck Stringency
E. Joint Vehicle Technology Assumptions
1. What technologies did the agencies
consider?
2. How did the agencies determine the
costs and effectiveness of each of these
technologies?
F. Joint Economic Assumptions
G. What are the estimated safety effects of
the final MYs 2012–2016 CAFE and GHG
standards?
1. What did the agencies say in the NPRM
with regard to potential safety effects?
2. What public comments did the agencies
receive on the safety analysis and
discussions in the NPRM?
3. How has NHTSA refined its analysis for
purposes of estimating the potential
safety effects of this Final Rule?
4. What are the estimated safety effects of
this Final Rule?
5. How do the agencies plan to address this
issue going forward?
III. EPA Greenhouse Gas Vehicle Standards
A. Executive Overview of EPA Rule
1. Introduction
2. Why is EPA establishing this Rule?
3. What is EPA adopting?
4. Basis for the GHG Standards Under
Section 202(a)
B. 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 CO2 Standards
Will Be Implemented for Individual
Manufacturers
4. Averaging, Banking, and Trading
Provisions for CO2 Standards
5. CO2 Temporary Lead-Time Allowance
Alternative Standards
6. Deferment of CO2 Standards for Small
Volume Manufacturers With Annual
Sales Less Than 5,000 Vehicles
7. Nitrous Oxide and Methane Standards
8. Small Entity Exemption
C. Additional Credit Opportunities for CO2
Fleet Average Program
1. Air Conditioning Related Credits
2. Flexible Fuel and Alternative Fuel
Vehicle Credits
3. Advanced Technology Vehicle
Incentives for Electric Vehicles, Plug-in
Hybrids, and Fuel Cell Vehicles
4. Off-Cycle Technology Credits
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5. Early Credit Options
D. Feasibility of the Final 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 decides between options to
improve CO2 performance to meet a fleet
average standard?
6. Why are the final 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 Duty Vehicles and Fuel Economy
Labeling
F. How will this Final Rule 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 Climate Indicators
Associated With the Rule’s GHG
Emissions Reductions
G. How will the standards 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 program?
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
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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 Final Rule and Record of
Decision for Passenger Car and Light
Truck CAFE Standards for MYs 2012–
2016
A. Executive Overview of NHTSA Final
Rule
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 Final 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. Energy Policy and Conservation Act, as
Amended by the Energy Independence
and Security Act
C. Development and Feasibility of the Final
Standards
1. How was the baseline and reference
vehicle fleet developed?
2. How were the technology inputs
developed?
3. How did NHTSA develop the economic
assumptions?
4. How does NHTSA use the assumptions
in its modeling analysis?
5. How did NHTSA develop the shape of
the target curves for the final standards?
D. Statutory Requirements
1. EPCA, as Amended by EISA
2. Administrative Procedure Act
3. National Environmental Policy Act
E. What are the final 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 final standards fulfill
NHTSA’s statutory obligations?
G. Impacts of the Final CAFE Standards
1. How will these standards improve fuel
economy and reduce GHG emissions for
MY 2012–2016 vehicles?
2. How will these standards improve fleetwide fuel economy and reduce GHG
emissions beyond MY 2016?
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3. How will these final standards impact
non-GHG emissions and their associated
effects?
4. What are the estimated costs and
benefits of these final standards?
5. How would these standards impact
vehicle sales?
6. Potential Unquantified Consumer
Welfare Impacts of the Final Standards
7. What other impacts (quantitative and
unquantifiable) will these final 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
5. Other CAFE Enforcement Issues—
Miscellaneous
J. Other Near-Term Rulemakings Mandated
by EISA
1. Commercial Medium- and Heavy-Duty
On-Highway Vehicles and Work Trucks
2. Consumer Information on Fuel
Efficiency and Emissions
K. NHTSA’s Record of Decision
L. Regulatory Notices and Analyses
1. Executive Order 12866 and DOT
Regulatory Policies and Procedures
2. National Environmental Policy Act
3. Clean Air Act (CAA)
4. National Historic Preservation Act
(NHPA)
5. Executive Order 12898 (Environmental
Justice)
6. Fish and Wildlife Conservation Act
(FWCA)
7. Coastal Zone Management Act (CZMA)
8. Endangered Species Act (ESA)
9. Floodplain Management (Executive
Order 11988 & DOT Order 5650.2)
10. Preservation of the Nation’s Wetlands
(Executive Order 11990 & DOT Order
5660.1a)
11. Migratory Bird Treaty Act (MBTA),
Bald and Golden Eagle Protection Act
(BGEPA), Executive Order 13186
12. Department of Transportation Act
(Section 4(f))
13. Regulatory Flexibility Act
14. Executive Order 13132 (Federalism)
15. Executive Order 12988 (Civil Justice
Reform)
16. Unfunded Mandates Reform Act
17. Regulation Identifier Number
18. Executive Order 13045
19. National Technology Transfer and
Advancement Act
20. Executive Order 13211
21. Department of Energy Review
22. 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 final rules whose
benefits will address the urgent and
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closely intertwined challenges of energy
independence and security and global
warming. These rules will implement a
strong and coordinated Federal
greenhouse gas (GHG) 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
rules will achieve substantial reductions
of 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. NHTSA’s final rule also
constitutes the agency’s Record of
Decision for purposes of its NEPA
analysis.
This joint rulemaking 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 GHG emissions and improve fuel
economy for all new cars and light-duty
trucks sold in the United States.3 The
National Program will deliver additional
environmental and energy benefits, cost
savings, and administrative efficiencies
on a nationwide basis that would likely
not be available under a less
coordinated approach. The National
Program also represents 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. The
National Program will allow automakers
to produce and sell a single fleet
nationally, mitigating 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, 2009 4 and responds to
the President’s January 26, 2009
memorandum on CAFE standards for
model years 2011 and beyond,5 the
3 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/. 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-fuelefficiency-standards/.
4 74 FR 24007 (May 22, 2009).
5 Available at: https://www.whitehouse.gov/the_
press_office/Presidential_Memorandum_Fuel
_Economy/.
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details of which can be found in Section
IV of this joint notice.
Climate change is widely viewed as a
significant long-term threat to the global
environment. As summarized in the
Technical Support Document for EPA’s
Endangerment and Cause or Contribute
Findings under Section 202(a) of the
Clear Air Act, anthropogenic emissions
of GHGs are very likely (90 to 99 percent
probability) the cause of most of the
observed global warming over the last
50 years.6 The primary GHGs of concern
are carbon dioxide (CO2), methane,
nitrous oxide, hydrofluorocarbons,
perfluorocarbons, and sulfur
hexafluoride. Mobile sources emitted 31
percent of all U.S. GHGs in 2007
(transportation sources, which do not
include certain off-highway sources,
account for 28 percent) and have been
the fastest-growing source of U.S. GHGs
since 1990.7 Mobile sources addressed
in the recent endangerment and
contribution findings under CAA
section 202(a)—light-duty vehicles,
heavy-duty trucks, buses, and
motorcycles—accounted for 23 percent
of all U.S. GHG in 2007.8 Light-duty
vehicles emit CO2, methane, nitrous
oxide, and hydrofluorocarbons and are
responsible for nearly 60 percent of all
mobile source GHGs and over 70
percent of Section 202(a) mobile source
GHGs. For light-duty vehicles in 2007,
CO2 emissions represent about 94
percent of all greenhouse emissions
(including HFCs), and the CO2
emissions measured over the EPA tests
used for fuel economy compliance
represent about 90 percent of total lightduty vehicle GHG emissions.9 10
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.
6 ‘‘Technical Support Document for
Endangerment and Cause or Contribute Findings for
Greenhouse Gases Under Section 202(a) of the
Clean Air Act’’ Docket: EPA–HQ–OAR–2009–0472–
11292, https://epa.gov/climatechange/
endangerment.html.
7 U.S. Environmental Protection Agency. 2009.
Inventory of U.S. Greenhouse Gas Emissions and
Sinks: 1990–2007. EPA 430–R–09–004. Available at
https://epa.gov/climatechange/emissions/
downloads09/GHG2007entire_report-508.pdf.
8 U.S. EPA. 2009 Technical Support Document for
Endangerment and Cause or Contribute Findings for
Greenhouse Gases under Section 202(a) of the Clean
Air Act. Washington, DC. pp. 180–194. Available at
https://epa.gov/climatechange/endangerment/
downloads/Endangerment%20TSD.pdf.
9 U.S. Environmental Protection Agency. 2009.
Inventory of U.S. Greenhouse Gas Emissions and
Sinks: 1990–2007. EPA 430–R–09–004. Available at
https://epa.gov/climatechange/emissions/
downloads09/GHG2007entire_report-508.pdf.
10 U.S. Environmental Protection Agency. RIA,
Chapter 2.
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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 a provision in EPCA
as originally enacted in 1975 requires
the use of the 1975 passenger car test
procedures under which vehicle air
conditioners are not turned on during
fuel economy testing.12 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
1. Building Blocks of the National
vehicle test, a difficult task to
Program
accomplish with precision. The carbon
The National Program is both needed
content of the test fuel 13 is then used to
and possible because the relationship
calculate the amount of fuel that had to
between improving fuel economy and
be consumed per mile in order to
reducing CO2 tailpipe emissions is a
produce that amount of CO2. Finally,
very direct and close one. The amount
that fuel consumption figure is
of those CO2 emissions is essentially
converted into a miles-per-gallon figure.
constant per gallon combusted of a
CAFE standards also do not address the
given type of fuel. Thus, the more fuel
5–8 percent of GHG emissions that are
efficient a vehicle is, the less fuel it
not CO2, i.e., nitrous oxide (N2O), and
burns to travel a given distance. The less methane (CH4) as well as emissions of
fuel it burns, the less CO2 it emits in
CO2 and hydrofluorocarbons (HFCs)
traveling that distance.11 While there are related to operation of the air
emission control technologies that
conditioning system.
reduce the pollutants (e.g., carbon
b. EPA’s GHG Standards for Light-duty
monoxide) produced by imperfect
Vehicles
combustion of fuel by capturing or
Under the Clean Air Act EPA is
converting them to other compounds,
responsible for addressing air pollutants
there is no such technology for CO2.
from motor vehicles. On April 2, 2007,
Further, while some of those pollutants
can also be reduced by achieving a more the U.S. Supreme Court issued its
opinion in Massachusetts v. EPA,14 a
complete combustion of fuel, doing so
case involving EPA’s a 2003 denial of a
only increases the tailpipe emissions of
petition for rulemaking to regulate GHG
CO2. Thus, there is a single pool of
emissions from motor vehicles under
technologies for addressing these twin
section 202(a) of the Clean Air Act
problems, i.e., those that reduce fuel
(CAA).15 The Court held that GHGs fit
consumption and thereby reduce CO2
within the definition of air pollutant in
emissions as well.
the Clean Air Act and further held that
a. DOT’s CAFE Program
the Administrator must determine
In 1975, Congress enacted the Energy
whether or not emissions from new
Policy and Conservation Act (EPCA),
motor vehicles cause or contribute to air
mandating that NHTSA establish and
pollution which may reasonably be
implement a regulatory program for
anticipated to endanger public health or
motor vehicle fuel economy to meet the welfare, or whether the science is too
various facets of the need to conserve
uncertain to make a reasoned decision.
energy, including ones having energy
The Court further ruled that, in making
independence and security,
these decisions, the EPA Administrator
environmental and foreign policy
is required to follow the language of
implications. Fuel economy gains since
section 202(a) of the CAA. The Court
1975, due both to the standards and
12 Although EPCA does not require the use of
market factors, have resulted in saving
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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
historically unprecedented U.S. 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.
11 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.
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1975 test procedures for light trucks, those
procedures are used for light truck CAFE standard
testing purposes.
13 This is the method that EPA uses to determine
compliance with NHTSA’s CAFE standards.
14 549 U.S. 497 (2007).
15 68 FR 52922 (Sept. 8, 2003).
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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.’’ 16 The case was
remanded back to the Agency for
reconsideration in light of the Court’s
decision.17
On December 15, 2009, EPA
published two findings (74 FR 66496):
That emissions of GHGs from new
motor vehicles and motor vehicle
engines contribute to air pollution, and
that the air pollution may reasonably be
anticipated to endanger public health
and welfare.
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.18 The granting of the
waiver permits California and the other
states to proceed with implementing the
California emission standards.
In addition, to promote the National
Program, in May 2009, California
announced its commitment to take
several actions in support of the
National Program, including revising its
16 549
U.S. at 531–32.
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. Also see
74 FR 18886, at 1888–90 (April 24, 2009).
18 74 FR 32744 (July 8, 2009).
17 For
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program for MYs 2009–2011 to facilitate
compliance by the automakers, and
revising its program for MYs 2012–2016
such that compliance with the Federal
GHG standards will be deemed to be
compliance with California’s GHG
standards. This will allow the single
national fleet produced by automakers
to meet the two Federal requirements
and to meet California requirements as
well. California is proceeding with a
rulemaking intended to revise its 2004
regulations to meet its commitments.
Several automakers and their trade
associations also announced their
commitment to take several actions in
support of the National Program,
including not contesting the final GHG
and CAFE standards for MYs 2012–
2016, not contesting any grant of a
waiver of preemption under the CAA for
California’s GHG standards for certain
model years, and to stay and then
dismiss all pending litigation
challenging California’s regulation of
GHG emissions, including litigation
concerning preemption under EPCA of
California’s and other states’ GHG
standards.
2. Public Participation
The agencies proposed their
respective rules on September 28, 2009
(74 FR 49454), and received a large
number of comments representing many
perspectives on the proposed rule. The
agencies received oral testimony at three
public hearings in different parts of the
country, and received written comments
from more than 130 organizations,
including auto manufacturers and
suppliers, States, environmental and
other non-governmental organizations
(NGOs), and over 129,000 comments
from private citizens.
The vast majority of commenters
supported the central tenets of the
proposed CAFE and GHG programs.
That is, there was broad support from
most organizations for a National
Program that achieves a level of 250
gram/mile fleet average CO2, which
would be 35.5 miles per gallon if the
automakers were to meet this CO2 level
solely through fuel economy
improvements. The standards will be
phased in over model years 2012
through 2016 which will allow
manufacturers to build a common fleet
of vehicles for the domestic market. In
general, commenters from the
automobile industry supported the
proposed standards as well as the credit
opportunities and other compliance
provisions providing flexibility, while
also making some recommendations for
changes. Environmental and public
interest non-governmental organizations
(NGOs), as well as most States that
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commented, were also generally
supportive of the National Program
standards. Many of these organizations
also expressed concern about the
possible impact on program benefits,
depending on how the credit provisions
and flexibilities are designed. The
agencies also received specific
comments on many aspects of the
proposal.
Throughout this notice, the agencies
discuss many of the key issues arising
from the public comments and the
agencies’ responses. In addition, the
agencies have addressed all of the
public comments in the Response to
Comments document associated with
this final rule.
B. Summary of the Joint Final Rule and
Differences From the Proposal
In this joint rulemaking, EPA is
establishing GHG emissions standards
under the Clean Air Act (CAA), and
NHTSA is establishing 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 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.
NHTSA and EPA have coordinated
closely and worked jointly in
developing their respective final rules.
This is reflected in many aspects of this
joint rule. 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 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 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
finalizing. Finally, 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
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authority of each agency to take into
consideration the standards of the other
agency, both EPA and NHTSA are
establishing standards that result in a
harmonized National Program.
This joint final rule 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 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 finalized in this notice
will 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, increased
use of hybrid and other advanced
technologies, and the initial
commercialization of electric vehicles
and plug-in hybrids. NHTSA’s and
EPA’s assessments of likely vehicle
technologies that manufacturers will
employ to meet the standards are
discussed in detail below and in the
Joint TSD.
The National Program is estimated to
result in approximately 960 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 (MYs) 2012 through
2016. In total, the combined EPA and
NHTSA 2012–2016 standards will
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 actions also
will provide important energy security
benefits, as light-duty vehicles are about
95 percent dependent on oil-based fuels.
The agencies project that the total
benefits of the National Program will be
more than $240 billion at a 3% discount
rate, or more than $190 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
National Program will be less than
$1,000. The average U.S. consumer who
purchases a vehicle outright is
estimated to save enough in lower fuel
costs over the first three years to offset
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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 will see immediate savings
due to their vehicle’s lower fuel
consumption in the form of a net
reduction in annual costs of $130–$180
throughout the duration of the loan (that
is, the fuel savings will outweigh the
increase in loan payments by $130–$180
per year). Whether a consumer takes out
a loan or purchases a new vehicle
outright, over the lifetime of a model
year 2016 vehicle, the consumer’s net
savings could be more than $3,000. The
average 2016 MY vehicle will emit 16
fewer metric tons of CO2-equivalent
emissions (that is, CO2 emissions plus
HFC air conditioning leakage emissions)
during its lifetime. Assumptions that
underlie these conclusions are
discussed in greater detail in the
agencies’ respective regulatory impact
analyses and in Section III.H.5 and
Section IV.
This joint rule also results in
important regulatory convergence and
certainty to automobile companies.
Absent this rule, 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 rule will
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,
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 will be deemed to be
compliance with California’s GHG
standards. This will allow the single
national fleet used by automakers to
meet the two Federal requirements and
to meet California requirements as well.
California is proceeding with a
rulemaking intended to revise its 2004
regulations to meet its commitments.
EPA and NHTSA are confident that
these GHG and CAFE standards will
successfully harmonize both the Federal
and State programs for MYs 2012–2016
and will 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
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by improving these vehicles’ fuel
economy.
A successful and sustainable
automotive industry depends upon,
among other things, continuous
technology innovation in general, and
low GHG emissions and high fuel
economy vehicles in particular. In this
respect, this action will 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 action covers MYs 2012–
2016, many stakeholders encouraged
EPA and NHTSA to also begin working
toward standards for MY 2017 and
beyond that would maintain a single
nationwide program. The agencies
recognize the importance of and are
committed to a strong, coordinated
national program for light-duty vehicles
for model years beyond 2016.
Key elements of the National Program
finalized today are the level and form of
the GHG and CAFE standards, the
available compliance mechanisms, and
general implementation elements. These
elements are summarized in the
following section, with more detailed
discussions about EPA’s GHG program
following in Section III, and about
NHTSA’s CAFE program in Section IV.
This joint final rule responds to the
wide array of comments that the
agencies received on the proposed rule.
This section summarizes many of the
major comments on the primary
elements of the proposal and describes
whether and how the final rule has
changed, based on the comments and
additional analyses. Major comments
and the agencies’ responses to them are
also discussed in more detail in later
sections of this preamble. For a full
summary of public comments and EPA’s
and NHTSA’s responses to them, please
see the Response to Comments
document associated with this final
rule.
1. Joint Analytical Approach
NHTSA and EPA have worked closely
together on nearly every aspect of this
joint final rule. The extent and results
of this collaboration are reflected in the
elements of the respective NHTSA and
EPA rules, 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 include
the build up of the baseline and
reference fleets, the derivation of the
shape of the curves that define the
standards, a detailed description of the
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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.
EPA and NHTSA have jointly
developed attribute curve shapes that
each agency is using for its final
standards. 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
analysis 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. 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 the new standards. These
are the OMEGA and Volpe models for
EPA and NHTSA, respectively. The
models and their inputs can also be
found in the docket. Further description
of the model and outputs can be found
in Sections III 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 final standards,
which are summarized in the sections
below.
The vast majority of public comments
expressed strong support for the joint
analytical work performed for the
proposal. Commenters generally agreed
with the analytical work and its results,
and supported the transparency of the
analysis and its underlying data. Where
commenters raised specific points, the
agencies have considered them and
made changes where appropriate. The
agencies’ further evaluation of various
technical issues also led to a limited
number of changes. A detailed
discussion of these issues can be found
in Section II of this preamble, and the
Joint TSD.
2. Level of the Standards
In this notice, EPA and NHTSA are
establishing two separate sets of
standards, each under its respective
statutory authorities. EPA is setting
national CO2 emissions standards for
light-duty vehicles under section 202(a)
of the Clean Air Act. These standards
will require these vehicles to meet an
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estimated combined average emissions
level of 250 grams/mile of CO2 in model
year 2016. NHTSA is setting CAFE
standards for passenger cars and light
trucks under 49 U.S.C. 32902. These
standards will require manufacturers of
those vehicles to meet an estimated
combined average fuel economy level of
34.1 mpg in model year 2016. The
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’ standards include some
important differences. Under the CO2
fleet average standards adopted 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 final
CO2 standards. NHTSA did not do so
because EPCA does not allow vehicle
manufacturers to use air conditioning
credits in complying with CAFE
standards for passenger cars.19 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,
improvement in the efficiency of
passenger car air conditioners is not
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 for MY 2016. The 250 grams
per mile of CO2 equivalent emissions
limit is equivalent to 35.5 mpg 20 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 setting
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.
The vast majority of public comments
expressed strong support for the
National Program standards, including
the stringency of the agencies’
respective standards and the phase-in
from model year 2012 through 2016.
There were a number of comments
supporting standards more stringent
than proposed, and a few others
supporting less stringent standards, in
particular for the 2012–2015 model
years. The agencies’ consideration of
comments and their updated technical
analyses led to only very limited
changes in the footprint curves and did
not change the agencies’ projections that
the nationwide fleet will achieve a level
of 250 grams/mile by 2016 (equivalent
to 35.5 mpg). The responses to these
comments are discussed in more detail
in Sections III and IV, respectively, and
in the Response to Comments
document.
As proposed, NHTSA and EPA’s final
standards, like the standards NHTSA
promulgated in March 2009 for 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.21 The
standards that must be met by each
manufacturer’s fleet will be determined
by computing the sales-weighted
average (harmonic average for CAFE) of
the targets applicable to each of the
manufacturer’s passenger cars and light
trucks. Under these footprint-based
standards, the levels required of
individual manufacturers will depend,
as noted above, on the mix of vehicles
sold. NHTSA’s and EPA’s respective
standards are shown in the tables below.
It is important to note that the standards
are the attribute-based curves
established by each agency. The values
in the tables below reflect the agencies’
projection of the corresponding fleet
levels that will result from these
attribute-based curves.
As a result of public comments and
updated economic and future fleet
projections, EPA and NHTSA have
updated the attribute based curves for
this final rule, as discussed in detail in
Section II.B of this preamble and
Chapter 2 of the Joint TSD. This update
in turn affects costs, benefits, and other
impacts of the final standards. Thus, the
agencies have updated their overall
projections of the impacts of the final
rule standards, and these results are
only slightly different from those
presented in the proposed rule.
As shown in Table I.B.2–1, NHTSA’s
fleet-wide CAFE-required levels for
passenger cars under the final standards
are projected to increase from 33.3 to
37.8 mpg between MY 2012 and MY
2016. Similarly, fleet-wide CAFE levels
for light trucks are projected to increase
from 25.4 to 28.8 mpg. 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 numbers
do not include the effects of other
flexibilities and credits in the program.
These standards represent a 4.3 percent
average annual rate of increase relative
to the MY 2011 standards.22
TABLE I.B.2–1—AVERAGE REQUIRED FUEL ECONOMY (mpg) UNDER FINAL CAFE STANDARDS
2011-base
2012
2013
2014
2015
2016
30.4
24.4
33.3
25.4
34.2
26.0
34.9
26.6
36.2
27.5
37.8
28.8
Combined Cars & Trucks .................
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Passenger Cars .......................................
Light Trucks .............................................
27.6
29.7
30.5
31.3
32.6
34.1
19 There is no such statutory limitation with
respect to light trucks.
20 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
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factor of 10,180 grams CO2 per gallon diesel fuel
though for the purposes of this calculation, we are
assuming 100% gasoline fuel.
21 See 49 CFR 523.2 for the exact definition of
‘‘footprint.’’
22 Because required CAFE levels depend on the
mix of vehicles sold by manufacturers in a model
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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 30.4 mpg for
passenger cars, 24.4 mpg for light trucks, and 27.6
mpg for the combined fleet.
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Accounting for the expectation that
some manufacturers could continue to
pay civil penalties rather than achieving
required CAFE levels, and the ability to
use FFV credits,23 NHTSA estimates
that the CAFE standards will 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: 24
TABLE I.B.2–2—PROJECTED FLEET-WIDE ACHIEVED CAFE LEVELS UNDER THE FINAL FOOTPRINT-BASED CAFE
STANDARDS (mpg)
2012
2013
2014
2015
2016
Passenger Cars ...................................................................
Light Trucks .........................................................................
32.3
24.5
33.5
25.1
34.2
25.9
35.0
26.7
36.2
27.5
Combined Cars & Trucks .............................................
28.7
29.7
30.6
31.5
32.7
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.* * * ’’ 25
Based on NHTSA’s current market
forecast, the agency’s estimates of these
minimum standards under the MY
2012–2016 CAFE standards (and, for
comparison, the final MY 2011
standard) are summarized below in
Table I.B.2–3.26 For eventual
compliance calculations, the final
calculated minimum standards will be
updated to reflect the average fuel
economy level required under the final
standards.
TABLE I.B.2–3—ESTIMATED MINIMUM STANDARD FOR DOMESTICALLY MANUFACTURED PASSENGER CARS UNDER MY
2011 AND MY 2012–2016 CAFE STANDARDS FOR PASSENGER CARS (mpg)
2011
2012
2013
2014
2015
2016
27.8
30.7
31.4
32.1
33.3
34.7
EPA is establishing GHG emissions
standards, and Table I.B.2–4 provides
EPA’s estimates of their projected
overall fleet-wide CO2 equivalent
emission levels.27 The g/mi values are
CO2 equivalent values because they
include the projected use of air
conditioning (A/C) credits by
manufacturers, which include both HFC
and CO2 reductions.
TABLE I.B.2–4—PROJECTED FLEET-WIDE EMISSIONS COMPLIANCE LEVELS UNDER THE FOOTPRINT-BASED CO2
STANDARDS (g/mi)
2012
2013
2014
2015
2016
Passenger Cars ...................................................................
Light Trucks .........................................................................
263
346
256
337
247
326
236
312
225
298
Combined Cars & Trucks .............................................
295
286
276
263
250
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As shown in Table I.B.2–4, fleet-wide
CO2 emission level requirements for
cars are projected to increase in
stringency from 263 to 225 g/mi
between MY 2012 and MY 2016.
Similarly, fleet-wide CO2 equivalent
emission level requirements for trucks
are projected to increase in stringency
from 346 to 298 g/mi. As shown, the
overall fleet average CO2 level
requirements are projected to increase
in stringency from 295 g/mi in MY 2012
to 250 g/mi in MY 2016.
EPA anticipates that manufacturers
will take advantage of program
flexibilities such as flexible 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.B.2–4, where full manufacturer
compliance without credit trading is
assumed. Table I.B.2–5 shows EPA’s
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 certain program
flexibilities including flex fueled
vehicle credits and the temporary lead
time allowance alternative standards.
The use of optional air conditioning
credits is considered both in this
analysis of achieved levels and of the
23 The penalties are similar in function to
essentially unlimited, fixed-price allowances.
24 NHTSA’s estimates account for availability of
CAFE credits for the sale of flexible-fuel vehicles
(FFVs), and for the potential that some
manufacturers will pay civil penalties rather than
comply with the CAFE standards. This yields
NHTSA’s estimates of the real-world fuel economy
that will likely be achieved under the final CAFE
standards. NHTSA has not included any potential
impact of car-truck credit transfer in its estimate of
the achieved CAFE levels.
25 49 U.S.C. 32902(b)(4).
26 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.
27 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.
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compliance levels described above. As
can be seen in Table I.B.2–5, the
projected achieved levels are slightly
higher for model years 2012–2015 due
to EPA’s assumptions about
manufacturers’ use of the regulatory
flexibilities, but by model year 2016 the
achieved level is projected to be 250 g/
mi for the fleet.
TABLE I.B.2–5—PROJECTED FLEET-WIDE ACHIEVED EMISSION LEVELS UNDER THE FOOTPRINT-BASED CO2 STANDARDS
(g/mi)
2012
2013
2014
2015
2016
267
365
256
353
245
340
234
324
223
303
Combined Cars & Trucks .............................................
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Passenger Cars ...................................................................
Light Trucks .........................................................................
305
293
280
266
250
Several auto manufacturers stated that
the increasingly stringent requirements
for fuel economy and GHG emissions in
the early years of the program should
follow a more linear phase-in. The
agencies’ consideration of comments
and of their updated technical analyses
did not lead to changes to the phase-in
of the standards discussed above. This
issue is discussed in more detail in
Sections II.D, and in Sections III and IV.
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. Commenters
were in general agreement with this
assessment.28 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 start-stop technology,
improvements in tire rolling resistance,
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 assessments
are that manufacturers will be able to
meet the 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
28 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.
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not on the market today. This rule
allows 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 rule, 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 also
provides manufacturers the opportunity
to plan for compliance using a multiyear time frame, again consistent with
normal business practice. Over these
five model years, there will 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.
Various commenters stated that the
proposed phase-in of the standards
should be introduced more aggressively,
less aggressively, or in a more linear
manner. However, our consideration of
these comments about the phase-in, as
well as our revised analyses, leads us to
conclude that the general rate of
introduction of the standards as
proposed remains appropriate. This
conclusion is also not affected by the
slight difference from the proposal in
the final footprint-based curves. These
issues are addressed further in Sections
III and IV.
Both agencies considered other
standards as part of the rulemaking
analyses, both more and less stringent
than those proposed. EPA’s and
NHTSA’s analyses of alternative
standards are contained in Sections III
and IV of this preamble, respectively, as
well as the agencies’ respective RIAs.
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. Some
environmental and other organizations
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commented that the test procedures
should be improved to reflect more realworld driving conditions; auto
manufacturers in general do not support
such changes to the test procedures at
this time. 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 CAFE test procedures. For that
reason, EPA is using the current CAFE
test procedures for the CO2 standards
and is not changing 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,
although 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
the agencies intend to continue to
evaluate it in the context of a future
rulemaking to address standards for
model year 2017 and thereafter. This
could include consideration of 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 public comments on
these issues and the final procedures for
determining emissions credits for
controls on air conditioners in Section
III.
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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 that will be achieved by the
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 realworld 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
NHTSA and EPA proposed attributebased standards for passenger cars and
light trucks. NHTSA adopted an
attribute approach based on vehicle
footprint in its Reformed CAFE program
for light trucks for model years 2008–
2011,29 and recently extended this
approach to passenger cars in the CAFE
rule for MY 2011 as required by EISA.30
The agencies also proposed using
vehicle footprint as the attribute for the
GHG 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.
Most commenters that expressed a view
on this topic supported basing the
standards on an attribute, and almost all
of these supported the proposed choice
of vehicle footprint as an appropriate
attribute. The agencies continue to
believe that the standards are best
expressed in terms of an attribute, and
29 71
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30 74
FR 17566 (Apr. 6, 2006).
FR 14196 (Mar. 30, 2009).
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that the footprint attribute is the most
appropriate attribute on which to base
the standards. These issues are further
discussed later in this notice and in
Chapter 2 of the Joint TSD.
Under the footprint-based standards,
each manufacturer will have a GHG and
CAFE target unique to its fleet,
depending on the footprints of the
vehicle models produced by that
manufacturer. A manufacturer will have
separate footprint-based standards for
cars and for trucks. Generally, larger
vehicles (i.e., vehicles with larger
footprints) will 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
lower levels of CO2 and higher levels of
fuel economy 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 will be based on its final
model year production figures. A
manufacturer’s calculation of fleet
average emissions at the end of the
model year will thus be based on the
production-weighted average emissions
of each model in its fleet.
The final footprint-based standards
are very similar in shape to those
proposed. NHTSA and EPA include
more discussion of the development of
the final curves in Section II below,
with a full discussion in the Joint TSD.
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.B.3–1 shows the fuel economy (mpg)
car standard curve.
Under an attribute-based standard,
every vehicle model has a performance
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25333
target (fuel economy for the CAFE
standards, and CO2 g/mile for the GHG
emissions standards), the level of which
depends on the vehicle’s attribute (for
this rule, footprint). The manufacturers’
fleet average performance is determined
by the production-weighted 31 average
(for CAFE, harmonic average) of those
targets. NHTSA and EPA are setting
CAFE and CO2 emissions standards
defined by constrained linear functions
and, equivalently, piecewise linear
functions.32 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 establishing 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 will 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.B.3–1 below
illustrates the passenger car CAFE
standard curves for model years 2012
through 2016 while Figure I.B.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 6560–50–P
31 Based on vehicles produced for sale in the
United States.
32 The equations are equivalent but are specified
differently due to differences in the agencies’
respective models.
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EPA is establishing 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 will be
production weighted to determine each
manufacturer’s fleet average standard
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for cars and trucks. As with the CAFE
curves above, the general form of the
equation is the same for each vehicle
category and each year, but the
parameters of the equation differ for cars
and trucks. Again, each parameter also
changes on an annual basis, resulting in
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the yearly increases in stringency.
Figure I.B.3–3 below illustrates the CO2
car standard curves for model years
2012 through 2016 while Figure I.B.3–
4 shows the CO2 truck standard curves
for model years 2012–2016.
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NHTSA and EPA received a number
of comments about the shape of the car
and truck curves. We address these
comments further in Section II.C below
as well as in Sections III and IV.
As proposed, NHTSA and EPA will
use the same vehicle category
definitions for determining which
vehicles are subject to the car curve
standards versus the truck curve
standards. In other words, a vehicle
classified as a car under the NHTSA
CAFE program will also be classified as
a car under the EPA GHG program, and
likewise for trucks. Auto industry
commenters generally agreed with this
approach and believe it is an important
aspect of harmonization across the two
agencies’ programs. Some other
commenters expressed concern about
potential consequences, especially in
how cars and trucks are distinguished.
However, EPA and NHTSA are
employing the same car and truck
definitions for the MY 2012–2016 CAFE
and GHG standards as those used in the
CAFE program for the 2011 model year
standards.33 This issue is further
discussed for the EPA standards in
Section III, and for the NHTSA
standards in Section IV. This approach
of using CAFE definitions allows EPA’s
CO2 standards and the CAFE standards
to be harmonized across all vehicles for
this program. However, EPA is not
changing the car/truck definition for the
purposes of any other previous rules.
Generally speaking, a smaller
footprint vehicle will have higher fuel
economy and lower CO2 emissions
relative to a larger footprint vehicle
when both have the same degree of fuel
efficiency improvement technology. In
this final rule, the standards apply to a
manufacturers overall fleet, not an
individual vehicle, thus a manufacturers
fleet which is dominated by small
footprint vehicles will have a higher
fuel economy requirement (lower CO2
requirement) than a manufacturer
whose fleet is dominated by large
footprint vehicles. A footprint-based
CO2 or CAFE 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
or improve fuel economy, 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. While targets are
manufacturer specific, rather than
vehicle specific, Table I.B.3–1 illustrates
the fact that different vehicle sizes will
have varying CO2 emissions and fuel
economy targets under the final
standards.
TABLE I.B.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)
Example Passenger Cars
Compact car .............................................
Midsize car ................................................
Fullsize car ................................................
Honda Fit ..................................................
Ford Fusion ..............................................
Chrysler 300 .............................................
40
46
53
206
230
263
41.1
37.1
32.6
44
49
55
67
259
279
303
348
32.9
30.6
28.2
24.7
Example Light-duty Trucks
Small SUV ................................................
Midsize crossover .....................................
Minivan ......................................................
Large pickup truck ....................................
4WD Ford Escape ....................................
Nissan Murano .........................................
Toyota Sienna ..........................................
Chevy Silverado .......................................
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4. Program Flexibilities
EPA’s and NHTSA’s programs as
established in this rule 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’
standards includes preserving
manufacturers’ flexibilities in meeting
the standards, to the extent appropriate
and required by law. The following
section provides an overview of this
final rule’s flexibility provisions. Many
auto manufacturers commented in
support of these provisions as critical to
meeting the standards in the lead time
33 49
provided. Environmental groups, some
States, and others raised concerns about
the possibility for windfall credits and
loss of program benefits. The provisions
in the final rule are in most cases the
same as those proposed. However
consideration of the issues raised by
commenters has led to modifications in
certain provisions. These comments and
the agencies’ response are discussed in
Sections III and IV below and in the
Response to Comments document.
a. CO2/CAFE Credits Generated Based
on Fleet Average Performance
Under this NHTSA and EPA final
rule, the fleet average standards that
apply to a manufacturer’s car and truck
fleets are 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 will
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 can
generate credits. Conversely, if the fleet
average CO2/CAFE level does not meet
the standard, the fleet would incur
debits (also referred to as a shortfall).
Under the final 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,
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
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other mobile source standards issued by
EPA under the CAA. The manufacturer
will be able to carry back credits to
offset a deficit that had accrued in a
prior model year and was subsequently
carried over to the current model year.
EPCA also provides for this. EPCA
restricts the carry-back of CAFE credits
to three years, and as proposed EPA is
establishing the same limitation, in
keeping with the goal of harmonizing
both sets of standards.
After satisfying any need to offset preexisting deficits, remaining credits can
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.34 As proposed, under the GHG
program, EPA is also allowing
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. As proposed for purposes of
this rule, EPA allows unlimited credit
transfers across a manufacturer’s cartruck fleet to meet the GHG standard.
This is based on the expectation that
this flexibility will facilitate
manufacturers’ ability to comply with
the GHG standards in the lead time
provided, and will allow the required
GHG emissions reductions to be
achieved in the most cost effective way.
Under the CAA, unlike under EISA,
there is no statutory limitation on cartruck credit transfers. Therefore, EPA is
not constraining car-truck credit
transfers, as doing so would reduce the
flexibility for lead time, and would
increase costs with no corresponding
environmental benefit. For the CAFE
program, however, EISA limits the
amount of credits that may be
transferred, which has the effects of
limiting the extent to which a
manufacturer can rely upon credits in
lieu of making fuel economy
improvements to a particular portion of
its vehicle fleet, but also of potentially
increasing the costs of improving the
manufacturer’s overall fleet. EISA also
prohibits the use of transferred credits
to meet the statutory minimum level for
the domestic car fleet standard.35 These
and other statutory limits will continue
to apply to the determination of
compliance with the CAFE standards.
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. As proposed, EPA
allows 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.36 Comments
discussing these provisions supported
the proposed approach. These final
provisions are the same as proposed.
As further discussed in Section IV of
this preamble, NHTSA sought to find a
way to provide credits for improving the
efficiency of light truck air conditioners
(A/Cs) and solicited public comments to
that end. The agency did so because the
power necessary to operate an A/C
compressor places a significant
additional load on the engine, thus
reducing fuel economy and increasing
CO2 tailpipe emissions. See Section
III.C.1 below. The agency would have
made a similar effort regarding cars, but
a 1975 statutory provision made it
unfruitful even to explore the possibility
of administratively proving such credits
for cars. The agency did not identify a
workable way of providing such credits
for light trucks in the context of this
rulemaking.
b. Air Conditioning Credits Under the
EPA Final Rule
Air conditioning (A/C) systems
contribute to GHG emissions in two
ways. Hydrofluorocarbon (HFC)
refrigerants, which are powerful GHGs,
can leak from the A/C system (direct A/
C emissions). As just noted, operation of
the A/C system also places an additional
load on the engine, which results in
additional CO2 tailpipe emissions
(indirect A/C related emissions). EPA is
allowing manufacturers to generate
credits by reducing either or both types
of GHG emissions related to A/C
35 49
34 49
U.S.C. 32903(a)(2).
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systems. Specifically, EPA is
establishing a method to calculate CO2
equivalent reductions for the vehicle’s
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 that this approach
provides manufacturers with a highly
cost-effective way to achieve a portion
of GHG emissions reductions under the
EPA program. EPA is estimating that
manufacturers will on average generate
11 g/mi GHG credit toward meeting the
250 g/mi by 2016 (though some
companies may generate more). EPA
will also allow manufacturers to earn
early A/C credits starting in MY 2009
through 2011, as discussed further in a
later section. There were many
comments on the proposed A/C
provisions. Nearly every one of these
was supportive of EPA including A/C
control as part of this rule, though there
was some disagreement on some of the
details of the program. The HFC
crediting scheme was widely supported.
The comments mainly were
concentrated on indirect A/C related
credits. The auto manufacturers and
suppliers had some technical comments
on A/C technologies, and there were
many concerns with the proposed idle
test. EPA has made some minor
adjustments in both of these areas that
we believe are responsive to these
concerns. EPA addresses A/C issues in
greater detail in Section III of this
preamble and in Chapter 2 of EPA’s
RIA.
c. Flexible-Fuel and Alternative Fuel
Vehicle Credits
EPCA authorizes a compliance
flexibility 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 E85 capable
vehicles, which can run on either
gasoline or a mixture of up to 85 percent
ethanol and 15 percent gasoline (E85).
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.37 Although NHTSA
37 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
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expressed concern about the non-use of
alternative fuel by FFVs in a 2002 report
to Congress (Effects of the Alternative
Motor Fuels Act CAFE Incentives
Policy), EISA 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, no FFV
credits will be available for CAFE
compliance after MY 2019.38 For
dedicated alternative fuel vehicles, there
are no limits or phase-out of the credits.
As required by the statute, NHTSA will
continue to allow the use of FFV credits
for purposes of compliance with the
CAFE standards until the end of the
EISA phase-out period.
For the GHG program, as proposed,
EPA will allow FFV credits in line with
EISA limits, but only during the period
from MYs 2012 to 2015. After MY 2015,
EPA will only allow FFV credits based
on a manufacturer’s demonstration that
the alternative fuel is actually being
used in the vehicles and based on the
vehicle’s actual performance. EPA
discusses this in more detail in Section
III.C of the preamble, including a
summary of key comments. These
provisions are being finalized as
proposed, with further discussion in
Section III.C of how manufacturers can
demonstrate that the alternative fuel is
being used.
d. Temporary Lead-Time Allowance
Alternative Standards Under the EPA
Final Rule
Manufacturers with limited product
lines may be especially challenged in
the early years of the National Program,
and need additional lead time.
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
manufacturer fleets consist entirely of
vehicles with very high baseline CO2
emissions. Their vehicles are 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 meet the
applicable CAFE standard. EPA believes
that these technological circumstances
call for more lead time in the form of a
more gradual phase-in of standards.
EPA is finalizing a temporary leadtime allowance for manufacturers that
sell vehicles in the U.S. in MY 2009 and
otherwise occur. This is typically referred to as an
FFV credit.
38 Id.
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for which U.S. vehicle sales in that
model year are below 400,000 vehicles.
This allowance will be available only
during the MY 2012–2015 phase-in
years of the program. A manufacturer
that satisfies the threshold criteria will
be able to treat a limited number of
vehicles as a separate averaging fleet,
which will be subject to a less stringent
GHG standard.39 Specifically, a
standard of 25 percent above the
vehicle’s otherwise applicable foot-print
target level will 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 setting 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 will no longer be eligible
for a different standard). EPA discusses
this in more detail in Section III.B of the
preamble.
EPA received comments from several
smaller manufacturers that the TLAAS
program was insufficient to allow
manufacturers with very limited
product lines to comply. These
manufacturers commented that they
need additional lead time to meet the
standards, because their CO2 baselines
are significantly higher and their vehicle
product lines are even more limited,
reducing their ability to average across
their fleets compared even to other
TLAAS manufacturers. EPA fully
summarizes the public comments on the
TLAAS program, including comments
not supporting the program, in Section
III.B. In summary, in response to the
lead time issues raised by
manufacturers, EPA is modifying the
TLAAS program that applies to
manufacturers with between 5,000 and
50,000 U.S. vehicle sales in MY 2009.
EPA believes these provisions are
necessary given that, compared with
other TLAAS manufacturers, these
manufacturers have even more limited
product offerings across which to
average and higher baseline CO2
emissions, and thus need additional
lead-time to meet the standards. These
manufacturers would have an increased
allotment of vehicles, a total of 250,000,
compared to 100,000 vehicles (for other
TLAAS-eligible manufacturers). In
addition, the TLAAS program for these
manufacturers would be extended by
one year, through MY 2016 for these
39 EPCA does not permit such an allowance.
Consequently, manufacturers who may be able to
take advantage of a lead-time allowance under the
GHG standards would be required to comply with
the applicable CAFE standard or be subject to
penalties for non-compliance.
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vehicles, for a total of five years of
eligibility. The other provisions of the
TLAAS program would continue to
apply, such as the restrictions on credit
trading and the level of the standard.
Additional restrictions would also apply
to these vehicles, as discussed in
Section III. In addition, for the smallest
volume manufacturers, those with
below 5,000 U.S. vehicle sales, EPA is
not setting standards at this time but is
instead deferring standards until a
future rulemaking. This is essentially
the same approach we are using for
small businesses, which are exempted
from this rule. The unique issues
involved with these manufacturers will
be addressed in that future rulemaking.
Further discussion of the public
comment on these issues and details on
these changes from the proposed
program are included in Section III.
e. Additional Credit Opportunities
Under the Clean Air Act (CAA)
EPA is establishing additional
opportunities for early credits in MYs
2009–2011 through over-compliance
with a baseline standard. The baseline
standard is set to be equivalent, on a
national level, to the California
standards. Credits can be generated by
over-compliance with this baseline in
one of two ways—over-compliance 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 providing for 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 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 early credits provisions are
designed to ensure that there would be
no double counting of early credits.
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 received comments from some
environmental organizations and States
expressing concern that these early
credits were inappropriate windfall
credits because they provided credits for
actions that were not surplus, that is
above what would otherwise be
required for compliance with either
State or Federal motor vehicle
standards. This focused on the credits
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for over-compliance with the California
standards generated during model years
2009 and perhaps 2010, where
according to commenters the CAFE
requirements were in effect more
stringent than the California standards.
EPA believes that early credits provide
a valuable incentive for manufacturers
that have implemented fuel efficient
technologies in excess of their CAFE
compliance obligations prior to MY
2012. With appropriate restrictions,
these credits, reflecting over-compliance
over a three model year time frame (MY
2009–2011) and not just over one or two
model years, will be surplus reductions
and not otherwise required by law.
Therefore, EPA is finalizing these
provisions largely as proposed, but in
response to comments, with an
additional restriction on the trading of
MY 2009 credits. The overall structure
of this early credit program addresses
concerns about the potential for
windfall credits in the first one or two
model years. This issue is fully
discussed in Section III.C.
EPA is providing an additional
temporary incentive to encourage the
commercialization of advanced GHG/
fuel economy control technologies—
including electric vehicles (EVs), plugin hybrid electric vehicles (PHEVs), and
fuel cell vehicles (FCVs)—for model
years 2012–2016. EPA’s proposal
included an emissions compliance
value of zero grams/mile for EVs and
FCVs, and the electric portion of PHEVs,
and a multiplier in the range of 1.2 to
2.0, so that each advanced technology
vehicle would count as greater than one
vehicle in a manufacturer’s fleetwide
compliance calculation. EPA received
many comments on the proposed
incentives. Many State and
environmental organization commenters
believed that the combination of these
incentives could undermine the GHG
benefits of the rule, and believed the
emissions compliance values should
take into account the net upstream GHG
emissions associated with electrified
vehicles compared to vehicles powered
by petroleum based fuel. Auto
manufacturers generally supported the
incentives, some believing the
incentives to be a critical part of the
National Program. Most auto makers
supported both the zero grams/mile
emissions compliance value and the
higher multipliers.
Upon considering the public
comments on this issue, EPA is
finalizing an advanced technology
vehicle incentive program that includes
a zero gram/mile emissions compliance
value for EVs and FCVs, and the electric
portion of PHEVs, for up to the first
200,000 EV/PHEV/FCV vehicles
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produced by a given manufacturer
during MY 2012–2016 (for a
manufacturer that produces less than
25,000 EVs, PHEVs, and FCVs in MY
2012), or for up to the first 300,000 EV/
PHEV/FCV vehicles produced during
MY 2012–2016 (for a manufacturer that
produces 25,000 or more EVs, PHEVs,
and FCVs in MY 2012). For any
production greater than this amount, the
compliance value for the vehicle will be
greater than zero gram/mile, set at a
level that reflects the vehicle’s net
increase in upstream GHG emissions in
comparison to the gasoline vehicle it
replaces. In addition, EPA is not
finalizing a multiplier. EPA will also
allow this early advanced technology
incentive program beginning in MYs
2009–2011. The purpose of these
provisions is to provide a temporary
incentive to promote technologies
which have the potential to produce
very large GHG reductions in the future.
The tailpipe GHG emissions from EVs,
FCVs, and PHEVs operated on grid
electricity are zero, and traditionally the
emissions of the vehicle itself are all
that EPA takes into account for purposes
of compliance with standards set under
section 202(a). This has not raised any
issues for criteria pollutants, as
upstream emissions associated with
production and distribution of the fuel
are addressed by comprehensive
regulatory programs focused on the
upstream sources of those emissions. At
this time, however, there is no such
comprehensive program addressing
upstream emissions of GHGs, and the
upstream GHG emissions associated
with production and distribution of
electricity are higher than the
corresponding upstream GHG emissions
of gasoline or other petroleum based
fuels. In the future, vehicle fleet
electrification combined with advances
in low-carbon technology in the
electricity sector have the potential to
transform the transportation sector’s
contribution to the country’s GHG
emissions. EPA will reassess the issue of
how to address EVs, PHEVs, and FCVs
in rulemakings for model years 2017
and beyond, based on the status of
advanced vehicle technology
commercialization, the status of
upstream GHG control programs, and
other relevant factors. Further
discussion of the temporary advanced
technology vehicle incentives, including
more detail on the public comments and
EPA’s response, is found in Section
III.C.
EPA is also providing an option for
manufacturers to generate credits for
employing new and innovative
technologies that achieve GHG
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25341
reductions that are not reflected on
current test procedures, as proposed.
Examples of such ‘‘off-cycle’’
technologies might include solar panels
on hybrids, adaptive cruise control, and
active aerodynamics, among other
technologies. These three credit
provisions are discussed in more detail
in Section III.
5. Coordinated Compliance
Previous NHTSA and EPA regulations
and statutory provisions establish ample
examples on which to develop an
effective compliance program that
achieves the energy and environmental
benefits from CAFE and motor vehicle
GHG standards. NHTSA and EPA have
developed 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 coordinated approach, the
compliance mechanisms for both
programs are consistent and nonduplicative. EPA will also apply the
CAA authorities applicable to its
separate in-use requirements in this
program.
The compliance 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 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 National 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
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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
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.
Several stakeholders commented on
the proposed coordinated compliance
approach. The comments indicated
broad support for the overall approach
EPA proposed. In particular, both
regulated industry and the public
interest community appreciated the
attempt to streamline compliance by
adopting current practice where
possible and by coordinating EPA and
NHTSA compliance requirements. Thus
the final compliance program design is
largely unchanged from the proposal.
Some commenters requested additional
detail or clarification in certain areas
and others suggested some relatively
narrow technical changes, and EPA has
responded to these suggestions. EPA
and NHTSA summarize these comments
and the agencies’ responses in Sections
III and IV, respectively, below. The
Response to Comments document
associated with this document includes
all of the comments and responses
received during the comment period.
C. Summary of Costs and Benefits of the
National Program
This section summarizes the projected
costs and benefits of the CAFE and GHG
emissions standards. These projections
helped inform the agencies’ choices
among the alternatives considered and
provide further confirmation that the
final standards are an appropriate
choice within the spectrum of choices
allowable under their respective
statutory criteria. The costs and benefits
projected by NHTSA to result from
these CAFE standards are presented
first, followed by those from EPA’s
analysis of the GHG emissions
standards.
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 standards
would require slightly different fuel
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efficiency improvements. EPA’s 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. NHTSA was unable to make
assumptions about manufacturers’
improving the efficiency of air
conditioners due to statutory
limitations. In addition, the CAFE and
GHG standards offer different program
flexibilities, and the agencies’ analyses
differ in their accounting for these
flexibilities (for example, FFVs),
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.
NHTSA performed two analyses: a
primary analysis that shows the
estimates of costs, fuel savings, and
related benefits that the agency
considered for purposes of establishing
new CAFE standards, and a
supplemental analysis that reflects the
agency’s best estimate of the potential
real-world effects of the CAFE
standards, including manufacturers’
potential use of FFV credits in
accordance with the provisions of EISA
concerning their availability. Because
EPCA prohibits NHTSA from
considering the ability of manufacturers
to use of FFV credits to increase their
fleet average fuel economy when
establishing CAFE standards, the
agency’s primary analysis 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’s supplemental
analysis of the effect of FFV credits on
benefits and costs from its CAFE
standards, demonstrates 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 pervehicle 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 standards, but also under
the baseline MY 2011 CAFE standards.
Also, EPCA, as amended by EISA,
allows manufacturers to transfer credits
between their passenger car and light
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truck fleets. However, EPCA also
prohibits NHTSA from considering
manufacturers’ ability to increase their
average fuel economy through the use of
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
possibility that some manufacturers
might utilize the opportunity under
EPCA to transfer some CAFE credits
between the passenger car and light
truck fleets, but determined that in
NHTSA’s year-by-year analysis,
manufacturers’ credit transfers cannot
be reasonably estimated at this time.40
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 GHG standards
reflect these assumptions. However,
under the GHG standards, FFV credits
would be available through MY 2015;
starting in MY 2016, EPA will only
allow FFV credits based on a
manufacturer’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 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 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
40 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 reasonable 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.
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both the costs and benefits of its CAFE
standards. In contrast, the CAA does not
allow for fine payment (civil penalties)
in lieu of compliance with emission
standards, and EPA’s analysis of
benefits from its standard thus assumes
full compliance. This assumption
results in higher estimates of fuel
savings, of reductions in GHG
emissions, and of manufacturers’
compliance costs to sell fleets that
comply with both NHTSA’s CAFE
program and EPA’s GHG program.
In summary, the projected costs and
benefits presented by NHTSA and EPA
are not directly comparable, because the
GHG emission levels established by EPA
include air conditioning-related
improvements in equivalent fuel
efficiency and HFC reductions, because
of the assumptions incorporated in
EPA’s analysis regarding car-truck credit
transfers, and because of EPA’s
projection of complete compliance with
the GHG standards. It should also be
expected that overall, EPA’s estimates of
GHG reductions and fuel savings
achieved by the 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 passenger car and light trucks GHG
standards are slightly higher than
NHTSA’s estimates for complying with
the CAFE standards.
A number of stakeholders commented
on NHTSA’s and EPA’s analytical
assumptions in estimating costs and
benefits of the program. These
comments and any changes from the
proposed values are summarized in
Section II.F, and further in Sections III
25343
(for EPA) and IV (for NHTSA); the
Response to Comments document
presents the detailed responses to each
of the comments.
NHTSA estimates that these new
CAFE standards will lead to fuel savings
totaling 61 billion gallons throughout
the useful lives of vehicles sold in MYs
2012–2016. At a 3% discount rate, the
1. Summary of Costs and Benefits of
present value of the economic benefits
NHTSA’s CAFE Standards
resulting from those fuel savings is $143
NHTSA has analyzed in detail the
billion. At a 7% discount rate, the
costs and benefits of the final CAFE
present value of the economic benefits
standards. Table I.C.1–1 presents the
total costs, benefits, and net benefits for resulting from those fuel savings is $112
billion.41
NHTSA’s final CAFE standards. The
values in Table I.C.1–1 display the total
The agency further estimates that
costs for all MY 2012–2016 vehicles and these new CAFE standards will lead to
the benefits and net benefits represent
corresponding reductions in CO2
the impacts of the standards over the
emissions totaling 655 million metric
full lifetime of the vehicles projected to
tons (mmt) during the useful lives of
be sold during model years 2012–2016.
vehicles sold in MYs 2012–2016. The
It is important to note that there is
present value of the economic benefits
significant overlap in costs and benefits from avoiding those emissions is $14.5
for NHTSA’s CAFE program and EPA’s
billion, based on a global social cost of
GHG program and therefore combined
carbon value of approximately $21 per
program costs and benefits, which
metric ton (in 2010, and growing
together comprise the National Program,
thereafter).42 It is important to note that
are not a sum of the two individual
NHTSA’s CAFE standards and EPA’s
programs.
GHG standards will both be in effect,
TABLE I.C.1–1—NHTSA’S ESTIMATED and each will lead to increases in
2012–2016 MODEL YEAR COSTS, average fuel economy and CO2
BENEFITS, AND NET BENEFITS emissions reductions. The two agencies’
standards together comprise the
UNDER THE CAFE STANDARDS BENational Program, and this discussion of
FORE FFV CREDITS
costs and benefits of NHTSA’s CAFE
[2007 dollars]
standards does not change the fact that
both the CAFE and GHG standards,
3% Discount Rate:
$billions
jointly, are the source of the benefits
and costs of the National Program.
Costs .......................................
Benefits ...................................
Net Benefits ............................
7% Discount Rate:
Costs .......................................
Benefits ...................................
Net Benefits ............................
51.8
182.5
130.7
51.8
146.3
94.5
TABLE I.C.1–2—NHTSA FUEL SAVED (BILLION GALLONS) AND CO2 EMISSIONS AVOIDED (mmt) UNDER CAFE
STANDARDS (WITHOUT FFV CREDITS)
2012
Fuel (b. gal.) .................................
CO2 (mmt) ....................................
2013
4.2
44
Considering manufacturers’ ability to
earn credit toward compliance by
selling FFVs, NHTSA estimates very
2014
8.9
94
2015
12.5
134
little change in incremental fuel savings
and avoided CO2 emissions, assuming
2016
16.0
172
Total
19.5
210
61.0
655
FFV credits would be used toward both
the baseline and final standards:
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TABLE I.C.1–3—NHTSA FUEL SAVED (BILLION GALLONS) AND CO2 EMISSIONS AVOIDED (MILLION METRIC TONS, MMT)
UNDER CAFE STANDARDS (WITH FFV CREDITS)
2012
Fuel (b. gal.) .............................................
4.9
41 These figures do not account for the
compliance flexibilities that NHTSA is prohibited
from considering when determining the level of
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2013
2014
8.2
2015
11.3
new CAFE standards, because manufacturers’
decisions to use those flexibilities are voluntary.
42 NHTSA also estimated the benefits associated
with three more estimates of a one ton GHG
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2016
15.0
Total
19.1
58.6
reduction in 2010 ($5, $35, and $65), which will
likewise grow thereafter. See Section II for a more
detailed discussion of the social cost of carbon.
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TABLE I.C.1–3—NHTSA FUEL SAVED (BILLION GALLONS) AND CO2 EMISSIONS AVOIDED (MILLION METRIC TONS, MMT)
UNDER CAFE STANDARDS (WITH FFV CREDITS)—Continued
2012
CO2 (mmt) ................................................
2013
2014
53
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’
tendency to travel more when the cost
89
2015
123
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 standards will
produce significant net benefits to
society. Using a 3% discount rate,
NHTSA estimates that the present value
of these benefits would total more than
$180 billion over the useful lives of
2016
163
Total
208
636
vehicles sold during MYs 2012–2016.
More discussion regarding monetized
benefits can be found in Section IV of
this notice and in NHTSA’s Regulatory
Impact Analysis. Note that the benefit
calculation in Tables I.C.1–4 through 1–
7 includes the benefits of reducing CO2
emissions,43 but not the benefits of
reducing other GHG emissions.
TABLE I.C.1–4—NHTSA DISCOUNTED BENEFITS ($BILLION) UNDER THE CAFE STANDARDS (BEFORE FFV CREDITS,
USING 3 PERCENT DISCOUNT RATE)
2012
2013
2014
2015
2016
Total
Passenger Cars .......................................
Light Trucks .............................................
6.8
5.1
15.2
10.7
21.6
15.5
28.7
19.4
35.2
24.3
107.5
75.0
Combined ..........................................
11.9
25.8
37.1
48.0
59.5
182.5
Using a 7% discount rate, NHTSA
estimates that the present value of these
benefits would total more than $145
billion over the same time period.
TABLE I.C.1–5—NHTSA DISCOUNTED BENEFITS ($BILLION) UNDER THE CAFE STANDARDS (BEFORE FFV CREDITS,
USING 7 PERCENT DISCOUNT RATE)
2012
2013
2014
2015
2016
Total
Passenger Cars .......................................
Light Trucks .............................................
5.5
4.0
12.3
8.4
17.5
12.2
23.2
15.3
28.6
19.2
87.0
59.2
Combined ..........................................
9.5
20.7
29.7
38.5
47.8
146.2
NHTSA estimates that FFV credits
could reduce achieved benefits by about
3.8%:
TABLE I.C.1–6A—NHTSA DISCOUNTED BENEFITS ($BILLION) UNDER THE CAFE STANDARDS (WITH FFV CREDITS, USING
A 3 PERCENT DISCOUNT RATE)
2012
2013
2014
2015
2016
Total
Passenger Cars .......................................
Light Trucks .............................................
7.6
6.4
13.7
10.4
19.1
14.6
25.6
19.8
34.0
24.4
100.0
75.6
Combined ..........................................
14.0
24.1
33.7
45.4
58.4
175.6
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TABLE I.C.1–6B—NHTSA DISCOUNTED BENEFITS ($BILLION) UNDER THE CAFE STANDARDS (WITH FFV CREDITS, USING
A 7 PERCENT DISCOUNT RATE)
2012
Passenger Cars .......................................
Light Trucks .............................................
6.1
5.0
43 CO benefits for purposes of these tables are
2
calculated using the $21/ton SCC values. Note that
net present value of reduced GHG emissions is
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2013
2014
11.1
8.2
2015
15.5
11.5
calculated differently than other benefits. The same
discount rate used to discount the value of damages
from future emissions (SCC at 5, 3, and 2.5 percent)
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20.7
15.6
Total
27.6
19.3
80.9
59.7
is used to calculate net present value of SCC for
internal consistency.
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TABLE I.C.1–6B—NHTSA DISCOUNTED BENEFITS ($BILLION) UNDER THE CAFE STANDARDS (WITH FFV CREDITS, USING
A 7 PERCENT DISCOUNT RATE)—Continued
2012
Combined ..........................................
2013
11.2
NHTSA attributes most of these
benefits—about $143 billion (at a 3%
discount rate and excluding
consideration of FFV credits), as noted
above—to reductions in fuel
2014
19.3
2015
27.0
consumption, valuing fuel (for societal
purposes) at the future pre-tax prices
projected in the Energy Information
Administration’s (AEO’s) reference case
forecast from the Annual Energy
2016
36.4
Total
46.9
140.7
Outlook (AEO) 2010 Early Release.
NHTSA’s Final Regulatory Impact
Analysis (FRIA) accompanying this rule
presents a detailed analysis of specific
benefits of the rule.
TABLE I.C.1–7—SUMMARY OF BENEFITS FUEL SAVINGS AND CO2 EMISSIONS REDUCTION DUE TO THE RULE (BEFORE
FFV CREDITS)
Monetized value (discounted)
Amount
3% discount rate
Fuel savings .........................................
CO2 emissions reductions ...................
61.0 billion gallons ...............................
655 mmt ..............................................
NHTSA estimates that the increases in
technology application necessary to
achieve the projected improvements in
fuel economy will entail considerable
7% discount rate
$143.0 billion .......................................
$14.5 billion .........................................
monetary outlays. The agency estimates
that incremental costs for achieving its
standards—that is, outlays by vehicle
manufacturers over and above those
$112.0 billion.
$14.5 billion.
required to comply with the MY 2011
CAFE standards—will total about $52
billion (i.e., during MYs 2012–2016).
TABLE I.C.1–8—NHTSA INCREMENTAL TECHNOLOGY OUTLAYS ($BILLION) UNDER THE CAFE STANDARDS (BEFORE FFV
CREDITS)
2012
2013
2014
2015
2016
Total
Passenger Cars .......................................
Light Trucks .............................................
4.1
1.8
5.4
2.5
6.9
3.7
8.2
4.3
9.5
5.4
34.2
17.6
Combined ..........................................
5.9
7.9
10.5
12.5
14.9
51.7
NHTSA estimates that use of FFV
credits could significantly reduce these
outlays:
TABLE I.C.1–9—NHTSA INCREMENTAL TECHNOLOGY OUTLAYS ($BILLION) UNDER CAFE STANDARDS (WITH FFV
CREDITS)
2012
2013
2014
2015
2016
Total
Passenger Cars .......................................
Light Trucks .............................................
2.6
1.1
3.6
1.5
4.8
2.5
6.1
3.4
7.5
4.4
24.6
12.9
Combined ..........................................
3.7
5.1
7.3
9.5
11.9
37.5
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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
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 standards would lead
to increases in average new vehicle
prices ranging from $457 per vehicle in
MY 2012 to $985 per vehicle in MY
2016:
TABLE I.C.1–10—NHTSA INCREMENTAL INCREASES IN AVERAGE NEW VEHICLE COSTS ($) UNDER CAFE STANDARDS
(BEFORE FFV CREDITS)
2012
Passenger Cars ...................................................................
Light Trucks .........................................................................
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322
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416
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690
621
07MYR2
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799
752
907
961
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TABLE I.C.1–10—NHTSA INCREMENTAL INCREASES IN AVERAGE NEW VEHICLE COSTS ($) UNDER CAFE STANDARDS
(BEFORE FFV CREDITS)—Continued
2012
Combined ......................................................................
2013
434
2014
513
2015
665
2016
782
926
NHTSA estimates that use of FFV
credits could significantly reduce these
costs, especially in earlier model years:
TABLE I.C.1–11—NHTSA INCREMENTAL INCREASES IN AVERAGE NEW VEHICLE COSTS ($) UNDER CAFE STANDARDS
(WITH FFV CREDITS)
2012
2013
2014
2015
2016
Passenger Cars ...................................................................
Light Trucks .........................................................................
303
194
378
260
481
419
593
581
713
784
Combined ......................................................................
261
333
458
589
737
NHTSA estimates, therefore, that the
total benefits of these CAFE standards
will be more than three times the
magnitude of the corresponding costs.
As a consequence, its standards would
produce net benefits of $130.7 billion at
a 3 percent discount rate (with FFV
credits, $138.2 billion) or $94.5 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
EPA’s GHG Standards
EPA has analyzed in detail the costs
and benefits of the final GHG standards.
Table I.C.2–1 shows EPA’s estimated
lifetime discounted cost, benefits and
net benefits for all vehicles projected to
be sold in model years 2012–2016. It is
important to note that there is
significant overlap in costs and benefits
for NHTSA’s CAFE program and EPA’s
GHG program and therefore combined
program costs and benefits are not a
sum of the individual programs.
TABLE I.C.2–1—EPA’S ESTIMATED
2012–2016 MODEL YEAR LIFETIME
DISCOUNTED COSTS, BENEFITS, AND
NET BENEFITS ASSUMING THE $21/
TON SCC VALUE a b c d—Continued
[2007 dollars]
3% Discount rate
$Billions
Net Benefits ............................
189
d Monetized GHG benefits exclude the value
of reductions in non-CO2 GHG emissions
(HFC, CH4 and N2O) expected under this final
rule. Although EPA has not monetized the
benefits of reductions in these non-CO2 emissions, the value of these reductions should not
be interpreted as zero. Rather, the reductions
in non-CO2 GHGs will contribute to this rule’s
climate benefits, as explained in Section
III.F.2. The SCC TSD notes the difference between the social cost of non-CO2 emissions
and CO2 emissions, and specifies a goal to
develop methods to value non-CO2 emissions
in future analyses.
7% Discount rate
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Table I.C.2–2 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.C.2–2 are projected
a Although EPA estimated the benefits assolifetime totals for each model year and
ciated with four different values of a one ton
GHG reduction ($5, $21, $35, $65), for the are not discounted. As documented in
purposes of this overview presentation of esti- EPA’s Final RIA, the potential credit
mated costs and benefits EPA is showing the transfer between cars and trucks may
benefits associated with the marginal value change the distribution of the fuel
deemed to be central by the interagency working group on this topic: $21 per ton of CO2e, savings and GHG emission impacts
in 2007 dollars and 2010 emissions. The $21/ between cars and trucks. As discussed
ton value applies to 2010 CO2 emissions and above with respect to NHTSA’s CAFE
grows over time.
standards, it is important to note that
b As noted in Section III.H, SCC increases
NHTSA’s CAFE standards and EPA’s
over time. The $21/ton value applies to 2010
TABLE I.C.2–1—EPA’S ESTIMATED CO2 emissions and grows larger over time.
GHG standards will both be in effect,
c Note that net present value of reduced
and each will lead to increases in
2012–2016 MODEL YEAR LIFETIME
DISCOUNTED COSTS, BENEFITS, AND GHG emissions is calculated differently than average fuel economy and reductions in
The
discount
NET BENEFITS ASSUMING THE $21/ other benefits. valuesamedamages rate used to CO2 emissions. The two agencies’
discount the
of
from future
TON SCC VALUE a b c d
emissions (SCC at 5, 3, and 2.5 percent) is standards together comprise the
used to calculate net present value of SCC for National Program, and this discussion of
[2007 dollars]
internal consistency. Refer to Section III.H for costs and benefits of EPA’s GHG
more detail.
standards does not change the fact that
3% Discount rate
$Billions
both the CAFE and GHG standards,
jointly, are the source of the benefits
Costs .......................................
51.5
Benefits ...................................
240
and costs of the National Program.
Costs .......................................
Benefits ...................................
Net Benefits ............................
51.5
192
140
TABLE I.C.2–2—EPA’S ESTIMATED 2012–2016 MODEL YEAR LIFETIME FUEL SAVED AND GHG EMISSIONS AVOIDED
2012
Cars ..................
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Fuel (billion barrels) ......................................
CO2 EQ (mmt) ..............................................
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0.10
49.3
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0.13
68.5
2014
7.3
0.17
92.7
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10.5
0.25
134
07MYR2
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14.3
0.34
177
Total
41.6
0.99
521
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TABLE I.C.2–2—EPA’S ESTIMATED 2012–2016 MODEL YEAR LIFETIME FUEL SAVED AND GHG EMISSIONS AVOIDED—
Continued
2012
2013
2014
2015
2016
Total
Light Trucks ......
Fuel (billion gallons) ......................................
Fuel (billion barrels) ......................................
CO2 EQ (mmt) ..............................................
3.3
0.08
39.6
5.0
0.12
61.7
6.6
0.16
81.6
9.0
0.21
111
12.2
0.29
147
36.1
0.86
441
Combined ..
Fuel (billion gallons) ......................................
Fuel (billion barrels) ......................................
CO2 EQ (mmt) ..............................................
7.3
0.17
88.8
10.5
0.25
130
13.9
0.33
174
19.5
0.46
244
26.5
0.63
325
77.7
1.85
962
Table I.C.2–3 shows EPA’s estimated
lifetime discounted benefits for all
vehicles sold in model years 2012–2016.
Although EPA estimated the benefits
associated with four different values of
a one ton GHG reduction ($5, $21, $35,
$65), for the purposes of this overview
presentation of estimated benefits EPA
is showing the benefits associated with
one of these marginal values, $21 per
ton of CO2, in 2007 dollars and 2010
emissions. Table I.C.2–3 presents
benefits based on the $21 value. Section
III.H presents the four marginal values
used to estimate monetized benefits of
GHG reductions and Section III.H
presents the program benefits using
each of the four 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. The values in
the table are discounted values for each
model year of vehicles throughout their
projected lifetimes. 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 four different social
cost of carbon (SCC) values considered
by EPA. The values in Table I.C.2–3 do
not include costs associated with new
technology required to meet the GHG
standard.
TABLE I.C.2–3—EPA’S ESTIMATED 2012–2016 MODEL YEAR LIFETIME DISCOUNTED BENEFITS ASSUMING THE $21/TON
SCC VALUE a b c
[Billions of 2007 dollars]
Model year
Discount rate
2012
3% ............................................................
7% ............................................................
2013
$21.8
17.4
2014
$32.0
25.7
2015
$42.8
34.2
2016
$60.8
48.6
Total
$83.3
66.4
$240
192
a The benefits include all benefits considered by EPA such as the economic value of reduced fuel consumption and accompanying savings in
refueling time, climate-related economic benefits from reducing emissions of CO2 (but not other GHGs), economic benefits from reducing emissions of PM and other air pollutants that contribute to its formation, and reductions in energy security externalities caused by U.S. petroleum consumption and imports. The analysis also includes disbenefits stemming from additional vehicle use, such as the economic damages caused by
accidents, congestion and noise.
b Note that net present value of reduced GHG emissions is calculated differently than other benefits. The same discount rate used to discount
the value of damages from future emissions (SCC at 5, 3, and 2.5 percent) is used to calculate net present value of SCC for internal consistency. Refer to Section III.H for more detail.
c Monetized GHG benefits exclude the value of reductions in non-CO GHG emissions (HFC, CH and N O) expected under this final rule. Al2
4
2
though EPA has not monetized the benefits of reductions in these non-CO2 emissions, the value of these reductions should not be interpreted as
zero. Rather, the reductions in non-CO2 GHGs will contribute to this rule’s climate benefits, as explained in Section III.F.2. The SCC TSD notes
the difference between the social cost of non-CO2 emissions and CO2 emissions, and specifies a goal to develop methods to value non-CO2
emissions in future analyses. Also, as noted in Section III.H, SCC increases over time. The $21/ton value applies to 2010 emissions and grows
larger over time.
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Table I.C.2–4 shows EPA’s estimated
lifetime fuel savings, lifetime CO2
emission reductions, and the monetized
net present values of those fuel savings
and CO2 emission reductions. The
gallons of fuel and CO2 emission
reductions are projected lifetime values
for all vehicles sold in the model years
2012–2016. The estimated fuel savings
in billions of barrels and the GHG
reductions in million metric tons of CO2
shown in Table I.C.2–4 are totals for the
five model years throughout their
projected lifetime and are not
discounted. The monetized values
shown in Table I.C.2–4 are the summed
values of the discounted monetized-fuel
savings and monetized-CO2 reductions
for the five model years 2012–2016
throughout their lifetimes. The
monetized values in Table I.C.2–4
reflect both a 3 percent and a 7 percent
discount rate as noted.
TABLE I.C.2–4—EPA’S ESTIMATED 2012–2016 MODEL YEAR LIFETIME FUEL SAVINGS, CO2 EMISSION REDUCTIONS, AND
DISCOUNTED MONETIZED BENEFITS AT A 3% DISCOUNT RATE
[Monetized values in 2007 dollars]
Amount
Fuel savings ......................................................................................................
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$ value
(billions)
1.8 billion barrels .................................
$182, 3% discount rate.
$142, 7% discount rate.
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TABLE I.C.2–4—EPA’S ESTIMATED 2012–2016 MODEL YEAR LIFETIME FUEL SAVINGS, CO2 EMISSION REDUCTIONS, AND
DISCOUNTED MONETIZED BENEFITS AT A 3% DISCOUNT RATE—Continued
[Monetized values in 2007 dollars]
$ value
(billions)
Amount
CO2e emission reductions (CO2 portion valued assuming $21/ton CO2 in
2010).
962 MMT CO2e ...................................
$17 a b.
a $17 billion for 858 MMT of reduced CO emissions. As noted in Section III.H, the $21/ton value applies to 2010 emissions and grows larger
2
over time. Monetized GHG benefits exclude the value of reductions in non-CO2 GHG emissions (HFC, CH4 and N2O) expected under this final
rule. Although EPA has not monetized the benefits of reductions in these non-CO2 emissions, the value of these reductions should not be interpreted as zero. Rather, the reductions in non-CO2 GHGs will contribute to this rule’s climate benefits, as explained in Section III.F.2. The SCC
TSD notes the difference between the social cost of non-CO2 emissions and CO2 emissions, and specifies a goal to develop methods to value
non-CO2 emissions in future analyses.
b Note that net present value of reduced CO emissions is calculated differently than other benefits. The same discount rate used to discount
2
the value of damages from future emissions (SCC at 5, 3, and 2.5 percent) is used to calculate net present value of SCC for internal consistency. Refer to Section III.H for more detail.
Table I.C.2–5 shows EPA’s estimated
incremental and total technology
outlays for cars and trucks for each of
the model years 2012–2016. The
technology outlays shown in Table
I.C.2–5 are for the industry as a whole
and do not account for fuel savings
associated with the program.
TABLE I.C.2–5—EPA’S ESTIMATED INCREMENTAL TECHNOLOGY OUTLAYS
[Billions of 2007 dollars]
2012
2013
2014
2015
2016
Total
Cars ..........................................................
Trucks ......................................................
$3.1
1.8
$5.0
3.0
$6.5
3.9
$8.0
4.8
$9.4
6.2
$31.9
19.7
Combined ..........................................
4.9
8.0
10.3
12.7
15.6
51.5
Table I.C.2–6 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
cumulative. In other words, the
estimated increase for 2012 model year
cars is $342 relative to a 2012 model
year car absent the National Program.
The estimated increase for a 2013 model
year car is $507 relative to a 2013 model
year car absent the National Program
(not $342 plus $507).
TABLE I.C.2–6—EPA’S ESTIMATED INCREMENTAL INCREASE IN AVERAGE NEW VEHICLE COST
[2007 dollars per unit]
2012
2013
2014
2015
2016
Cars ......................................................................................
Trucks ..................................................................................
$342
314
$507
496
$631
652
$749
820
$869
1,098
Combined ......................................................................
331
503
639
774
948
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D. Background and Comparison of
NHTSA and EPA Statutory Authority
Section I.C of the proposal contained
a detailed overview discussion of the
NHTSA and EPA statutory authorities.
In addition to the discussion in the
proposal, each agency discusses
comments pertaining to its statutory
authority and the agency’s responses in
Sections III and IV of this notice,
respectively.
II. Joint Technical Work Completed for
This Final Rule
A. Introduction
In this section NHTSA and EPA
discuss several aspects of the joint
technical analyses on which the two
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agencies collaborated. These analyses
are common to the development of each
agency’s final standards. Specifically we
discuss: the development of the vehicle
market forecast used by each agency for
assessing costs, benefits, and effects, the
development of the attribute-based
standard curve shapes, the
determination of the relative stringency
between the car and truck fleet
standards, the technologies the agencies
evaluated and their costs and
effectiveness, and the economic
assumptions the agencies included in
their analyses. The Joint Technical
Support Document (TSD) discusses the
agencies’ joint technical work in more
detail.
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B. Developing the Future Fleet for
Assessing Costs, Benefits, and Effects
1. Why did the agencies establish a
baseline and reference vehicle fleet?
In order to calculate the impacts of
the EPA and NHTSA regulations, it is
necessary to estimate the composition of
the future vehicle fleet absent these
regulations, to provide a reference point
relative to which costs, benefits, and
effects of the regulations are assessed.
As in the proposal, EPA and NHTSA
have developed this 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 model years 2011–
2016. This is called the reference fleet.
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The third step was to modify that MY
2011–2016 reference fleet such that it
had sufficient technology to meet the
MY 2011 CAFE standards. This final
version of the reference fleet is the lightduty fleet estimated to exist in MY
2012–2016 in the absence of today’s
standards, based on the assumption that
manufacturers would continue to meet
the MY 2011 CAFE standards (or pay
civil penalties allowed under EPCA 44)
in the absence of further increases in the
stringency of CAFE standards. Each
agency used this approach to develop 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.
EPA and NHTSA proposed a
transparent approach to developing the
baseline and reference fleets, largely
working from publicly available data.
This proposed approach differed from
previous CAFE rules, which relied on
confidential manufacturers’ product
plan information to develop the
baseline. Most of the public comments
to the NPRM addressing this issue
supported this methodology for
developing the inputs to the rule’s
analysis. Because the input sheets can
be made public, stakeholders can verify
and check EPA’s and NHTSA’s
modeling, and perform their own
analyses with these datasets. In this
final rulemaking, EPA and NHTSA are
using an approach very similar to that
proposed, continuing to rely on publicly
available data as the basis for the
baseline and reference fleets.
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2. How did the agencies develop the
baseline vehicle fleet?
At proposal, EPA and NHTSA
developed a baseline fleet comprised of
model year 2008 data gathered from
EPA’s emission certification and fuel
economy database. MY 2008 was used
as the basis for the baseline vehicle fleet
because it was the most recent model
year for which a complete set of data is
publicly available. This remains the
case. Manufacturers are not required to
submit final sales and mpg figures for
MY 2009 until April 2010,45 after the
CAFE standard’s mandated
promulgation date. Consequently, in
this final rule, EPA and NHTSA made
no changes to the method or the results
44 That is, the manufacturers who have
traditionally paid fines under EPCA instead of
complying with the CAFE standards were
‘‘allowed,’’ for purposes of the reference fleet, to
reach only the CAFE level at which paying fines
became more cost-effective than adding technology,
even if that fell short of the MY 2011 standards.
45 40 CFR 600.512–08, Model Year Report.
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of the MY 2008 baseline fleet used at
proposal, except for some specific
corrections to engineering inputs for
some vehicle models reflected in the
market forecast input to NHTSA’s CAFE
model. More details about how the
agencies constructed this baseline fleet
can be found in Chapter 1.2 of the Joint
TSD. Corrections to engineering inputs
for some vehicle models in the market
forecast input to NHTSA’s CAFE model
are discussed in Chapter 2 of the Joint
TSD.
3. How did the agencies develop the
projected MY 2011–2016 vehicle fleet?
EPA and NHTSA have based the
projection of total car and total light
truck sales for MYs 2011–2016 on
projections made by the Department of
Energy’s Energy Information
Administration (EIA). EIA publishes a
mid-term projection of national energy
use called the Annual Energy Outlook
(AEO). 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. In the
proposal, the agencies used the three
reports published by EIA as part of the
AEO 2009. We also stated that updated
versions of these reports could be used
in the final rules should AEO timely
issue a new version. EIA published an
early version of its AEO 2010 in
December 2009, and the agencies are
making use of it in this final
rulemaking. The differences in projected
sales in the 2009 report (used in the
NPRM) and the early 2010 report are
very small, so NHTSA and EPA have
decided to simply scale the NPRM
volumes for cars and trucks (in the
aggregate) to match those in the 2010
report. We thus employ the sales
projections from the scaled updated
2009 Annual Energy Outlook, which is
equivalent to AEO 2010 Early Release,
for the final rule. The scaling factors for
each model year are presented in
Chapter 1 of the Joint TSD for this final
rule.
The agencies recognize that AEO 2010
Early Release does include some
impacts of future projected increases in
CAFE stringency. We have closely
examined the difference between AEO
2009 and AEO 2010 Early Release and
we believe the differences in total sales
and the car/truck split attributed to
considerations of the standard in the
final rule are small.46
46 The agencies have also looked at the impact of
the rule in EIA’s projection, and concluded that the
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In the AEO 2010 Early Release, EIA
projects that total light-duty vehicle
sales will gradually recover from their
currently depressed levels by around
2013. In 2016, car sales are projected to
be 9.4 million (57 percent) and truck
sales are projected to be 7.1 million (43
percent). Although the total level of
sales of 16.5 million units is similar to
pre-2008 levels, the fraction of car sales
is projected to be higher than that
existing in the 2000–2007 timeframe.
This projection reflects the impact of
higher fuel prices, as well as EISA’s
requirement that the new vehicle fleet
average at least 35 mpg by MY 2020.
The agencies note that AEO does not
represent the fleet at a level of detail
sufficient to explicitly account for the
reclassification—promulgated as part of
NHTSA’s final rule for MY 2011 CAFE
standards—of a number of 2-wheel
drive sport utility vehicles from the
truck fleet to the car fleet for MYs 2011
and after. Sales projections of cars and
trucks for future model years can be
found in the Joint TSD for these final
rules.
In addition to a shift towards more car
sales, sales of segments within both the
car and truck markets have been
changing and are expected to continue
to change. Manufacturers are
introducing more crossover models
which offer much of the utility of SUVs
but use more car-like designs. The AEO
2010 report does not, however,
distinguish such changes within the car
and truck classes. In order to reflect
these changes in fleet makeup, EPA and
NHTSA considered several other
available forecasts. 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, modified as
described below, for several reasons
presented in the NPRM preamble 47 and
draft Joint TSD. The changes between
company market share and industry
market segments were most significant
from 2011–2014, while for 2014–2015
the changes were relatively small.
Noting this, and lacking a credible
forecast of company and segment shares
after 2015, the agencies assumed 2016
market share and market segments to be
the same as for 2015.
impact was small. EPA and NHTSA have evaluated
the differences between the AEO 2010 (early draft)
and AEO 2009 and found little difference in the
fleet projections (or fuel prices). This analysis can
be found in the memo to the docket: Kahan, A. and
Pickrell, D. Memo to Docket EPA–HQ–OAR–2009–
0472 and Docket NHTSA–2009–0059. ‘‘Energy
Information Administration’s Annual Energy
Outlook 2009 and 2010.’’ March 24, 2010.
47 See, e.g., 74 FR 49484.
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CSM Worldwide provides quarterly
sales forecasts for the automotive
industry. In the NPRM, the agencies
identified a concern with the 2nd
quarter CSM forecast that was used as
a basis for the projection. CSM
projections at that time were based on
an industry that was going through a
significant financial transition, and as a
result the market share forecasts for
some companies were impacted in
surprising ways. As the industry’s
situation has settled somewhat over the
past year, the 4th quarter projection
appears to address this issue—for
example, it shows nearly a two-fold
increase in sales for Chrysler compared
to significant loss of market share
shown for Chrysler in the 2nd quarter
projection. Additionally, some
commenters, such as GM, recognized
that the fleet appeared to include an
unusually high number of large pickup
trucks.48 In fact, the agencies discovered
(independently of the comments) that
CSM’s standard forecast included all
vehicles below 14,000 GVWR, including
class 2b and 3 heavy duty vehicles,
which are not regulated by this final
rule.49 The commenters were thus
correct that light duty reference fleet
projections at proposal had more full
size trucks and vans due to the mistaken
inclusion of the heavy duty versions of
those vehicles. The agencies requested a
separate data forecast from CSM that
filtered their 4th quarter projection to
exclude these heavy duty vehicles. The
agencies then used this filtered 4th
quarter forecast for the final rule. A
detailed comparison of the market by
manufacturer can be found in the final
TSD. For the public’s reference, copies
of the 2nd, 3rd, and 4th quarter CSM
forecasts have been placed in the docket
for this rulemaking.50
We then projected the CSM forecasts
for relative sales of cars and trucks by
manufacturer and by market segment
onto the total sales estimates of AEO
2010. Tables II.B.3–1 and II.B.3–2 show
the resulting projections for the
reference 2016 model year and compare
these to actual sales that occurred in
baseline 2008 model year. Both tables
show sales using the traditional
definition of cars and light trucks.
TABLE II.B.3–1—ANNUAL SALES OF LIGHT-DUTY VEHICLES BY MANUFACTURER IN 2008 AND ESTIMATED FOR 2016
Cars
2008 MY
Light trucks
2016 MY
2008 MY
2016 MY
Total
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
709,583
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
424,923
340,908
272,252
1,118,727
1,283,937
811,214
401,372
455,643
350,055
49,914
33,471
876,677
230,705
97,466
65,806
2,069,283
586,011
61,324
1,119,397
79,135
1,158,805
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
171,560
525,128
126,880
1,363,256
1,585,828
671,437
211,996
210,717
144,992
88,754
16,749
457,114
95,054
26,108
42,695
1,249,719
124,703
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
596,482
866,037
399,133
2,481,983
2,869,766
1,482,651
613,368
666,360
495,047
138,668
50,220
1,333,790
325,760
123,574
108,501
3,319,002
710,011
Total ..........................................................................
7,034,997
9,468,365
6,806,367
7,112,689
13,841,364
16,580,353
TABLE II.B.3–2—ANNUAL SALES OF LIGHT-DUTY VEHICLES BY MARKET SEGMENT IN 2008 AND ESTIMATED FOR 2016
Cars
Light trucks
2008 MY
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Full-Size Car .....................................
Luxury Car ........................................
Mid-Size Car .....................................
Mini Car .............................................
Small Car ..........................................
Specialty Car .....................................
829,896
1,048,341
2,166,849
617,902
1,912,736
459,273
48 GM argued that the unusually large volume of
large pickups led to higher overall requirements for
those vehicles. As discussed below, the agencies’
analysis for the final rule corrects the number of
large pickups. With this correction and other
updates to the agencies’ market forecast and other
analytical inputs, the target functions defining the
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2016 MY
530,945
1,548,242
2,550,561
1,565,373
2,503,566
769,679
2008 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 ........................................
final standards (and achieving the average required
performance levels defining the national program)
are very similar to those from the NPRM, especially
for light trucks, as illustrated below in Figures II.C–
7 and II.C–8.
49 These include the Ford F–250 & F–350,
Econoline E–250, & E–350; Chevy Express,
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Fmt 4701
Sfmt 4700
1,331,989
452,013
33,384
719,529
110,353
231,265
559,160
436,080
196,424
264,717
923,165
1,548,288
2016 MY
1,379,036
332,082
65,650
839,194
116,077
62,514
232,619
162,502
108,858
260,662
1,372,200
2,181,296
Silverado 2500, & 3500; GMC Savana, Dodge 2500,
& 3500; among others.
50 The CSM Sales Forecast Excel file (‘‘CSM North
America Sales Forecasts 2Q09 3Q09 4Q09 for the
Docket’’) is available in the docket (Docket EPA–
HQ–OAR–2009–0472).
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TABLE II.B.3–2—ANNUAL SALES OF LIGHT-DUTY VEHICLES BY MARKET SEGMENT IN 2008 AND ESTIMATED FOR 2016—
Continued
Cars
Light trucks
2008 MY
Total Sales ** .............................
2016 MY
7,034,997
9,468,365
2008 MY
...........................................................
6,806,367
2016 MY
7,079,323
* MAV—Multi-Activity Vehicle, SUV—Sport Utility Vehicle, CUV—Crossover Utility Vehicle.
** Total Sales are based on the classic Car/Truck definition.
Determining which traditionallydefined trucks will be defined as cars
for purposes of this final rule using the
revised definition established by
NHTSA for MYs 2011 and beyond
requires more detailed information
about each vehicle model. This is
described in greater detail in Chapter 1
of the final TSD.
The forecasts obtained from CSM
provided estimates of car and truck
sales by segment and by manufacturer,
but not by manufacturer for each market
segment. Therefore, NHTSA and EPA
needed other information on which to
base these more detailed projected
market splits. For this task, the agencies
used as a starting point each
manufacturer’s sales by market segment
from model year 2008, which is the
baseline fleet. Because of the larger
number of segments in the truck market,
the agencies 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, the agencies found that
Ford’s 51 cars sales in 2008 were broken
down as shown in Table II.B.3–3:
TABLE II.B.3–3—BREAKDOWN OF
FORD’S 2008 CAR SALES
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Full-size cars .......................
Mid-size Cars ......................
Small/Compact Cars ...........
Subcompact/Mini Cars ........
Luxury cars ..........................
Specialty cars ......................
160,857 units.
170,399 units.
180,249 units.
None.
87,272 units.
110,805 units.
EPA and NHTSA 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 AEO and CSM forecasts.
For example, as indicated in Table
II.B.3–1, Ford’s total car sales in 2008
were 709,583 units, while the agencies
51 Note: In the NPRM, Ford’s 2008 sales per
segment, and the total number of cars was different
than shown here. The change in values is due to
a correction of vehicle segments for some of Ford’s
vehicles.
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project that they will increase to
1,113,333 units by 2016. This represents
an increase of 56.9 percent. Thus, the
agencies increased the 2008 sales of
each Ford car segment by 56.9 percent.
This produced estimates of future sales
which matched total car and truck sales
per AEO and the manufacturer
breakdowns per CSM. However, the
sales splits by market segment would
not necessarily match those of CSM
(shown for 2016 in Table II.B.3–2).
In order to adjust the market segment
mix for cars, the agencies 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,
mid-size cars, and so on? The agencies
have assumed that any changes in the
sales of cars within these three segments
were compensated for by proportional
changes in the sales of the other four car
segments. For example, for 2016, the
figures in Table II.B.3–2 indicate that
luxury car sales in 2016 are 1,548,242
units. Luxury car sales are 1,048,341
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 decreased to
1,523,171 units. Thus, overall for 2016,
luxury car sales had to increase by
25,071 units or 6 percent. The agencies
accordingly increased the luxury car
sales by each manufacturer by this
percentage. The absolute decrease in
luxury car sales was spread across sales
of full-size, mid-size, 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.
The agencies used a slightly different
approach to adjust for changing sales of
the remaining four car segments.
Starting with full-size cars, the agencies
again determined the overall percentage
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Sfmt 4700
change that needed to occur in future
year full-size car sales after 1) adjusting
for total sales per AEO 2010, 2)
adjusting for manufacturer sales mix per
CSM and 3) adjusting 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, the agencies assigned the
entire change to mid-size vehicles. The
agencies did so because the CSM data
followed the trend of increasing
volumes of smaller cars while reducing
volumes of larger cars. If a consumer
had previously purchased a full-size car,
we thought it unlikely that their next
purchase would decrease by two size
categories, down 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
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 model years
2012–2016—the reference fleet—which
matched the total sales projections of
the AEO forecast and the manufacturer
and segment splits of the CSM forecast.
These sales splits can be found in
Chapter 1 of the Joint TSD for this final
rule.
As mentioned above, the agencies
applied a slightly different process to
truck sales, because the agencies 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, the
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agencies applied an iterative, but
straightforward process for adjusting
2008 truck sales to match the AEO and
CSM forecasts.
The first three steps were exactly the
same as for cars. EPA and NHTSA broke
down each manufacturer’s truck sales
into the truck segments as defined by
CSM. The agencies then adjusted all
manufacturers’ truck segment sales by
the same factor so that total truck sales
in each model year matched AEO
projections for truck sales by model
year. The agencies 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, the agencies
adjusted the sales of each truck segment
by a common factor so that total sales
for that segment matched the
combination of the AEO and CSM
forecasts. For example, projected sales
of large pickups across all
manufacturers were 1,286,184 units in
2016 after adjusting total sales to match
AEO’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 AEO’s total sales forecast
indicated total large pickup sales of
1,379,036 units. Thus, we increased
each manufacturer’s sales of large
pickups by 7 percent.52 The agencies
applied the same type of adjustment to
all the other truck segments at the same
time. The result was a set of sales
projections which matched AEO’s total
truck sales projection and CSM’s market
segment forecast. However, after this
step, sales 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
AEO’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 to the desired
52 Note: In the NPRM this example showed 29
percent instead of 7 percent. The significant
decrease was due to using the filtered 4th quarter
CSM forecast. Commenters, such as GM, had
commented that we had too many full-size trucks
and vans, and this change addresses their comment.
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result. The agencies repeated these
adjustments, matching manufacturer
sales mix in one step and then market
segment in the next 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
percent of our goal, which is well
within the needs of this analysis.
The next step in developing the
reference fleets 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—
i.e., the vehicles comprising the baseline
fleet. 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 by interested parties. Two,
because it is constructed beginning with
actual sales data, this vehicle fleet is
limited to vehicle models known to
satisfy consumer demands in light of
price, utility, performance, safety, and
other vehicle attributes.
As noted above, the agencies gathered
most of the information about the 2008
baseline 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 final
rule. Thus, the agencies augmented this
description with publicly available data
which includes more complete
technology descriptions from Ward’s
Automotive Group.53 In a few instances
when required vehicle information
(such as vehicle footprint) was not
available from these two sources, the
agencies obtained this information from
publicly accessible Internet sites such as
Motortrend.com and Edmunds.com.54
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, the agencies placed each vehicle
in the EPA certification database into
one of the CSM market segments. The
agencies then totaled the sales by each
53 Note that WardsAuto.com is a fee-based
service, but all information is public to subscribers.
54 Motortrend.com and Edmunds.com are free,
no-fee Internet sites.
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manufacturer for each market segment.
If the combination of AEO 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 percent 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 percent
of Toyota’s compact car sales.
The projection of average footprint for
both cars and trucks remained virtually
constant over the years covered by the
final rulemaking. This occurrence is
strictly a result of the CSM projections.
There are a number of trends that occur
in the CSM projections that caused the
average footprint to remain constant.
First, as the number of subcompacts
increases, so do the number of 2-wheel
drive crossover vehicles (that are
regulated as cars). Second, truck
volumes have many segment changes
during the rulemaking time frame.
There is no specific footprint related
trend in any segment that can be linked
to the unchanging footprint, but there is
a trend that non-pickups’ volumes will
move from truck segments that are
ladder frame to those that are unibodytype vehicles. A table of the footprint
projections is available in the TSD as
well as further discussion on this topic.
4. How was the development of the
baseline and reference fleets for this
Final Rule different from NHTSA’s
historical approach?
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.
The proposal discusses many of the
advantages and disadvantages of the
market forecast approach used by the
agencies, including the agencies’
interest in examining product plans as
a check on the reference fleet developed
by the agencies for this rulemaking. One
of the primary reasons for the request
for data in 2009 was to obtain
permission from the manufacturers to
make public their product plan
information for model years 2010 and
2011. There are a number of reasons that
this could be advantageous in the
development of a reference fleet. First,
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some known changes to the fleet may
not be captured by the approach of
solely using publicly available
information. For example, the agencies’
current market forecast includes some
vehicles for 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
Mercury Sable, the Pontiac Grand Prix,
the Pontiac G5 and the Saturn Vue.
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. However, although the
agencies recognize that these specific
vehicles will be discontinued, we
continue to include them in the market
forecast because they are useful as a
surrogate for successor vehicles that
may appear in the rulemaking time
frame to replace the discontinued
vehicles in that market segment.55
Second, the agencies’ market forecast
does not include some forthcoming
vehicle models, such as the Chevrolet
Volt, the Ford Fiesta and several
publicly announced electric vehicles,
including the announcements from
Nissan regarding the Leaf. 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 defining
specific vehicle models in the reference
fleet 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.
Chrysler Group LLC has announced
plans to offer small- and medium-sized
cars using Fiat powertrains. 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.
Some commenters, such as CBD and
NESCAUM, suggested that the agencies’
omission of known future vehicles and
technologies in the reference fleet
causes inaccuracies, which CBD further
suggested could lead the agencies to set
lower standards. On the other hand,
55 An example of this is in the GM Pontiac line,
which is in the process of being phased out during
the course of this rulemaking. GM has similar
vehicles within their other brands (like Chevy) that
will ‘‘presumably’’ pick up the loss in Pontiac share.
We model this simply by leaving the Pontiac brand
in.
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CARB commented that ‘‘the likely
impact of this omission is minor.’’
Because the agencies’ analysis examines
the costs and benefits of progressively
adding technology to manufacturers’
fleets, the omission of future vehicles
and technologies primarily affects how
much additional technology (and,
therefore, how much incremental cost
and benefit) is available relative to the
point at which the agencies’
examination of potential new standards
begins. Thus, in fact, the omission only
reflects the reference fleet, rather than
the agencies’ conclusions regarding how
stringent the standards should be. This
is discussed further below. The agencies
believe the above-mentioned comments
by CBD, NESCAUM, and others are
based on a misunderstanding of the
agencies’ approach to analyzing
potential increases in regulatory
stringency. The agencies also note that
manufacturers do not always use
technology solely to increase fuel
economy, and that use of technology to
increase vehicles’ acceleration
performance or utility would probably
make that technology unavailable
toward more stringent standards.
Considering the incremental nature of
the agencies’ analysis, and the
counterbalancing aspects of potentially
omitted technology in the reference
fleet, the agencies believe their
determination of the stringency of new
standards has not been impacted by any
such omissions.
Moreover, EPA and NHTSA believe
that not including such vehicles after
MY 2008 does not significantly impact
our estimates of the technology required
to comply with the standards. If
included, these vehicles could increase
the extent to which manufacturers are,
in the reference case, expected to overcomply with the MY 2011 CAFE
standards, and could thereby make the
new standards appear to cost less and
yield less benefit relative to the
reference case. However, in the
agencies’ judgment, production of the
most advanced technology vehicles,
such as the Chevy Volt or the Nissan
Leaf (for example), will most likely be
too limited during MY 2011 through MY
2016 to significantly impact
manufacturers’ compliance positions.
While we are projecting the
characteristics of the future fleet by
extrapolating from the MY 2008 fleet,
the primary difference between the
future fleet and the 2008 fleet in the
same vehicle segment is the use of
additional CO2-reducing and fuel-saving
technologies. Both the NHTSA and EPA
models add such technologies to
evaluate means of complying with the
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standards, and the costs of doing so.
Thus, our future projections of the
vehicle fleet generally shift vehicle
designs towards those more likely to be
typical of newer vehicles. Compared to
using product plans that show
continued fuel economy increases
planned based on expectations that
CAFE standards will continue to
increase, this approach helps to clarify
the costs and benefits of the new
standards, as the costs and benefits of
all fuel economy improvements beyond
those required by the MY 2011 CAFE
standards are being assigned to the final
rules. In some cases, the ‘‘actual’’ (vs.
projected or ‘‘modeled’’) new vehicles
being introduced into the market by
manufacturers are done so in
anticipation of this rulemaking. On the
other hand, manufacturers may plan to
continue using technologies to improve
vehicle performance and/or utility, not
just fuel economy. Our approach
prevents some of these actual
technological improvements and their
associated cost and fuel economy
improvements from being assumed in
the reference fleet. Thus, the added
technology will not be considered to be
free (or having no benefits) for the
purposes of this rule.
In this regard, the agencies further
note that manufacturer announcements
regarding forward models (or future
vehicle models) need not be accepted
automatically. Manufacturers tend to
limit accurate production intent
information in these releases for reasons
such as: (a) Competitors will closely
examine their information for data in
their product planning decisions; (b) the
press coverage of forward model
announcements is not uniform, meaning
highly anticipated models have more
coverage and materials than models that
may be less exciting to the public and
consistency and uniformity cannot be
ensured with the usage of press
information; and (c) these market
projections are subject to change
(sometimes significant), and
manufacturers may not want to give the
appearance of being indecisive, or
under/over-confident to their
shareholders and the public with
premature release of information.
NHTSA has evaluated the use of
public manufacturer forward model
press information to update the vehicle
fleet inputs to the baseline and reference
fleet. The challenges in this approach
are evidenced by the continuous stream
of manufacturer press releases
throughout a defined rulemaking
period. Manufacturers’ press releases
suffer from the same types of
inaccuracies that many commenters
believe can affect product plans.
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Manufacturers can often be overly
optimistic in their press releases, both
on projected date of release of new
models and on sales volumes.
More generally and more critically, as
discussed in the proposal and as
endorsed by many of the public
comments, there are several advantages
to the approach used by the agencies in
this final rule. 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. 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
addition, by developing baseline and
reference fleets 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. An additional
advantage of the approach used for this
rule is a consistent projection of the
change in fuel economy and CO2
emissions across the various vehicles
from the application of new technology.
With the approach used for this final
rule, the baseline market data comes
from actual vehicles (on the road today)
which have actual fuel economy test
data (in contrast to manufacturer
estimates of future product fuel
economy)—so there is no question what
is the basis for the fuel economy or CO2
performance of the baseline market data
as it is.
5. How does manufacturer product plan
data factor into the baseline used in this
Final Rule?
In the spring and fall of 2009, many
manufacturers submitted product plans
in response to NHTSA’s recent requests
that they do so. 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 for vehicles could
have been looked up on the Internet
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(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 agencies’ 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
manufacturer’s data.
Also, 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 56 for many
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
56 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
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.
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footprint value in order to maintain
accuracy.
Additionally, as discussed in the
NPRM, in an effort to update the 2008
baseline to account for the expected
changes in the fleet in the near-term
model years 2009–2011 described
above, NHTSA requested permission
from the manufacturers to make this
limited product plan information
public. Unfortunately, virtually no
manufacturers agreed to allow the use of
their data after 2009 model year. A few
manufacturers, such as GM and Ford,
stated we could use their 2009 product
plan data after the end of production
(December 31), but this would not have
afforded us sufficient time to do the
analysis for the final rule. Since the
agencies were unable to obtain
consistent updates, the baseline and
reference fleets were not updated
beyond 2008 model year for the final
rule. The 2008 baseline fleet and
projections were instead updated using
the latest AEO and CSM data as
discussed earlier.
NHTSA and EPA recognize that the
approach applied for the current rule
gives transparency and openness of the
vehicle market forecast high priority,
and accommodates minor inaccuracies
that may be introduced by not
accounting for future product mix
changes anticipated in manufacturers’
confidential product plans. For any
future fleet analysis that the agencies are
required to perform, NHTSA and EPA
plan to request that manufacturers
submit product plans and allow some
public release of information. In
performing this analysis, the agencies
plan to reexamine potential tradeoffs
between transparency and technical
reasonableness, and to explain resultant
choices.
C. Development of Attribute-Based
Curve Shapes
In the NPRM, NHTSA and EPA
proposed to set attribute-based 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.57
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
57 49
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to the MYs 2011–2015 CAFE NPRM.
Cummins supported the agencies using
a secondary attribute to account for
towing and hauling capacity in large
trucks, for example, while Ferrari asked
the agencies to consider a multiattribute approach incorporating curb
weight, maximum engine power or
torque, and/or engine displacement, as
it had requested in the previous round
of CAFE rulemaking. An individual, Mr.
Kenneth Johnson, commented that
weight-based standards would be
preferable to footprint-based ones,
because weight correlates better with
fuel economy than footprint, because
the use of footprint does not necessarily
guarantee safety the way the agencies
say it does, and because weight-based
standards would be fairer to
manufacturers.
In response, EPA and NHTSA
continue to believe that the benefits of
footprint-attribute-based standards
outweigh any potential drawbacks
raised by commenters, and that
harmonization between the two
agencies should be the overriding goal
on this issue. As discussed by NHTSA
in the MY 2011 CAFE final rule,58 the
agencies believe that the possibility of
gaming is lowest with footprint-based
standards, as opposed to weight-based
or multi-attribute-based standards.
Specifically, standards that incorporate
weight, torque, power, towing
capability, and/or off-road capability in
addition to footprint would not only be
significantly more complex, but by
providing degrees of freedom with
respect to more easily-adjusted
attributes, they would make it less
certain that the future fleet would
actually achieve the average fuel
economy and CO2 levels projected by
the agencies. The agencies recognize
that based on economic and consumer
demand factors that are external to this
rule, the distribution of footprints in the
future may be different (either smaller
or larger) than what is projected in this
rule. However, the agencies continue to
believe that there will not be significant
shifts in this distribution as a direct
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TARGET =
Where
58 See
consequence of this rule. The agencies
are therefore finalizing MYs 2012–2016
CAFE and GHG standards based on
footprint.
The agencies also recognize that there
could be benefits for a number of
manufacturers if there was greater
international harmonization of fuel
economy and GHG standards, but this is
largely a question of how stringent
standards are and how they are
enforced. It is entirely possible that
footprint-based and weight-based
systems can coexist internationally and
not present an undue burden for
manufacturers if they are carefully
crafted. Different countries or regions
may find different attributes appropriate
for basing standards, depending on the
particular challenges they face—from
fuel prices, to family size and land use,
to safety concerns, to fleet composition
and consumer preference, to other
environmental challenges besides
climate change. The agencies anticipate
working more closely with other
countries and regions in the future to
consider how to mitigate these issues in
a way that least burdens manufacturers
while respecting each country’s need to
meet its own particular challenges.
Under an attribute-based standard,
every vehicle model has a performance
target (fuel economy and CO2 emissions
for CAFE and CO2 emissions standards,
respectively), the level of which
depends on the vehicle’s attribute (for
the proposal, footprint). The
manufacturers’ fleet average
performance is determined by the
production-weighted 59 average (for
CAFE, harmonic average) of those
targets. NHTSA and EPA are
promulgating CAFE and CO2 emissions
standards defined by constrained linear
functions and, equivalently, piecewise
linear functions.60 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 was defined
according to the following formula: 61
1
⎡
1 ⎞ 1⎤
⎛
MIN ⎢ MAX ⎜ c × FOOTPRINT + d, ⎟ , ⎥
a ⎠ b⎦
⎝
⎣
TARGET = the fuel economy target (in mpg)
applicable to vehicles of a given
footprint (FOOTPRINT, in square feet),
74 FR 14359 (Mar. 30, 2009).
for sale in the United States.
59 Production
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a = the function’s upper limit (in mpg),
b = the function’s lower limit (in mpg),
60 The equations are equivalent but are specified
differently due to differences in the agencies’
respective models.
61 This function is linear in fuel consumption but
not in fuel economy.
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goal of coordinating and harmonizing
CO2 standards promulgated under the
CAA and CAFE standards promulgated
under EPCA, EPA also proposed to issue
standards that are attribute-based and
defined by mathematical functions.
There was consensus in the public
comments that EPA should develop
attribute-based CO2 standards.
Comments received in response to the
agencies’ decision to base standards on
vehicle footprint were largely
supportive. Several commenters (BMW,
NADA, NESCAUM) expressed support
for attribute-based (as opposed to flat or
universal) standards generally, and
agreed with EPA’s decision to
harmonize with NHTSA in this respect.
Many commenters (Aluminum
Association, BMW, ICCT, NESCAUM,
NY DEC, Schade, Toyota) also
supported the agencies’ decision to
continue setting CAFE standards, and
begin setting GHG standards, on the
basis of vehicle footprint, although one
commenter (NJ DEP) opposed the use of
footprint due to concern that it
encourages manufacturers to upsize
vehicles and undercut the gains of the
standard. Of the commenters supporting
the use of footprint, several focused on
the benefits of harmonization—both
between EPA and NHTSA, and between
the U.S. and the rest of the world. BMW
commented, for example, that many
other countries use weight-based
standards rather than footprint-based.
While BMW did not object to NHTSA’s
and EPA’s use of footprint-based
standards, it emphasized the impact of
this non-harmonization on
manufacturers who sell vehicles
globally, and asked the agencies to
consider these effects. NADA supported
the use of footprint, but cautioned that
the agencies must be careful in setting
the footprint curve for light trucks to
ensure that manufacturers can continue
to provide functionality like 4WD and
towing/hauling capacity.
Some commenters requested that the
agencies consider other or more
attributes in addition to footprint,
largely reiterating comments submitted
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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
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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.
per-gallon basis, it is plotted as fuel
consumption below. Graphically, the
constrained linear form appears as
shown in Figure II.C–1.
Because the format is linear on a
gallons-per-mile basis, not on a miles-
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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.
EPA proposed the equivalent equation
below for assigning CO2 targets 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
and for each model year. Described
mathematically, EPA’s proposed
piecewise linear function was as
follows:
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Target = a, if x ≤ l
Target = cx + d, if l < x ≤ h
Target = b, if x > h
In the constrained linear form similar in
form to the fuel economy equation
above, this equation takes the simplified
form:
Target = MIN [ MAX (c * x + d, a), b]
Where
Target = the CO2 target value for a given
footprint (in g/mi)
a = the minimum target value (in g/mi CO2) 62
62 These a, b, d coefficients differ from the a, b,
d coefficients in the constrained linear fuel
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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)
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–2.
economy equation primarily by a factor of 8887
(plus an additive factor for air conditioning).
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As for the constrained linear form, the
specific form and stringency of the
piecewise linear function 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 the proposed rules,
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 involved defining the
relevant vehicle characteristics in the
form used by NHTSA’s CAFE model
(e.g., fuel economy, footprint, vehicle
class, technology) described in Section
II.B of this preamble and in Chapter 1
of the Joint TSD. However, because the
baseline fleet utilizes a wide range of
available fuel saving technologies,
NHTSA used the CAFE model to
develop a fleet to which all of the
technologies discussed in Chapter 3 of
the Joint TSD 63 were applied, except
dieselization and strong hybridization.
This was accomplished 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 and EPA
also continued to fit the sloped portion
of the function to vehicle models
between the footprint values at which
the agencies 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 result in stringency levels
that are technologically infeasible and/
or economically impracticable for those
63 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.
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manufacturers that may elect to focus on
the smallest 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
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 and
EPA selected footprints above and
below which to apply constraints (i.e.,
minimum and maximum values) on the
function. The agencies believe that the
linear form performs well in describing
the observed relationship between
footprint and fuel consumption or CO2
emissions for vehicle models within the
footprint ranges covering most vehicle
models, but that the single (as opposed
to piecewise) linear form does not
perform well in describing this
relationship for the smallest and largest
vehicle models. For passenger cars, the
agency noted that several manufacturers
offer small, sporty coupes below 41
square feet, such as the BMW Z4 and
Mini, Honda S2000, Mazda MX–5
Miata, Porsche Carrera and 911, and
Volkswagen New Beetle. Because such
vehicles represent a small portion (less
than 10 percent) of the passenger car
market, yet often have performance,
utility, and/or structural characteristics
that could make it technologically
infeasible and/or economically
impracticable for manufacturers
focusing on such vehicles to achieve the
very challenging average requirements
that could apply in the absence of a
constraint, EPA and NHTSA proposed
to ‘‘cut off’’ the linear portion of the
passenger car function at 41 square feet.
The agencies recognize that for
manufacturers who make small vehicles
in this size range, this cut off creates
some incentive to downsize (i.e., further
reduce the size, and/or increase the
production of models currently smaller
than 41 square feet) to make it easier to
meet the target. The cut off may also
create the incentive for manufacturers
who do not currently offer such models
to do so in the future. However, at the
same time, the agencies believe that
there is a limit to the market for cars
smaller than 41 square feet—most
consumers likely have some minimum
expectation about interior volume,
among other things. The agencies thus
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believe that the number of consumers
who will want vehicles smaller than 41
square feet (regardless of how they are
priced) is small, and that the incentive
to downsize in response to this final
rule, if present, will be minimal. For
consistency, the agency proposed to ‘‘cut
off’’ the light truck function at the same
footprint, although no light trucks are
currently offered below 41 square feet.
The agencies 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 and EPA
therefore also proposed to ‘‘cut off’’ the
linear portion of the passenger car
function at 56 square feet. Finally, the
agencies 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. EPA and
NHTSA therefore proposed to ‘‘cut off’’
the linear portion of the light truck
function at 66 square feet.
Having developed a set of vehicle
emissions and footprint data which
represent the benefit of all non-diesel,
non-hybrid technologies, we determined
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
limits) and the straight line of 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.
Finally, NHTSA calculated the values
of the upper and lower parameters (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.C–3 and II.C–
4 for passenger cars and light 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.
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For trucks, the corresponding MAD was
10 percent.
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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
produce the same fleetwide fuel
economy (and CO2 emission levels) for
cars and light trucks described in the
NPRM.
A number of public comments
generally supported the agencies’ choice
of attribute-based mathematical
functions, as well as the methods
applied to fit the function. Ferrari
indicated support for the use of a
constrained linear form rather than a
constrained logistic form, support for
the application of limits on the
functions’ values, support for a
generally less steep passenger car curve
compared to MY 2011, and support for
the inclusion of all manufacturers in the
analysis used to fit the curves. ICCT also
supported the use of a constrained
linear form. Toyota expressed general
support for the methods and outcome,
including a less-steep passenger car
curve, and the application of limits on
fuel economy targets applicable to the
smallest vehicles. The UAW commented
that the shapes and levels of the curves
are reasonable.
Other commenters suggested that
changes to the agencies’ methods and
results would yield better outcomes. GM
suggested that steeper curves would
provide a greater incentive for limitedline manufacturers to apply technology
to smaller vehicles. GM argued that
steeper and, in their view, fairer curves
could be obtained by using salesweighted least-squares regression rather
than minimization of the unweighted
mean absolute deviation. Conversely,
students from UC Santa Barbara
commented that the passenger car and
light truck curves should be flatter and
should converge over time in order to
encourage the market to turn, as the
agencies’ analysis assumes it will, away
from light trucks and toward passenger
cars.
NADA commented that there should
be no ‘‘cut-off’’ points (i.e., lower limits
or floors), because these de facto
‘‘backstops’’ might limit consumer
choice, especially for light trucks—a
possibility also suggested by the
Alliance. The Alliance and several
individual manufacturers also
commented that the cut-off point for
light trucks should be shifted to 72
square feet (from the proposed 66 square
feet), arguing that the preponderance of
high-volume light truck models with
footprints greater than 66 square feet is
such that a 72 square foot cut-off point
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makes it unduly challenging for
manufacturers serving the large pickup
market and thereby constitutes a de
facto backstop. Also, with respect to the
smallest light truck models, Honda
commented that the cut-off point should
be set at the point defining the smallest
10 percent of the fleet, both for
consistency with the passenger car cutoff point, and to provide a greater
incentive for manufacturers to downsize
the smallest light truck models (which
provide greater functionality than
passenger cars).
Other commenters focused on
whether the agencies should have
separate curves for different fleets or
whether they should have a single curve
that applied to both passenger cars and
light trucks. This issue is related, to
some extent, to commenters who
discussed whether car and truck
definitions should change. CARB, Ford,
and Toyota supported separate curves
for cars and trucks, generally stating that
different fleets have different functional
characteristics and these characteristics
are appropriately addressed by separate
curves. Likewise, AIAM, Chrysler, and
NADA supported leaving the current
definitions of car and truck the same.
CBD, ICCT, and NESCAUM supported a
single curve, based on concerns about
manufacturers gaming the system and
reclassifying passenger cars as light
trucks in order to obtain the often-less
stringent light truck standard, which
could lead to lower benefits than
anticipated by the agencies.
In addition, the students from UC
Santa Barbara reported being unable to
reproduce the agencies’ analysis to fit
curves to the passenger car and light
truck fleets, even when using the model,
inputs, and external analysis files
posted to NHTSA’s Web site when the
NPRM was issued.
Having considered public comments,
NHTSA and EPA have re-examined the
development of curves underlying the
standards proposed in the NPRM, and
are promulgating standards based on the
same underlying curves. The agencies
have made this decision considering
that, while EISA mandates that CAFE
standards be defined by a mathematical
function in terms of one or more
attributes related to fuel economy,
neither EISA nor the CAA require that
the mathematical function be limited to
the observed or theoretical dependence
of fuel economy on the selected
attribute or attributes. As a means by
which CAFE and GHG standards are
specified, the mathematical function
can and does properly play a normative
role. Therefore, NHTSA and EPA have
concluded that, as supported by
comments, the mathematical function
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can reasonably be based on a blend of
analytical and policy considerations, as
discussed below and in the Joint
Technical Support Document.
With respect to GM’s
recommendation that NHTSA and EPA
use weighted least-squares analysis, the
agencies find that the market forecast
used for analysis supporting both the
NPRM and the final rule exhibits the
two key characteristics that previously
led NHTSA to use minimization of the
unweighted Mean Absolute Deviation
(MAD) rather than weighted leastsquares analysis. First, projected modelspecific sales volumes in the agencies’
market forecast cover an extremely wide
range, such that, as discussed in
NHTSA’s rulemaking for MY 2011,
while unweighted regression gives lowselling vehicle models and high-selling
vehicle models equal emphasis, salesweighted regression would give some
vehicle models considerably more
emphasis than other vehicle models.64
The agencies’ intention is to fit a curve
that describes a technical relationship
between fuel economy and footprint,
given comparable levels of technology,
and this supports weighting discrete
vehicle models equally. On the other
hand, sales weighted regression would
allow the difference between other
vehicle attributes to be reflected in the
analysis, and also would reflect
consumer demand.
Second, even after NHTSA’s
‘‘maximum technology’’ analysis to
increase technological parity of vehicle
models before fitting curves, the
agencies’ market forecast contains many
significant outliers. As discussed in
NHTSA’s rulemaking for MY 2011,
MAD is a statistical procedure that has
been demonstrated to produce more
efficient parameter estimates than leastsquares analysis in the presence of
significant outliers.65 In addition, the
64 For example, the agencies’ market forecast
shows MY 2016 sales of 187,000 units for Toyota’s
2WD Sienna, and shows 27 model configurations
with MY 2016 sales of fewer than 100 units.
Similarly, the agencies’ market forecast shows MY
2016 sales of 268,000 for the Toyota Prius, and
shows 29 model configurations with MY 2016 sales
of fewer than 100 units. Sales-weighted analysis
would give the Toyota Sienna and Prius more than
a thousand times the consideration of many vehicle
model configurations. Sales-weighted analysis
would, therefore, cause a large number of vehicle
model configurations to be virtually ignored. See
discussion in NHTSA’s final rule for MY 2011
passenger car and light truck CAFE standards, 74
FR 14368 (Mar. 30, 2009), and in NHTSA’s NPRM
for that rulemaking, 73 FR 24423–24429 (May 2,
2008).
65 Id. In the case of a dataset not drawn from a
sample with a Gaussian, or normal, distribution,
there is often a need to employ robust estimation
methods rather than rely on least-squares approach
to curve fitting. The least-squares approach has as
an underlying assumption that the data are drawn
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agencies remain concerned that the
steeper curves resulting from weighted
least-squares analysis would increase
the risk that energy savings and
environmental benefits would be lower
than projected, because the steeper
curves would provide a greater
incentive to increase sales of larger
vehicles with lower fuel economy
levels. Based on these technical
considerations and these concerns
regarding potential outcomes, the
agencies have decided not to re-fit
curves using weighted least-squares
analysis, but note that they may
reconsider using least-squares
regression in future analysis.
NHTSA and EPA have considered
GM’s comment that steeper curves
would provide a greater incentive for
limited-line manufacturers to apply
technology to smaller vehicles. While
the agencies agree that a steeper curve
would, absent any changes in fleet mix,
tend to shift average compliance
burdens away from GM and toward
companies that make smaller vehicles,
the agencies are concerned, as stated
above, that steeper curves would
increase the risk that induced increases
in vehicle size could erode projected
energy and environmental benefits.
NHTSA and EPA have also
considered the comments by the
students from UC Santa Barbara
indicating that the passenger car and
light truck curves should be flatter and
should converge over time. The agencies
conclude that flatter curves would
reduce the incentives intended in
shifting from ‘‘flat’’ CAFE standards to
attribute-based CAFE and GHG
standards—those being the incentive to
respond to attribute-based standards in
ways that minimize compromises in
vehicle safety, and the incentive for
more manufacturers (than primarily
those selling a wider range of vehicles)
across the range of the attribute to have
to increase the application of fuel-saving
technologies. With regard to whether
the agencies should set separate curves
or a single one, NHTSA also notes that
from a normal distribution, and hence fits a curve
using a sum-of-squares method to minimize errors.
This approach will, in a sample drawn from a nonnormal distribution, give excessive weight to
outliers by making their presence felt in proportion
to the square of their distance from the fitted curve,
and, hence, distort the resulting fit. With outliers in
the sample, the typical solution is to use a robust
method such as a minimum absolute deviation,
rather than a squared term, to estimate the fit (see,
e.g., ‘‘AI Access: Your Access to Data Modeling,’’ at
https://www.aiaccess.net/English/Glossaries/
GlosMod/e_gm_O_Pa.htm#Outlier). The effect on
the estimation is to let the presence of each
observation be felt more uniformly, resulting in a
curve more representative of the data (see, e.g.,
Peter Kennedy, A Guide to Econometrics, 3rd
edition, 1992, MIT Press, Cambridge, MA).
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EPCA requires NHTSA to establish
standards separately for passenger cars
and light trucks, and thus concludes
that the standards for each fleet should
be based on the characteristics of
vehicles in each fleet. In other words,
the passenger car curve should be based
on the characteristics of passenger cars,
and the light truck curve should be
based on the characteristics of light
trucks—thus to the extent that those
characteristics are different, an
artificially-forced convergence would
not accurately reflect those differences.
However, such convergence could be
appropriate depending on future trends
in the light vehicle market, specifically
further reduction in the differences
between passenger car and light truck
characteristics. While that trend was
more apparent when car-like 2WD SUVs
were classified as light trucks, it seems
likely to diminish for the model year
vehicles subject to these rules as the
truck fleet will be more purely ‘‘trucklike’’ than has been the case in recent
years.
NHTSA and EPA have also
considered comments on the maxima
and minima that the agencies have
applied to ‘‘cut off’’ the linear function
underlying the proposed curves for
passenger cars and light trucks. Contrary
to NADA’s suggestion that there should
be no such cut-off points, the agencies
conclude that curves lacking maximum
fuel economy targets (i.e., minimum
CO2 targets) would result in average fuel
economy and GHG requirements that
would not be technologically feasible or
economically practicable for
manufacturers concentrating on those
market segments. In addition, minimum
fuel economy targets (i.e., maximum
CO2 targets) are important to mitigate
the risk to energy and environmental
benefits of potential market shifts
toward large vehicles. The agencies also
disagree with comments by the Alliance
and several individual manufacturers
that the cut-off point for light trucks
should be shifted to 72 square feet (from
the proposed 66 square feet) to ease
compliance burdens facing
manufacturers serving the large pickup
market. Such a shift would increase the
risk that energy and environmental
benefits of the standards would be
compromised by induced increases in
the sales of large pickups, in situations
where the increased compliance burden
is feasible and appropriate. Also, the
agencies’ market forecast suggests that
most of the light trucks models with
footprints larger than 66 square feet
have curb weights near or above 5,000
pounds. This suggests, in turn, that in
terms of highway safety, there is little or
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no need to discourage downsizing of
light trucks with footprints larger than
66 square feet. Based on these energy,
environmental, technological feasibility,
economic practicability, and safety
considerations, the agencies conclude
that the light truck curve should be cut
off at 66 square feet, as proposed, rather
than at 72 square feet. The agencies also
disagree with Honda’s suggestion that
the cut-off point for the smallest trucks
be shifted to a larger footprint value,
because doing so could potentially
increase the incentive to reclassify
vehicles in that size range as light
trucks, and could thereby increase the
possibility that energy and
environmental benefits of the rule
would be less than projected.
Finally, considering comments by the
UC Santa Barbara students regarding
difficulties reproducing NHTSA’s
analysis, NHTSA reexamined its
analysis, and discovered some
erroneous entries in model inputs
underlying the analysis used to develop
the curves proposed in the NPRM.
These errors are discussed in NHTSA’s
final Regulatory Impact Analysis (FRIA)
and have since been corrected. They
include the following: Incorrect
valvetrain phasing and lift inputs for
many BMW engines, incorrect indexing
for some Daimler models, incorrectly
enabled valvetrain technologies for
rotary engines and Atkinson cycle
engines, omitted baseline applications
of cylinder deactivation in some Honda
and GM engines, incorrect valve
phasing codes for some 4-cylinder
Chrysler engines, omitted baseline
applications of advanced transmissions
in some VW models, incorrectly enabled
advanced electrification technologies for
several hybrid vehicle models, and
incorrect DCT effectiveness estimates
for subcompact passenger cars. These
errors, while not significant enough to
impact the overall analysis of
stringency, did affect the fitted slope for
the passenger car curve and would have
prevented precise replication of
NHTSA’s NPRM analysis by outside
parties.
After correcting these errors and
repeating the curve development
analysis presented in the NPRM,
NHTSA obtained the curves shown
below in Figures II.C–5 and II.C–6 for
passenger cars and light 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.
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This refitted passenger car curve is
similar to that presented in the NPRM,
and the refitted light truck curve is
nearly identical to the corresponding
curve in the NPRM. However, the slope
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of the refitted passenger car curve is
about 27 percent steeper (on a gpm per
sf basis) than the curve presented in the
NPRM. For passenger cars and light
trucks, respectively, Figures II.C–7 and
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II.C–8 show the results of adjustment—
discussed in the next section—of the
above curves to yield the average
required fuel economy levels
corresponding to the final standards.
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While the resultant light truck curves
are visually indistinguishable from one
another, the refitted curve for passenger
cars would increase stringency for the
smallest cars, decrease stringency for
the largest cars, and provide a greater
incentive to increase vehicle size
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throughout the range of footprints
within which NHTSA and EPA project
most passenger car models will be sold
through MY 2016. The agencies are
concerned that these changes would
make it unduly difficult for
manufacturers to introduce new small
passenger cars in the United States, and
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unduly risk losses in energy and
environmental benefits by increasing
incentives for the passenger car market
to shift toward larger vehicles.
Also, the agencies note that the
refitted passenger car curve produces
only a slightly closer fit to the corrected
fleet than would the curve estimated in
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the NPRM; with respect to the corrected
fleet (between the ‘‘cut off’’ footprint
values, and after the ‘‘maximum
technology’’ analysis discussed above),
the mean absolute deviation for the
refitted curve is 13.887 percent, and that
of a refitted curve held to the original
slope is 13.933 percent. In other words,
the data support the original slope very
nearly as well as they support the
refitted slope.
Considering NHTSA’s and EPA’s
concerns regarding the change in
incentives that would result from a
refitted curve for passenger cars, and
considering that the data support the
original curves about as well as they
would support refitted curves, the
agencies are finalizing CAFE and GHG
standards based on the curves presented
in the NPRM.
Finally, regarding some commenters’
inability to reproduce the agencies’
NPRM analysis, NHTSA believes that its
correction of the errors discussed above
and its release (on NHTSA’s Web site)
of the updated Volpe model and all
accompanying inputs and external
analysis files should enable outside
parties to independently reproduce the
agencies’ analysis. If outside parties
continue to experience difficulty in
doing so, we encourage them to contact
NHTSA, and the agency will do its best
to provide assistance.
Thus, in summary, the agencies’
approach to developing the attributebased mathematical functions for MY
2012–2016 CAFE and CO2 standards
represents the agencies’ best technical
judgment and consideration of potential
outcomes at this time, and we are
confident that the conclusions have
resulted in appropriate and reasonable
standards. The agencies recognize,
however, that aspects of these decisions
may merit updating or revision in future
analysis to support CAFE and CO2
standards or for other purposes.
Consistent with best rulemaking
practices, the agencies will take a fresh
look at all assumptions and approaches
to curve fitting, appropriate attributes,
and mathematical functions in the
context of future rulemakings.
The agencies also recognized in the
NPRM the possibility that lower fuel
prices could lead to lower fleetwide fuel
economy (and higher CO2 emissions)
than projected in this rule. One way of
addressing that concern is through the
use of a universal standard—that is, an
average standard set at a (single)
absolute level. This is often described as
a ‘‘backstop standard.’’ The agencies
explained that under the CAFE program,
EISA requires such a minimum average
fuel economy standard for domestic
passenger cars, but is silent with regard
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to similar backstops for imported
passenger cars and light trucks, while
under the CAA, a backstop could be
adopted under section 202(a) assuming
it could be justified under the relevant
statutory criteria. NHTSA and EPA also
noted that the flattened portions of the
curves at the largest footprints
directionally address the issue of a
backstop (i.e., the mpg ‘‘floor’’ or gpm
‘‘ceiling’’ applied to the curves provides
a universal and absolute value for that
range of footprints). The agencies sought
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.
The agencies received a number of
comments regarding the need for a
backstop beyond NHTSA’s alternative
minimum standard. Comments were
divided fairly evenly between support
for and opposition to additional
backstop standards. The following
organizations supported the need for
EPA and NHTSA to have explicit
backstop standards: American Council
for an Energy Efficient Economy
(ACEEE), American Lung Association,
California Air Resources Board (CARB),
Environment America, Environment
Defense Fund, Massachusetts
Department of Environmental
Protection, Natural Resources Defense
Council (NRDC), Northeast States for
Coordinated Air Use Management
(NESCAUM), Public Citizen and Safe
Climate Campaign, Sierra Club, State of
Washington Department of Ecology,
Union of Concerned Scientists, and a
number of private citizens. Commenters
in favor of additional backstop
standards for all fleets for both NHTSA
and EPA 66 generally stated that the
emissions reductions and fuel savings
expected to be achieved by MY 2016
depended on assumptions about fleet
mix that might not come to pass, and
that various kinds of backstop standards
or ‘‘ratchet mechanisms’’ 67 were
necessary to ensure that those
reductions were achieved in fact. In
addition, some commenters 68 stated
that manufacturers might build larger
vehicles or more trucks during MYs
66 ACEEE, American Lung Association, CARB,
Christopher Lish, Environment America, EDF, MA
DEP, NRDC, NESCAUM, Public Citizen, Sierra Club
et al., SCAQMD, UCS, WA DE.
67 Commenters generally defined a ‘‘ratchet
mechanism’’ as an automatic re-calculation of
stringency to ensure cumulative goals are reached
by 2016, even if emissions reductions and fuel
savings fall short in the earlier years covered by the
rulemaking.
68 CBD, MA DEP, NJ DEP, Public Citizen, Sierra
Club et al., UCS.
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2012–2016 than the agencies project, for
example, because (1) any amount of
slope in target curves encourages
manufacturers to upsize, and (2) lower
targets for light trucks than for
passenger cars encourage manufacturers
to find ways to reclassify vehicles as
light trucks, such as by dropping 2WD
versions of SUVs and offering only 4WD
versions, perhaps spurred by NHTSA’s
reclassification of 2WD SUVs as
passenger cars. Both of these
mechanisms will be addressed further
below. Some commenters also discussed
EPA authority under the CAA to set
backstops,69 agreeing with EPA’s
analysis that section 202(a) allows such
standards since EPA has wide discretion
under that section to craft standards.
The following organizations opposed
a backstop: Alliance of Automobile
Manufacturers (AAM), Association of
International Automobile Manufacturers
(AIAM), Ford Motor Company, National
Automobile Dealers Association
(NADA), Toyota Motor Company, and
the United Auto Workers Union.
Commenters stating that additional
backstops would not be necessary
disagreed that upsizing was likely,70
and emphasized the anti-backsliding
characteristics of the target curves.
Others argued that universal absolute
standards as backstops could restrict
consumer choice of vehicles.
Commenters making legal arguments
under EPCA/EISA71 stated that
Congress’ silence regarding backstops
for imported passenger cars and light
trucks should be construed as a lack of
authority for NHTSA to create further
backstops. Commenters making legal
arguments under the CAA72 focused on
the lack of clear authority under the
CAA to create multiple GHG emissions
standards for the same fleets of vehicles
based on the same statutory criteria, and
opposed EPA taking steps that would
reduce harmonization with NHTSA in
standard setting. Furthermore, AIAM
indicated that EISA’s requirement that
the combined (car and truck) fuel
economy level reach at least 35 mpg by
69 CARB,
Public Citizen, Sierra Club et al.
example, the Alliance and Toyota said that
upsizing would not be likely because (1) it would
not necessarily make compliance with applicable
standards easier, since larger vehicles tend to be
heavier and heavier vehicles tend to achieve worse
fuel economy/emissions levels; (2) it may require
expensive platform changes; (3) target curves
become increasingly more stringent from year to
year, which reduces the benefits of upsizing; and
(4) the mpg floor and gpm ceiling for the largest
vehicles (the point at which the curve is ‘‘cut off’’)
discourages manufacturers from continuing to
upsize beyond a point because doing so makes it
increasingly difficult to meet the flat standard at
that part of the curve.
71 AIAM, Alliance, Ford, NADA, Toyota.
72 Alliance, Ford, NADA, UAW.
70 For
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2020 itself constitutes a backstop.73 One
individual 74 commented that while
additional backstop standards might be
necessary given optimism of fleet mix
assumptions, both agencies’ authorities
would probably need to be revised by
Congress to clarify that backstop
standards (whether for individual fleets
or for the national fleet as a whole) were
permissible.
In response, EPA and NHTSA remain
confident that their projections of the
future fleet mix are reliable, and that
future changes in the fleet mix of
footprints and sales are not likely to
lead to more than modest changes in
projected emissions reductions or fuel
savings.75 Both agencies thus remain
confident in these fleet projections and
the resulting emissions reductions and
fuel savings from the standards. As
explained in Section II.B above, the
agencies’ projections of the future fleet
are based on the most transparent
information currently available to the
agencies. In addition, there are only a
relatively few model years at issue.
Moreover, market trends today are
73 NHTSA and EPA agree with AIAM that the
EISA 35 mpg requirement in MY 2020 has a
backstop-like function, in that it requires a certain
level of achieved fleetwide fuel economy by a
certain date, although it is not literally a backstop
standard. Considering that NHTSA’s MY 2011
CAFE standards increased projected average fuel
economy requirements (relative to the MY 2010
standards) at a significantly faster rate than would
be required to achieve the 35-in-2020 requirement,
and considering that the standards being finalized
today would increase projected average combined
fuel economy requirements to 34.1 mpg in MY
2016, four years before MY 2020, the agencies
believe that the U.S. vehicle market would have to
shift in highly unexpected ways in order to put the
35-in-2020 requirement at risk, even despite the fact
that due to the attribute-based standards, average
fuel economy requirements will vary depending on
the mix of vehicles produced for sale in the U.S.
in each model year. The agencies further emphasize
that both NHTSA and EPA plan to conduct and
document retrospective analyses to evaluate how
the market’s evolution during the rulemaking
timeframe compares with the agencies’ forecasts
employed for this rulemaking. Additionally, we
emphasize that both agencies have the authority,
given sufficient lead time, to revise their standards
upwards if necessary to avoid missing the 35-in2020 requirement.
74 Schade.
75 For reference, NHTSA’s March 2009 final rule
establishing MY 2011 CAFE standards was based on
a forecast that passenger cars would represent 57.6
percent of the MY 2011 fleet, and that MY 2011
passenger cars and light trucks would average 45.6
square feet (sf) and 55.1 sf, respectively, such that
average required CAFE levels would be 30.2 mpg,
24.1 mpg, and 27.3 mpg, respectively, for passenger
cars, light trucks, and the overall light-duty fleet.
Based on the agencies’ current market forecast, even
as soon as MY 2011, passenger cars will comprise
a larger share (59.2 percent) of the light vehicle
market; passenger cars and light trucks will, on
average, be smaller by 0.5 sf and 1.3 sf, respectively;
and average required CAFE levels will be higher by
0.2 mpg, 0.3 mpg, and 0.3 mpg, respectively, for
passenger cars, light trucks, and the overall lightduty fleet.
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consistent with the agencies’ estimates,
showing shifts from light trucks to
passenger cars and increased emphasis
on fuel economy from all vehicles.
Finally, the shapes of the curves,
including the ‘‘flattening’’ at the largest
footprint values, tend to avoid or
minimize regulatory incentives for
manufacturers to upsize their fleet to
change their compliance burden. Given
the way the curves are fit to the data
points (which represent vehicle models’
fuel economy mapped against their
footprint), the agencies believe that
there is little real benefit to be gained by
a manufacturer upsizing their vehicles.
As discussed above, the agencies’
analysis indicates that, for passenger car
models with footprints falling between
the two flattened portions of the
corresponding curve, the actual slope of
fuel economy with respect to footprint,
if fit to that data by itself, is about 27
percent steeper than the curve the
agencies are promulgating today. This
difference suggests that manufacturers
would, if anything, have more to gain by
reducing vehicle footprint than by
increasing vehicle footprint. For light
trucks, the agencies’ analysis indicates
that, for models with footprints falling
between the two flatted portions of the
corresponding curve, the slope of fuel
economy with respect to footprint is
nearly identical to the curve the
agencies are promulgating today. This
suggests that, within this range,
manufacturers would typically have
little incentive to either incrementally
increase or reduce vehicle footprint. The
agencies recognize that based on
economic and consumer demand factors
that are external to this rule, the
distribution of footprints in the future
may be different (either smaller or
larger) than what is projected in this
rule. However, the agencies continue to
believe that there will not be significant
shifts in this distribution as a direct
consequence of this rule.
At the same time, adding another
backstop standard would have virtually
no effect if the standard was weak, but
a more stringent backstop could
compromise the objectives served by
attribute-based standards—that they
distribute compliance burdens more
equally among manufacturers, and at
the same time encourage manufacturers
to apply fuel-saving technologies rather
than simply downsizing their vehicles,
as they did in past decades under flat
standards. This is why Congress
mandated attribute-based CAFE
standards in EISA. This compromise in
objectives could occur for any
manufacturer whose fleet average was
above the backstop, irrespective of why
they were above the backstop and
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irrespective of whether the industry as
a whole was achieving the emissions
and fuel economy benefits projected for
the final standards, the problem the
backstop is supposed to address. For
example, the projected industry wide
level of 250 gm/mile for MY 2016 is
based on a mix of manufacturer levels,
ranging from approximately 205 to 315
gram/mile 76 but resulting in an industry
wide basis in a fleet average of 250 gm/
mile. Unless the backstop was at a very
weak level, above the high end of this
range, then some percentage of
manufacturers would be above the
backstop even if the performance of the
entire industry remains fully consistent
with the emissions and fuel economy
levels projected for the final standards.
For these manufacturers and any other
manufacturers who were above the
backstop, the objectives of an attribute
based standard would be compromised
and unnecessary costs would be
imposed. This could directionally
impose increased costs for some
manufacturers. It would be difficult if
not impossible to establish the level of
a backstop standard such that costs are
likely to be imposed on manufacturers
only when there is a failure to achieve
the projected reductions across the
industry as a whole. An example of this
kind of industry wide situation could be
when there is a significant shift to larger
vehicles across the industry as a whole,
or if there is a general market shift from
cars to trucks. The problem the agencies
are concerned about in those
circumstances is not with respect to any
single manufacturer, but rather is based
on concerns over shifts across the fleet
as a whole, as compared to shifts in one
manufacturer’s fleet that may be more
than offset by shifts the other way in
another manufacturer’s fleet. However,
in this respect, a traditional backstop
acts as a manufacturer specific standard.
The concept of a ratchet mechanism
recognizes this problem, and would
impose the new more stringent standard
only when the problem arises across the
industry as a whole. While the new
more stringent standards would enter
into force automatically, any such
standards would still need to provide
adequate lead time for the
manufacturers. Given the limited
number of model years covered by this
rulemaking and the short lead-time
already before the 2012 model year, a
ratchet mechanism in this rulemaking
that would automatically tighten the
standards at some point after model year
2012 is finished and apply the new
more stringent standards for model
76 Based on estimated standards presented in
Tables III.B.1–1 and III.B.1–2.
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years 2016 or earlier, would fail to
provide adequate lead time for any new,
more stringent standards
Additionally, we do not believe that
the risk of vehicle upsizing or changing
vehicle offerings to ‘‘game’’ the
passenger car and light truck definitions
is as great as commenters imply for the
model years in question.77 The changes
that commenters suggest manufacturers
might make are neither so simple nor so
likely to be accepted by consumers. For
example, 4WD versions of vehicles tend
to be more expensive and, other things
being equal, have inherently lower fuel
economy than their 2WD equivalent
models. Therefore, although there is a
market for 4WD vehicles, and some
consumers might shift from 2WD
vehicles to 4WD vehicles if 4WD
becomes available at little or no extra
cost, many consumers still may not
desire to purchase 4WD vehicles
because of concerns about cost premium
and additional maintenance
requirements; conversely, many
manufacturers often require the 2WD
option to satisfy demand for base
vehicle models. Additionally, increasing
the footprint of vehicles requires
platform changes, which usually
requires a product redesign phase (the
agencies estimate that this occurs on
average once every 5 years for most
models). Alternatively, turning many
2WD SUVs into 2WD light trucks would
require manufacturers to squeeze a third
row of seats in or significantly increase
their GVWR, which also requires a
significant change in the vehicle.78 The
agencies are confident that the
anticipated increases in average fuel
economy and reductions in average CO2
emission rates can be achieved without
backstops under EISA or the CAA. As
noted above, the agencies plan to
conduct retrospective analysis to
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77 We note that NHTSA’s recent clarification of
the light truck definitions has significantly reduced
the potential for gaming, and resulted in the
reclassification of over a million vehicles from the
light truck to the passenger car fleet.
78 Increasing the GVWR of a light truck (assuming
this was the only goal) can be accomplished in a
number of ways, and must include consideration of:
(1) Redesign of wheel axles; (2) improving the
vehicle suspension; (3) changes in tire specification
(which will likely affect ride quality); (4) vehicle
dynamics development (especially with vehicles
equipped with electronic stability control); and (5)
brake redesign. Depending on the vehicle, some of
these changes may be easier or more difficult than
others.
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monitor progress. Both agencies have
the authority to revise standards if
warranted, as long as sufficient lead
time is provided.
The agencies acknowledge that the
MY 2016 fleet emissions and fuel
economy goals of 250 g/mi and 34.1
mpg for EPA and NHTSA respectively
are estimates and not standards (the MY
2012–2016 curves are the standards).
Changes in fuel prices, consumer
preferences, and/or vehicle survival and
mileage accumulation rates could result
in either smaller or larger oil and GHG
savings. As explained above and
elsewhere in the rule, the agencies
believe that the possibility of not
meeting (or, alternatively, exceeding)
fuel economy and emissions goals
exists, but is not likely. Given this, and
given the potential complexities in
designing an appropriate backstop, the
agencies believe the balance here points
to not adopting additional backstops at
this time for the MYs 2012–2016
standards other than NHTSA’s
finalizing of the ones required by EPCA/
EISA for domestic passenger cars.
Nevertheless, the agencies recognize
there are many factors that are
inherently uncertain which can affect
projections in the future, including fuel
price and other factors which are
unrelated to the standards contained in
this final rule. Such factors can affect
consumer preferences and are difficult
to predict. At this time and based on the
available information, the agencies have
not included a backstop for model years
2012–2016. However, if circumstances
change in the future in unanticipated
ways, the agencies may revisit the issue
of a backstop in the context of a future
rulemaking either for model years 2012–
2016 or as needed for standards for
model years beyond 2016. This issue
will be discussed further in Sections III
and IV.
D. Relative Car-Truck Stringency
The agencies proposed fleetwide
standards with the projected levels of
stringency of 34.1 mpg or 250 g/mi in
MY 2016 (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
for those model years, the agencies were
concerned that increasing the difference
between the car and truck standards
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(either by 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.79 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 incentives
regarding vehicle classification.
To calculate relative car-truck
stringency for the proposal, the agencies
explored a number of possible
alternatives, and for the reasons
described in the proposal used the
Volpe model in order to estimate
stringencies at which net benefits would
be maximized. The agencies have
followed the same approach in
calculating the relative car-truck
stringency for the final standards
promulgated today. Further details of
the development of this approach can be
found in Section IV of this preamble as
well as in NHTSA’s RIA and EIS.
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
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 remained 31
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.B.1–1. 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 final rule.
BILLING CODE 6560–50–P
79 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.
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The final car and truck standards for
EPA (Table I.B.1–4 above) were
subsequently determined by first
converting the average required fuel
economy levels to average required CO2
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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
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can be found in Section III of this
preamble or in the EPA RIA.
80 We assume slightly higher A/C penetration in
2012 than was assumed in the proposal only to
Continued
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TABLE II.D–1 EXPECTED FLEET A/C CREDITS (IN CO2 EQUIVALENT g/mi) FROM 2012–2016
Average
technology
penetration
(%)
2012
2013
2014
2015
2016
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
Average credit
for cars
Average credit
for trucks
Average credit
for combined
fleet
3.4
4.8
7.2
9.6
10.2
3.8
5.4
8.1
10.8
11.5
3.5
5.0
7.5
10.0
10.6
80 28
40
60
80
85
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The agencies sought comment on the
use of this methodology for
apportioning the fleet stringencies to
relative car and truck standards for
2012–2016. General Motors commented
that, compared to the passenger car
standard, the light truck standard is too
stringent because ‘‘the most fuel efficient
cars and small trucks already meet the
2016 MY requirements’’ but ‘‘the most
fuel efficient large trucks must increase
fuel economy by 20 percent to meet the
2016 MY requirements.’’ GM
recommended that the agencies relax
stringency specifically for large pickups,
such as the Silverado.
The agencies disagree with the
premise of the comment that the
standard is too stringent under the
applicable statutory provisions because
some existing large trucks are not
already meeting a later model year
standard. Our analysis shows that the
standards are not too stringent for
manufacturers selling these vehicles.
The agencies’ analyses demonstrate a
means by which manufacturers could
apply cost-effective technologies in
order to achieve the standards, and we
have provided adequate lead time for
the technology to be applied. More
important, the agencies’ analysis
demonstrate that the fleetwide emission
standards for MY 2016 are technically
feasible, for example by implementing
technologies such as engine downsizing,
turbocharging, direct injection,
improving accessories and tire rolling
resistance, etc.
GM did not comment on the use of
the methodology applied by the
agencies to develop the gap between the
passenger car and light truck
standards—only on the outcome of the
methodology. For the reasons discussed
below, the agencies maintain that the
methodology applied above provides an
appropriate basis to determine the gap
between the passenger car and light
truck standards, and disagree with GM’s
arguments that the outcome is unfair.
First, GM’s argument incorrectly
suggests that every individual vehicle
model must achieve its fuel economy
and emissions targets. CAFE standards
and new GHG emissions standards
apply to fleetwide average performance,
not model-specific performance, even
though average required levels are based
on average model-specific targets, and
the agencies’ analysis demonstrates that
GM and other manufacturers of large
trucks can cost-effectively comply with
the new standards.
Second, GM implies that every
manufacturer must be challenged
equally with respect to fuel economy
and emissions. Although NHTSA and
EPA maintain that attribute-based CAFE
and GHG emissions standards can more
evenly balance compliance challenges,
attribute-based standards are not
intended to and cannot make these
challenges equal, and while the agencies
are mindful of the potential impacts of
the standards on the relative
competitiveness of different vehicle
manufacturers, there is nothing in EPCA
or the CAA 81 requiring that these
challenges be equal.
We have also already addressed and
rejected GM’s suggestion of shifting the
‘‘cut off’’ point for light trucks from 66
square feet to 72 square feet, thereby
‘‘dropping the floor’’ of the target
function for light trucks. As discussed
in the preceding section, this is so as not
to forego the rules’ energy and
environmental benefits, and because
there is little or no safety basis to
discourage downsizing of the largest
light trucks.
Finally, NHTSA and EPA disagree
with GM’s claim that the outcome of the
agencies’ approach is unfairly
burdensome for light trucks as
compared to passenger cars. Based on
the agencies’ market forecast, NHTSA’s
analysis indicates that incremental
technology outlays could, on average, be
comparable for passenger cars and light
trucks under the final CAFE standards,
and further indicates that the ratio of
total benefits to total costs could be
greater under the final light truck
standards than under the final passenger
car standards.
correct for rounding that occurred in the curve
setting process.
81 As NHTSA explained in the NPRM, 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.’’
CEI–I, 793 F.2d 1322, 1352 (D.C. Cir. 1986). 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. Similarly, EPA is afforded great discretion
under section 202(a) of the CAA to balance issues
of technical feasibility, cost, adequacy of lead time,
and safety, and certainly is not required to do so
in a manner that imposes regulatory obligations
uniformly on each manufacturer. See NRDC v. EPA,
655 F. 2d 318, 322, 328 (D.C. Cir. 1981) (wide
discretion afforded by the statutory factors, and
EPA predictions of technical feasibility afforded
considerable discretion subject to constraints of
reasonableness EPA predictions of technical
feasibility afforded considerable discretion subject
to constraints of reasonableness); and cf.
International Harvester Co. v. Ruckelshaus, 479 F.
2d 615, 640 (D.C. Cir. 1973) (‘‘as long as feasible
technology permits the demand for new passenger
automobiles to be generally met, the basic
requirements of the Act would be satisfied, even
though this might occasion fewer models and a
more limited choice of engine types’’).
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E. Joint Vehicle Technology
Assumptions
Vehicle technology assumptions, i.e.,
assumptions about technologies’ cost,
effectiveness, and the rate at which they
can be incorporated into new vehicles,
are often controversial as they have a
significant impact on the levels of the
standards. The agencies must, therefore,
take great care in developing and
justifying these estimates. In developing
technology inputs for the analysis of the
MY 2012–2016 standards, the agencies
reviewed the technology assumptions
that NHTSA used in setting the MY
2011 standards, the comments that
NHTSA received in response to its May
2008 Notice of Proposed Rulemaking
(NPRM), and the comments received in
response to the NPRM for this rule. 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
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estimates identified in EPA’s July 2008
Advance Notice of Proposed
Rulemaking. The review of these
documents was supplemented with
updated information from more current
literature, new product plans from
manufacturers, and from EPA
certification testing.
As a general matter, EPA and NHTSA
believe that the best way to derive
technology cost estimates is to conduct
real-world tear down studies. Most of
the commenters on this issue agreed.
The advantages not only lie in the rigor
of the approach, but also in its
transparency. 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 and the
processes required to integrate them. As
such, tear down studies require a
significant amount of time and are very
costly. EPA has been conducting tear
down studies to assess the costs of
vehicle technologies under a contract
with FEV. Further details for this
methodology is described below and in
the TSD.
Due to the complexity and time
incurred in a tear down study, only a
few technologies evaluated in this
rulemaking have been costed in this
manner thus far. The agencies
prioritized the technologies to be costed
first based on how prevalent the
agencies believed they might be likely to
be during the rulemaking time frame,
and based on their anticipated costeffectiveness. The agencies believe that
the focus on these important
technologies (listed below) is sufficient
for the analysis in this rule, but EPA is
continuing to analyze more technologies
beyond this rule as part of studies both
already underway and in the future. For
most of 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
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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 in the
Technical Support Document.
Similarly, the agencies followed a
BOM approach for developing the
technology 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 has been
conducting a study for NHTSA to
update Chapter 3 of their 2002 NAS
Report, which presents technology
effectiveness estimates for light-duty
vehicles. The update takes a fresh look
at that list of technologies and their
associated cost and effectiveness values.
The updated NAS report was expected
to be available on September 30, 2009,
but has not been completed and
released to the public. The results from
this study thus are unavailable for this
rulemaking. The agencies look forward
to considering the results from this
study as part of the next round of
rulemaking for CAFE/GHG standards.
1. What technologies did 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 lead
time available for this rule is not
sufficient to move most of these
technologies from research to
production.
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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 FRIA, and Chapter 1 of
EPA’s final RIA. Technologies to reduce
CO2 and HFC emissions from air
conditioning systems are discussed in
Section III of this preamble and in EPA’s
final RIA.
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
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
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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
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
final rule have been revised from the
NHTSA MY 2011 CAFE final rule.
Additionally, the diesel technology
option has been made available to small
cars in the Volpe and OMEGA models.
Though this is not expected to make a
significant difference in the modeling
results, the agencies agreed with the
commenters that supported such a
revision.
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 to enable the engine to
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operate in a more efficient operating
range over a broader range of vehicle
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 and an infinite number of
transmission ratios that enable the
engine to operate in a more efficient
operating range over a broader range of
vehicle operating conditions.
• 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, thereby 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.
• 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
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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 the final
standards.
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. The latter is covered
explicitly within the A/C credit
program.
• 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 discussed later in this preamble and
covered separately in the EPA RIA.
• 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
higher 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
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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.
• 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 than other
hybrids. They also use a control system
that allows the battery pack to be
substantially depleted under electriconly 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.
2. How did the agencies determine the
costs and effectiveness of each of these
technologies?
As mentioned above, EPA and
NHTSA believe that the best way to
derive technology cost estimates is to
conduct real-world tear down studies.
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To date, the costs of the following five
technologies have been evaluated with
respect to their baseline (or replaced)
technologies. For these technologies
noted below, the agencies relied on the
tear down data available and scaling
methodologies used in EPA’s ongoing
study with FEV. Only the cost estimate
for the first technology on the list below
was used in the NPRM. The others were
completed subsequent to the
publication of the NPRM.
1. Stoichiometric gasoline direct
injection and turbo charging with
engine downsizing (T–DS) for a large
DOHC 4 cylinder engine to a small
DOHC (dual overhead cam) 4 cylinder
engine.
2. Stoichiometric gasoline direct
injection and turbo charging with
engine downsizing for a SOHC single
overhead cam) 3 valve/cylinder V8
engine to a SOHC V6 engine.
3. Stoichiometric gasoline direct
injection and turbo charging with
engine downsizing for a DOHC V6
engine to a DOHC 4 cylinder engine.
4. 6-speed automatic transmission
replacing a 5-speed automatic
transmission.
5. 6-speed wet dual clutch
transmission (DCT) replacing a 6-speed
automatic transmission.
This costing methodology has been
published and gone through a peer
review.82 Using this tear down costing
methodology, FEV has developed costs
for each of the above technologies. In
addition, FEV and EPA extrapolated the
engine downsizing costs for the
following scenarios that were outside of
the noted study cases:83
1. Downsizing a SOHC 2 valve/
cylinder V8 engine to a DOHC V6.
2. Downsizing a DOHC V8 to a DOHC
V6.
3. Downsizing a SOHC V6 engine to
a DOHC 4 cylinder engine.
4. Downsizing a DOHC 4 cylinder
engine to a DOHC 3 cylinder engine.
The agencies relied on the findings of
FEV in part for estimating the cost of
these technologies in this rulemaking.
However, for some of the technologies,
NHTSA and EPA modified FEV’s
estimated costs. FEV made the
assumption that these technologies
would be mature when produced in
large volumes (450,000 units or more).
The agencies believe that there is some
uncertainty regarding each
manufacturer’s near-term ability to
employ the technology at the volumes
82 EPA–420–R–09–020; EPA docket number EPA–
HQ–OAR–2009–0472–11282 and 11285.
83 ‘‘Binning of FEV Costs to GDI, Turbo-charging,
and Engine Downsizing,’’ memorandum to Docket
EPA–HQ–OAR–2009–0472, from Michael Olechiw,
U.S. EPA, dated March 25, 2010.
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assumed in the FEV analysis. There is
also the potential for near term (earlier
than 2016) supplier-level Engineering,
Design and Testing (ED&T) costs to be
in excess of those considered in the FEV
analysis as existing equipment and
facilities are converted to production of
new technologies. The agencies have
therefore decided to average the FEV
results with the NPRM values in an
effort to account for these near-term
factors. This methodology was done for
the following technologies:
1. Converting a port-fuel injected (PFI)
DOHC I4 to a turbocharged-downsizedstoichiometric GDI DOHC I3.
2. Converting a PFI DOHC V6 engine
to a T–DS-stoichiometric GDI DOHC I4.
3. Converting a PFI SOHC V6 engine
to a T–DS-stoichiometric GDI DOHC I4.
4. Converting a PFI DOHC V8 engine
to a T–DS-stoichiometric GDI DOHC V6.
5. Converting a PFI SOHC 3V V8
engine to a T–DS-stoichiometric GDI
DOHC V6.
6. Converting a PFI SOHC 2V V8
engine to a T–DS-stoichiometric GDI
DOHC V6.
7. Replacing a 4-speed automatic
transmission with a 6-speed automatic
transmission.
8. Replacing a 5-speed automatic
transmission with a 6-speed automatic
transmission.
9. Replacing a 6-speed automatic
transmission with a 6-speed wet dual
clutch transmission.
For the I4 to Turbo GDI I4 study
applied in the NPRM, the agencies
requested from FEV an adjusted cost
estimate which accounted for these
uncertainties as an adjustment to the
base technology burden rate.84 These
new costs are used in the final rules.
These details are also further described
in the memo to the docket.85 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
84 Burden costs include the following fixed and
variable costs: Rented and leased equipment;
manufacturing equipment depreciation; plant office
equipment depreciation; utilities expense;
insurance (fire and general); municipal taxes; plant
floor space (equipment and plant offices);
maintenance of manufacturing equipment—nonlabor; maintenance of manufacturing building—
general, internal and external, parts, and labor;
operating supplies; perishable and supplier-owned
tooling; all other plant wages (excluding direct,
indirect and MRO labor); returnable dunnage
maintenance; and intra-company shipping costs
(see EPA–HQ–OAR–2009–0472–0149).
85 ‘‘Binning of FEV Costs to GDI, Turbo-charging,
and Engine Downsizing,’’ memorandum to Docket
EPA–HQ–OAR–2009–0472, from Michael Olechiw,
U.S. EPA, dated March 25, 2010.
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suppliers served largely as a check on
publicly-available data.
For the other technologies,
considering all sources of information
(including public comments) and using
the BOM approach, the agencies worked
together intensively to determine
component costs for each of the
technologies and build up the costs
accordingly. Where estimates differ
between sources, we have used our
engineering judgment to arrive at what
we believe to be the best available cost
estimate, and explained the basis for
that exercise of judgment in the TSD.
Building on NHTSA’s estimates
developed for the MY 2011 CAFE final
rule and EPA’s Advance Notice of
Proposed Rulemaking, which relied on
the EPA 2008 Staff Technical Report,86
the agencies took a fresh look at
technology cost and effectiveness values
for purposes of the joint rulemaking
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 in NHTSA’s
MY 2011 final rule based on
recommendation from Ricardo, Inc., as
described above. EPA used a similar
approach in the EPA 2008 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 economyimproving 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
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
86 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.
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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,87 88 89 90 91 92 93 revised several
component costs of several major
technologies: turbocharging with engine
downsizing (as described above), 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
final RIA.
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,94 and indirect costs were
accounted for using the ICM (indirect
cost multiplier) approach explained in
Chapter 3 of the Joint TSD, rather than
using the traditional Retail Price
Equivalent (RPE) multiplier approach. A
report explaining how EPA developed
the ICM approach can be found in the
docket for this rule. The comments
addressing the ICM approach were
generally positive and encouraging.
However, one commenter suggested that
we had mischaracterized the complexity
of a few of our technologies, which
would result in higher or lower markups
than presented in the NPRM. That
commenter also suggested that we had
used the ICMs as a means of placing a
higher level of manufacturer learning on
87 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—update).
88 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—update).
89 ‘‘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.
90 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.
91 Martec, ‘‘Variable Costs of Fuel Economy
Technologies,’’ June 1, 2008, (the ‘‘2008 Martec
Report’’) available at Docket No. NHTSA–2008–
0089–0169.1.
92 Vehicle fuel economy certification data.
93 Confidential data submitted by manufacturers
in response to the March 2009 and other requests
for product plans.
94 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.
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the cost estimates. The latter comment
is not true and the methodology behind
the ICM approach is explained in detail
in the reports that are available in the
docket for this rule.95 The former is
open to debate given the subjective
nature of the engineering analysis
behind it, but upon further thought both
agencies believe that the complexities
used in the NPRM were appropriate and
have, therefore, carried those forward
into the final rule. We discuss this in
greater detail in the Response to
Comments document.
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. The agencies also carefully
examined the pertinent public
comments. 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
95 Rogozhin, Alex, Michael Gallaher, and Walter
McManus, ‘‘Automobile Industry Retail Price
Equivalent and Indirect Cost Multipliers,’’ EPA 420–
R–09–003, Docket EPA Docket EPA–HQ–OAR–
2009–0472–0142, February 2009, https://epa.gov/
otaq/ld-hwy/420r09003.pdf; A. Rogozhin et al.,
International Journal of Production Economics 124
(2010) 360–368, Volume 124, Issue 2, April 2010.
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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 first into the NPRM, and now
into these final rules. When NHTSA and
EPA’s estimates for effectiveness
diverged slightly due to differences in
how the agencies apply technologies to
vehicles in their respective models, we
report the ranges for the effectiveness
values used in each model. There were
only a few comments on the technology
effectiveness estimates used in the
NPRM. Most of the technologies that
were mentioned in the comments were
the more advanced technologies that are
not assumed to have large penetrations
in the market within the timeframe of
this rule, notably hybrid technologies.
Even if the effectiveness figures for
hybrid vehicles were adjusted, it would
have made little difference in the
NHTSA and EPA analysis of the impacts
and costs of the rule. The response to
comments document has more specific
responses to these comments.
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 enormous
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
the final standards, NHTSA and EPA
believe that employing average values
for technology effectiveness estimates,
as adjusted depending on vehicle
subclass, is an appropriate way of
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recognizing the potential variation in
the specific benefits that individual
manufacturers (and individual vehicles)
might obtain from adding a fuel-saving
technology.
Chapter 3 of the 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 final
rule take into account only those
associated with the initial build of the
vehicle. Although comments were
received to the NPRM that suggested
there could be additional maintenance
required with some new technologies
(e.g., turbocharging, hybrids, etc.), and
that additional maintenance costs could
occur as a result, the agencies do not
believe that the amount of additional
cost will be significant in the timeframe
of this rulemaking, based on the
relatively low application rates for these
technologies. The agencies will
undertake a more detailed review of
these potential costs in preparation for
the next round of CAFE/GHG standards.
F. Joint Economic Assumptions
The agencies’ final analysis of
alternative CAFE and GHG standards for
the model years covered by this final
rulemaking rely on a range of forecast
information, economic estimates, and
input parameters. This section briefly
describes the agencies’ choices of
specific parameter values. These
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 final rule, NHTSA and
EPA reconsidered previous comments
that NHTSA had received, reviewed
newly available literature, and reviewed
comments received in response to the
proposed rule. For this final rule, we
made three major changes to the
economic assumptions. First, we revised
the technology costs to reflect more
recently available data. Second, we
updated fuel price and transportation
demand assumptions to reflect the
Annual Energy Outlook (AEO) 2010
Early Release. Third, we have updated
our estimates of the social cost of carbon
(SCC) based on a recent interagency
process. The key economic assumptions
are summarized below, and are
discussed in greater detail in Section III
(EPA) and Section IV (NHTSA), as well
as in Chapter 4 of the Joint TSD, Chapter
VIII of NHTSA’s RIA and Chapter 8 of
EPA’s RIA.
• Costs of fuel economy-improving
technologies—These estimates are
presented in summary form above and
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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’
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. This
accounts for both the direct and indirect
costs associated with implementing new
technologies in response to this final
rule. The technology cost estimates for
a select group of technologies have
changed since the NPRM. These
changes, as summarized in Section II.E
and in Chapter 3 of the Joint TSD, were
made in response to updated cost
estimates available to the agencies
shortly after publication of the NPRM,
not in response to comments. In general,
commenters were supportive of the cost
estimates used in the NPRM and the
transparency of the methodology used
to generate them.
• 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
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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. This
issue is discussed in EPA’s RIA, Section
8.1.2 and NHTSA’s RIA Section VIII.H.
The agencies requested 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. Commenters did not provide
recommendations for how to evaluate
the quality of different models or
identify a model appropriate for the
agencies’ purposes. Some commenters
expressed various concerns about the
use of existing consumer vehicle choice
models. While EPA and NHTSA are not
using a consumer vehicle choice model
to analyze the effects of this rule, we
continue to investigate these models.
• 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 final
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
(20*.80).96 NHTSA previously used this
estimate in its MY 2011 final rule, and
the agencies confirmed it based on
independent analysis for use in this
FRM. No substantive comments were
received on this input.
• 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. For the
proposed rule, the agencies had relied
on the then most recent fuel price
projections from the U.S. Energy
Information Administration’s (EIA)
Annual Energy Outlook (AEO) 2009
(Revised Updated). However, for this
final rule, the agencies have updated the
analyses based on AEO 2010 (December
96 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.
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2009 Early Release) Reference Case
forecasts of inflation-adjusted (constantdollar) 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.97 AEO 2010 includes slightly
lower petroleum prices compared to
AEO 2009.
The forecasts of fuel prices reported
in EIA’s AEO 2010 Early Release
Reference Case extends through 2035,
compared to the AEO 2009 which only
went through 2030. As in the proposal,
fuel prices beyond the time frame of
AEO’s forecast were estimated using an
average growth rate.
While EIA revised AEO 2010, the
vehicle MPG standards are similar to
those that were published in AEO 2009.
No substantive comments were received
on the use of AEO as a source of fuel
prices.98
• Consumer valuation of fuel
economy and payback period—In
estimating the impacts on vehicle sales,
the agencies assume that potential
buyers value the resulting fuel savings
improvements that would result from
alternative CAFE and GHG standards
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. One commenter argued that
higher-fuel-economy vehicles should
have higher resale prices than vehicles
with lower fuel economy, but did not
provide supporting data. This revision,
if made, would increase the net benefits
of the rule. Another commenter
supported the use of a five-year payback
period for this analysis. In the absence
of data to support changes, EPA and
NHTSA have kept the same
assumptions. In the analysis of net
benefits, EPA and NHTSA assume that
vehicle buyers benefit from the full fuel
savings over the vehicle’s lifetime,
discounted for present value
calculations at 3 and 7 percent.
• Vehicle sales assumptions—The
first step in estimating lifetime fuel
97 Energy Information Administration, Annual
Energy Outlook 2010, Early Release Reference Case
(December 2009), Table 12. Available at https://
www.eia.doe.gov/oiaf/aeo/aeoref_tab.html (last
accessed February 02, 2010).
98 Kahan, A. and Pickrell, D. Memo to Docket
EPA–HQ–OAR–2009–0472 and Docket NHTSA–
2009–0059. ‘‘Energy Information Administration’s
Annual Energy Outlook 2009 and 2010.’’ March 24,
2010.
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consumption by vehicles produced
during a model year is to calculate the
number of vehicles expected to be
produced and sold.99 The agencies
relied on the AEO 2010 Early Release
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. No substantive
comments were received on vehicle
survival assumptions.
• 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),100 adjusted to account for the
effect on vehicle use of subsequent
increases in fuel prices. Due to the
lower fuel prices projected in AEO
2010, the average vehicle is estimated to
be used slightly more (∼3 percent) over
its lifetime than assumed in the
proposal. 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 2010 Early Release
Reference Case. The growth rate in
average annual car and light truck use
produced by this calculation is
99 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 Feb. 15, 2010).
100 For a description of the Survey, see https://
nhts.ornl.gov/quickStart.shtml (last accessed July
27, 2009).
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approximately 1.1 percent per year.101
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.102
While commenters requested further
detail on the assumptions regarding
total vehicle use, no specific issues were
raised.
• 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 more stringent 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. We
received comments supporting our
proposed value of 10 percent, although
we also received comments
recommending higher and lower values.
However, we did not receive any new
data or comments that justify revising
the 10 percent value for the rebound
effect at this time.
• 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. These benefits are measured by
the net ‘‘consumer surplus’’ resulting
from increased vehicle use, over and
above the fuel expenses associated with
this additional travel. 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
101 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.
102 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.
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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.103 Please see the Chapter 4 of the
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
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.104
• 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
103 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 Feb. 15,
2010); update available at https://ostpxweb.dot.gov/
policy/Data/VOTrevision1_2-11-03.pdf (last
accessed Feb. 15, 2010).
104 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 Feb. 15, 2010).
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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
expected costs from 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.105 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. Since the agencies are
taking a global perspective with respect
to the estimate of the social cost of
carbon for this rulemaking, the agencies
do not include the value of any
reduction in monopsony payments as a
benefit from lower fuel consumption,
because those payments from a global
perspective represent a transfer of
income from consumers of petroleum
products to oil suppliers rather than a
savings in real economic resources.
Similarly, the agencies do not include
any savings in budgetary outlays to
support U.S. military activities among
the benefits of higher fuel economy and
the resulting fuel savings. 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
$0.169 (2007$). Each gallon of 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.106
105 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.
106 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
percent imported crude petroleum and 10 percent
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The energy security analysis
conducted for this rule estimates that
the world price of oil will fall modestly
in response to lower U.S. demand for
refined fuel. One potential result of this
decline in the world price of oil would
be an increase in the consumption of
petroleum products outside the U.S.,
which would in turn lead to a modest
increase in emissions of greenhouse
gases, criteria air pollutants, and
airborne toxics from their refining and
use. While additional information
would be needed to analyze this
‘‘leakage effect’’ in detail, NHTSA
provides a sample estimate of its
potential magnitude in its Final EIS.107
This analysis indicates that the leakage
effect is likely to offset only a modest
fraction of the reductions in emissions
projected to result from the rule.
EPA and NHTSA received comments
about the treatment of the monopsony
effect, macroeconomic disruption effect,
and the military costs associated with
the energy security benefits of this rule.
The agencies did not receive any
comments that justify changing the
energy security analysis. As a result, the
agencies continue to only use the
macroeconomic disruption component
of the energy security analysis under a
global context when estimating the total
energy security benefits associated with
this rule. Further, the Agencies did not
receive any information that they could
use to quantity that component of
military costs directly related to energy
security, and thus did not modify that
part of its analysis. A more complete
discussion of the energy security
analysis can be found in Chapter 4 of
the Joint TSD, and Sections III and IV
of this preamble.
• 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 Economic value of reductions in
criteria air pollutants—For the purpose
of the joint technical analysis, EPA and
NHTSA estimate the economic value of
the human health benefits associated
with reducing exposure to PM2.5 using
a ‘‘benefit-per-ton’’ method. These PM2.5related 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 rule includes a description of these
values. Separately, EPA also conducted
air quality modeling to estimate the
change in ambient concentrations of
criteria pollutants and used this as a
basis for estimating the human health
benefits and their economic value.
Section III.H.7 presents these benefits
estimates.
Æ Reductions in GHG emissions—
Emissions of carbon dioxide and other
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
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 2010).108 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 received extensive
comments about how to improve the
characterization of the SCC and have
since developed new estimates through
an interagency modeling exercise. The
comments addressed various issues,
such as discount rate selection,
treatment of uncertainty, and emissions
and socioeconomic trajectories, and
justified the revision of SCC for the final
rule. The modeling exercise involved
running three integrated assessment
models using inputs agreed upon by the
interagency group for climate
sensitivity, socioeconomic and
emissions trajectories, and discount
rates. A more complete discussion of
SCC can be found in the Technical
Support Document, Social Cost of
Carbon for Regulatory Impact Analysis
Under Executive Order 12866 (hereafter,
‘‘SCC TSD’’); revised SCC estimates
corresponding to assumed values of the
discount rate are shown in Table II.F–
1.109
domestically-produced 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 percent = 0.50 gallons + 0.45
gallons = 0.95 gallons.
107 NHTSA Final Environmental Impact
Statement: Corporate Average Fuel Economy
Standards, Passenger Cars and Light Trucks, Model
Years 2012–2016, February 2010, page 3–14.
108 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
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
vehicle travel, are assumed to be unaffected by
changes in fuel economy.
109 Interagency Working Group on Social Cost of
Carbon, U.S. Government, with participation by
Council of Economic Advisers, Council on
Environmental Quality, Department of Agriculture,
Department of Commerce, Department of Energy,
Department of Transportation, Environmental
Protection Agency, National Economic Council,
Office of Energy and Climate Change, Office of
Management and Budget, Office of Science and
Technology Policy, and Department of Treasury,
‘‘Social Cost of Carbon for Regulatory Impact
Analysis Under Executive Order 12866,’’ February
2010, available in docket EPA–HQ–OAR–2009–
0472.
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TABLE II.F–1—SOCIAL COST OF CO2, 2010
[In 2007 dollars]
Discount Rate
5%
3%
2.5%
Source of Estimate .........................................................
Mean of Estimates Values
2010 Estimate .................................................................
$5
3%
• 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 final standards, the
agencies have employed discount rates
of both 3 percent and 7 percent. We
received some comments on the
discount rates used in the proposal,
most of which were directed at the
discount rates used to value future fuel
savings and the rates used to value of
95th percentile estimate.
$21
the social cost of carbon. In general,
commenters were supporting one of the
discount rates over the other, although
some suggested that our rates were too
high or too low. We have revised the
discounting used when calculating the
net present value of social cost of carbon
as explained in Sections III.H. and VI
but have not revised our discounting
procedures for other costs or benefits.
For the reader’s reference, Table II.F–
2 below summarizes the values used to
calculate the impacts of each final
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.
$35
$65.
The agencies recognize that each of
these values has some degree of
uncertainty, which the agencies further
discuss in the Joint TSD. The agencies
have conducted a range of sensitivities
and present them in their respective
RIAs. For example, NHTSA has
conducted a sensitivity analysis on
several assumptions including (1)
forecasts of future fuel prices, (2) the
discount rate applied to future benefits
and costs, (3) the magnitude of the
rebound effect, (4) the value to the U.S.
economy of reducing carbon dioxide
emissions, (5) inclusion of the
monopsony effect, and (6) the reduction
in external economic costs resulting
from lower U.S. oil imports. This
information is provided in NHTSA’s
RIA.
TABLE II.F–2—ECONOMIC VALUES FOR BENEFITS COMPUTATIONS
[2007$]
Fuel Economy Rebound Effect ................................................................................................................................................
‘‘Gap’’ between test and on-road MPG ...................................................................................................................................
Value of refueling time per ($ per vehicle-hour) .....................................................................................................................
Average tank volume refilled during refueling stop .................................................................................................................
Annual growth in average vehicle use ....................................................................................................................................
Fuel Prices (2012–50 average, $/gallon):
Retail gasoline price .........................................................................................................................................................
Pre-tax gasoline price .......................................................................................................................................................
10%.
20%.
$24.64.
55%.
1.15%.
$3.66.
$3.29.
Economic Benefits From Reducing Oil Imports ($/gallon)
‘‘Monopsony’’ Component ........................................................................................................................................................
Price Shock Component ..........................................................................................................................................................
Military Security Component ....................................................................................................................................................
Total Economic Costs ($/gallon) .............................................................................................................................................
$0.00.
$0.17.
$0.00.
$0.17.
Emission Damage Costs (2020, $/ton or $/metric ton)
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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) emissions in 2010 ................................................................................................................................
Annual Increase in CO2 Damage Cost ...................................................................................................................................
$0.
$1,300.
$5,100.
$ 5,300.
$ 240,000.
$ 290,000.
$ 31,000.
$5.
$21.
$35.
$65.
variable, depending
on estimate.
External Costs From Additional Automobile Use ($/vehicle-mile)
Congestion ...............................................................................................................................................................................
Accidents .................................................................................................................................................................................
Noise ........................................................................................................................................................................................
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$ 0.054.
$ 0.023.
$ 0.001.
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TABLE II.F–2—ECONOMIC VALUES FOR BENEFITS COMPUTATIONS—Continued
[2007$]
Total External Costs .........................................................................................................................................................
$ 0.078.
External Costs From Additional Light Truck Use ($/vehicle-mile)
Congestion ...............................................................................................................................................................................
Accidents .................................................................................................................................................................................
Noise ........................................................................................................................................................................................
Total External Costs ................................................................................................................................................................
Discount Rates Applied to Future Benefits .............................................................................................................................
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G. What are the estimated safety effects
of the final MYs 2012–2016 CAFE and
GHG standards?
The primary goals of the final CAFE
and GHG standards are to reduce fuel
consumption and GHG emissions, but in
addition to these intended effects, the
agencies must consider the potential of
the standards to affect vehicle safety,110
which the agencies have assessed in
evaluating the appropriate levels at
which to set the final standards. Safety
trade-offs associated with fuel economy
increases have occurred in the past, and
the agencies must be mindful of the
possibility of future ones. These past
safety trade-offs occurred because
manufacturers chose, at the time, to
build smaller and lighter vehicles—
partly in response to CAFE standards—
rather than adding more expensive fuelsaving technologies (and maintaining
vehicle size and safety), and the smaller
and lighter vehicles did not fare as well
in crashes as larger and heavier
vehicles. Historically, as shown in
FARS data analyzed by NHTSA, 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 per crash is
higher for small/light vehicle crashes.
Changes in relative safety are related
to shifts in the distribution of vehicles
on the road. A policy that induces a
widening in the size distribution of
vehicles on the road, could result in
negative impacts on safety, The primary
mechanism in this rulemaking for
mitigating the potential negative effects
on safety is the application of footprintbased standards, which create a
disincentive for manufacturers to
produce smaller-footprint vehicles. This
is because as footprint decreases, the
corresponding fuel economy/GHG
emission target becomes more
110 In this rulemaking document, vehicle safety is
defined as societal fatality rates which include
fatalities to occupants of all the vehicles involved
in the collisions, plus any pedestrians.
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stringent.111 The shape of the footprint
curves themselves have also been
designed to be approximately ‘‘footprint
neutral’’ within the sloped portion of the
functions—that is, to neither encourage
manufacturers to increase the footprint
of their fleets, nor to decrease it.
Upsizing also is discouraged through a
‘‘cut-off’’ at larger footprints. For both
cars and light trucks there is a ‘‘cut-off’’
that affects vehicles smaller than 41
square feet. The agencies recognize that
for manufacturers who make small
vehicles in this size range, this cut off
creates some incentive to downsize (i.e.
further reduce the size and/or increase
the production of models currently
smaller than 41 square feet) to make it
easier to meet the target. The cut off may
also create some incentive for
manufacturers who do not currently
offer such models to do so in the future.
However, at the same time, the agencies
believe that there is a limit to the market
for cars smaller than 41 square feet—
most consumers likely have some
minimum expectation about interior
volume, among other things. In
addition, vehicles in this market
segment are the lowest price point for
the light-duty automotive market, with
a number of models in the $10,000 to
$15,000 range. In order to justify selling
more vehicles in this market in order to
generate fuel economy or CO2 credits
(that is, for this final rule to be the
incentive for selling more vehicles in
this small car segment), a manufacturer
111 We note, however, that 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, or to other portions of the vehicle outside the
wheels. The crush space provided by those portions
of a vehicle can make important contributions to
managing crash energy. At least one manufacturer
has confidentially indicated plans to reduce
overhang as a way of reducing mass on some
vehicles during the rulemaking time frame.
Additionally, simply because footprint-based
standards create no incentive to downsize vehicles,
does not mean that manufacturers may not choose
to do so if doing so makes it easier to meet the
overall standard (as, for example, if the smaller
vehicles are so much lighter that they exceed their
targets by much greater amounts).
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$0.026.
$0.001.
$0.075.
3%, 7%.
would need to add additional
technology to the lowest price segment
vehicles, which could be challenging.
Therefore, due to these two reasons (a
likely limit in the market place for the
smallest sized cars and the potential
consumer acceptance difficulty in
adding the necessary technologies in
order to generate fuel economy and CO2
credits), the agencies believe that the
incentive for manufacturers to increase
the sale of vehicles smaller than 41
square feet due to this rulemaking, if
present, is small. For further discussion
on these aspects of the standards, please
see Section II.C above and Chapter 2 of
the Joint TSD.
Manufacturers have stated, however,
that they will reduce vehicle weight as
one of the cost-effective means of
increasing fuel economy and reducing
CO2 emissions, and the agencies have
incorporated this expectation into our
modeling analysis supporting today’s
final standards. NHTSA’s previous
analyses examining the relationship
between vehicle mass and fatalities
found fatality increases as vehicle
weight and size were reduced, but these
previous analyses did not differentiate
between weight reductions and size
(i.e., weight and footprint) reductions.
The question of the effect of changes
in vehicle mass 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, as discussed by a number
of commenters to the NPRM. This
contentiousness arises, at least in part,
from the difficulty of isolating vehicle
mass from other confounding factors
(e.g., driver behavior, or vehicle factors
such as engine size and wheelbase). In
addition, several vehicle factors have
been closely related historically, such as
vehicle mass, wheelbase, and track
width. The issue has been reviewed and
analyzed in the literature for more than
two decades. For the reader’s reference,
much more information about safety in
the CAFE context is available in Chapter
IX of NHTSA’s FRIA. Chapter 7.6 of
EPA’s final RIA also contained
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additional discussion on mass and
safety.
Over the past several years, as also
discussed by a number of commenters
to the NPRM, contention has arisen with
regard to the applicability of analysis of
historical crash data to future safety
effects due to mass reduction. The
agencies recognize that there are a host
of factors that may make future mass
reduction different than what is
reflected in the historical data. For one,
the footprint-based standards have been
carefully developed by the agencies so
that they do not encourage vehicle
footprint reductions as a way of meeting
the standards, but so that they do
encourage application of fuel-saving
technologies, including mass reduction.
This in turn encourages manufacturers
to find ways to separate mass reduction
from footprint reduction, which will
very likely result in a future relationship
between mass and fatalities that is safer
than the historical relationship.
However, as manufacturers pursue these
methods of mass reduction, the fleet
moves further away from the historical
trends, which the agencies recognize.
NHTSA’s NPRM analysis of the safety
effects of the proposed CAFE standards
was based on NHTSA’s 2003 report
concerning mass and size reduction in
MYs 1991–1999 vehicles, and evaluated
a ‘‘worst-case scenario’’ in which the
safety effects of the combined
reductions of both mass and size for
those vehicles were determined for the
future passenger car and light truck
fleets.112 In the NPRM analysis, mass
and size could not be separated from
one another, resulting in what NHTSA
recognized was a larger safety disbenefit
than was likely under the MYs 2012–
2016 footprint-based CAFE standards.
NHTSA emphasized, however, that
actual fatalities would likely be less
than these ‘‘worst-case’’ estimates, and
possibly significantly less, based on the
various factors discussed in the NPRM
that could reduce the estimates, such as
careful mass reduction through material
substitution, etc.
For the final rule, as discussed in the
NPRM and in recognition of the
importance of conducting analysis that
better reflects, within the limits of our
current knowledge, the potential safety
effects of future mass reduction in
response to the final CAFE and GHG
standards that is highly unlikely to
involve concurrent reductions in
footprint, NHTSA has revised its
analysis in consultation with EPA.
Perhaps the most important change has
been that NHTSA agreed with
commenters that it was both possible
112 The
analysis excluded 2-door cars.
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and appropriate to separate the effect of
mass reductions from the effect of
footprint reductions. NHTSA thus
performed a new statistical analysis,
hereafter referred to as the 2010 Kahane
analysis, of the MYs 1991–99 vehicle
database from its 2003 report (now
including rather than excluding 2-door
cars in the passenger car fleet), assessing
relationships between fatality risk,
mass, and footprint for both passenger
cars and LTVs (light trucks and vans).113
As part of its results, the new report
presents an ‘‘upper-estimate scenario,’’ a
‘‘lower-estimate scenario,’’ as well as an
‘‘actual regression result scenario’’
representing potential safety effects of
future mass reductions without
corresponding vehicle size reductions,
that assume, by virtue of being a crosssectional analysis of historical data, that
historical relationships between vehicle
mass and fatalities are maintained. The
‘‘upper-estimate scenario’’ and ‘‘lowerestimate scenario’’ are based on
NHTSA’s judgment as a vehicle safety
agency, and are not meant to convey any
more or less likelihood in the results,
but more to convey a sense of bounding
for potential safety effects of reducing
mass while holding footprint constant.
The upper-estimate scenario reflects
potential safety effects given the report’s
finding that, using the one-step
regression method of the 2003 Kahane
report, the regression coefficients show
that mass and footprint each accounted
for about half the fatality increase
associated with downsizing in a crosssectional analysis of MYs 1991–1999
cars. A similar effect was found for
lighter LTVs. Applying the same
regression method to heavier LTVs,
however, the coefficients indicated a
significant societal fatality reduction
when mass, but not footprint, is reduced
in the heavier LTVs.114 Fatalities are
reduced primarily because mass
reduction in the heavier LTVs will
113 ‘‘Relationships Between Fatality Risk, Mass,
and Footprint in Model Year 1991–1999 and Other
Passenger Cars and LTVs,’’ Charles J. Kahane,
NCSA, NHTSA, March 2010. The text of the report
may be found in Chapter IX of NHTSA’s FRIA,
where it constitutes a section of that chapter. We
note that this report has not yet been externally
peer-reviewed, and therefore may be changed or
refined after it has been subjected to peer review.
The results of the report have not been included in
the tables summarizing the costs and benefits of this
rulemaking and did not affect the stringency of the
standards. NHTSA has begun the process for
obtaining peer review in accordance with OMB
guidance. The agency will ensure that concerns
raised during the peer review process are addressed
before relying on the report for future rulemakings.
The results of the peer review and any subsequent
revisions to the report will be made available in a
public docket and on NHTSA’s Web site as they are
completed.
114 Conversely, the coefficients indicate a
significant increase if footprint is reduced.
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reduce risk to occupants of the other
cars and lighter LTVs involved in
collisions with these heavier LTVs.115
Thus, even in the ‘‘upper-estimate
scenario,’’ the potential fatality increases
associated with mass reduction in the
passenger cars would be to a large
extent offset by the benefits of mass
reduction in the heavier LTVs.
The lower-estimate scenario, in turn,
reflects NHTSA’s estimate of potential
safety effects if future mass reduction is
accomplished entirely by material
substitution, smart design,116 and
component integration, among other
things, that can reduce mass without
perceptibly changing a vehicle’s shape,
functionality, or safety performance,
maintaining structural strength without
compromising other aspects of safety. If
future mass reduction follows this path,
it could limit the added risk close to
only the effects of mass per se (the
ability to transfer momentum to other
vehicles or objects in a collision),
resulting in estimated effects in
passenger cars that are substantially
smaller than in the upper-estimate
scenario based directly on the regression
results. The lower-estimate scenario also
covers both passenger cars and LTVs.
Overall, based on the new analyses,
NHTSA estimated that fatality effects
could be markedly less than those
estimated in the ‘‘worst-case scenario’’
presented in the NPRM. The agencies
believe that the overall effect of mass
reduction in cars and LTVs may be close
to zero, and may possibly be beneficial
in terms of the fleet as a whole if mass
reduction is carefully applied in the
future (as with careful material
substitution and other methods of mass
reduction that can reduce mass without
perceptibly changing a car’s shape,
functionality, or safety performance,
115 We note that there may be some (currently
non-quantifiable) welfare losses for purchasers of
these heavier LTVs, the mass of which is reduced
in response to these final standards. This is due to
the fact that in certain crashes, as discussed below
and in greater detail in Chapter IX of the NHTSA
FRIA, more mass will always be helpful (although
certainly in other crashes, the amount of mass
reduction modeled by the agency will not be
enough to have any significant effect on driver/
occupant safety). However, we believe the effects of
this will likely be minor. Consumer welfare impacts
of the final rule are discussed in more detail in
Chapter VIII of the NHTSA FRIA.
116 Manufacturers may reduce mass through smart
design using computer aided engineering (CAE)
tools that can be used to better optimize load paths
within structures by reducing stresses and bending
moments applied to structures. 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.
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and maintain its structural strength
without making it excessively rigid).
This is especially important if the mass
reduction in the heavier LTVs is greater
(in absolute terms) than in passenger
cars, as discussed further below and in
the 2010 Kahane report.
The following sections will address
how the agencies addressed potential
safety effects in the NPRM for the
proposed standards, how commenters
responded, and the work that NHTSA
has done since the NPRM to revise its
estimates of potential safety effects for
the final rule. The final section
discusses some of the agencies’ plans for
the future with respect to potential
analysis and studies to further enhance
our understanding of this important and
complex issue.
1. What did the agencies say in the
NPRM with regard to potential safety
effects?
In the NPRM preceding these final
standards, NHTSA’s safety assessment
derived from the agency’s belief that
some of these vehicle factors, namely
vehicle mass and footprint, could not be
accurately separated. NHTSA relied on
the 2003 study by Dr. Charles Kahane,
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.117 The study compares
the fatality rates of LTVs and cars to
quantify differences between vehicle
types, given drivers of the same age/
gender, etc. In that 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, safety features, and size of the
occupant compartment, that were
naturally or historically confounded
with mass in MYs 1991–1999 vehicles.
The rationale was that adding length,
width, or strength to a vehicle
historically also made it heavier.
NHTSA utilized the relationships
between mass and safety from Kahane
(2003), expressed as percentage
increases in fatalities per 100-pound
mass reduction, and examined the mass
effects assumed in the NPRM modeling
analysis. While previous CAFE
rulemakings had limited mass reduction
as a ‘‘technology option’’ to vehicles over
5,000 pounds GVWR, both NHTSA’s
and EPA’s modeling analyses in the
NPRM included mass reduction of up to
117 Kahane, Charles J., PhD, ‘‘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 March 10, 2010).
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5–10 percent of baseline curb weight,
depending on vehicle subclass, in
response to recently-submitted
manufacturer product plans as well as
public statements indicating that these
levels were possible and likely. 5–10
percent represented a maximum bound;
EPA’s modeling, for example, included
average vehicle weight reductions of 4
percent between MYs 2011 and 2016,
although the average per-vehicle mass
reduction was greater in absolute terms
for light trucks than for passenger cars.
NHTSA’s assumptions for mass
reduction were also limited by lead time
such that mass reductions of 1.5 percent
were included for redesigns occurring
prior to MY 2014, and mass reductions
of 5–10 percent were only ‘‘achievable’’
in redesigns occurring in MY 2014 or
later. NHTSA further assumed that mass
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).
Based on these assumptions of how
manufacturers might comply with the
standards, NHTSA examined the effects
of the identifiable safety trends over the
lifetime of the vehicles produced in
each model year. The effects were
estimated on a year-by-year basis,
assuming that certain known safety
trends would result in a reduction in the
target population of fatalities from
which the mass effects are derived.118
Using this method, NHTSA found a 12.6
percent reduction in fatality levels
between 2007 and 2020. The estimates
derived from applying Kahane’s 2003
percentages to a baseline of 2007
fatalities were then multiplied by 0.874
to account for changes that the agency
believed would take place in passenger
car and light truck safety between the
118 NHTSA explained that there are several
identifiable safety trends that are already in place
or expected to occur in the foreseeable future and
that were 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. Additionally, the
agency stated that it anticipates 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 mass reductions. Thus, while the
percentage increases in Kahane (2003) was applied,
the reduced base resulted in smaller absolute
increases than those that were predicted in the 2003
report.
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2007 baseline on-road fleet used for that
particular analysis and year 2020.119
NHTSA and EPA both emphasized
that the safety effect estimates in the
NPRM needed to be understood in the
context of the 2003 Kahane report,
which is based upon a cross-sectional
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 those analyses were used to
predict the safety-related fatalities that
could occur in the unlikely event that
weight reduction for MYs 2012–2016 is
accomplished entirely by reducing mass
and reducing footprint. Any estimates
derived from those analyses represented
a ‘‘worst-case’’ estimate of safety effects,
for several reasons.
First, manufacturers are far less likely
to reduce mass by ‘‘downsizing’’ (making
vehicles smaller overall) under the
current attribute-based standards,
because the standards are based on
vehicle footprint. The selection of
footprint as the attribute in setting CAFE
and GHG standards helps to reduce the
incentive to alter a vehicle’s physical
dimensions. This is because as footprint
decreases, the corresponding fuel
economy/GHG emission target becomes
more stringent.120 The shape of the
footprint curves themselves have also
been designed to be approximately
‘‘footprint neutral’’ within the sloped
portion of the functions—that is, to
neither encourage manufacturers to
increase the footprint of their fleets, nor
to decrease it. For further discussion on
these aspects of the standards, please
see Section II.C above and Chapter 2 of
the Joint TSD. However, as discussed in
Sections III.H.1 and IV.G.6 below, the
agencies acknowledge some uncertainty
regarding how consumer purchases will
change in response to the vehicles
119 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)
120 We note, however, that 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, or to other portions of the vehicle outside the
wheels. The crush space provided by those portions
of a vehicle can make important contributions to
managing crash energy. NHTSA noted in the NPRM
that at least one manufacturer has confidentially
indicated plans to reduce overhang as a way of
reducing mass on some vehicles during the
rulemaking time frame. Additionally, simply
because footprint-based standards create no
incentive to downsize vehicles, does not mean that
manufacturers may not choose to do so if doing so
makes it easier to meet the overall standard (as, for
example, if the smaller vehicles are so much lighter
that they exceed their targets by much greater
amounts).
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designed to meet the MYs 2012–2016
standards. This could potentially affect
the mix of vehicles sold in the future,
including the mass and footprint
distribution.
As a result, the agencies found it
likely that a significant portion of the
mass reduction in the MY 2012–2016
vehicles would be accomplished by
strategies, such as material substitution,
smart design, reduced powertrain
requirements,121 and mass
compounding, that have a lesser safety
effect than the prevalent 1980s strategy
of simply making the vehicles smaller.
The agencies noted that to the extent
that future mass reductions could be
achieved by these methods—without
any accompanying reduction in the size
or structural strength of the vehicle—
then the fatality increases associated
with the mass reductions anticipated by
the model as a result of the proposed
standards could be significantly smaller
than those in the worst-case scenario.
However, even though the agencies
recognized that these methods of mass
reduction could be technologically
feasible in the rulemaking time frame,
and included them as such in our
modeling analyses, the agencies
diverged as to how potential safety
effects accompanying such methods of
mass reduction could be evaluated,
particularly in relation to the worst-case
scenario presented by NHTSA. NHTSA
stated that it could not predict how
much smaller those increases would be
for any given mixture of mass reduction
methods, since the data on the safety
effects of mass reduction alone (without
size reduction) was not available due to
the low numbers of vehicles in the
current on-road fleet that have utilized
these technologies extensively. Further,
to the extent that mass reductions were
accomplished through use of light, highstrength materials, NHTSA emphasized
that there would be significant
additional costs that would need to be
determined and accounted for than were
reflected in the agency’s proposal.
Additionally, NHTSA emphasized
that while it thought material
substitution and other methods of mass
reduction could considerably lessen the
potential safety effects compared to the
historical trend, NHTSA also stated that
it did not believe the effects in
passenger cars would be smaller than
zero. EPA disagreed with this, and
stated in the NPRM that the safety
121 Reduced powertrain requirements do not
include a reduction in performance. When vehicle
mass is reduced, engine torque and transmission
gearing can be altered so that acceleration
performance is held constant instead of improving.
A detailed discussion is included in Chapter 3 of
the Technical Support Document.
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effects could very well be smaller than
zero. Even though footprint-based
standards discourage downsizing as a
way of ‘‘balancing out’’ sales of larger/
heavier vehicles, they do not discourage
manufacturers from reducing crush
space in overhang areas or from
reducing structural support as a way of
taking out mass.122 Moreover, NHTSA’s
analysis had also found that lighter cars
have a higher involvement rate in fatal
crashes, even after controlling for the
driver’s age, gender, urbanization, and
region of the country. Being unable to
explain this clear trend in the crash
data, NHTSA stated that it must assume
that mass reduction is likely to be
associated with higher fatal-crash rates,
no matter how the weight reduction is
achieved.
NHTSA also noted in the NPRM that
several studies by Dynamic Research,
Inc. (DRI) had been repeatedly cited to
the agency in support of the proposition
that reducing vehicle mass while
maintaining track width and wheelbase
would lead to significant safety benefits.
In its 2005 studies, one of which was
published and peer-reviewed through
the Society of Automotive Engineers as
a technical paper, DRI attempted to
assess the independent effects of vehicle
weight and size (in terms of wheelbase
and track width) on safety, and
presented results indicating that
reducing vehicle weight tends to reduce
fatalities, but that reducing vehicle
wheelbase and track width tends to
increase fatalities. DRI’s analysis was
based on FARS data for MYs 1985–1998
passenger cars and 1985–1997 light
trucks, similar to the MYs 1991–1999
car and truck data used in the 2003
Kahane report. However, DRI included
2-door passenger cars, while the 2003
Kahane report excluded those vehicles
out of concern that their inclusion could
bias the results of the regression
analysis, because a significant
proportion of MYs 1991–1999 2-door
cars were sports and ‘‘muscle’’ cars,
which have particularly high fatal crash
rates for their relatively short
wheelbases compared to the rest of the
fleet. While in the NPRM NHTSA
rejected the results of the DRI studies
based in part on this concern, the
agencies note that upon further
consideration, NHTSA has agreed for
this final rule that the inclusion of
2-door cars in regression analysis of
historical data is appropriate, and
indeed has no overly-biasing effects.
The 2005 DRI studies also differed
from the 2003 Kahane report in terms of
122 However, we recognize that FMVSS and
NCAP ratings may limit the manufacturer’s ability
to reduce crush space or structural support.
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their estimates of the effect of vehicle
weight on rollover fatalities. The 2003
Kahane report analyzed a single
variable, curb weight, as a surrogate for
both vehicle size and weight, and found
that curb weight reductions would
increase rollover fatalities. The DRI
study, in contrast, attempted to analyze
curb weight, wheelbase, and track width
separately, and found that curb weight
reduction would decrease rollover
fatalities, while wheelbase reduction
and track width reduction would
increase them. DRI suggested that
heavier vehicles may have higher
rollover fatalities for two reasons: first,
because taller vehicles tend to be
heavier, so the correlation between
vehicle height and weight and vehicle
center-of-gravity height may make
heavier vehicles more rollover-prone;
and second, because heavier vehicles
may have been less rollovercrashworthy due to FMVSS No. 216’s
constant (as opposed to proportional)
requirements for MYs 1995–1999
vehicles weighing more than 3,333 lbs
unloaded.
Overall, DRI’s 2005 studies found a
reduction in fatalities for cars (580 in
the first study, and 836 in the second
study) and for trucks (219 in the first
study, 682 in the second study) for a 100
pound reduction in curb weight without
accompanying wheelbase or track width
reductions. In the NPRM, NHTSA
disagreed with the results of the DRI
studies, out of concern that DRI’s
inclusion of 2-door cars in its analysis
biased the results, and because NHTSA
was unable to reproduce DRI’s results
despite repeated attempts. NHTSA
stated that it agreed intuitively with
DRI’s conclusion that vehicle mass
reductions without accompanying size
reductions (as through substitution of a
heavier material for a lighter one) would
be less harmful than downsizing, but
without supporting real-world data and
unable to verify DRI’s results, NHTSA
stated that it could not conclude that
mass reductions would result in safety
benefits. EPA, in contrast, believed that
DRI’s results contained some merit, in
particular because the study separated
the effects of mass and size and EPA
stated that applying them using the curb
weight reductions in EPA’s modeling
analysis would show an overall
reduction of fatalities for the proposed
standards.
On balance, both agencies recognized
that mass reduction could be an
important tool for achieving higher
levels of fuel economy and reducing
CO2 emissions, and emphasized that
NHTSA’s fatality estimates represented
a worst-case scenario for the potential
effects of the proposed standards, and
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that actual fatalities will be less than
these estimates, possibly significantly
less, based on the various factors
discussed in the NPRM that could
reduce the estimates. The agencies
sought comment on the safety analysis
and discussions presented in the NPRM.
2. What public comments did the
agencies receive on the safety analysis
and discussions in the NPRM?
Several dozen commenters addressed
the safety issue. Claims and arguments
made by commenters in response to the
safety effects analysis and discussion in
the NPRM tended to follow several
general themes, as follows:
• NHTSA’s safety effects estimates
are inaccurate because they do not
account for:
Æ While NHTSA’s study only
considers vehicles from MYs 1991–
1999, more recently-built vehicles are
safer than those, and future vehicles
will be safer still;
Æ Lighter vehicles are safer than
heavier cars in terms of crashavoidance, because they handle and
brake better;
Æ Fatalities are linked more to other
factors than mass;
Æ The structure of the standards
reduces/contributes to potential safety
effects from mass reduction;
Æ NHTSA could mitigate additional
safety effects from mass reduction, if
there are any, by simply regulating
safety more;
Æ Casualty risks range widely for
vehicles of the same weight or footprint,
which skews regression analysis and
makes computer simulation a better
predictor of the safety effects of mass
reduction;
• DRI’s analysis shows that lighter
vehicles will save lives, and NHTSA
reaches the opposite conclusion without
disproving DRI’s analysis;
Æ Possible reasons that NHTSA and
DRI have reached different conclusions:
fi NHTSA’s study should distinguish
between reductions in size and
reductions in weight like DRI’s;
fi NHTSA’s study should include
two-door cars;
fi NHTSA’s study should have used
different assumptions;
fi NHTSA’s study should include
confidence intervals;
• NHTSA should include a ‘‘bestcase’’ estimate in its study;
• NHTSA should not include a
‘‘worst-case’’ estimate in its study;
The agencies recognize that the issue
of the potential safety effects of mass
reduction, which was one of the many
factors considered in the balancing that
led to the agencies’ conclusion as to
appropriate stringency levels for the
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MYs 2012–2016 standards, is of great
interest to the public and could possibly
be a more significant factor in
regulators’ and manufacturers’ decisions
with regard to future standards beyond
MY 2016. The agencies are committed
to analyzing this issue thoroughly and
holistically going forward, based on the
best available science, in order to
further their closely related missions of
safety, energy conservation, and
environmental protection. We respond
to the issues and claims raised by
commenters in turn below.
NHTSA’s estimates are inaccurate
because NHTSA’s study only
considers vehicles from MYs 1991–
1999, but more recently-built vehicles
are safer than those, and future
vehicles will be safer still
A number of commenters (CAS,
Adcock, NACAA, NJ DEP, NY DEC,
UCS, and Wenzel) argued that the 2003
Kahane report, on which the ‘‘worst-case
scenario’’ in the NPRM was based, is
outdated because it considers the
relationship between vehicle weight and
safety in MYs 1991–1999 passenger
cars. These commenters generally stated
that data from MYs 1991–1999 vehicles
provide an inaccurate basis for assessing
the relationship between vehicle weight
and safety in current or future vehicles,
because the fleets of vehicles now and
in the future are increasingly different
from that 1990s fleet (more crossovers,
fewer trucks, lighter trucks, etc.), with
different vehicle shapes and
characteristics, different materials, and
more safety features. Several of these
commenters argued that NHTSA should
conduct an updated analysis for the
final rule using more recent data—
Wenzel, for example, stated that an
updated regression analysis that
accounted for the recent introduction of
crossover SUVs would likely find
reduced casualty risk, similar to DRI’s
previous finding using fatality data. CEI,
in contrast, argued that the ‘‘safety tradeoff’’ would not be eliminated by new
technologies and attribute-based
standards, because additional weight
inherently makes a vehicle safer to its
own occupants, citing the 2003 Kahane
report, while AISI argued that Desapriya
had found that passenger car drivers
and occupants are two times more likely
to be injured than drivers and occupants
in larger pickup trucks and SUVs.
Several commenters (Adcock, CARB,
Daimler, NESCAUM, NRDC, Public
Citizen, UCS, Wenzel) suggested that
NHTSA’s analysis was based on overly
pessimistic assumptions about how
manufacturers would choose to reduce
mass in their vehicles, because
manufacturers have a strong incentive
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in the market to build vehicles safely.
Many of these commenters stated that
several manufacturers have already
committed publicly to fairly ambitious
mass reduction goals in the mid-term,
but several stated further that NHTSA
should not assume that manufacturers
will reduce the same amount of mass in
all vehicles, because it is likely that they
will concentrate mass reduction in the
heaviest vehicles, which will improve
compatibility and decrease aggressivity
in the heaviest vehicles. Daimler
emphasized that all vehicles will have
to comply with the Federal Motor
Vehicle Safety Standards, and will
likely be designed to test well in
NHTSA’s NCAP tests.
Other commenters (Aluminum
Association, CARB, CAS, ICCT, MEMA,
NRDC, U.S. Steel) also emphasized the
need for NHTSA to account for the
safety benefits to be expected in the
future from use of advanced materials
for lightweighting purposes and other
engineering advances. The Aluminum
Association stated that advanced
vehicle design and construction
techniques using aluminum can
improve energy management and
minimize adverse safety effects of their
use,123 but that NHTSA’s safety analysis
could not account for those benefits if
it were based on MYs 1991–1999
vehicles. CAS, ICCT, and U.S. Steel
discussed similar benefits for more
recent and future vehicles built with
high strength steel (HSS), although U.S.
Steel cautioned that given the
stringency of the proposed standards,
manufacturers would likely be
encouraged to build smaller and lighter
vehicles in order to achieve compliance,
which fare worse in head-on collisions
than larger, heavier vehicles. AISI, in
contrast to U.S. Steel, stated that in its
research with the Auto/Steel
Partnership and in programs supported
by DOE, it had found that the use of new
Advanced HSS steel grades could
enable mass of critical crash structures,
such as front rails and bumper systems,
to be reduced by 25 percent without
degrading performance in standard
NHTSA frontal or IIHS offset
123 The Aluminum Association (NHTSA–2009–
0059–0067.3) stated that its research on vehicle
safety compatibility between an SUV and a midsized car, done jointly with DRI, shows that
reducing the weight of a heavier SUV by 20% (a
realistic value for an aluminum-intensive vehicle)
could reduce the combined injury rate for both
vehicles by 28% in moderately severe crashes. The
commenter stated that it would keep NHTSA
apprised of its results as its research progressed.
Based on the information presented, NHTSA
believes that this research appears to agree with
NHTSA’s latest analysis, which finds that a
reduction in weight for the heaviest vehicles may
improve overall fleet safety.
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instrumented crash tests compared to
their ‘‘heavier counterparts.’’
Agencies’ response: NHTSA, in
consultation with EPA and DOE, plans
to begin updating the MYs 1991–1999
database on which NHTSA’s safety
analyses in the NPRM and final rule are
based in the next several months in
order to analyze the differences in safety
effects against vehicles built in more
recent model years. As this task will
take at least a year to complete,
beginning it immediately after the
NPRM would not have enabled the
agency to complete it and then conduct
a new analysis during the period
between the NPRM and the final rule.
For purposes of this final rule,
however, we believe that using the same
MYs 1991–1999 database as that used in
the 2003 Kahane study provides a
reasonable basis for attempting to
estimate safety effects due to reductions
in mass. While commenters often stated
that updating the database would help
to reveal the effect of recentlyintroduced lightweight vehicles with
extensive material substitution, there
have in fact not yet been a significant
number of vehicles with substantial
mass reduction/material substitution to
analyze, and they must also show up in
the crash databases for NHTSA to be
able to add them to its analysis. Based
on NHTSA’s research, specifically, on
three statistical analyses over a 12-year
period (1991–2003) covering a range of
22 model years (1978–1999), NHTSA
believes that the relationships between
mass, size, and safety has only changed
slowly over time, although we recognize
that they may change somewhat more
rapidly in the future.124 As the on-road
fleet gains increasing numbers of
vehicles with increasing amounts of
different methods of mass reduction
applied to them, we may begin to
discern changes in the crash databases
due to the presence of these vehicles,
but any such changes are likely to be
slow and evolutionary, particularly in
the context of MYs 2000–2009 vehicles.
The agencies do expect that further
analysis of historical data files will
continue to provide a robust and
practicable basis for estimating the
124 NHTSA notes the CAS’ comments regarding
changes in the vehicle fleets since the introduction
of CAFE standards in the late 1970s, but believes
they apply more to the differences between late
1970s through 1980s vehicles and 2010s vehicles
than to the differences between 1990s and 2010s
vehicles. NHTSA believes that the CAS comments
regarding the phase-out of 1970s vehicles and their
replacement with safer, better fuel-economyachieving 1980s vehicles paint with rather too large
a brush to be relevant to the main discussion of
whether the 2003 Kahane report database can
reasonably be used to estimate safety effects of mass
reduction for the MYs 2012–2016 fleet.
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potential safety effects that might occur
with future reductions in vehicle mass.
However, we recognize that estimates
derived from analysis of historical data,
like estimates from any other type of
analysis (including simulation-based
analysis, which cannot feasibly cover all
relevant scenarios), will be uncertain in
terms of predicting actual future
outcomes with respect to a vehicle fleet,
driving population, and operating
environment that does not yet exist.
The agencies also recognize that more
recent vehicles have more safety
features than 1990s vehicles, which are
likely to make them safer overall. To
account for this, NHTSA did adjust the
results of both its NPRM and final rule
analysis to include known safety
improvements, like ESC and increases
in seat belt use, that have occurred since
MYs 1991–1999.125 However, simply
because newer vehicles have more
safety countermeasures, does not mean
that the weight/safety relationship
necessarily changes. More likely, it
would change the target population (the
number of fatalities) to which one
would apply the weight/safety
relationship. Thus, we still believe that
some mass reduction techniques for
both passenger cars and light trucks can
make them less safe, in certain crashes
as discussed in NHTSA’s FRIA, than if
mass had not been reduced.126
As for NHTSA’s assumptions about
mass reduction, in its analysis, NHTSA
generally assumed that lighter vehicles
could be reduced in weight by 5 percent
while heavier light trucks could be
reduced in weight by 10 percent.
NHTSA recognizes that manufacturers
might choose a different mass reduction
scheme than this, and that its
quantification of the estimated effect on
safety would be different if they did. We
emphasize that our estimates are based
on the assumptions we have employed
and are intended to help the agency
consider the potential effect of the final
standards on vehicle safety. Thus, based
on the 2010 Kahane analysis, reductions
in weight for the heavier light trucks
would have positive overall safety
effects,127 while mass reductions for
passenger cars and smaller light trucks
125 See
NHTSA FRIA Chapter IX.
one has a vehicle (vehicle A), and both
reduces the vehicle’s mass and adds new safety
equipment to it, thus creating a variant (vehicle A1),
the variant might conceivably have a level of overall
safety for its occupants equal to that of the original
vehicle (vehicle A). However, vehicle A1 might not
be as safe as second variant (vehicle A2) of vehicle
A, one that is produced by adding to vehicle A the
same new safety equipment added to the first
variant, but this time without any mass reduction.
127 This is due to the beneficial effect on the
occupants of vehicles struck by the downweighted
larger vehicles.
126 If
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would have negative overall safety
effects.
NHTSA’s estimates are inaccurate
because they do not account for the
fact that lighter vehicles are safer than
heavier cars in terms of crashavoidance, because they handle and
brake better
ICCT stated that lighter vehicles are
better able to avoid crashes because they
‘‘handle and brake slightly better,’’
arguing that size-based standards
encourage lighter-weight car-based
SUVs with ‘‘significantly better handling
and crash protection’’ than 1996–1999
mid-size SUVs, which will reduce both
fatalities and fuel consumption. ICCT
stated that NHTSA did not include
these safety benefits in its analysis. DRI
also stated that its 2005 report found
that crash avoidance improves with
reduction in curb weight and/or with
increases in wheelbase and track,
because ‘‘Crash avoidance can depend,
amongst other factors, on the vehicle
directional control and rollover
characteristics.’’ DRI argued that,
therefore, ‘‘These results indicate that
vehicle weight reduction tends to
decrease fatalities, but vehicle
wheelbase and track reduction tends to
increase fatalities.’’
Agencies’ response: In fact, NHTSA’s
regression analysis of crash fatalities per
million registration years measures the
effects of crash avoidance, if there are
any, as well as crashworthiness. Given
that the historical empirical data for
passenger cars show a trend of higher
crash rates for lighter cars, it is unclear
whether lighter cars have, in the net,
superior crash avoidance, although the
agencies recognize that they may have
advantages in certain individual
situations. EPA presents a discussion of
improved accident avoidance as vehicle
mass is reduced in Chapter 7.6 of its
final RIA. The important point to
emphasize is that it depends on the
situation—it would oversimplify
drastically to point to one situation in
which extra mass helps or hurts and
then extrapolate effects for crash
avoidance across the board based on
only that.
For example, the relationship of
vehicle mass to rollover and directional
stability is more complex than
commenters imply. For rollover, it is
true that if heavy pickups were always
more top-heavy than lighter pickups of
the same footprint, their higher center of
gravity could make them more rolloverprone, yet some mass can be placed so
as to lower a vehicle’s center of gravity
and make it less rollover-prone. For
mass reduction to be beneficial in
rollover crashes, then, it must take
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center of gravity height into account
along with other factors such as
passenger compartment design and
structure, suspension, the presence of
various safety equipment, and so forth.
Similarly, for directional stability, it is
true that having more mass increases the
‘‘understeer gradient’’ of cars—i.e., it
reinforces their tendency to proceed in
a straight line and slows their response
to steering input, which would be
harmful where prompt steering response
is essential, such as in a double-lanechange maneuver to avoid an obstacle.
Yet more mass and a higher understeer
gradient could help when it is better to
remain on a straight path, such as on a
straight road with icy patches where
wheel slip might impair directional
stability. Thus, while less vehicle mass
can sometimes improve crash avoidance
capability, there can also be situations
when more vehicle mass can help in
other kinds of crash avoidance.
Further, NHTSA’s research suggests
that additional vehicle mass may be
even more helpful, as discussed in
Chapter IX of NHTSA’s FRIA, when the
average driver’s response to a vehicle’s
maneuverability is taken into account.
Lighter cars have historically (1976–
2009) had higher collision-involvement
rates than heavier cars—even in multivehicle crashes where directional and
rollover stability is not particularly an
issue.128 Based on our analyses using
nationally-collected FARS and GES
data, drivers of lighter cars are more
likely to be the culpable party in a 2vehicle collision, even after controlling
for footprint, the driver’s age, gender,
urbanization, and region of the country.
Thus, based on this data, it appears
that lighter cars may not be driven as
well as heavier cars, although it is
unknown why this is so. If poor drivers
intrinsically chose light cars (selfselection), it might be evidenced by an
increase in antisocial driving behavior
(such as DWI, drug involvement,
speeding, or driving without a license)
as car weight decreases, after controlling
for driver age and gender—in addition
to the increases in merely culpable
driver behavior (such as failure to yield
the right of way). But analyses in
NHTSA’s 2003 report did not show an
increase in antisocial driver behavior in
the lighter cars paralleling their increase
in culpable involvements.
NHTSA also hypothesizes that certain
aspects of lightness and/or smallness in
a car may give a driver a perception of
greater maneuverability that ultimately
results in driving with less of a ‘‘safety
margin,’’ e.g., encouraging them to
weave in traffic. That may appear
paradoxical at first glance, as
maneuverability is, in the abstract, a
safety plus. Yet the situation is not
unlike powerful engines that could
theoretically enable a driver to escape
some hazards, but in reality have long
been associated with high crash and
fatality rates.129
NHTSA’s estimates are inaccurate
because fatalities are linked more to
other factors than mass
Tom Wenzel stated that the safety
record of recent model year crossover
SUVs indicates that weight reduction in
this class of vehicles (small to mid-size
SUVs) resulted in a reduction in fatality
risk. Wenzel argued that NHTSA should
acknowledge that other vehicle
attributes may be as important, if not
more important, than vehicle weight or
footprint in terms of occupant safety,
such as unibody construction as
compared to ladder-frame, lower
bumpers, and less rigid frontal
structures, all of which make crossover
SUVs more compatible with cars than
truck-based SUVs.
Marc Ross commented that fatalities
are linked more strongly to intrusion
than to mass, and stated that research by
safety experts in Japan and Europe
suggests the main cause of serious
injuries and deaths is intrusion due to
the failure of load-bearing elements to
properly protect occupants in a severe
crash. Ross argued that the results from
this project have ‘‘overturned the
original views about compatibility,’’
which thought that mass and the mass
ratio were the dominant factors. Since
footprint-based standards will
encourage the reduction of vehicle
weight through materials substitution
while maintaining size, Ross stated,
they will help to reduce intrusion and
consequently fatalities, as the lower
weight reduces crash forces while
maintaining size preserves crush space.
Ross argued that this factor was not
considered by NHTSA in its discussion
of safety. ICCT agreed with Ross’
comments on this issue.
128 See, e.g., NHTSA (2000). Traffic Safety Facts
1999. Report No. DOT HS 809 100. Washington, DC:
National Highway Traffic Safety Administration, p.
71; Najm, W.G., Sen, B., Smith, J.D., and Campbell,
B.N. (2003). Analysis of Light Vehicle Crashes and
Pre-Crash Scenarios Based on the 2000 General
Estimates System, Report No. DOT HS 809 573.
Washington, DC: National Highway Traffic Safety
Administration, p. 48.
129 Robertson, L.S. (1991), ‘‘How to Save Fuel and
Reduce Injuries in Automobiles,’’ The Journal of
Trauma, Vol. 31, pp. 107–109; Kahane, C.J. (1994).
Correlation of NCAP Performance with Fatality Risk
in Actual Head-On Collisions, NHTSA Technical
Report No. DOT HS 808 061. Washington, DC:
National Highway Traffic Safety Administration,
https://www-nrd.nhtsa.dot.gov/Pubs/808061.PDF,
pp. 4–7.
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In previous comments on NHTSA
rulemakings and in several studies,
Wenzel and Ross have argued generally
that vehicle design and ‘‘quality’’ is a
much more important determinant of
vehicle safety than mass. In comments
on the NPRM, CARB, NRDC, Sierra
Club, and UCS echoed this theme.
ICCT commented as well that fatality
rates in the EU are much lower than
rates in the U.S., even though the
vehicles in the EU fleet tend to be
smaller and lighter than those in the
U.S. fleet. Thus, ICCT argued, ‘‘This
strongly supports the idea that vehicle
and highway design are far more
important factors than size or weight in
vehicle safety.’’ ICCT added that ‘‘It also
suggests that the rise in SUVs in the
U.S. has not helped reduce fatalities.’’
CAS also commented that Germany’s
vehicle fleet is both smaller and lighter
than the American fleet, and has lower
fatality rates.
Agencies’ response: NHTSA and EPA
agree that there are many features that
affect safety. While crossover SUVs have
lower fatality rates than truck-based
SUVs, there are no analyses that
attribute the improved safety to mass
alone, and not to other factors such as
the lower center of gravity or the
unibody construction of these vehicles.
While a number of improvements in
safety can be made, they do not negate
the potential that another 100 lbs. could
make a passenger car or crossover
vehicle safer for its occupants, because
of the effects of mass per se as discussed
in NHTSA’s FRIA, albeit similar mass
reductions could make heavier LTVs
safer to other vehicles without
necessarily harming their own drivers
and occupants. Moreover, in the 2004
response to docket comments, NHTSA
explained that the significant
relationship between mass and fatality
risk persisted even after controlling for
vehicle price or nameplate, suggesting
that vehicle ‘‘quality’’ as cited by Wenzel
and Ross is not necessarily more
important than vehicle mass.
As for reductions in intrusions due to
material substitution, the agencies agree
generally that the use of new and
innovative materials may have the
potential to reduce crash fatalities, but
such vehicles have not been introduced
in large numbers into the vehicle fleet.
The agencies will continue to monitor
the situation, but ultimately the effects
of different methods of mass reduction
on overall safety in the real world (not
just in simulations) will need to be
analyzed when vehicles with these
types of mass reduction are on the road
in sufficient quantities to provide
statistically significant results. For
example, a vehicle that is designed to be
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much stiffer to reduce intrusion is likely
to have a more severe crash pulse and
thus impose greater forces on the
occupants during a crash, and might not
necessarily be good for elderly and child
occupant safety in certain types of
crashes. Such trade-offs make it difficult
to estimate overall results accurately
without real world data. The agencies
will continue to evaluate and analyze
such real world data as it becomes
available, and will keep the public
informed as to our progress.
ICCT’s comment illustrates the fact
that different vehicle fleets in different
countries can face different challenges.
NHTSA does not believe that the fact
that the EU vehicle fleet is generally
lighter than the U.S. fleet is the
exclusive reason, or even the primary
factor, for the EU’s lower fatality rates.
The data ICCT cites do not account for
significant differences between the U.S.
and EU such as in belt usage, drunk
driving, rural/urban roads, driving
culture, etc.
The structure of the standards reduces/
contributes to potential safety risks
from mass reduction
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Since switching in 2006 to setting
attribute-based light truck CAFE
standards, NHTSA has emphasized that
one of the benefits of a footprint-based
standard is that it discourages
manufacturers from building smaller,
less safe vehicles to achieve CAFE
compliance by ‘‘balancing out’’ their
larger vehicles, and thus avoids a
negative safety consequence of
increasing CAFE stringency.130 Some
commenters on the NPRM (Daimler,
IIHS, NADA, NRDC, Sierra Club et al.)
agreed that footprint-based standards
would protect against downsizing and
help to mitigate safety risks, while
others stated that there would still be
safety risks even with footprint-based
standards—CEI, for example, argued
that mass reduction inherently creates
safety risks, while IIHS and Porsche
expressed concern about footprint-based
standards encouraging manufacturers to
manipulate wheelbase, which could
reduce crush space and worsen vehicle
handling. U.S. Steel and AISI both
commented that the ‘‘aggressive
schedule’’ for the proposed increases in
stringency could encourage
130 We note that commenters were divided on
whether they believed there was a clear correlation
between vehicle size/weight and safety (CEI,
Congress of Racial Equality, Heritage Foundation,
IIHS, Spurgeon, University of PA Environmental
Law Project) or whether they believed that the
correlation was less clear, for example, because they
believed that vehicle design was more important
than vehicle mass (CARB, Public Citizen).
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manufacturers to build smaller, lighter
vehicles in order to comply.
Some commenters also focused on the
shape and stringency of the target
curves and their potential effect on
vehicle safety. IIHS agreed with the
agencies’ tentative decision to cut off
the target curves at the small-footprint
end. Regarding the safety effect of the
curves requiring less stringent targets for
larger vehicles, while IIHS stated that
increasing footprint is good for safety,
CAS, Wenzel, and the UCSB students
stated that decreasing footprint may be
better for safety in terms of risk to
occupants of other vehicles. Daimler,
Wenzel, and the University of PA
Environmental Law Project commented
generally that more similar passenger
car and light truck targets at identical
footprints (as Wenzel put it, a single
target curve) would improve fleet
compatibility and thus, safety, by
encouraging manufacturers to build
more passenger cars instead of light
trucks.
Agencies’ response: The agencies
continue to believe that footprint-based
standards help to mitigate potential
safety risks from downsizing if the target
curves maintain sufficient slope,
because, based on NHTSA’s analysis,
larger-footprint vehicles are safer than
smaller-footprint vehicles.131 The
structure of the footprint-based curves
will also discourage the upsizing of
vehicles. Nevertheless, we recognize
that footprint-based standards are not a
panacea—NHTSA’s analysis continues
to show that there was a historical
relationship between lower vehicle
mass and increased safety risk in
passenger cars even if footprint is
maintained, and there are ways that
manufacturers may increase footprint
that either improve or reduce vehicle
safety, as indicated by IIHS and Porsche.
With regard to whether the agencies
should set separate curves or a single
one, NHTSA also notes in Section II.C
that EPCA requires NHTSA to establish
standards separately for passenger cars
and light trucks, and thus concludes
that the standards for each fleet should
be based on the characteristics of
vehicles in each fleet. In other words,
the passenger car curve should be based
on the characteristics of passenger cars,
and the light truck curve should be
based on the characteristics of light
trucks—thus to the extent that those
characteristics are different, an
artificially-forced convergence would
not accurately reflect those differences.
However, such convergence could be
appropriate depending on future trends
in the light vehicle market, specifically
131 See
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25389
further reduction in the differences
between passenger car and light truck
characteristics. While that trend was
more apparent when car-like 2WD SUVs
were classified as light trucks, it seems
likely to diminish for the model year
vehicles subject to these rules as the
truck fleet will be more purely ‘‘trucklike’’ than has been the case in recent
years.
NHTSA’s estimates are inaccurate
because NHTSA could mitigate
additional safety risks from mass
reduction, if there are any, by simply
regulating safety more
Since NHTSA began considering the
potential safety risks from mass
reduction in response to increased
CAFE standards, some commenters have
suggested that NHTSA could mitigate
those safety risks, if any, by simply
regulating more.132 In response to the
safety analysis presented in the NPRM,
several commenters stated that NHTSA
should develop additional safety
regulations to require vehicles to be
designed more safely, whether to
improve compatibility (Adcock, NY
DEC, Public Citizen, UCS), to require
seat belt use (CAS, UCS), to improve
rollover and roof crush resistance (UCS),
or to improve crashworthiness generally
by strengthening NCAP and the star
rating system (Adcock). Wenzel
commented further that ‘‘Improvements
in safety regulations will have a greater
effect on occupant safety than FE
standards that are structured to
maintain, but may actually increase,
vehicle size.’’
Agencies’ response: NHTSA
appreciates the commenters’ suggestions
and notes that the agency is continually
striving to improve motor vehicle safety
consistent with its mission. As noted
above, improving safety in other areas
affects the target population that the
mass/footprint relationship could affect,
but it does not necessarily change the
relationship.
The 2010 Kahane analysis discussed
in this final rule evaluates the relative
safety risk when vehicles are made
lighter than they might otherwise be
absent the final MYs 2012–2016
standards. It does consider the effect of
known safety regulations as they are
projected to affect the target population.
Casualty risks range widely for vehicles
of the same weight or footprint, which
skews regression analysis and makes
computer simulation a better
predictor of the safety effects of mass
reduction
132 See, e.g., MY 2011 CAFE final rule, 74 FR
14403–05 (Mar. 30, 2009).
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Wenzel commented that he had
found, in his most recent work, after
accounting for drivers and crash
location, that there is a wide range in
casualty risk for vehicles with the same
weight or footprint. Wenzel stated that
for drivers, casualty risk does generally
decrease as weight or footprint
increases, especially for passenger cars,
but the degree of variation in the data
for vehicles (particularly light trucks) at
a given weight or footprint makes it
difficult to say that a decrease in weight
or footprint will necessarily result in
increased casualty risk. In terms of risk
imposed on the drivers of other
vehicles, Wenzel stated that risk
increases as light truck weight or
footprint increases.
Wenzel further stated that because a
regression analysis can only consider
the average trend in the relationship
between vehicle weight/size and risk, it
must ‘‘ignore’’ vehicles that do not
follow that trend. Wenzel therefore
recommended that the agency employ
computer crash simulations for
analyzing the effect of vehicle weight
reduction on safety, because they can
‘‘pinpoint the effect of specific vehicle
designs on safety,’’ and can model future
vehicles which do not yet exist and are
not bound to analyzing historical data.
Wenzel cited, as an example, a DRI
simulation study commissioned by the
Aluminum Association (Kebschull
2004), which used a computer model to
simulate the effect of changing SUV
mass or footprint (without changing
other attributes of the vehicle) on crash
outcomes, and showed a 15 percent net
decrease in injuries, while increasing
wheelbase by 4.5 inches while
maintaining weight showed a 26 percent
net decrease in serious injuries.
Agencies’ response: The agencies have
reviewed Mr. Wenzel’s draft report for
DOE to which he referred in his
comments, but based on NHTSA’s work
do not find such a wide range of safety
risk for vehicles with the same weight,
although we agree there is a range of
risk for a given footprint. Wenzel found
that for drivers, casualty risk does
generally decrease as weight or footprint
increases, especially for passenger cars,
and that in terms of risk imposed on the
drivers of other vehicles, risk increases
as light truck weight or footprint
increases, but concluded that the
variation in the data precluded the
possibility of drawing any conclusions.
In the 2010 Kahane study presented in
the FRIA, NHTSA undertook a similar
analysis in which it correlated weight to
fatality risk for vehicles of essentially
the same footprint.133 The ‘‘decile
133 Subsections
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analysis,’’ provided as a check on the
trend/direction of NHTSA’s regression
analysis, shows that societal fatality risk
generally increases and rarely decreases
for lighter relative to heavier cars of the
same footprint. Thus, while Mr. Wenzel
was reluctant to draw a conclusion,
NHTSA believes that both our research
and Mr. Wenzel’s appear to point to the
same conclusion. We agree that there is
a wide range in casualty risk among cars
of the same footprint, but we find that
that casualty risk is correlated with
weight. The correlation shows that
heavier cars have lower overall societal
fatality rates than lighter cars of very
similar footprint.
The agencies agree that simulation
can be beneficial in certain
circumstances. NHTSA cautions,
however, that it is difficult for a
simulation analysis to capture the full
range of variations in crash situations in
the way that a statistical regression
analysis does. Vehicle crash dynamics
are complex, and small changes in
initial crash conditions (such as impact
angle or closing speed) can have large
effects on injury outcome. This
condition is a consequence of variations
in the deformation mode of individual
components (e.g., buckling, bending,
crushing, material failure, etc.) and how
those variations affect the creation and
destruction of load paths between the
impacting object and the occupant
compartment during the crash event. It
is therefore difficult to predict and
assess structural interactions using
computational methods when one does
not have a detailed, as-built geometric
and material model. Even when a
complete model is available, prudent
engineering assessments require
extensive physical testing to verify crash
behavior and safety. Despite all this, the
agencies recognize that detailed crash
simulations can be useful in estimating
the relative structural effects of design
changes over a limited range of crash
conditions, and will continue to
evaluate the appropriate use of this tool
in the future.
Simplified crash simulations can also
be valuable tools, but only when
employed as part of a comprehensive
analytical program. They are especially
valuable in evaluating the relative effect
and associated confidence intervals of
feasible design alternatives. For
example, the method employed by
Nusholtz et al.134 could be used by a
134 Nusholtz, G.S., G. Rabbiolo, and Y. Shi,
‘‘Estimation of the Effects of Vehicle Size and Mass
on Crash-Injury Outcome Through Parameterized
Probability Manifolds,’’ Society of Automotive
Engineers (2003), Document No. 2003–01–0905.
Available at https://www.sae.org/technical/papers/
2003–01–0905 (last accessed Feb. 15, 2010).
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vehicle designer to estimate the benefit
of incremental changes in mass or
wheelbase as well as the tradeoffs that
might be made between them once that
designer has settled on a preliminary
design. A key difference between the
research by Nusholtz and the research
by Kebschull that Mr. Wenzel cited 135
is in their suggested applications. The
former is useful in evaluating proposed
alternatives early in the design
process—Nusholtz specifically warns
that the model provides only ‘‘general
insights into the overall risk * * * and
cannot be used to obtain specific
response characteristics.’’ Mr. Wenzel
implies the latter can ‘‘isolate the effect
of specific design changes, such as
weight reduction’’ and thus quantify the
fleet-wide effect of substantial vehicle
redesigns. Yet while Kebschull reports
injury reductions to three significant
digits, there is no validation that vehicle
structures of the proposed weight and
stiffness are even feasible with current
technology. Thus, while the agencies
agree that computer simulations can be
useful tools, we also recognize the value
of statistical regression analysis for
determining fleet-wide effects, because
it inherently incorporates real-world
factors in historical safety assessments.
DRI’s analysis shows that lighter
vehicles will save lives, and NHTSA
reaches the opposite conclusion
without disproving DRI’s analysis
The difference between NHTSA’s
results and DRI’s results for the
relationship between vehicle mass and
vehicle safety has been at the crux of
this issue for several years. While
NHTSA offered some theories in the
NPRM as to why DRI might have found
a safety benefit for mass reduction,
NHTSA’s work since then has enabled
it to identify what we believe is the
most likely reason for DRI’s findings.
135 Mr. Wenzel cites the report by Kebschull et al.
[2004, DRI–TR–04–04–02] as an example of what he
regards as the effective use of computer crash
simulation. NHTSA does not concur that this
analysis represents a viable analytical method for
evaluating the fleet-wide tradeoffs between vehicle
mass and societal safety. The simulation method
employed was not a full finite element
representation of each major structural component
in the vehicles in question. Instead, an Articulated
Total Body (ATB) representation was constructed
for each of two representative vehicles. In the ATB
model, large structural subsystems were
represented by a single ellipsoid. Consolidated
load-deflection properties of these subsystems and
the joints that tie them together were ‘‘calibrated’’
for an ATB vehicle model by requiring that it
reproduce the acceleration pulse of a physical
NHTSA crash test. NHTSA notes that vehicle
simulation models that are calibrated to a single
crash test configuration (e.g., a longitudinal NCAP
test into a rigid wall) are often ill-equipped to
analyze alternative crash scenarios (e.g., vehicle-tovehicle crashes at arbitrary angles and lateral
offsets).
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The potential near multicollinearity of
the variables of curb weight, track
width, and wheelbase creates some
degree of concern that any regression
models with those variables could
inaccurately calibrate their effects.
However, based on its own experience
with statistical analysis, NHTSA
believes that the specific two-step
regression model used by DRI increases
this concern, because it weakens
relationships between curb weight and
dependent variables by splitting the
effect of curb weight across the two
regression steps.
The comments below are in response
to NHTSA’s theories in the NPRM about
the source of the differences between
NHTSA’s and DRI’s results. The
majority of them are answered more
fully in the 2010 Kahane report
included in NHTSA’s FRIA, but we
respond to them in this document as
well for purposes of completeness.
NHTSA and DRI may have reached
different conclusions because
NHTSA’s study does not distinguish
between reductions in size and
reductions in weight like DRI’s
Several commenters (CARB, CBD,
EDF, ICCT, NRDC, and UCS) stated that
DRI had been able to separate the effect
of size and weight in its analysis, and
in so doing proved that there was a
safety benefit to reducing weight
without reducing size. The commenters
suggested that if NHTSA properly
distinguished between reductions in
size and reductions in weight, it would
find the same result as DRI.
Agencies’ response: In the 2010
Kahane analysis presented in the FRIA,
NHTSA did attempt to separate the
effects of vehicle size and weight by
performing regression analyses with
footprint (or alternatively track width
and wheelbase) and curb weight as
separate independent variables. For
passenger cars, NHTSA found that the
regressions attribute the fatality increase
due to downsizing about equally to
mass and footprint—that is, the effect of
reducing mass alone is about half the
effect of reducing mass and reducing
footprint. Unlike DRI’s results, NHTSA’s
regressions for passenger cars and for
lighter LTVs did not find a safety benefit
to reducing weight without reducing
size; while NHTSA did find a safety
benefit for reducing weight in the
heaviest LTVs, the magnitude of the
benefit as compared to DRI’s was
significantly smaller. NHTSA believes
that these differences in results may be
an artifact of DRI’s two-step regression
model, as explained above.
NHTSA and DRI may have reached
different conclusions because
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NHTSA’s study does not include twodoor cars like DRI’s
One of NHTSA’s primary theories in
the NPRM as to why NHTSA and DRI’s
results differed related to DRI’s
inclusion in its analysis of 2-door cars.
NHTSA had excluded those vehicles
from its analysis on the grounds that 2door cars had a disproportionate crash
rate (perhaps due to their inclusion of
muscle and sports cars) which appeared
likely to skew the regression. Several
commenters argued that NHTSA should
have included 2-door cars in its
analysis. DRI and James Adcock stated
that 2-door cars should not be excluded
because they represent a significant
portion of the light-duty fleet, while
CARB and ICCT stated that because DRI
found safety benefits whether 2-door
cars were included or not, NHTSA
should include 2-door cars in its
analysis. Wenzel also commented that
NHTSA should include 2-door cars in
subsequent analyses, stating that while
his analysis of MY 2000–2004 crash
data from 5 states indicates that, in
general, 4-door cars tend to have lower
fatality risk than 2-door cars, the risk is
even lower when he accounts for driver
age/gender and crash location. Wenzel
suggested that the increased fatality risk
in the 2-door car population seemed
primarily attributable to the sports cars,
and that that was not sufficient grounds
to exclude all 2-door cars from NHTSA’s
analysis.
Agencies’ response: The agencies
agree that 2-door cars can be included
in the analysis, and NHTSA retracts
previous statements that DRI’s inclusion
of them was incorrect. In its 2010
analysis, NHTSA finds that it makes
little difference to the results whether 2door cars are included, partially
included, or excluded from the analysis.
Thus, analyses of 2-door and 4-door cars
combined, as well as other
combinations, have been included in
the analysis. That said, no combination
of 2-door and 4-door cars resulted in
NHTSA’s finding a safety benefit for
passenger cars due to mass reduction.
NHTSA and DRI may have reached
different conclusions due to different
assumptions
DRI commented that the differences
found between its study and NHTSA’s
may be due to the different assumptions
about the linearity of the curb weight
effect and control variable for driver age,
vehicle age, road conditions, and other
factors. NHTSA’s analysis was based on
a two-piece linear model for curb weight
with two different weight groups (less
than 2,950 lbs., and greater than or
equal to 2.950 lbs). The DRI analysis
assumed a linear model for curb weight
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with a single weight group.
Additionally, DRI stated that NHTSA’s
use of eight control variables (rather
than three control variables like DRI
used) for driver age introduces
additional degrees of freedom into the
regressions, which it suggested may be
correlated with the curb weight,
wheelbase, and track width, and/or
other control variables. DRI suggested
that this may also affect the results and
cause or contribute to the differences in
outcomes between NHTSA and DRI.
Agencies’ response: NHTSA’s FRIA
documents that NHTSA analyzed its
database using both a single parameter
for weight (a linear model) and two
parameters for weight (a two-piece
linear model). In both cases, the logistic
regression responded identically,
allocating the same way between
weight, wheelbase, track width, or
footprint.136 Thus, NHTSA does not
believe that the differences between its
results and DRI’s results are due to
whether the studies used a single weight
group or two weight groups.
The FRIA also documents that
NHTSA examined NHTSA’s use of eight
control variables for driver age (ages 14–
30, 30–50, 50–70, 70+ for males and
females separately, versus DRI’s use of
three control variables for age (FEMALE
= 1 for females, 0 for males,
YOUNGDRV = 35–AGE for drivers
under 35, 0 for all others, OLDMAN =
AGE–50 for males over 50, 0 for all
others; OLDWOMAN = AGE–45 for
females over 45, 0 for all others) to see
if that affected the results. NHTSA ran
its analysis using the eight control
variables and again using three control
variables for age, and obtained similar
results each time.137 Thus, NHTSA does
not believe that the differences between
its results and DRI’s results are due to
the number of control variables used for
driver age.
NHTSA’s and DRI’s conclusions may be
similar if confidence intervals are
taken into account
DRI commented that NHTSA has not
reported confidence intervals, while DRI
has reported them in its studies. Thus,
DRI argued, it is not possible to
determine whether the confidence
intervals overlap and whether the
differences between NHTSA’s and DRI’s
analyses are statistically significant.
Agencies’ response: NHTSA has
included confidence intervals for the
main results of the 2010 Kahane
analysis, as shown in Chapter IX of
NHTSA’s FRIA. For passenger cars, the
NHTSA results are a statistically
136 Subsections
137 Id.
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significant increase in fatalities with a
100 pound reduction while maintaining
track width and wheelbase (or
footprint); the DRI results are a
statistically significant decrease in
fatalities with a 100 pound reduction
while maintaining track width and
wheelbase. The DRI results are thus
outside the confidence bounds of the
NHTSA results and do not overlap.
NHTSA should include a ‘‘best-case’’
estimate in its study
Several commenters (Center for Auto
Safety, NRDC, Public Citizen, Sierra
Club et al., and Wenzel) urged NHTSA
to include a ‘‘best-case’’ estimate in the
final rule, showing scenarios in which
lives were saved rather than lost. Public
Citizen stated that there would be safety
benefits to reducing the weight of the
heaviest vehicles while leaving the
weight of the lighter vehicles
unchanged, and that increasing the
number of smaller vehicles would
provide safety benefits to pedestrians,
bicyclists, and motorcyclists. Sierra
Club et al. stated that new materials,
smart design, and lighter, more
advanced engines can all improve fuel
economy while maintaining or
increasing vehicle safety. Both Center
for Auto Safety and Sierra Club argued
that the agency should have presented
a ‘‘best-case’’ scenario to balance out the
‘‘worst-case’’ scenario presented in the
NPRM, especially if NHTSA itself
believed that the worst-case scenario
was not inevitable. NRDC requested that
NHTSA present both a ‘‘best-case’’ and a
‘‘most likely’’ scenario. Wenzel simply
stated that NHTSA did not present a
‘‘best-case’’ scenario, despite DRI’s
finding in 2005 that fatalities would be
reduced if track width was held
constant.
Agencies’ response: NHTSA has
included an ‘‘upper estimate’’ and a
‘‘lower estimate’’ in the new 2010
Kahane analysis. The lower estimate
assumes that mass reduction will be
accomplished entirely by material
substitution or other techniques that do
not perceptibly change a vehicle’s
shape, structural strength, or ride
quality. The lower estimate examines
specific crash modes and is meant to
reflect the increase in fatalities for the
specific crash modes in which a
reduction in mass per se in the case
vehicle would result in a reduction in
safety: namely, collisions with larger
vehicles not covered by the regulations
(e.g., trucks with a GVWR over 10,000
lbs), collisions with partially-movable
objects (e.g., some trees, poles, parked
cars, etc.), and collisions of cars or light
LTVs with heavier LTVs—as well as the
specific crash modes where a reduction
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in mass per se in the case vehicle would
benefit safety: namely, collisions of
heavy LTVs with cars or lighter LTVs.
NHTSA believes that this is the effect of
mass per se, i.e., the effects of reduced
mass will generally persist in these
crashes regardless of how the mass is
reduced. The lower estimate attempts to
quantify that scenario, although any
such estimate is hypothetical and
subject to considerable uncertainty.
NHTSA believes that a ‘‘most likely’’
scenario cannot be determined with any
certainty, and would depend entirely
upon agency assumptions about how
manufacturers intend to reduce mass in
their vehicles. While we can speculate
upon the potential effects of different
methods of mass reduction, we cannot
predict with certainty what
manufacturers will ultimately do.
NHTSA should not include a ‘‘worstcase’’ estimate in its study
NRDC, Public Citizen and Sierra Club
et al. commented that NHTSA should
remove the ‘‘worst-case scenario’’
estimate from the rulemaking, generally
because it was based on an analysis that
evaluated historical vehicles, and future
vehicles would be sufficiently different
to render the ‘‘worst-case scenario’’
inapplicable.
Agencies’ response: NHTSA stated in
the NPRM that the ‘‘worst-case scenario’’
addressed the effect of a kind of
downsizing (i.e., mass reduction
accompanied by footprint reduction)
that was not likely to be a consequence
of attribute-based CAFE standards, and
that the agency would refine its analysis
of such a scenario for the final rule.
NHTSA has not used the ‘‘worst-case
scenario’’ in the final rule. Instead, we
present three scenarios: the first is an
estimate based directly on the regression
coefficients of weight reduction while
maintaining footprint in the statistical
analyses of historical data. As discussed
above, presenting this scenario is
possible because NHTSA attempted to
separate the effects of weight and
footprint reduction in the new analysis.
However, even the new analysis of LTVs
produced some coefficients that NHTSA
did not consider entirely plausible.
NHTSA also presents an ‘‘upper
estimate’’ in which those coefficients for
the LTVs were adjusted based on
additional analyses and expert opinion
as a safety agency and a ‘‘lower
estimate,’’ which estimates the effect if
mass reduction is accomplished entirely
by safety-conscious technologies such as
material substitution.
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3. How has NHTSA refined its analysis
for purposes of estimating the potential
safety effects of this Final Rule?
During the past months, NHTSA has
extensively reviewed the literature on
vehicle mass, size, and fatality risk.
NHTSA now agrees with DRI and other
commenters that it is essential to
analyze the effect of mass
independently from the effects of size
parameters such as wheelbase, track
width, or footprint—and that the
NPRM’s ‘‘worst-case’’ scenario based on
downsizing (in which weight,
wheelbase, and track width could all be
changed) is not useful for that purpose.
The agency should instead provide
estimates that better reflect the more
likely effect of the regulation—
estimating the effect of mass reduction
that maintains footprint.
Yet it is more difficult to analyze
multiple, independent parameters than
a single parameter (e.g., curb weight),
because there is a potential concern that
the near multicollinearity of the
parameters—the strong, natural and
historical correlation of mass and size—
can lead to inaccurate statistical
estimates of their effects.138 NHTSA has
performed new statistical analyses of its
historical database of passenger cars,
light trucks, and vans (LTVs) from its
2003 report (now including also 2-door
cars), assessing relationships between
fatality risk, mass, and footprint. They
are described in Subsections 2.2 (cars)
and 3.2 (LTVs) of the 2010 Kahane
report presented in Chapter IX of the
FRIA. While the potential concerns
associated with near multicollinearity
are inherent in regression analyses with
multiple size/mass parameters, NHTSA
believes that the analysis approach in
the 2010 Kahane report, namely a
single-step regression analysis, generally
reduces those concerns 139 and models
the trends in the historical data. The
results differ substantially from DRI’s,
based on a two-step regression analysis.
Subsections 2.3 and 2.4 of the 2010
138 Greene, W. H. (1993). Econometric Analysis,
Second Edition. New York: Macmillan Publishing
Company, pp. 266–268; Allison, P.D. (1999),
Logistic Regression Using the SAS System. Cary,
NC: SAS Institute Inc., pp. 48–51. The report shows
variance inflation factor (VIF) scores in the 5–7
range for curb weight, wheelbase, and track width
(or, alternatively, curb weight and footprint) in
NHTSA’s database, exceeding the 2.5 level where
near multicollinearity begins to become a concern
in logistic regression analyses.
139 NHTSA believes that, given the near
multicollinearity of the independent variables, the
two-step regression augments the possibility of
estimating inaccurate coefficients for curb weight,
because it weakens relationships between curb
weight and dependent variables by splitting the
effect of curb weight across the two regression steps
as discussed further in Subsection 2.3 of NHTSA’s
report.
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Kahane report attempt to account for the
differences primarily by applying
selected techniques from DRI’s analyses
to NHTSA’s database.
The statistical analyses—logistic
regressions—of trends in MYs 1991–
1999 vehicles generate one set of
estimates of the possible effects of
reducing mass by 100 pounds while
maintaining footprint. While these
effects might conceivably carry over to
future mass reductions, there are two
reasons that future safety effects of mass
reduction could differ from projections
from historical data:
• The statistical analyses are ‘‘crosssectional’’ analyses that estimate the
increase in fatality rates for vehicles
weighing n-100 pounds relative to
vehicles weighing n pounds, across the
spectrum of vehicles on the road, from
the lightest to the heaviest. They do not
directly compare the fatality rates for a
specific make and model before and
after a 100-pound reduction from that
model. Instead, they use the differences
across makes and models as a surrogate
for the effects of actual reductions
within a specific model; those crosssectional differences could include
trends that are statistically, but not
causally related to mass.
• The manner in which mass changed
across MY 1991–1999 vehicles might
not be consistent with future mass
reductions, due to the availability of
newer materials and design methods.
Therefore, Subsections 2.5 and 3.4 of
the 2010 Kahane report supplement
those estimates with one or more
scenarios in which some of the logistic
regression coefficients are replaced by
numbers based on additional analyses
and NHTSA’s judgment of the likely
effect of mass per se (the ability to
transfer momentum to other vehicles or
objects in a collision) and of what trends
in the historical data could be avoided
by current mass-reduction technologies
such as materials substitution. The
various scenarios may be viewed as a
plausible range of point estimates for
the effects of mass reduction while
maintaining footprint, but they should
not be construed as upper and lower
bounds. Furthermore, being point
estimates, they are themselves subject to
uncertainties, such as, for example, the
sampling errors associated with
statistical analyses.
The principal findings and
conclusions of the 2010 Kahane report
are as follows:
Passenger cars: This database with the
one-step regression method of the 2003
Kahane report estimates an increase of
700–800 fatalities when curb weight is
reduced by 100 pounds and footprint is
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reduced by 0.65 square feet (the historic
average footprint reduction per 100pound mass reduction in cars). The
regression attributes the fatality increase
about equally to curb weight and to
footprint. The results are approximately
the same whether 2-door cars are fully
included or partially included in the
analysis or whether only 4-door cars are
included (as in the 2003 report).
Regressions by curb weight, track width
and wheelbase produce findings quite
similar to the regressions by curb weight
and footprint, but the results with the
single ‘‘size’’ variable, footprint, rather
than the two variables, track width and
wheelbase vary even less with the
inclusion or exclusion of 2-door cars.
In Subsection 2.3 of the new report,
a two-step regression method that
resembles (without exactly replicating)
the approach by DRI, when applied to
the same (NHTSA’s) crash and
registration data, estimates a large
benefit when mass is reduced, offset by
even larger fatality increases when track
width and wheelbase (or footprint) are
reduced. NHTSA believes that the
benefit estimated by this method is
inaccurate, due to the potential
concerns with the near multicollinearity
of the parameters (curb weight, track
width, and wheelbase) 140 even though
the analysis is theoretically unbiased.141
Almost any analysis incorporating those
parameters has a possibility of
inaccurate coefficients due to near
multicollinearity; however, based on
our own experience with other
regression analyses of crash data,
NHTSA believes a DRI-type two-step
method augments the possibility of
estimating inaccurate coefficients for
curb weight, because it weakens
relationships between curb weight and
dependent variables by splitting the
effect of curb weight across the two
regression steps.
In Subsection 2.4 of the new report,
as a check on the results from the
regression methods, NHTSA also
performed what we refer to as ‘‘decile’’
analyses: Simpler, tabular data analysis
that compares fatality rates of cars of
different mass but similar footprint.
Decile analysis is not a precise tool
because it does not control for
140 As evidenced by VIF scores in the 5–7 range,
exceeding the 2.5 level where near multicollinearity
begins to become a concern in logistic regression
analyses.
141 Subsection 2.3 of the 2010 Kahane report
attempts to explain why the two-step method, when
applied to NHTSA’s 2003 database, produces
results a lot like DRI’s, but it does not claim that
DRI obtained its results from its own database for
exactly those reasons. NHTSA did not analyze DRI’s
database. The two-step method is ‘‘theoretically
unbiased’’ in the sense that it seeks to estimate the
same parameters as the one-step analysis.
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confounding factors such as driver age/
gender or the specific type of car, but it
may be helpful in identifying the
general directional trend in the data
when footprint is held constant and
curb weight varies. The decile analyses
show that fatality risk in MY 1991–1999
cars generally increased and rarely
decreased for lighter relative to heavier
cars of the same footprint. They suggest
that the historical, cross-sectional trend
was generally in the lighter ↔ more
fatalities direction and not in the
opposite direction, as might be
suggested by the regression coefficients
from the method that resembles DRI’s
approach.
The regression coefficients from
NHTSA’s one-step method suggest that
mass and footprint each accounted for
about half the fatality increase
associated with downsizing in a crosssectional analysis of 1991–1999 cars.
They estimate the historical difference
in societal fatality rates (i.e., including
fatalities to occupants of all the vehicles
involved in the collisions, plus any
pedestrians) of cars of different curb
weights but the same footprint. They
may be considered an ‘‘upper-estimate
scenario’’ of the effect of future mass
reduction—if it were accomplished in a
manner that resembled the historical
cross-sectional trend—i.e., without any
particular regard for safety (other than
not to reduce footprint).
However, NHTSA believes that future
vehicle design is likely to take
advantage of safety-conscious
technologies such as materials
substitution that can reduce mass
without perceptibly changing a car’s
shape or ride and maintain its structural
strength. This could avoid much of the
risk associated with lighter and smaller
vehicles in the historical analyses,
especially the historical trend toward
higher crash-involvement rates for
lighter and smaller vehicles.142 It could
thereby shrink the added risk close to
just the effects of mass per se (the ability
to transfer momentum to other vehicles
or objects in a collision). Subsection 2.5
of the 2010 Kahane report attempts to
quantify a ‘‘lower-estimate scenario’’ for
the potential effect of mass reduction
achieved by safety-conscious
technologies; the estimated effects are
substantially smaller than in the upper142 This is discussed in greater depth in
Subsections 2.1 and 2.5 of the 2010 Kahane report.
The historic trend toward higher crash-involvement
rates for lighter and smaller vehicles is documented
in IIHS Advisory No. 5, July 1988, https://
www.iihs.org/research/advisories/
iihs_advisory_5.pdf; IIHS News Release, February
24, 1998, https://www.iihs.org/news/1998/
iihs_news_022498.pdf; Auto Insurance Loss Facts,
September 2009, https://www.iihs.org/research/hldi/
fact_sheets/CollisionLoss_0909.pdf.
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estimate scenario based directly on the
regression results.
We note, again, that the preceding
paragraph is conditional. Nothing in the
CAFE standard requires manufacturers
to use material substitution or, more
generally, take a safety-conscious
approach to mass reduction.143 Federal
Motor Vehicle Safety Standards include
performance tests that verify historical
improvements in structural strength and
crashworthiness, but few FMVSS
provide test information that sheds light
about how a vehicle rides or otherwise
helps explain the trend toward higher
crash-involvement rates for lighter and
smaller vehicles. It is possible that using
material substitution and other current
mass reduction methods could avoid the
historical trend in this area, but that
remains to be studied as manufacturers
introduce more of these vehicles into
the on-road fleet in coming years. A
detailed discussion of methods
currently used for reducing the mass of
passenger cars and light trucks is
included in Chapter 3 of the Technical
Support Document.
LTVs: The principal difference
between LTVs and passenger cars is that
mass reduction in the heavier LTVs is
estimated to have significant societal
benefits, in that it reduces the fatality
risk for the occupants of cars and light
LTVs that collide with the heavier
LTVs. By contrast, footprint (size)
reduction in LTVs has a harmful effect
(for the LTVs’ own occupants), as in
cars. The regression method of the 2003
Kahane report applied to the database of
that report estimates a societal increase
of 231 fatalities when curb weight is
reduced by 100 pounds and footprint is
reduced by 0.975 square feet (the
historic average footprint reduction per
100-pound mass reduction in LTVs).
But the regressions attribute an overall
reduction of 266 fatalities to the 100pound mass reduction and an increase
of 497 fatalities to the .975-square-foot
footprint reduction. The regression
results constitute one of the scenarios
for the possible societal effects of future
mass reduction in LTVs.
However, NHTSA cautions that some
of the regression coefficients, even by
NHTSA’s preferred method, might not
accurately model the historical trend in
the data, possibly due to near
multicollinearity of curb weight and
footprint or because of the interaction of
both of these variables with LTV
type.144 Based on supplementary
analyses and discussion in Subsections
3.3 and 3.4, the new report defines an
additional upper-estimate scenario that
NHTSA believes may more accurately
reflect the historical trend in the data
and a lower-estimate scenario that may
come closer to the effects of mass per se.
All three scenarios, however, attribute a
societal fatality reduction to mass
reduction in the heavier LTVs.
Overall effects of mass reduction
while maintaining footprint in cars and
LTVs: The immediate purpose of the
new report’s analyses of relationships
between fatality risk, mass, and
footprint is to develop the four
parameters that the Volpe model needs
in order to predict the safety effects, if
any, of the modeled mass reductions in
MYs 2012–2016 cars and LTVs over the
lifetime of those vehicles. The four
numbers are the overall percentage
increases or decreases, per 100-pound
mass reduction while holding footprint
constant, in crash fatalities involving:
(1) Cars < 2,950 pounds (which was the
median curb weight of cars in MY 1991–
1999), (2) cars ≥ 2,950 pounds, (3) LTVs
< 3,870 pounds (which was the median
curb weight of LTVs in those model
years), and (4) LTVs ≥ 3,870 pounds.
Here are the percentage effects for each
of the three alternative scenarios, again,
the ‘‘upper-estimate scenario’’ and the
‘‘lower-estimate scenario’’ have been
developed based on NHTSA’s expert
opinion as a vehicle safety agency:
FATALITY INCREASE PER 100-POUND REDUCTION (%) 145
Actual regression
result scenario
NHTSA expert
opinion upper-estimate scenario 146
NHTSA expert
opinion lower-estimate scenario
2.21
0.90
0.17
¥1.90
2.21
0.90
0.55
¥0.62
1.02
0.44
0.41
¥0.73
Cars < 2,950 pounds .................................................................................................
Cars ≥ 2,950 pounds .................................................................................................
LTVs < 3,870 pounds ................................................................................................
LTVs ≥ 3,870 pounds ................................................................................................
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In all three scenarios, the estimated
effects of a 100-pound mass reduction
while maintaining footprint are an
increase in fatalities in cars < 2,950
pounds, substantially smaller increases
in cars ≥ 2,950 pounds and LTVs
< 3,870 pounds, and a societal benefit
for LTVs ≥ 3,870 pounds (because it
reduces fatality risk to occupants of cars
and lighter LTVs they collide with).
These are the estimated effects of
reducing each vehicle by exactly
100pounds. However, the actual mass
reduction will vary by make, model, and
year. The aggregate effect on fatalities
can only be estimated by attempting to
forecast, as NHTSA has using inputs to
the Volpe model, the mass reductions
by make and model. It should be noted,
however, that a 100-pound reduction
would be 5 percent of the mass of a
2000-pound car but only 2 percent of a
5000-pound LTV. Thus, a forecast that
mass will decrease by an equal or
greater percentage in the heavier
vehicles than in the lightest cars would
be proportionately more influenced by
the benefit for mass reduction in the
heavy LTVs than by the fatality
increases in the other groups; it is likely
to result in an estimated net benefit
under one or more of the scenarios. It
should also be noted, again, that the
143 Footprint-based standards do not specify how
or where to remove mass while maintaining
footprint, nor do they categorically forbid footprint
reductions, even if they discourage them.
144 For example, mid-size SUVs of the 1990s
typically had high mass relative to their short
wheelbase and footprint (and exceptionally high
rates of fatal rollovers); minivans typically have low
mass relative to their footprint (and low fatality
rates); heavy-duty pickup trucks used extensively
for work tend to have more mass, for the same
footprint, as basic full-sized pickup trucks that are
more often used for personal transportation.
145 Reducing mass by 100 pounds in these
vehicles is estimated to have the listed percentage
effect on fatalities in crashes involving these
vehicles. For example, if these vehicles are involved
in crashes that result in 10,000 fatalities, 2.21
means that if mass is reduced by 100 pounds,
fatalities will increase to 10,221 and ¥0.73 means
fatalities will decrease to 9,927. In the scenario
based on actual regression results, the 1.96-sigma
sampling errors in the above estimates are ±0.91
percentage points for cars < 2,950 pounds and also
for cars ≥ 2,950 pounds, ±0.82 percentage points for
LTVs < 3,870 pounds, and ±1.18 percentage points
for LTVs ≥ 3,870 pounds. In other words, the
fatality increase in the cars < 2,950 pounds and the
societal fatality reduction attributed to mass
reduction in the LTVs ≥ 3,870 pounds are
statistically significant. The sampling errors
associated with the scenario based on actual
regression results perhaps also indicate the general
level of statistical noise in the other two scenarios.
146 For passenger cars, the upper-estimate
scenario is the actual-regression-result scenario.
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three scenarios are point estimates and
are subject to uncertainties, such as the
sampling errors associated with the
regression results. In the scenario based
on actual regression results, the 1.96sigma sampling errors in the above
estimates are ± 0.91 percentage points
for cars < 2,950 pounds and also for cars
≥ 2,950 pounds, ± 0.82 percentage
points for LTVs < 3,870 pounds, and ±
1.18 percentage points for LTVs ≥ 3,870
pounds. In other words, the fatality
increase in the cars < 2,950 pounds and
the societal fatality reduction attributed
to mass reduction in the LTVs ≥ 3,870
pounds are statistically significant. The
sampling errors associated with the
scenario based on actual regression
results perhaps also indicate the general
level of statistical noise in the other two
scenarios.
The table below shows the estimated
safety effects of the modeled reduction
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NPRM ‘‘Worst Case’’ .....................................................
NHTSA Expert Opinion Final Rule Upper Estimate ......
NHTSA Expert Opinion Final Rule Lower Estimate ......
Actual Regression Result Scenario ...............................
NHTSA emphasizes that the table
above is based on the NHTSA’s
assumptions about how manufacturers
might choose to reduce the mass of their
vehicles in response to the final rule,
which are very similar to EPA’s
assumptions. In general, as discussed
above, the agencies assume that mass
will be reduced by as much as 10
percent in the heaviest LTVs but only by
as much as 5 percent in other vehicles
and that substantial mass reductions
will take place only in the year that
models are redesigned. The actual mass
reduction that is likely to occur in
response to the standards will of course
vary by make and model, depending on
each manufacturer’s particular
approach, with likely more opportunity
for the largest LTVs that still use
separate frame construction.
The ‘‘upper estimate’’ presented
above, as discussed in the FRIA,
assumes only that manufacturers will
reduce vehicle mass without reducing
footprint. Thus, under such a scenario,
safety effects could be somewhat
adverse if, for example, manufacturers
chose to reduce crush space associated
with vehicle overhang as a way of
reducing mass without changing
footprint. The ‘‘lower estimate,’’ in turn,
is based on the assumption that
manufacturers will reduce vehicle mass
solely through methods like material
substitution, which (under these
assumptions) fully maintain not only
footprint but also all structural integrity,
and other aspects of vehicle safety.
Under these scenarios, safety effects
could be worse if mass reduction was
not undertaken thoughtfully to maintain
existing safety levels, but could also be
better if it was undertaken with a
thorough and extensive vehicle redesign
to maximize both mass reduction and
safety.
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in vehicle mass provided in the NPRM
and in this final rule in order to meet
the MYs 2012–2016 standards, based on
the analysis described briefly above and
in much more detail in Chapter IX of the
FRIA. These are combined results for
passenger cars and light trucks. A
positive number is an estimated
increase in fatalities and a negative
number (shown in parentheses) is an
estimated reduction in fatalities over the
lifetime of the model year vehicles
compared to the MY 2011 baseline fleet.
4. What are the estimated safety effects
of this Final Rule?
MY 2012
MY 2013
34
9
2
0
MY 2014
54
14
4
2
And finally, while NHTSA does not
believe that the ‘‘worst-case’’ scenario
presented in the NPRM is likely to occur
during the MYs 2012–2016 timeframe,
we cannot guarantee that manufacturers
will never choose to reduce vehicle
footprint, particularly if market forces
lead to increased sales of small vehicles
in response to sharp increases in the
price of petroleum, though this situation
would not be in direct response to the
CAFE/GHG standards. Thus, we cannot
completely reject the worst-case
scenario for all vehicles, although we
can and do recognize that the footprintbased standards will significantly limit
the likelihood of its occurrence within
the context of this rulemaking.
In summary, the agencies recognize
the balancing inherent in achieving
higher levels of fuel economy and lower
levels of CO2 emissions through
reduction of vehicle mass. Based on the
2010 Kahane analysis that attempts to
separate the effects of mass reductions
and footprint reductions, and to account
better for the possibility that mass
reduction will be accomplished entirely
through methods that preserves
structural strength and vehicle safety,
the agencies now believe that the likely
deleterious safety effects of the MYs
2012–2016 standards may be much
lower than originally estimated. They
may be close to zero, or possibly
beneficial if mass reduction is carefully
undertaken in the future and if the mass
reduction in the heavier LTVs is greater
(in absolute terms) than in passenger
cars. In light of these findings, we
believe that the balancing is reasonable.
5. How do the agencies plan to address
this issue going forward?
NHTSA and EPA believe that it is
important for the agencies to conduct
further study and research into the
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MY 2015
194
26
(17)
(94)
313
24
(53)
(206)
MY 2016
493
22
(80)
(301)
interaction of mass, size and safety to
assist future rulemakings. The agencies
intend to begin working collaboratively
and to explore with DOE, CARB, and
perhaps other stakeholders an
interagency/intergovernmental working
group to evaluate all aspects of mass,
size and safety. It would also be the goal
of this team to coordinate government
supported studies and independent
research, to the extent possible, to help
ensure the work is complementary to
previous and ongoing research and to
guide further research in this area.
DOE’s EERE office has long funded
extensive research into component
advanced vehicle materials and vehicle
mass reduction. Other agencies may
have additional expertise that will be
helpful in establishing a coordinated
work plan. The agencies are interested
in looking at the weight-safety
relationship in a more holistic
(complete vehicle) way, and thanks to
this CAFE rulemaking NHTSA has
begun to bring together parts of the
agency—crashworthiness, and crash
avoidance rulemaking offices and the
agency’s Research & Development
office—in an interdisciplinary way to
better leverage the expertise of the
agency. Extending this effort to other
agencies will help to ensure that all
aspects of the weight-safety relationship
are considered completely and carefully
with our future research. The agencies
also intend to carefully consider
comments received in response to the
NPRM in developing plans for future
studies and research and to solicit input
from stakeholders.
The agencies also plan to watch for
safety effects as the U.S. light-duty
vehicle fleet evolves in response both to
the CAFE/GHG standards and to
consumer preferences over the next
several years. Additionally, as new and
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advanced materials and component
smart designs are developed and
commercialized, and as manufacturers
implement them in more vehicles, it
will be useful for the agencies to learn
more about them and to try to track
these vehicles in the fleet to understand
the relationship between vehicle design
and injury/fatality data. Specifically, the
agencies intend to follow up with study
and research of the following:
First, NHTSA is in the process of
contracting with an independent
institution to review the statistical
methods that NHTSA and DRI have
used to analyze historical data related to
mass, size and safety, and to provide
recommendation on whether the
existing methods or other methods
should be used for future statistical
analysis of historical data. This study
will include a consideration of potential
near multicollinearity in the historical
data and how best to address it in a
regression analysis. This study is being
initiated because, in response to the
NPRM, NHTSA received a number of
comments related to the methodology
NHTSA used for the NPRM to
determine the relationship between
mass and safety, as discussed in detail
above.
Second, NHTSA and EPA, in
consultation with DOE, intend to begin
updating the MYs 1991–1999 database
on which the safety analyses in the
NPRM and final rule are based with
newer vehicle data in the next several
months. This task will take at least a
year to complete. This study is being
initiated in response to the NPRM
comments related to the use of data
from MYs 1991–1999 in the NHTSA
analysis, as discussed in detail above.
Third, in order to assess if the design
of recent model year vehicles that
incorporate various mass reduction
methods affect the relationships among
vehicle mass, size and safety, NHTSA
and EPA intend to conduct collaborative
statistical analysis, beginning in the
next several months. The agencies
intend to work with DOE to identify
vehicles that are using material
substitution and smart design. After
these vehicles are identified, the
agencies intend to assess if there are
sufficient data for statistical analysis. If
there are sufficient data, statistical
analysis would be conducted to
compare the relationship among mass,
size and safety of these smart design
vehicles to vehicles of similar size and
mass with more traditional designs.
This study is being initiated because, in
response to the NPRM, NHTSA received
comments related to the use of data
from MYs 1991–1999 in the NHTSA
analysis that did not include new
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designs that might change the
relationship among mass, size and
safety, as discussed in detail above.
NHTSA may initiate a two-year study
of the safety of the fleet through an
analysis of the trends in structural
stiffness and whether any trends
identified impact occupant injury
response in crashes. Vehicle
manufacturers may employ stiffer light
weight materials to limit occupant
compartment intrusion while
controlling for mass that may expose the
occupants to higher accelerations
resulting in a greater chance of injury in
real-world crashes. This study would
provide information that would increase
the understanding of the effects on
safety of newer vehicle designs.
In addition, NHTSA and EPA,
possibly in collaboration with DOE, may
conduct a longer-term computer
modeling-based design and analysis
study to help determine the maximum
potential for mass reduction in the MYs
2017–2021 timeframe, through direct
material substitution and smart design
while meeting safety regulations and
guidelines, and maintaining vehicle size
and functionality. This study may build
upon prior research completed on
vehicle mass reduction. This study
would further explore the
comprehensive vehicle effects,
including dissimilar material joining
technologies, manufacturer feasibility of
both supplier and OEM, tooling costs,
and crash simulation and perhaps
eventual crash testing.
III. EPA Greenhouse Gas Vehicle
Standards
A. Executive Overview of EPA Rule
1. Introduction
The Environmental Protection Agency
(EPA) is establishing GHG emissions
standards for the largest sources of
transportation GHGs—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 emissions of
the six gases discussed above (Section
I.A). This action represents the first-ever
EPA rule to regulate vehicle GHG
emissions under the Clean Air Act
(CAA) and will establish standards for
model years 2012–2016 and later light
vehicles sold in the United States.
EPA is adopting 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
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CO2 emissions-footprint curves, where
each vehicle has a different CO2
emissions compliance target depending
on its footprint value. Vehicle CO2
emissions will be measured over the
EPA city and highway tests. The rule
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 325
grams per mile while the average
vehicle fleetwide average CO2 emissions
compliance level for the model year
2016 standard will be 250 grams per
mile, an average reduction of 23 percent
from today’s CO2 levels.
EPA is also finalizing 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
vehicles. Accordingly, the goal of these
two standards is to limit any potential
increases of tailpipe emissions of these
compounds in the future but not to force
reductions relative to today’s low levels.
This final rule responds to the
Supreme Court’s 2007 decision in
Massachusetts v. EPA 147 which found
that greenhouse gases fit within the
definition of air pollutant in 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 making
these decisions, the EPA Administrator
is required to follow the language of
section 202(a) of the CAA. The case was
remanded back to the Agency for
reconsideration in light of the court’s
decision.
The Administrator has responded to
the remand by issuing two findings
under section 202(a) of the Clean Air
147 549 U.S.C. 497 (2007). For further information
on Massachusetts v. EPA see the Endangerment and
Cause or Contribute Findings for Greenhouse Gases
under Section 202(a) the Clean Air Act, published
in the Federal Register on December 15, 2009 (74
FR 66496). 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. This
information is also available at: https://
www.epa.gov/climatechange/endangerment.html.
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Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
Act.148 First, the Administrator found
that the science supports a positive
endangerment finding that the mix of
six greenhouse gases (carbon dioxide
(CO2), methane (CH4), nitrous oxide
(N2O), hydrofluorocarbons (HFCs),
perfluorocarbons (PFCs), and sulfur
hexafluoride (SF6)) 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
found that the combined emissions of
the same six gases 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. Motor vehicles
and new motor vehicle engines emit
carbon dioxide, methane, nitrous oxide,
and hydrofluorocarbons. EPA provides
more details below on the legal and
scientific bases for this final rule.
As discussed in Section I, this GHG
rule is part of a joint National Program
such that a large majority of the
projected benefits are achieved jointly
with NHTSA’s CAFE rule which is
described in detail in Section IV of this
preamble. EPA projects total CO2
equivalent emissions savings of
approximately 960 million metric tons
as a result of the rule, and oil savings
of 1.8 billion barrels over the lifetimes
of the MY 2012–2016 vehicles subject to
the rule. EPA projects that over the
lifetimes of the MY 2012–2016 vehicles,
the rule will cost $52 billion but will
result in benefits of $240 billion at a 3
percent discount rate, or $192 billion at
a 7 percent discount rate (both values
assume the average SCC value at 3%,
i.e., the $21/ton SCC value in 2010).
Accordingly, these light vehicle
greenhouse gas emissions standards
represent an important contribution
under the Clean Air Act toward meeting
long-term greenhouse gas emissions and
import oil reduction goals, while
providing important economic benefits
as well. The results of our analysis of
2012–2016 MY vehicles, which we refer
to as our ‘‘model year analysis,’’ are
summarized in Tables III.H.10–4 to
III.H.10–7.
We have also looked beyond the
lifetimes of 2012–2016 MY vehicles at
annual costs and benefits of the program
for the 2012 through 2050 timeframe.
We refer to this as our ‘‘calendar year’’
analysis (as opposed to the costs and
benefits mentioned above which we
148 See 74 FR 66496 (Dec. 15, 2009),
‘‘Endangerment and Cause or Contribute Findings
for Greenhouse Gases Under Section 202(a) of the
Clean Air Act’’.
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refer to as our ‘‘model year analysis’’). In
our calendar year analysis, the new
2016 MY standards are assumed to
apply to all vehicles sold in model years
2017 and later. The net present values
of annual costs for the 2012 through
2050 timeframe are $346 billion for new
vehicle technology which will provide
$1.5 billion in fuel savings, both values
at a 3 percent discount rate. At a 7
percent discount rate over the same
period, the technology costs are
estimated at $192 billion which will
provide $673 billion in fuel savings. The
social benefits during the 2012 through
2050 timeframe are estimated at $454
billion and $305 billion at a 3 and 7
percent discount rate, respectively. Both
of these benefit estimates assume the
average SCC value at 3% (i.e., the $21/
ton SCC value in 2010). The net benefits
during this time period are then $1.7
billion and $785 million at a 3 and 7
percent discount rate, respectively. The
results of our ‘‘calendar year’’ analysis
are summarized in Tables III.H 10–1 to
III.H.10–3.
2. Why is EPA establishing this Rule?
This rule 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 GHG
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 their 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 compliance and fuel economy
determinations, which would require
only minor modifications to
accommodate greenhouse gas emissions
regulations. Finally, this rule is an
important step in responding to the
Supreme Court’s ruling in
Massachusetts v. EPA, which applies to
other emissions sources in addition to
light-duty vehicles. In fact, EPA is
currently evaluating controls for motor
vehicles other than those covered by
this rule, and is also reviewing seven
motor vehicle related 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
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25397
and vehicle sources (also under
§ 213(a)(4)).
a. Light Vehicle Emissions Contribute to
Greenhouse Gases and the Threat of
Climate Change
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 that are directly
emitted by human activities 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 likely the cause of
most of the observed global warming
over the last 50 years.149 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 promulgated
Endangerment and Cause or Contribute
Findings for Greenhouse Gases Under
Section 202(a) of the Clean Air Act.150
Mobile sources represent a large and
growing share of United States
greenhouse gases and include light-duty
vehicles, light-duty trucks, mediumduty passenger vehicles, heavy duty
trucks, airplanes, railroads, marine
vessels and a variety of other sources. In
2007, all mobile sources emitted 31% of
149 ‘‘Technical Support Document for
Endangerment and Cause or Contribute Findings for
Greenhouse Gases Under Section 202(a) of the
Clean Air Act’’ Docket: EPA–HQ–OAR–2009–0472–
11292.
150 74 FR 66496 (Dec. 15, 2009). Both the Federal
Register Notice and the Technical Support
Document for Endangerment and Cause or
Contribute Findings are found in the public docket
No. EPA–OAR–2009–0171, in the public docket
established for this rulemaking, and at https://
epa.gov/climatechange/endangerment.html.
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all U.S. GHGs, and were the fastestgrowing source of U.S. GHGs in the U.S.
since 1990. Transportation sources,
which do not include certain offhighway sources such as farm and
construction equipment, account for
28% of U.S. GHG emissions, and
Section 202(a) sources, which include
light-duty vehicles, light-duty trucks,
medium-duty passenger vehicles,
heavy-duty trucks, buses, and
motorcycles account for 23% of total
U.S. GHGs.151
Light vehicles emit 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.152
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 post-combustion
control of hydrocarbon emissions (such
as catalytic converters).153 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.154
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
systems, during operations, and during
decommissioning and disposal.155
151 Inventory of U.S. Greenhouse Gases and Sinks:
1990–2007.
152 Mobile source carbon dioxide emissions in
2006 equaled 26 percent of total U.S. CO2
emissions.
153 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.
154 In 2006, nitrous oxide emissions for these
sources accounted for 8 percent of total U.S. nitrous
oxide emissions.
155 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.
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b. Basis for Action Under the 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 found that the
elevated concentrations of greenhouse
gases in the atmosphere may reasonably
be anticipated to endanger public health
and welfare.156 The Administrator
defined the ‘‘air pollution’’ referred to in
CAA section 202(a) to be the combined
mix of six long-lived and directly
emitted GHGs: Carbon dioxide (CO2),
methane (CH4), nitrous oxide (N2O),
hydrofluorocarbons (HFCs),
perfluorocarbons (PFCs), and sulfur
hexafluoride (SF6). The Administrator
has further found under CAA section
202(a) that emissions of the single air
pollutant defined as the aggregate group
of these same six greenhouse gases from
new motor vehicles and new motor
vehicle engines contribute to air
pollution. As a result of these findings,
section 202(a) requires EPA to issue
standards applicable to emissions of
that air pollutant. New motor vehicles
and engines emit CO2, methane, N2O
and HFC. This preamble describes the
provisions that control emissions of
CO2, HFCs, nitrous oxide, and methane.
For further discussion of EPA’s
authority under section 202(a), see
Section I.C.2 of the preamble to the
proposed rule (74 FR at 49464–66).
There are a variety of other CAA Title
II provisions that are relevant to
standards established under section
202(a). The standards are applicable to
motor vehicles for their useful life. EPA
has the discretion in determining what
standard applies over the vehicles’
useful life and has exercised that
discretion in this rule. See Section
III.E.4 below.
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 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
156 74
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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).
Section III.E describes the rule’s
certification, compliance, and
enforcement mechanisms.
c. EPA’s Endangerment and Cause or
Contribute Findings for Greenhouse
Gases Under Section 202(a) of the Clean
Air Act
On December 7, 2009 EPA’s
Administrator signed an action with two
distinct findings regarding greenhouse
gases under section 202(a) of the Clean
Air Act. On December 15, 2009, the
final findings were published in the
Federal Register. This action is called
the Endangerment and Cause or
Contribute Findings for Greenhouse
Gases under Section 202(a) of the Clean
Air Act (Endangerment Finding).157
Below are the two distinct findings:
• Endangerment Finding: The
Administrator finds that the current and
projected concentrations of the six key
well-mixed 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.
• Cause or Contribute Finding: The
Administrator finds that the combined
emissions of these well-mixed
greenhouse gases from new motor
vehicles and new motor vehicle engines
contribute to the greenhouse gas
pollution which threatens public health
and welfare.
Specifically, the Administrator found,
after a thorough examination of the
scientific evidence on the causes and
impact of current and future climate
change, and careful review of public
comments, that the science
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 finding, the
Administrator relied heavily upon the
major findings and conclusions from the
157 74
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recent assessments of the U.S. Climate
Change Science Program and the U.N.
Intergovernmental Panel on Climate
Change.158 The Administrator made 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 finding focused
on impacts within the U.S. but noted
that the evidence concerning risks and
impacts occurring outside the U.S.
provided further support for the finding.
The key scientific findings supporting
the 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.
The Administrator found that
emissions of the single air pollutant
defined as the aggregate group of these
same six greenhouse gases from new
motor vehicles and new motor vehicle
engines contribute to the air pollution
and hence to the threat of climate
change. Key facts supporting this 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
U.S. greenhouse gas emissions, and
more than 4% of total global greenhouse
gas emissions.159 As noted above, these
findings require EPA to issue standards
under section 202(a) ‘‘applicable to
emission’’ of the air pollutant that EPA
found causes or contributes to the air
pollution that endangers public health
and welfare. The final emissions
standards satisfy this requirement for
greenhouse gases from light-duty
vehicles. Under section 202(a) the
Administrator has significant discretion
in how to structure the standards that
apply to the emission of the air
pollutant at issue here, the aggregate
group of six greenhouse gases. EPA has
the discretion under section 202(a) to
adopt separate standards for each gas, a
single composite standard covering
various gases, or any combination of
these. In this rulemaking EPA is
finalizing 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
emission of the single air pollutant, the
aggregate group of six greenhouse gases.
EPA is not setting any standards for
perfluorocarbons (PFCs) or sulfur
hexafluoride (SF6) as they are not
emitted by motor vehicles.
3. What is EPA adopting?
a. Light-Duty Vehicle, Light-Duty Truck,
and Medium-Duty Passenger Vehicle
Greenhouse Gas Emission Standards
and Projected Compliance Levels
The following section provides an
overview of EPA’s final rule. The key
public comments are not discussed
here, but are discussed in the sections
that follow which provide the details of
the program. Comments are also
discussed in the Response to Comments
document.
The CO2 emissions standards are by
far the most important of the three
standards and are the primary focus of
this summary. As proposed, EPA is
adopting an attribute-based approach for
the CO2 fleet-wide standard (one for cars
and one for trucks), using 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
finalizing for model years (MY) 2012
and later:
TABLE III.A.3–1—INDUSTRY-WIDE GREENHOUSE GAS EMISSIONS STANDARDS
Standard/covered
compounds
Form of standard
Level of standard
Credits
CO2 Standard: 160 Tailpipe
CO2.
Fleetwide average footprint
CO2-curves for cars and
trucks.
CO2-e credits161 ................
EPA 2-cycle (FTP and
HFET test cycles).162
N2O Standard: Tailpipe
N2O.
CH4 Standard: Tailpipe
CH4.
Cap per vehicle .................
Projected Fleetwide CO2
level of 250 g/mi (See
footprint curves in Sec.
III.B.2).
0.010 g/mi .........................
None * ................................
EPA FTP test.
Cap per vehicle .................
0.030 g/mi .........................
None * ................................
EPA FTP test.
Test cycles
* For N2O and CH4, manufacturers may optionally demonstrate compliance with a CO2-equivalent standard equal to its footprint-based CO2 target level, using the FTP and HFET tests.
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One important flexibility associated
with the CO2 standard is the option for
158 The U.S. Climate Change Science Program
(CCSP) is now called the U.S. Global Change
Research Program (GCRP).
159 This figure includes the greenhouse gas
contributions of light vehicles, heavy duty vehicles,
and remaining on-highway mobile sources. Lightduty vehicles are responsible for over 70 percent of
Section 202(a) mobile source GHGs, or about 17%
of total U.S. greenhouse gas emissions. U.S.
EPA.2009 Technical Support Document for
Endangerment and Cause or Contribute Findings for
Greenhouse Gases under Section 202(a) of the Clean
Air Act. Washington, DC. pp. 180–194. Available at
https://epa.gov/climatechange/endangerment/
downloads/Endangerment%20TSD.pdf.
160 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 III.B.
161 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.
162 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
Continued
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manufacturers to obtain credits
associated with improvements in their
air conditioning systems. EPA is
adopting the air conditioning provisions
with minor modifications. 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 will be reflected in the
EPA FTP or HFET tests. These
improvements will 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 use this flexibility to
earn air conditioning-related credits for
MY 2012–2016 vehicles such that the
average credit earned is about 11 grams
per mile CO2-equivalent in 2016.
A second flexibility, being finalized
essentially as 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 allowing
comparable CO2 credits for flexible fuel
vehicles through MY 2015, but for MY
2016 and beyond, the GHG rule treats
flexible and dual fuel vehicles on a CO2performance 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 the alternative fuel, and
on a manufacturer’s demonstration of
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 will be achieved by manufacturer
compliance with the GHG standards for
MY 2012–2016.
For MY 2011, Table III.A.3–2 uses the
NHTSA projections of the average fuel
economy level that will be achieved by
the MY 2011 fleet of 30.8 mpg for cars
and 23.3 mpg for trucks, converted to an
equivalent combined car and truck CO2
level of 326 grams per mile.163 EPA
believes this is a reasonable estimate
with which to compare the MY 2012–
2016 CO2 emission standards.
Identifying the proper MY 2011 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 MY 2011 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 MY 2011 projected
CAFE achieved 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 promulgated CO2footprint curves and projected footprint
values, and will decrease each year to
250 grams per mile (g/mi) in MY 2016.
For MY 2012–2016, 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. The Projected CO2 Emissions
column gives the CO2 emissions levels
projected to be achieved given use of the
flexible fuel credits and temporary leadtime allowance program. This column
shows that, relative to the MY 2011
estimate, EPA projects that MY 2016
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 MY
2016, the projected A/C credit of 10.6 g/
mi represents 14 percent of the 76 g/mi
CO2 emissions reductions associated
with the final standards. The Projected
2-cycle CO2 Emissions column shows
the projected CO2 emissions as
measured over the EPA 2-cycle tests,
which will allow compliance with the
standard assuming projected utilization
of the FFV, TLAAS, and A/C credits.
TABLE III.A.3–2—PROJECTED FLEETWIDE CO2 EMISSIONS VALUES
[Grams per mile]
Projected CO2
emissions for
the footprintbased
standard
Model year
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2011
2012
2013
2014
2015
2016
.......................................................
.......................................................
.......................................................
.......................................................
.......................................................
.......................................................
Projected FFV
credit
Projected
TLAAS credit
........................
295
286
276
263
250
........................
6.5
5.8
5.0
3.7
0.0
........................
1.2
0.9
0.6
0.3
0.1
Projected
A/C credit
Projected CO2
emissions
EPA is also finalizing 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 reduce the
costs of achieving those reductions.
These flexibilities include the ability to
earn: Annual credits for a
manufacturer’s over-compliance with its
CAFE standards compliance; EPA projects that
fleet-wide in-use or real world CO2 emissions are
approximately 25 percent higher, on average, than
(326)
303
293
282
267
250
........................
3.5
5.0
7.5
10.0
10.6
2-cycle CO2 values. Separate mechanisms apply for
A/C credits.
163 As discussed in Section IV of this preamble.
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Projected
2-cycle CO2
emissions
(326)
307
298
290
277
261
unique fleet-wide average standard,
early credits from MY 2009–2011, credit
for ‘‘off-cycle’’ CO2 reductions from new
and innovative technologies that are not
reflected in CO2/fuel economy tests, as
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well as the carry-forward and carrybackward of credits, and the ability to
transfer credits between a
manufacturer’s car and truck fleets.
These flexibilities are being adopted
with only very minor changes from the
proposal, as discussed in Section III.C.
EPA is finalizing an incentive to
encourage the commercialization of
advanced GHG/fuel economy control
technologies, including electric vehicles
(EVs), plug-in hybrid electric vehicles
(PHEVs), and fuel cell vehicles (FCVs),
for model years 2012–2016. EPA’s
proposal included an emissions
compliance value of zero grams/mile for
EVs and FCVs, and the electric portion
of PHEVs, and a multiplier in the range
of 1.2 to 2.0, so that each advanced
technology vehicle would count as
greater than one vehicle in a
manufacturer’s fleet-wide compliance
calculation. Several commenters were
very concerned about these credits and
upon considering the public comments
on this issue, EPA is finalizing an
advanced technology vehicle incentive
program to assign a zero gram/mile
emissions compliance value for EVs and
FCVs, and the electric portion of PHEVs,
for up to the first 200,000 EV/PHEV/
FCV vehicles produced by a given
manufacturer during MY 2012–2016.
For any production greater than this
amount, the compliance value for the
vehicle will be greater than zero gram/
mile, set at a level that reflects the
vehicle’s average net increase in
upstream greenhouse gas emissions in
comparison to the gasoline or diesel
vehicle it replaces. EPA is not finalizing
a multiplier based on the concerns
potentially excessive credits using that
incentive. EPA agrees that the
multiplier, in combination with the zero
grams/mile compliance value, would be
excessive. EPA will also allow this early
advanced technology incentive program
beginning in MYs 2009 through 2011.
Further discussion on the advanced
technology vehicle incentives, including
more detail on the public comments and
EPA’s response, is found in Section
III.C.
EPA is also finalizing a temporary
lead-time allowance (TLAAS) for
manufacturers that sell vehicles in the
U.S. in MY 2009 and for which U.S.
vehicle sales in that model year are
below 400,000 vehicles. This allowance
will be available only during the MY
2012–2015 phase-in years of the
program. A manufacturer that satisfies
the threshold criteria will be able to
treat a limited number of vehicles as a
separate averaging fleet, which will be
subject to a less stringent GHG
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standard.164 Specifically, a standard of
125 percent of the vehicle’s otherwise
applicable foot-print target level will
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 setting
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 will no longer be eligible for a
different standard). EPA discusses this
in more detail in Section III.B of the
preamble.
EPA received comments from several
smaller manufacturers that the TLAAS
program was insufficient to allow
manufacturers with very limited
product lines to comply. These
manufacturers commented that they
need additional lead-time to meet the
standards, because their CO2 baselines
are significantly higher and their vehicle
product lines are even more limited,
reducing their ability to average across
their fleets compared even to other
TLAAS manufacturers. EPA fully
summarizes the public comments on the
TLAAS program, including comments
not supporting the program, in Section
III.B. In summary, in response to the
lead time issues raised by
manufacturers, EPA is modifying the
TLAAS program that applies to
manufacturers with between 5,000 and
50,000 U.S. vehicle sales in MY 2009.
These manufactures would have an
increased allotment of vehicles, a total
of 250,000, compared to 100,000
vehicles for other TLAAS-eligible
manufacturers. In addition, the TLAAS
program for these manufacturers would
be extended by one year, through MY
2016 for these vehicles, for a total of five
years of eligibility. The other provisions
of the TLAAS program would continue
to apply, such as the restrictions on
credit trading and the level of the
standard. Additional restrictions would
also apply to these vehicles, as
discussed in Section III.B.5. In addition,
for the smallest volume manufacturers,
those with U.S. sales of below 5,000
vehicles, EPA is not setting standards at
this time but is instead deferring
standards until a future rulemaking.
This is the same approach we are using
for small businesses. The unique issues
involved with these manufacturers will
be addressed in that future rulemaking.
164 EPCA does not permit such an allowance.
Consequently, manufacturers who may be able to
take advantage of a lead-time allowance under the
GHG standards would be required to comply with
the applicable CAFE standard or be subject to
penalties for non-compliance.
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Further discussion of the public
comment on these issues and details on
these changes from the proposed
program are included in Section III.B.6.
The agency received comments on its
compliance with the Regulatory
Flexibility Act. As stated in Section
III.I.3, small entities are not significantly
impacted by this rulemaking.
EPA is also adopting 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 late model 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 costs or
benefits associated with these standards.
EPA has attempted to build on
existing practice wherever possible in
designing a compliance program for the
GHG standards. In particular, the
program structure 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 emissions and CAFE
programs.
EPA received numerous comments on
issues related to the impacts on
stationary sources, due to the Clean Air
Act’s provisions for permitting
requirements related to the issuance of
the proposed GHG standards for new
motor vehicles. Some comments
suggested that EPA had underestimated
the number of stationary sources that
may be subject to GHG permitting
requirements; other comments
suggested that EPA did not adequately
consider the permitting impact on small
business sources. Other comments
related to EPA’s interpretation of the
CAA’s provisions for subjecting
stationary sources to permit regulation
after GHG standards are set. EPA’s
response to these comments is
contained in the Response to Comments
document; however, many of these
comments pertain to issues that EPA is
addressing in its consideration of the
final Greenhouse Gas Permit Tailoring
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Rule, Prevention of Significant
Deterioration and Title V Greenhouse
Gas Tailoring Rule; Proposed Rule, 74
FR 55292 (October 27, 2009) and will
thus be fully addressed in that
rulemaking.
Some of the comments relating to the
stationary source permitting issues
suggested that EPA should defer setting
GHG standards for new motor vehicles
to avoid such stationary source
permitting impacts. EPA is issuing these
final GHG standards for light-duty
vehicles as part of its efforts to
expeditiously respond to the Supreme
Court’s nearly three year old ruling in
Massachusetts v. EPA, 549 U.S. 497
(2007). In that case, the Court held that
greenhouse gases fit within the
definition of air pollutant in the Clean
Air Act, and that EPA is therefore
compelled to respond to the rulemaking
petition under section 202(a) by
determining 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 stated that under
section 202(a), ‘‘[i]f EPA makes [the
endangerment and cause or contribute
findings], the Clean Air Act requires the
agency to regulate emissions of the
deleterious pollutant.’’ 549 U.S. at 534.
As discussed above, EPA has made the
two findings on contribution and
endangerment. 74 FR 66496 (December
15, 2009). Thus, EPA is required to issue
standards applicable to emissions of this
air pollutant from new motor vehicles.
The Court properly noted that EPA
retained ‘‘significant latitude’’ as to the
‘‘timing * * * and coordination of its
regulations with those of other agencies’’
(id.). However it has now been nearly
three years since the Court issued its
opinion, and the time for delay has
passed. In the absence of these final
standards, there would be three separate
Federal and State regimes
independently regulating light-duty
vehicles to increase fuel economy and
reduce 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 EPA–
NHTSA program will allow automakers
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to meet all of these requirements with
a single national fleet because California
has indicated that it will accept
compliance with EPA’s GHG standards
as compliance with California’s GHG
standards. 74 FR at 49460. California
has not indicated that it would accept
NHTSA’s CAFE standards by
themselves. Without EPA’s vehicle GHG
standards, the states will not offer the
Federal program as an alternative
compliance option to automakers and
the benefits of a harmonized national
program will be lost. California and
several other states have expressed
strong concern that, without comparable
Federal vehicle GHG standards, the
states will not offer the Federal program
as an alternative compliance option to
automakers. Letter dated February 23,
2010 from Commissioners of California,
Maine, New Mexico, Oregon and
Washington to Senators Harry Reid and
Mitch McConnell (Docket EPA–HQ–
OAR–2009–0472–11400). The
automobile industry also strongly
supports issuance of these rules to allow
implementation of the national program
and avoid ‘‘a myriad of problems for the
auto industry in terms of product
planning, vehicle distribution, adverse
economic impacts and, most
importantly, adverse consequences for
their dealers and customers.’’ Letter
dated March 17, 2010 from Alliance of
Automobile Manufacturers to Senators
Harry Reid and Mitch McConnell, and
Representatives Nancy Pelosi and John
Boehner (Docket EPA–HQ–OAR–2009–
0472–11368). Thus, without EPA’s GHG
standards as part of a Federal
harmonized program, important GHG
reductions as well as benefits to the
automakers and to consumers would be
lost.165 In addition, delaying the rule
would impose significant burdens and
uncertainty on automakers, who are
already well into planning for
production of MY 2012 vehicles, relying
on the ability to produce a single
national fleet. Delaying the issuance of
this final rule would very seriously
disrupt the industry’s plans.
Instead of delaying the LDV rule and
losing the benefits of this rule and the
harmonized national program, EPA is
directly addressing concerns about
stationary source permitting in other
actions that EPA is taking with regard to
165 As discussed elsewhere, EPA’s GHG standards
achieve greater overall reductions in GHGs than
NHTSA’s CAFE standards.
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such permitting. That is the proper
approach to address the issue of
stationary source permitting, as
compared to delaying the issuance of
this rule for some undefined, indefinite
time period.
Some parties have argued that EPA’s
issuance of this light-duty vehicle rule
amounts to a denial of various
administrative requests pending before
EPA, in which parties have requested
that EPA reconsider and stay the GHG
endangerment finding published on
December 15, 2009. That is not an
accurate characterization of the impact
of this final rule. EPA has not taken
final action on these administrative
requests, and issuance of this vehicle
rule is not final agency action, explicitly
or implicitly, on those requests.
Currently, while we carefully consider
the pending requests for reconsideration
on endangerment, these final findings
on endangerment and contribution
remain in place. Thus under section
202(a) EPA is obligated to promulgate
GHG motor vehicle standards, although
there is no statutory deadline for
issuance of the light-duty vehicle rule or
other motor vehicle rules. In that
context, issuance of this final light-duty
vehicle rule does no more than
recognize the current status of the
findings—they are final and impose a
rulemaking obligation on EPA, unless
and until we change them. In issuing
the vehicle rule we are not making a
decision on requests to reconsider or
stay the endangerment finding, and are
not in any way prejudicing or limiting
EPA’s discretion in making a final
decision on these administrative
requests.
For discussion of comments on
impacts on small entities and EPA’s
compliance with the Regulatory
Flexibility Act, see the discussion in
Section III.I.3.
b. Environmental and Economic
Benefits and Costs of EPA’s 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 percent and a 7
percent discount rate. As discussed
previously, EPA recognizes that much of
these same costs and benefits are also
attributable to the CAFE standard
contained in this joint final rule.
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25403
TABLE III.A.3–3—PROJECTED QUANTIFIABLE BENEFITS AND COSTS FOR CO2 STANDARD
[In million 2007$]
2020
¥$20,100
Quantified Annual Costsb ........................
2030
2040
¥$64,000
¥$101,900
¥$152,200
Benefits From Reduced CO2 Emissions at Each Assumed SCC
Avg SCC at 5% ........................................
Avg SCC at 3% ........................................
Avg SCC at 2.5% .....................................
95th percentile SCC at 3% ......................
900
3,700
5,800
11,000
2,700
8,900
14,000
27,000
NPV, 3% a
2050
NPV, 7% a
¥$1,199,700
¥$480,700
Value c d e
4,600
14,000
21,000
43,000
7,200
21,000
30,000
62,000
34,500
176,700
299,600
538,500
34,500
176,700
299,600
538,500
1,200–1,300
6,000
6,300
13,000
¥6,100
1,200–1,300
7,600
8,000
18,400
¥7,800
21,000
81,900
87,900
171,500
¥84,800
14,000
36,900
40,100
75,500
¥38,600
1,511,700
1,653,900
1,776,800
2,015,700
643,100
785,300
908,200
1,147,100
Other Impacts
Criteria Pollutant Benefits f g h i .................
Energy Security Impacts (price shock) ....
Reduced Refueling ..................................
Value of Increased Driving j .....................
Accidents, Noise, Congestion ..................
B
2,200
2,400
4,200
¥2,300
1,200–1,300
4,500
4,800
8,800
¥4,600
Quantified Net Benefits at Each Assumed SCC Value c d e
Avg SCC at 5% ........................................
Avg SCC at 3% ........................................
Avg SCC at 2.5% .....................................
95th percentile SCC at 3% ......................
27,500
30,300
32,400
37,600
81,500
87,700
92,800
105,800
127,000
136,400
143,400
165,400
186,900
200,700
209,700
241,700
a Note that net present value of reduced GHG emissions is calculated differently than other benefits. The same discount rate used to discount
the value of damages from future emissions (SCC at 5, 3, 2.5 percent) is used to calculate net present value of SCC for internal consistency.
Refer to Section III.F for more detail.
b Quantified annual costs are negative because of fuel savings (see Table III.H.10–1 for a breakdown of the vehicle technology costs and fuel
savings). The fuel savings outweigh the vehicle technology costs and, therefore, the costs are presented here are negative values.
c Monetized GHG benefits exclude the value of reductions in non-CO GHG emissions (HFC, CH and N O) expected under this final rule. Al2
4
2
though EPA has not monetized the benefits of reductions in these non-CO2 emissions, the value of these reductions should not be interpreted as
zero. Rather, the reductions in non-CO2 GHGs will contribute to this rule’s climate benefits, as explained in Section III.F.2. The SCC Technical
Support Document (TSD) notes the difference between the social cost of non-CO2 emissions and CO2 emissions, and specifies a goal to develop methods to value non-CO2 emissions in future analyses.
d Section III.H.6 notes that SCC increases over time. Corresponding to the years in this table, the SCC estimates range as follows: for Average
SCC at 5%: $5–$16; for Average SCC at 3%: $21–$45; for Average SCC at 2.5%: $35–$65; and for 95th percentile SCC at 3%: $65–$136. Section III.H.6 also presents these SCC estimates.
e Note that net present value of reduced GHG emissions is calculated differently than other benefits. The same discount rate used to discount
the value of damages from future emissions (SCC at 5, 3, 2.5 percent) is used to calculate net present value of SCC for internal consistency.
Refer to SCC TSD for more detail.
f Note that ‘‘B’’ indicates unquantified criteria pollutant benefits in the year 2020. For the final rule, we only modeled the rule’s PM - and
2.5
ozone-related impacts in the calendar year 2030. For the purposes of estimating a stream of future-year criteria pollutant benefits, we assume
that the benefits out to 2050 are equal to, and no less than, those modeled in 2030 as reflected by the stream of estimated future emission reductions. The NPV of criteria pollutant-related benefits should therefore be considered a conservative estimate of the potential benefits associated with the final rule.
g The benefits presented in this table include an estimate of PM-related premature mortality derived from Laden et al., 2006, and the ozone-related premature mortality estimate derived from Bell et al., 2004. If the benefit estimates were based on the ACS study of PM-related premature
mortality (Pope et al., 2002) and the Levy et al., 2005 study of ozone-related premature mortality, the values would be as much as 70% smaller.
h The calendar year benefits presented in this table assume either a 3% discount rate in the valuation of PM-related premature mortality
($1,300 million) or a 7% discount rate ($1,200 million) to account for a twenty-year segmented cessation lag. Note that the benefits estimated
using a 3% discount rate were used to calculate the NPV using a 3% discount rate and the benefits estimated using a 7% discount rate were
used to calculate the NPV using a 7% discount rate. For benefits totals presented at each calendar year, we used the mid-point of the criteria
pollutant benefits range ($1,250).
i Note that the co-pollutant impacts presented here do not include the full complement of endpoints that, if quantified and monetized, would
change the total monetized estimate of impacts. The full complement of human health and welfare effects associated with PM and ozone remain
unquantified because of current limitations in methods or available data. We have not quantified a number of known or suspected health effects
linked with ozone and PM for which appropriate health impact functions are not available or which do not provide easily interpretable outcomes
(e.g., changes in heart rate variability). Additionally, we are unable to quantify a number of known welfare effects, including reduced acid and
particulate deposition damage to cultural monuments and other materials, and environmental benefits due to reductions of impacts of eutrophication in coastal areas.
j Calculated using pre-tax fuel prices.
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4. Basis for the 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
of the proposed rule (74 FR at 49464–
65). The following is a summary of the
basis for the final GHG standards under
section 202(a), which is discussed in
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more detail in the following portions of
Section III.
With respect to CO2 and HFCs, EPA
is adopting 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
standards, and the information and
analysis performed by EPA indicates
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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 standards
indicates that manufacturers will be
able to meet the standards by employing
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a wide variety of technologies that are
already commercially available and can
be incorporated into their vehicles at the
time of redesign. In addition to the
consideration 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 standards can be met using
technology that will be available in the
lead-time provided. At the same time, it
must be noted that because technology
is commercially available today does
not mean it can automatically be
incorporated fleet-wide during the
model years in question. As discussed
below, and in detail in Section III.D.7,
EPA and NHTSA carefully analyzed
issues of adequacy of lead time in
determining the level of the standards,
and the agencies are convinced both
that lead time is sufficient to meet the
standards but that major further
additions of technology across the fleet
is not possible during these model
years.
To account for additional lead-time
concerns for various manufacturers of
typically higher performance vehicles,
EPA is adopting a Temporary Lead-time
Allowance similar to that proposed 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 is
deferring standards pending later
rulemaking.
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 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
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.
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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 960
million metric tons CO2 eq. and fuel
reductions of 1.8 billion barrels of oil.
These are important and significant
reductions. EPA has also analyzed a
variety of other impacts of the
standards, ranging from the standards’
effects on emissions of non-GHG
pollutants, impacts on noise, energy,
safety and congestion. EPA has also
quantified the cost and benefits of the
standards, to the extent practicable. Our
analysis to date indicates that the
overall quantified benefits of the
standards far outweigh the projected
costs. Utilizing a 3% discount rate, 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.166
These values are estimated at $136
billion and $787 billion, respectively,
using a 7% discount rate and the SCC
discounted at 3 percent.167
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 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 in emissions and in oil
usage, and the significantly greater
quantified benefits compared to
quantified costs, EPA is confident that
the standards are an appropriate and
reasonable balance of the factors to
166 Based on the mean SCC at 3 percent discount
rate, which is $21 per metric ton CO2 in 2010 rising
to $45 per metric ton CO2 in 2050.
167 SCC was discounted at 3 percent to maintain
internal consistency in the SCC calculations while
all other benefits were discounted at 7 percent.
Specifically, the same discount rate used to
discount the value of damages from future CO2
emissions is used to calculate net present value of
SCC.
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consider under section 202(a). See
Husqvarna AB v. EPA, 254 F. 3d 195,
200 (DC 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 (DC 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 (DC Cir. 2002) (same).
EPA recognizes that the vast majority
of technologies which we are
considering for purposes of setting
standards under section 202(a) are
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 rule, would result from
the increased use of these technologies.
EPA also recognizes that this 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 therefore evaluated two sets of
alternative standards, one more
stringent than the promulgated
standards and one less stringent.
The alternatives are 4% per year
increase in standards which would be
less stringent and a 6% per year
increase in the standards which would
be more stringent. EPA is not adopting
either of these. As discussed in Section
III.D.7, the 4% per year forgoes CO2
reductions which can be achieved at
reasonable cost 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
penetration which appears
inappropriate in this timeframe due to
the 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 adopting either of the
alternatives.) EPA also believes that the
no backsliding standards it is adopting
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for N2O and CH4 are appropriate under
section 202(a).
B. GHG Standards for Light-Duty
Vehicles, Light-Duty Trucks, and
Medium-Duty Passenger Vehicles
EPA is finalizing new emission
standards to control greenhouse gases
(GHGs) from light-duty vehicles. First,
EPA is finalizing an emission standard
for carbon dioxide (CO2) on a gram per
mile (g/mile) basis that will apply to a
manufacturer’s fleet of cars, and a
separate standard that will apply to a
manufacturer’s fleet of trucks. CO2 is the
primary greenhouse gas 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
CO2 emissions related to the increased
load on the engine. Third, EPA is
finalizing separate emissions standards
for two other GHGs: Methane (CH4) and
nitrous oxide (N20). 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 will be set
as a cap that will limit emissions
increases and prevent backsliding from
current emission levels. The final
standards described below will 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.’’ 168
EPA’s program includes a number of
credit opportunities and other
flexibilities to help manufacturers
comply, especially in the early years of
the program. EPA is establishing a
system of averaging, banking, and
trading of credits integral to the fleet
averaging approach, based on
manufacturer fleet average CO2
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168 As
described in Section III.B.2., GHG
emissions standards will use the same vehicle
category definitions as are used in the CAFE
program.
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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 including A/C credits as an
aspect of the standards, as mentioned
above. EPA is also including several
additional credit provisions that apply
only in the initial model years of the
program. These include flex fuel vehicle
credits, incentives for the early
commercialization of certain advanced
technology vehicles, credits for new and
innovative ‘‘off-cycle’’ technologies that
are not captured by the current test
procedures, and generation of credits
prior to model year 2012. The A/C
credits and additional credit
opportunities are described in Section
III.C. These credit programs will provide
flexibility to manufacturers, which may
be especially important during the early
transition years of the program. EPA
will also allow a manufacturer to carry
a credit deficit into the future for a
limited number of model years. A
parallel provision, referred to as credit
carry-back, will be part of the CAFE
program. Finally, EPA is finalizing an
optional compliance flexibility, the
Temporary Leadtime Allowance
Alternative Standard program, for
intermediate volume manufacturers,
and is deferring standards for the
smallest manufacturers, as discussed in
Sections III.B.5 and 6 below.
1. What fleet-wide emissions levels
correspond to the CO2 standards?
The attribute-based CO2 standards are
projected to achieve a national fleetwide average, covering both light cars
and trucks, of 250 grams/mile of CO2 in
model year (MY) 2016. This includes
CO2-equivalent emission reductions
from A/C improvements, reflected as
credits in the standard. The standards
will begin with MY 2012, with a
generally linear increase in stringency
from MY 2012 through MY 2016. EPA
will have 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 standards. The actual fleetwide average g/mi level that will be
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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, EPA discusses
the year-by-year estimate of emissions
reductions that are projected to be
achieved by the standards.
In general, the schedule of standards
acts as a phase-in to the MY 2016
standards, and reflects consideration of
the appropriate lead-time for each
manufacturer to implement the requisite
emission reductions technology across
its product line.169 Note that 2016 is the
final model year in which standards
become more stringent. The 2016 CO2
standards will 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 2016 MY
standards will achieve a level of 250 g/
mile CO2, including CO2-equivalent
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 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 provides these
estimates for each manufacturer.170
As a result of public comments and
updated economic and future fleet
projections, the attribute based curves
have been updated for this final rule, as
discussed in detail in Section II.B of this
preamble and Chapter 2 of the Joint
TSD. This update in turn affects costs,
benefits, and other impacts of the final
standards—thus EPA’s overall
projection of the impacts of the final
rule standards have been updated and
the results are different than for the
NPRM, though in general not by a large
degree.
169 See
CAA section 202(a)(2).
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.
170 These
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TABLE III.B.1–1—ESTIMATED FLEET CO2-EQUIVALENT LEVELS CORRESPONDING TO THE STANDARDS FOR CARS
[g/mile]
Model year
Manufacturer
2012
BMW ....................................................................................
Chrysler ................................................................................
Daimler .................................................................................
Ford ......................................................................................
General Motors ....................................................................
Honda ...................................................................................
Hyundai ................................................................................
Kia ........................................................................................
Mazda ..................................................................................
Mitsubishi .............................................................................
Nissan ..................................................................................
Porsche ................................................................................
Subaru ..................................................................................
Suzuki ..................................................................................
Tata ......................................................................................
Toyota ..................................................................................
Volkswagen ..........................................................................
2013
266
269
274
267
268
260
260
263
260
257
263
244
253
245
288
259
256
2014
259
262
267
259
261
252
254
255
252
249
256
237
246
238
280
251
249
2015
250
254
259
251
252
244
246
247
243
241
248
228
237
230
272
243
240
2016
239
243
249
240
241
233
233
235
232
230
237
217
226
218
261
232
229
228
232
238
229
230
222
222
224
221
219
226
206
215
208
250
221
219
TABLE III.B.1–2—ESTIMATED FLEET CO2-EQUIVALENT LEVELS CORRESPONDING TO THE STANDARDS FOR LIGHT TRUCKS
[g/mile]
Model year
Manufacturer
2012
BMW ....................................................................................
Chrysler ................................................................................
Daimler .................................................................................
Ford ......................................................................................
General Motors ....................................................................
Honda ...................................................................................
Hyundai ................................................................................
Kia ........................................................................................
Mazda ..................................................................................
Mitsubishi .............................................................................
Nissan ..................................................................................
Porsche ................................................................................
Subaru ..................................................................................
Suzuki ..................................................................................
Tata ......................................................................................
Toyota ..................................................................................
Volkswagen ..........................................................................
These estimates were aggregated
based on projected production volumes
2013
330
342
343
354
364
327
325
335
319
316
343
334
315
320
321
342
341
2014
320
333
332
344
354
318
316
327
308
306
334
325
305
310
310
333
331
2015
310
323
323
334
344
309
307
318
299
297
323
315
296
300
301
323
322
2016
297
309
308
319
330
295
292
303
285
283
308
301
281
286
287
308
307
283
295
294
305
316
281
278
289
271
269
294
287
267
272
272
294
293
into the fleet-wide averages for cars and
trucks (Table III.B.1–3).171
TABLE III.B.1–3—ESTIMATED FLEET-WIDE CO2-EQUIVALENT LEVELS CORRESPONDING TO THE STANDARDS
Cars
Trucks
CO2 (g/mi)
CO2 (g/mi)
Model year
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2012
2013
2014
2015
2016
.................................................................................................................................................................
.................................................................................................................................................................
.................................................................................................................................................................
.................................................................................................................................................................
and later ..................................................................................................................................................
As shown in Table III.B.1–3, fleetwide CO2-equivalent emission levels for
cars under the approach are projected to
decrease from 263 to 225 grams per mile
263
256
247
236
225
between MY 2012 and MY 2016.
Similarly, fleet-wide CO2-equivalent
171 Due to rounding during calculations, the
estimated fleet-wide CO2-equivalent levels may
vary by plus or minus 1 gram.
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337
326
312
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emission levels for trucks are projected
to decrease from 346 to 398 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
Regulatory Impact Analysis (RIA).
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
STANDARDS
Model year
Combined car
and truck
CO2 (g/mi)
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2012
2013
2014
2015
2016
......................................
......................................
......................................
......................................
......................................
295
286
276
263
250
As noted above, EPA is finalizing
standards that will 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. Comments from the Center
for Biological Diversity (CBD)
challenged EPA to increase the
stringency of the standards for all of the
years of the program, and even argued
that 2016 standards should be feasible
in 2012. Other commenters noted the
non-linear increase in the standards
from 2011 (CAFE) to the 2012 GHG
standards. As explained in greater detail
in Section III.D below and the relevant
support documents, EPA believes that
the 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 averaging, banking and trading
provisions, as well as other creditgenerating mechanisms, allow
manufacturers further flexibilities
which reduce the cost of the 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 CO2
standards, based on projections of what
actions manufacturers are expected to
take to reduce emissions. The results of
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the analysis are discussed in detail in
Section III.D below and in the RIA. EPA
also presents the estimated costs and
benefits of the car and truck CO2
standards in Section III.H. In developing
the final rule, 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 will 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. The
time-frame and levels for the 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 final rule, as it will avoid
the much higher costs that will occur if
manufacturers needed to add or change
technology at times other than these
scheduled redesigns. This time period
will also provide manufacturers the
opportunity to plan for compliance
using a multi-year time frame, again in
accord with their normal business
practice. Further details on lead time,
redesigns and feasibility can be found in
Section III–D.
Consistent with the requirement of
CAA section 202(a)(1) that standards be
applicable to vehicles ‘‘for their useful
life,’’ EPA is finalizing CO2 vehicle
standards that will 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.172 Tier 2 refers to EPA’s
standards for criteria pollutants such as
NOX, HC, and CO. EPA is finalizing new
172 See
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CO2 standards for the same group of
vehicles, and therefore the Tier 2 useful
life will apply for CO2 standards as well.
The in-use emission standard will be
10% higher than the model-level
certification emission test results, to
address issues of production variability
and test-to-test variability. The in-use
standard is discussed in Section III.E.
EPA is requiring manufacturers 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 Test (HFET or
‘‘highway’’ test).173 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 using these test
procedures for the CO2 standards in this
final rule, given the lack of data on
control technology effectiveness under
these procedures.174 There were a
number of commenters that advocated
for a change in either the test
procedures or the fuel economy
calculation weighting factors. The U.S.
Coalition for Advanced Diesel Cars
urged a changing of the city/highway
weighting factors from their current
values of 45/55 to 43/57 to be more
consistent with the EPA (5-cycle) fuel
economy labeling rule. EPA has decided
that such a change would not be
appropriate, nor consistent with the
technical analyses supporting the 5cycle fuel economy label rulemaking.
The city/highway weighting of 43/57
was found to be appropriate when the
city fuel economy is based on a
combination of Bags 2 and 3 of the FTP
and the city portion of the US06 test
cycle, and when the highway fuel
economy is based on a combination of
the HFET and the highway portion of
the US06 cycle. When city and highway
fuel economy are based on the FTP and
HFET cycles, respectively, the
appropriate city/highway weighting is
not 43/57, but very close to 55/45.
Therefore, the weighting of the city and
173 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.
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.
174 See 71 FR 77872, December 27, 2006.
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highway fuel economy values contained
in this rule is appropriate for and
consistent with the use of the FTP and
HFET cycles to measure city and
highway fuel economy.
The American Council for an EnergyEfficient Economy (ACEEE), Cummins,
and Sierra Club all suggested using
more real-world test procedures. It is
not feasible at this time to base the final
CO2 standards on EPA’s five-cycle fuel
economy formulae. Consistent with its
name, these formulae require vehicle
testing over five test cycles, the two
cycles associated with the proposed CO2
standards, plus the cold temperature
FTP, the US06 high speed, high
acceleration cycle and the SC03 air
conditioning test. EPA considered
employing the five-cycle calculation of
fuel economy and GHG emissions for
this rule, but there were a number of
reasons why this was not practical. As
discussed extensively in the Joint TSD,
setting the appropriate levels of CO2
standards requires extensive knowledge
of the CO2 emission control
effectiveness over the certification test
cycles. Such knowledge has been
gathered over the FTP and HFET cycles
for decades, but is severely lacking for
the other three test cycles. EPA simply
lacks the technical basis to project the
effectiveness of the available
technologies over these three test cycles
and therefore, could not adequately
support a rule which set CO2 standards
based on the five-cycle formulae. The
benefits of today’s rule do presume a
strong connection between CO2
emissions measured over the FTP and
HFET cycles and onroad operation.
Since CO2 emissions determined by the
five-cycle formulae are believed to
correlate reasonably with onroad
emissions, this implies a strong
connection between emissions over the
FTP and HFET cycles and the five cycle
formulae. However, while we believe
that this correlation is reasonable on
average for the vehicle fleet, it may not
be reasonable on a per vehicle basis, nor
for any single manufacturer’s vehicles.
Thus, we believe that it is reasonable to
project a direct relationship between the
percentage change in CO2 emissions
over the two certification cycles and
onroad emissions (a surrogate of which
is the five-cycle formulae), but not
reasonable to base the certification of
specific vehicles on that untested
relationship. Furthermore, EPA is
allowing for off-cycle credits to
encourage technologies that may not be
not properly captured on the 2-cycle
city/highway test procedure (although
these credits could apply toward
compliance with EPA’s standards, not
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toward compliance with the CAFE
standards). For future analysis, EPA will
consider examining new drive cycles
and test procedures for fuel economy.175
EPA is finalizing standards that
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 will 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 is finalizing the same vehicle
category definitions that are used in the
CAFE program for the 2011 model year
standards.176 This approach allows
EPA’s CO2 standards and the CAFE
standards to be harmonized across all
vehicles. In other words, vehicles will
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. The CAFE vehicle category
definitions differ slightly from the EPA
definitions for cars and light trucks used
for the Tier 2 program and other EPA
vehicle programs. However, EPA is not
changing the vehicle category
definitions for any other light-duty
mobile source programs, except the
GHG standards.
EPA is finalizing 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.
Some commenters requested a single
or converging curve for both cars and
trucks.177 EPA is not finalizing 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.178 Due to
these differences, it is reasonable to
separate the light-duty vehicle fleet into
two groups. Second, EPA wishes 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. As
discussed in Section IV, EPCA does not
preclude NHTSA from issuing
converging standards if its analysis
indicates that these are the appropriate
standards under the statute applicable
separately to each fleet.
Finally, most of the advantages of a
single standard for all light duty
vehicles are also present in the two-fleet
standards finalized here. Because EPA is
allowing 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
will 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 finalizing
separate car and truck fleet standards.
However, it is possible that in the
future, recent trends may continue such
that cars may become more truck-like
and trucks may become more car-like.
Therefore, EPA will reconsider whether
it is appropriate to use converging
curves if justified by future analysis.
For model years 2012 and later, EPA
is finalizing a series of CO2 standards
that are described mathematically by a
family of piecewise linear functions
175 There were also a number of comments on air
conditioner test procedures; these will be discussed
in Section III.C and the RIA.
176 See 49 CFR 523.
177 CBD, ICCT and NESCAUM supported a single
curve and the students at UC Santa Barbara
commented on converging curves.
178 There is a distinction between body-on-frame
trucks and unibody cars and trucks that make them
technically different in a number of ways. Also,
2WD vehicles tend to have lower CO2 emissions
than their 4WD counterparts (all other things being
equal). More discussion of this can be found in the
TSD and RIA.
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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)
(with respect to vehicle footprint).179
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:
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 parameter values that define
the family of functions for the 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]
Model year
2012
2013
2014
2015
2016
a
.........................................................
.........................................................
.........................................................
.........................................................
and later ..........................................
b
244
237
228
217
206
c
315
307
299
288
277
Lower
constraint
d
4.72
4.72
4.72
4.72
4.72
50.5
43.3
34.8
23.4
12.7
Upper
constraint
41
41
41
41
41
56
56
56
56
56
TABLE III.B.2–2—PARAMETER VALUES FOR TRUCKS
[For CO2 gram per mile targets]
Model year
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2012
2013
2014
2015
2016
a
.........................................................
.........................................................
.........................................................
.........................................................
and later ..........................................
294
284
275
261
247
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.
The EPA received a number of
comments on both the attribute and the
shape of the curve. For reasons
described in Section IIC and Chapter 2
of the TSD, the EPA feels that footprint
is the most appropriate choice of
attribute for this rule. More background
discussion on other alternative
attributes and curves EPA explored can
be found in the EPA RIA. 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 a footprint-based program
will harmonize EPA’s program and the
CAFE program as a single national
program, resulting in reduced
compliance complexity for
manufacturers. EPA’s reasons for using
an attribute based standard are
discussed in more detail in the Joint
TSD. Also described in these other
sections are the reasons why EPA is
finalizing the slopes and the constraints
as shown above. For future analysis,
179 See
final regulations at 40 CFR 86.1818–12.
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b
c
395
385
376
362
348
4.04
4.04
4.04
4.04
4.04
EPA will consider other options and
suggestions made by commenters.
EPA also received public comments
from three manufacturers, General
Motors, Ford Motor Company, and
Chrysler, suggesting that the GHG
program should harmonize with an
EPCA provision that allows a
manufacturer to exclude emergency
vehicles from its CAFE fleet by
providing written notice to NHTSA.180
These manufacturers believe this
provision is necessary because law
enforcement vehicles (e.g., police cars)
must be designed with special
performance and features necessary for
police work—but which tend to raise
GHG emissions and reduce fuel
economy relative to the base vehicle.
These commenters provided several
examples of features unique to these
special purpose vehicles that negatively
impact GHG emissions, such as heavyduty suspensions, unique engine and
transmission calibrations, and heavyduty components (e.g., batteries,
stabilizer bars, engine cooling). These
manufacturers believe consistency in
addressing these vehicles between the
EPA and NHTSA programs is critical, as
a manufacturer may be challenged to
continue providing the performance
needs of the Federal, State, and local
180 49
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constraint
d
128.6
118.7
109.4
95.1
81.1
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41
41
41
41
41
66
66
66
66
66
government purchasers of emergency
vehicles.
EPA is not finalizing such an
emergency vehicle provision in this
rule, since we believe that it is feasible
for manufacturers to apply the same
types of technologies to the base
emergency vehicle as they would to
other vehicles in their fleet. However,
EPA also recognizes that, because of the
unique ‘‘performance upgrading’’ needed
to convert a base vehicle into one that
meets the performance demands of the
law enforcement community—which
tend to reduce GHGs relative to the base
vehicles—there could be situations
where a manufacturer is more
challenged in meeting the GHG
standards than the CAFE standards,
simply due to inclusion of these higheremitting vehicles in the GHG program
fleet. While EPA is not finalizing such
an exclusion for emergency vehicles
today, we do believe it is important to
assess this issue in the future. EPA
plans to assess the unique
characteristics of these emergency
vehicles and whether special provisions
for addressing them are warranted. EPA
plans to undertake this evaluation as
part of a follow-up rulemaking in the
next 18 months (this rulemaking is
discussed in the context of small
U.S.C. 32902(e).
Frm 00087
Upper
constraint
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volume manufacturers in Section III.B.6.
below).
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3. Overview of How EPA’s CO2
Standards Will Be Implemented for
Individual Manufacturers
This section provides a brief overview
of how EPA will implement the CO2
standards. Section III.E explains EPA’s
approach to certification and
compliance in detail. As proposed, EPA
is finalizing two kinds of standards—
fleet average standards determined by a
manufacturer’s fleet makeup, and in-use
standards that will apply to the
individual vehicles that make up the
manufacturer’s fleet. Although this is
similar in concept to the current lightduty vehicle Tier 2 program, there are
important differences. In explaining
EPA’s 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 is retaining the Tier 2 approach
of requiring manufacturers to
demonstrate in good faith at the time of
certification that vehicles in a test group
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will meet applicable standards
throughout useful life. EPA is also
retaining 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. These differences
and resulting modifications to EPA’s
certification protocols are summarized
below and are described in detail in
Section III.E.
EPA will continue to certify test
groups as it does for Tier 2, and the CO2
emission results for the test vehicle will
serve as the initial or default standard
for all of the vehicles in the test group.
However, manufacturers will later
collect and submit data for individual
vehicle model types 181 within each test
group, based on the extensive fuel
economy testing that occurs through the
course of the model year. This model
type data will be used to assign a
distinct certification level for each
model type, thus replacing the initial
test group data as the compliance value
for each model. It is these model type
values that will be used to calculate the
fleet average after the end of the model
year.182 The option to substitute model
type data for the test group data is at the
manufacturer’s discretion, except they
are required, as they are under the CAFE
test protocols, to submit sufficient
vehicle test data to represent no less
than 90 percent of their actual model
year production. The test group
emissions data will continue to apply
for any model type that is not covered
by vehicle test data specific to that
model type.
EPA’s CO2 standards also differ from
Tier 2 in that the fleet average
calculation for Tier 2 is based on test
group bin levels and test group sales
whereas under the CO2 program the CO2
fleet average could be based on a
combination of test group and model
type emissions and model type
production. For the new CO2 standards,
the final regulations use production
rather than sales in calculating the fleet
average in order to closely conform with
the CAFE program, which is a
181 ‘‘Model type’’ is defined in 40 CFR 600.002–
08 as ‘‘* * * a unique combination of car line, basic
engine, and transmission class.’’ A ‘‘car line’’ is
essentially a model name, such as ‘‘Camry,’’
‘‘Malibu,’’ or ‘‘F150.’’ The fleet average is calculated
on the basis of model type emissions.
182 The final in-use vehicle standards for each
vehicle will also be based on the testing used to
determine the model type values. As discussed in
Section III.E.4, an in-use adjustment factor will be
applied to the vehicle test results to determine the
in-use standard that will apply during the useful
life of the vehicle.
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production-based program.183
Production as defined in the regulations
is relatively easy for manufacturers to
track, but once the vehicle is delivered
to dealerships the manufacturer
becomes once step removed from the
sale to the ultimate customer, and it
becomes more difficult to track that
final transaction. There is no
environmental impact of using
production instead of actual sales, and
many commenters supported
maintaining alignment between EPA’s
program and the CAFE program where
possible.
4. Averaging, Banking, and Trading
Provisions for CO2 Standards
As explained above, EPA is finalizing
a fleet average CO2 program for
passenger cars and light trucks. EPA has
previously 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.184
The program will operate much like
EPA’s existing averaging programs in
that manufacturers will calculate
production-weighted fleet average
emissions at the end of the model year
and compare their fleet average with a
fleet average emission standard to
determine compliance. As in other EPA
averaging programs, the Agency is also
finalizing 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, consistent with their typical
redesign schedules.185
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
183 ‘‘Production’’ is defined as ‘‘vehicles produced
and delivered for sale’’ and is not a measure of the
number of vehicles actually sold.
184 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).
185 See final regulations at 40 CFR 86.1865–12.
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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 and at the same
time it increases flexibility and reduces
costs for the regulated industry. A wide
range of commenters expressed general
support for the ABT provisions. Some
commenters noted issues regarding
specific provisions of the ABT program,
which will be discussed in the
appropriate context below. Several
commenters requested that EPA
publicly release manufacturer-specific
ABT data to improve the transparency
of credit transactions. These comments
are addressed in Section III.E.
This section discusses generation of
credits by achieving a fleet average CO2
level that is lower than the
manufacturer’s CO2 fleet average
standard. The final rule includes a
variety of additional ways credits may
be generated by manufacturers. Section
III.C describes these additional
opportunities to generate credits in
detail. Manufacturers may earn credits
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, early credits can
be generated prior to the program’s MY
2012 start date. The credits will be used
to determine a manufacturer’s
compliance at the end of the model
year. These credit generating
opportunities are described below in
Section III.C.
As explained earlier, manufacturers
will determine the fleet average
standard that applies to their car fleet
and the standard for their truck fleet
from the applicable attribute-based
curve. A manufacturer’s credit or debit
balance will be determined by
comparing their fleet average with the
manufacturer’s CO2 standard for that
model year. The standard will be
calculated from footprint values on the
attribute curve and actual production
levels of vehicles at each footprint. A
manufacturer will generate credits if its
car or truck fleet achieves a fleet average
CO2 level lower than its standard and
will generate debits if its fleet average
CO2 level is above that standard. At the
end of the model year, each
manufacturer will 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
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than its standard will generate credits,
and if its fleet average CO2 level is above
that standard its fleet will generate
debits.
The regulations will 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’s standards 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 accounting for the
second issue by expressing credits when
they are generated in total lifetime
Megagrams (metric tons), rather than
through the use of conversion factors
that would apply at certain times. In
this way credits may be freely
exchanged between car and truck
compliance categories without the need
for 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 derivation of the
estimated vehicle lifetime miles traveled
can be found in Chapter 4 of the Joint
Technical Support Document.
A manufacturer that generates credits
in a given year and vehicle category may
use those credits in essentially four
ways, although with some limitations.
These provisions are very similar to
those of other EPA averaging, banking,
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and trading programs. These provisions
have the potential to reduce costs and
compliance burden, and support the
feasibility of the standards in terms of
lead time and orderly redesign by a
manufacturer, thus promoting and not
reducing the environmental benefits of
the program.
First, EPA proposed that the
manufacturer must use any credits
earned to offset any deficit that had
accrued in the current year or in a prior
model year that had been carried over
to the current model year. NRDC
commented that such a provision is
necessary to prevent credit ‘‘shell
games’’ from delaying the adoption of
new technologies. EPA’s Tier 2 program
includes such a restriction, and EPA is
applying an identical restriction to the
GHG program. Simply stated, a
manufacturer may not bank (or carry
forward) credits if that manufacturer is
also carrying a deficit. In such a case,
the manufacturer is obligated to use any
current model year credits to offset that
deficit. Using current model year credits
to offset a prior model year deficit is
referred to in the CAFE program as
credit carry-back. EPA’s deficit carryforward, or credit carry-back provisions
are described further, below.
Second, after satisfying any needs to
offset pre-existing deficits, remaining
credits may be banked, or saved for use
in future years. Credits generated in this
program will be available to the
manufacturer for use in any of the five
model years after the model year in
which they were generated, consistent
with the CAFE program under EISA.
This is also referred to as a credit carryforward provision.
EPA received a number of comments
regarding the credit carry-back and
carry-forward provisions. Many
supported the proposed consistency of
these provisions with EISA and the
flexibility provided by these provisions,
and several offered qualified or tentative
support. For example, NRDC
encouraged EPA to consider further
restrictions in the 2017 and later model
years. Public Citizen expressed concern
regarding the complexity of the program
and how these provisions might obscure
a straightforward determination of
compliance in any given model year. At
least two automobile manufacturers
suggested modeling the program after
California, which allows credits to be
carried forward for three additional
years following a discounting schedule.
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
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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
standards were sufficiently stringent to
remove the restrictions on credit life.
EPA is therefore acting consistently
with our past practice in finalizing
reasonable restrictions on credit life in
this new program. The Agency believes
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, early credits generated by
a manufacturer are also be subject to the
five year credit carry-forward restriction
based on the year in which they are
generated. This limits the effect of the
early credits on the long-term emissions
reductions anticipated to result from the
new standards.
Third, the new program enables
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 may 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 provides important
additional flexibility in the transition to
emissions control technology without
affecting overall emission reductions.
Comments regarding the credit transfer
provisions expressed general support,
noting that it does not matter to the
environment whether a gram of
greenhouse gas is generated from a car
or a truck. Additional comments
regarding EPA’s streamlined megagram
approach and method of accounting for
expected vehicle lifetime miles traveled
are summarized in Section III.E.
Finally, accumulated credits may be
traded to another vehicle manufacturer.
As with intra-company credit use, such
inter-company credit trading provides
flexibility in the transition to emissions
control technology without affecting
overall emission reductions. Trading
credits to another vehicle manufacturer
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could be a straightforward process
between the two manufacturers, but
could also involve third parties that
could serve as credit brokers. Brokers
may 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 lightduty vehicle NOX fleet average standard
and the heavy-duty engine NOX fleet
average standards, although
manufacturers have seldom made such
exchanges. Comments generally
reflected support for the credit trading
flexibility, although some questioned
the extent to which trading might
actually occur. As noted above,
comments regarding program
transparency are addressed in Section
III.E.
If a manufacturer has accrued a deficit
at the end of a model year—that is, its
fleet average level failed to meet the
required fleet average standard—the
manufacturer may carry that deficit
forward (also referred to credit carryback) for a total of three model years
after the model year in which that
deficit was generated. 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 noncompliance with the fleet average
standards.186 As noted above, such a
deficit carry-forward may only occur
after the manufacturer has applied any
banked credits or credits from another
averaging set. If a deficit still remains
after the manufacturer has applied all
available credits, and the manufacturer
did not obtain credits elsewhere, the
deficit may be carried forward for up to
three model years. No deficit may be
carried into the fourth model year after
the model year in which the deficit
occurred. Any deficit from the first
model year that remains after the third
model year will constitute a violation of
the condition on the certificate, which
will constitute a violation of the Clean
Air Act and will be subject to
enforcement action.
The averaging, banking, and trading
provisions are generally consistent with
those included in the CAFE program,
with a few notable exceptions. As with
EPA’s approach, CAFE allows five year
carry-forward of credits and three year
carry-back. Under CAFE, transfers of
credits across a manufacturer’s car and
186 EPA emission control programs that
incorporate ABT provisions (e.g., the Tier 2
program and the Mobile Source Air Toxics
program) have provided this three-year deficit
carry-forward provision for this reason. See 65 FR
6745 (February 10, 2000), and 71 FR 8427 (February
26, 2007).
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truck averaging 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 did not
propose, and is not finalizing, these
constraints on the use of transferred
credits.
Additional details regarding the
averaging, banking, and trading
provisions and how EPA will
implement these provisions can be
found in Section III.E.
5. CO2 Temporary Lead-Time
Allowance Alternative Standards
EPA proposed adopting 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. As
noted in the proposal, this option was
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 final rule. The other situation
involves manufacturers who have a
limited line of vehicles and are therefore
unable to average emissions
performance across a full line of
production. For example, some smaller
volume manufacturers produce only
vehicles with emissions above the
corresponding CO2 footprint target, and
do not have other types of vehicles (that
exceed their compliance targets) 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 through payment of civil
penalties is impermissible for the GHG
standards under the CAA, both of these
types of manufacturers need additional
lead time to upgrade vehicles and meet
the standards. EPA proposed that this
subset of manufacturers be allowed to
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produce up to 100,000 vehicles over
model years 2012–2015 that would be
subject to a somewhat less stringent CO2
standard of 1.25 times the standard that
would otherwise apply to those
vehicles. Only manufacturers with total
U.S. sales of less than 400,000 vehicles
per year in MY 2009 would be eligible
for this allowance. Those manufacturers
would have to exhaust designated
program flexibilities in order to be
eligible, and credit generating and
trading opportunities for the eligible
vehicles would be restricted. See 74 FR
49522–224.
EPA is finalizing the optional TLAAS
provisions, with certain limited
modifications, 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.187
EPA is finalizing modified provisions to
address the unique lead-time issues of
smaller volume manufacturers. One
provision involves additional flexibility
under the TLAAS program for
manufacturers below 50,000 U.S.
vehicle sales, as discussed further in
Section III.B.5.b below. Another
provision defers the CO2 standards for
the smallest volume manufacturers,
those below 5,000 U.S. vehicle sales, as
discussed in Section III.B.6.
Comments from several
manufacturers strongly supported the
TLAAS program as critical to provide
the lead time needed for manufacturers
to meet the standards. Volkswagen
commented that TLAAS is an important
aspect of EPA’s proposal and that it
responds to the needs of some smaller
manufacturers for additional lead time
and flexibility under the CAA. Daimler
Automotive Group commented that
TLAAS is a critical element of the
program and falls squarely within EPA’s
discretion to provide appropriate lead
time to limited-line low-volume
manufacturers. BMW also commented
that TLAAS is needed because most of
the companies with limited lines will
have to meet a more stringent fleet
standard by 2016 than full-line
manufacturers because they sell
‘‘feature-dense’’ vehicles (as opposed to
light-weight large wheel-base vehicles)
and no pick-up trucks. BMW
commented that their MY 2016
footprint-based standard is projected to
be 4 percent more stringent than the
fleet average standard of 250 g/mile. The
Alliance of Automobile Manufacturers
supported the flexibilities proposed by
EPA, including TLAAS. As discussed in
detail below, EPA received extensive
comments from many smaller volume
187 See
final regulations at 40 CFR 86.1818–12(e).
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manufacturers that the proposed TLAAS
program was insufficient to address lead
time and feasibility issues they will face
under the program.
In contrast, EPA also received
comments from the Center for Biological
Diversity opposing the TLAAS program,
commenting that an exception for high
performance vehicles is not allowed
under EPCA or the CAA and that it
rewards manufacturers that pay
penalties under CAFE and penalizes
those that have complied with CAFE.
This commenter suggests that
manufacturers could decrease vehicle
mass or power output of engines,
purchase credits from another
manufacturer, or earn off-cycle credits.
EPA responds to these comments below.
After carefully considering the public
comments, EPA continues to believe
that the TLAAS program is essential in
providing necessary lead time and
flexibility to eligible manufacturers in
the early years of the standards. First,
EPA believes that it is acting well
within its legal authority in adopting the
various TLAAS provisions. EPA is
required to provide sufficient lead time
for industry as a whole for standards
under section 202(a)(1), which
mandates that standards are to take
effect only ‘‘after providing such period
as the Administrator finds necessary to
permit the development and application
of the requisite technology, giving
appropriate consideration to the cost of
compliance within such period.’’ Thus,
although section 202(a)(1) does not
explicitly authorize this or any other
specific lead time provision, it affords
ample leeway for EPA to craft
provisions designed to provide adequate
lead time, and to tailor those provisions
as appropriate. We show below that the
types of technology penetrations
required for TLAAS-eligible vehicles in
the program’s earlier years raise critical
issues as to adequacy of lead time. As
discussed in the EPA feasibility analysis
provided in Section III.D.6 and III.D.7
several manufacturers eligible for
TLAAS are projected to face a
compliance shortfall in MY 2016
without the TLAAS program, even with
the full application of technologies
assumed by the OMEGA Model,
including hybrid use of up to 15
percent. These include BMW, Jaguar
Land Rover, Daimler, Porsche, and
Volkswagen In addition, the smaller
volume manufacturers of this group
(i.e., Jaguar Land Rover and Porsche)
face the greatest shortfall (see Table
III.D.6–4). Even with TLAAS, these
manufacturers will need to take
technology steps to comply with
standards above and beyond those of
other manufacturers. These
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manufacturers have relatively few
models with high baseline emissions
and this flexibility allows them
additional lead time to adapt to a longer
term strategy of meeting the final
standards within their vehicle redesign
cycles.
Second, EPA has carefully evaluated
other means of eligible manufacturers to
meet the standards, such as utilizing
available credit opportunities. Indeed,
eligibility for the TLAAS, and for
temporary deferral of regulation for very
small volume manufacturers, is
conditioned on first exhausting the
various programmatic flexibilities
including credit utilization. At the same
time, a basic reason certain
manufacturers are faced with special
lead time difficulties is their inability to
generate credits which can be then be
averaged across their fleet because of
limited product lines. And although
purchasing credits is an option under
the program, there are no guarantees
that credits will be available. Historic
practice in fact suggests that
manufacturers do not sell credits to
competitors. While some of the smaller
manufacturers covered by the TLAAS
program may be in a position to obtain
credits, they are not likely to be
available for the TLAAS manufacturers
across the board in the volume needed
to comply without the TLAAS
provisions. At the same time the TLAAS
provisions have been structured such
that any credits that do become
available would likely be used before a
manufacturer would turn to the more
restricted and limiting TLAAS
provisions.
As discussed in Section III.C., offcycle credits are available if
manufacturers are able to employ new
and innovative technologies not already
in widespread use, which provide realworld emissions reductions not
captured on the current test cycles.
Further, these credits are eligible only
for technologies that are newly
introduced on just a few vehicle models,
and are not yet in widespread use across
the fleet. The magnitude of these credits
are highly uncertain because they are
based on new technologies, and EPA is
not aware of any such technologies that
would provide enough credits to bring
these manufacturers into compliance
without TLAAS lead time flexibility.
Manufacturers first must develop these
technologies and then demonstrate their
emissions reductions capabilities,
which will require lead time. Moreover,
the technologies mentioned in the
proposal which are the most likely to be
eligible based on present knowledge,
including solar panels and active
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aerodynamics, are likely to provide only
small incremental emissions reductions.
We agree with the comment that
reducing vehicle mass or power are
potential methods for reducing
emissions that should be employed by
TLAAS-eligible manufacturers to help
them meet standards. However, based
on our assessment of the lead time
needed for these manufacturers to
comply with the standards, especially
given their more limited product
offerings and higher baseline emissions,
we believe that additional time is
needed for them to come into
compliance. EPA can permissibly
consider the TLAAS and other
manufacturers’ lead time, cost, and
feasibility issues in developing the
primary standards and has discretion in
setting the overall stringency of the
standards to account for these factors.
Natural Resources Defense Council v.
Thomas, 805 F. 2d 410, 421 (DC Cir.
1986) (even when implementing
technology-forcing provisions of Title II,
EPA may base standards on an industrywide capability ‘‘taking into account the
broad spectrum of technological
capabilities as well as cost and other
factors’’ across the industry). EPA is not
legally required to set standards that
drive these manufacturers or their
products out of the market, nor is EPA
legally required to preserve a certain
product line or vehicle characteristic.
Instead EPA has broad discretion under
section 202(a)(1) to set standards that
reasonably balance lead time needs
across the industry as a whole and
vehicle availability. In this rulemaking,
EPA has consistently emphasized the
importance of obtaining very significant
reductions in emissions of GHGs from
the industry as a whole, and obtaining
those reductions through regulatory
approaches that avoid limiting the
ability of manufacturers to provide
model availability and choice for
consumers. The primary mechanism to
achieve this is the use of a footprint
attribute curve in setting the
increasingly stringent model year
standards. The TLAAS provisions are a
temporary and strictly limited
modification to these attribute standards
allowing the TLAAS manufacturers lead
time to upgrade their product lines to
meet the 2016 GHG standards. EPA has
made a reasonable choice here to
preserve the overall stringency of the
program, and to afford increased
flexibility in the program’s early years to
a limited class of vehicles to assure
adequate lead time for all manufacturers
to meet the strictest of the standards by
MY 2016.
As described below, EPA also
carefully considered the comments of
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smaller volume manufacturers and
believes additional lead time is needed.
Therefore, EPA is finalizing the TLAAS
program, similar to that proposed, and
is also finalizing an additional TLAAS
option for manufacturers with annual
U.S. sales under 50,000 vehicles. EPA is
also deferring standards for
manufacturers with annual sales of less
than 5,000 vehicles. These new TLAAS
provisions and the small volume
manufacturer deferment are discussed
in detail below and in Section III.B.6.
a. Base TLAAS Program
As proposed, EPA is establishing the
TLAAS program for a specified subset of
manufacturers. This alternative standard
is an option only for 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. For manufacturers with
annual U.S. sales of 50,000 or more but
less than 400,000 vehicles, EPA is
finalizing the TLAAS program largely as
proposed. EPA proposed that under the
TLAAS, qualifying manufacturers
would be allowed to produce up to
100,000 vehicles that would be subject
to a somewhat less stringent CO2
standard of 1.25 times the standard that
would otherwise apply to those
vehicles. 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.
EPA is retaining this limit for
manufacturers with baseline MY 2009
sales of 50,000 but less than 400,000. In
addition, as discussed further below,
EPA is finalizing a variety of restrictions
on the use of the TLAAS program, to
ensure that only manufacturers who
need more lead time for the kinds of
reasons noted above are likely to use the
program.
Volvo and Saab commented that
basing eligibility strictly on MY 2009
sales would be problematic for these
companies, which are being spun-off
from larger manufacturer in the MY
2009 time frame due to the upheaval in
the auto industry over the past few
years. These commenters offered a
variety of suggestions including using
MY 2010 as the eligibility cut-off
instead of MY 2009, reassessing
eligibility on a year-by-year basis as
corporate relationships change, or
allowing companies separated from a
larger parent company by the end of
2010 to use their MY 2009 branded U.S.
sales to qualify for TLAAS. In response
to these concerns, EPA recognizes that
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these companies currently being sold by
larger manufacturers will share the same
characteristics of the manufacturers for
which the TLAAS program was
designed. As newly independent
companies, these firms will face the
challenges of a narrower fleet of
vehicles across which to average, and
may potentially be in a situation, at least
in the first few years, of paying fines
under CAFE. Lead time concerns in the
program’s initial years are in fact
particularly acute for these
manufacturers since they will be newly
independent, and thus would have even
less of an opportunity to modify their
vehicles to meet the standards.
Therefore, EPA is finalizing an approach
that allows manufacturers with U.S.
‘‘branded sales’’ in MY 2009 under the
umbrella of a larger manufacturer that
become independent by the end of
calendar year 2010 to use their MY 2009
branded sales to qualify for TLAAS
eligibility. In other words, a
manufacturer will be eligible for TLAAS
if it produced vehicles for the U.S.
market in MY 2009, its branded sales of
U.S. vehicles were less than 400,000 in
MY 2009 but whose vehicles were sold
as part of a larger manufacturer, and it
becomes independent by the end of
calendar year 2010, if the new entity has
sales below 400,000 vehicles.
Manufacturers with no U.S. sales in
MY 2009 are not eligible to utilize the
TLAAS program. EPA does not support
the commenter’s suggestion of a year-byyear eligibility determination because it
opens up the TLAAS program to an
unknown universe of potential eligible
manufacturers, with the potential for
gaming. EPA does not believe the
TLAAS program should be available to
new entrants to the U.S. market since
these manufacturers are not
transitioning from the CAFE regime
which allows fine paying as a means of
compliance to a CAA regime which
does not, and hence do not present the
same types of lead time issues.
Manufacturers entering the U.S. market
for the first time thus will be fully
subject to the GHG fleet-average
standards.
As proposed, manufacturers
qualifying for TLAAS will be allowed to
meet slightly less stringent standards for
a limited number of vehicles. An
eligible manufacturer could have a total
of up to 100,000 units of cars or trucks
combined over model years 2012–2015
which 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
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less stringent by a factor of 1.25 for up
to 100,000 of an eligible manufacturer’s
vehicles for model years 2012–2015.
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 necessary lead time
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.
Finally, for manufacturers of 50,000
but less than 400,000 U.S. vehicles sales
during 2009, the program expires at the
end of MY 2015 as proposed. EPA
continues to believe the program
reasonably addresses a real world lead
time constraint for these manufacturers,
and does so in a way that balances the
need for more lead time with the need
to minimize any resulting loss in
potential emissions reductions. In MY
2016, the TLAAS option thus ends for
all but the smallest manufacturers
opting for TLAAS, and manufacturers
must comply with the same CO2
standards as non-TLAAS manufacturers;
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 almost all except the
smallest companies beginning in MY
2016. This option, even with the
modifications being adopted, thereby
results in more fuel savings and CO2
reductions than would be the case
under the CAFE program by itself.
EPA proposed that manufacturers
meeting the cut-point of below 400,000
sales for MY 2009 but whose U.S. sales
grew above 400,000 in any subsequent
model years would remain eligible for
the TLAAS program. The total sales
number applies at the corporate level, so
if a corporation owns several vehicle
brands the aggregate sales for the
corporation must 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 (except in the case of
a manufacturer being sold by a larger
manufacturer by the end of calendar
year 2010, as discussed above). In other
words, corporations grouped together
for purposes of meeting CAFE standards
in MY 2009, must be grouped together
for determining whether or not they are
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eligible under the 400,000 vehicle cut
point. EPA is finalizing these provisions
with the following modifications. EPA
recognizes the dynamic corporate
restructuring occurring in the auto
industry and believes it is important to
structure additional provisions to
ensure there is no ability to game the
TLAAS provisions and to ensure no
unintended loss of feasible
environmental benefits. Therefore, EPA
is finalizing a provision that if two or
more TLAAS eligible companies are
later merged, with one company having
at least 50% or more ownership of the
other, or if the companies are combined
for the purposes of EPA certification
and compliance, the TLAAS allotment
is not additive. The merged company
will only be allowed the allotment for
what is considered the parent company
under the new corporate structure.
Further, if the newly formed company
would have exceeded the 400,000
vehicle cut point based on combined
MY 2009 sales, the new entity is not
eligible for TLAAS in the model year
following the merger. EPA believes that
such mergers and acquisitions would
give the parent company additional
opportunities to average across its fleet,
eliminating one of the primary needs for
the TLAAS program. This provision will
not be retroactive and will not affect the
TLAAS program in the year of the
merger or for previous model years. EPA
believes these additional provisions are
essential to ensure the integrity of the
TLAAS program by ensuring that it does
not become available to large
manufacturers through mergers and
acquisitions.
As proposed, the TLAAS vehicles will
be separate car and truck fleets for that
model year and subject to the less
stringent footprint-based standards of
1.25 times the primary fleet average that
would otherwise apply. The
manufacturer will determine what
vehicles are assigned to these separate
averaging sets for each model year. As
proposed, credits from the primary fleet
average program can be transferred and
used in the TLAAS program. Credits
generated within the TLAAS program
may also be transferred between the
TLAAS car and truck averaging sets (but
not to the primary fleet as explained
below) for use through MY 2015 when
the TLAAS ends.
EPA is finalizing a number of
restrictions on credit trading within the
TLAAS program, as proposed. EPA is
concerned that if credit use in the
TLAAS program were unrestricted,
some manufacturers would be able to
place relatively clean vehicles in the
TLAAS fleet, and generate credits for
the primary program fleet. First, credits
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25417
generated under TLAAS may not be
transferred or traded to the primary
program. Therefore, any unused credits
under TLAAS expire after model year
2015 (or 2016 for manufacturers with
annual sales less than 50,000 vehicles).
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 where
it is not needed. EPA continues to
believe this provision is necessary to
prevent credits from being earned
simply by removing some high-emitting
vehicles from the primary fleet. Absent
this restriction, manufacturers would be
able to choose to use the TLAAS for
these vehicles and also be able to earn
credits under the primary program that
could be banked or traded under the
primary program without restriction.
Second, EPA is finalizing two additional
restrictions on the use of 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 comply
with the primary standard before
accessing the TLAAS—i.e., TLAAS
eligibility is not available to those
manufacturers with other readilyavailable means of compliance.
Specifically, before using the TLAAS a
manufacturer must: (1) Use any banked
emission credits from previous model
years; 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, the company must
make use of any available intramanufacturer credit transfers first.
Finally, EPA is restricting the use of
banking and trading between companies
of credits in the primary program in
years in which the TLAAS is being
used. No such restriction is in place for
years when the TLAAS is not being
used.
EPA received several comments in
support of these credit restrictions for
the TLAAS program. On the negative
side, one manufacturer commented that
the restrictions were not necessary,
saying that the restrictions are counter
to providing manufacturers with
flexibility and that the emissions
impacts estimated by EPA due to the
full use of the program are small.
However, EPA continues to believe that
the restrictions are appropriate to
prevent the potential gaming described
above, and to ensure that the TLAAS
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program is used only by those
manufacturers that have exhausted all
other readily available compliance
mechanisms and consequently have
legitimate lead time issues.
One manufacturer commented that
the program is restrictive due to the
requirement that manufacturers must
decide prior to the start of the model
year whether or not and how to use the
TLAAS program. EPA did not intend for
manufactures to have to make this
determination prior to the start of the
model year. EPA expects that
manufacturers will provide a best
estimate of their plans to use the TLAAS
program during certification based on
projected model year sales, as part of
their pre model year report projecting
their overall plan for compliance (as
required by § 600.514–12 of the
regulations). Manufacturers must
determine the program’s actual use at
the end of the model year during the
process of demonstrating year-end
compliance. EPA recognizes that
depending on actual sales for a given
model year, a manufacturer’s use of
TLAAS may change from the
projections used in the pre-model year
report.
b. Additional TLAAS Flexibility for
Manufacturers With MY 2009 Sales of
Less Than 50,000 Vehicles
EPA received extensive comments
that the TLAAS program would not
provide sufficient lead time and
flexibility for companies with sales of
significantly less than 400,000 vehicles.
Jaguar Land Rover, which separated
from Ford in 2008, commented that it
sells products only in the middle and
large vehicle segments and that its total
product range remains significantly
more limited in terms of segments in
comparison with its main competitors
which typically have approximately
75% of their passenger car fleet in the
small and middle segments. Jaguar Land
Rover also commented that it has
already committed $1.3 billion of
investment to reducing CO2 from its
vehicle fleet and that this investment is
already delivering a range of
technologies to improve the fuel
economy and CO2 performance of its
existing vehicles. Jaguar Land Rover
submitted confidential business
information regarding their future
product plans and emissions
performance capabilities of their
vehicles which documents their
assertions.
Porsche commented that their
passenger car footprint-based standard
is the most stringent of any
manufacturer and this, combined with
their high baseline emissions level,
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means that it would need to reduce
emissions by about 10 percent per year
over the 2012–2016 time-frame. Porsche
commented that such reductions were
not feasible. They commented that their
competitors will be able to continue to
offer their full line of products because
the competitors have a wider range of
products with which to average. Porsche
further commented that their product
development cycles are longer than
larger competitors. Porsche
recommended for small limited line
niche manufacturers that EPA require
an annual 5 percent reduction in
emissions from baseline up to a total
reduction of 25 percent, or to modify the
TLAAS program to require such
reductions. Porsche noted that this
percent reduction would be in line with
the average emissions reductions
required for larger manufacturers.
EPA also received comments from
several very small volume
manufacturers that, even with the
TLAAS program, the proposed
standards are not feasible for them,
certainly not in the MY 2012–2016 MY
time frame. These manufacturers
included Aston Martin, McLaren, Lotus,
and Ferrari. Their comments
consistently focused on the need for
separate, less stringent standards for
small volume manufacturers. The
manufacturers commented that they are
willing to make progress in reducing
emissions, but that separate, lessstringent small volume manufacturer
standards are needed for them to remain
in the U.S. market. The commenters
note that their product line consists
entirely of high end sports cars. Most of
these manufacturers have only a few
vehicle models, have annual sales on
the order of a few hundred to a few
thousand vehicles, and several have
average baseline CO2 emissions in
excess of 500 g/mile—nearly twice the
industry average. McLaren commented
that its vehicle model to be introduced
in MY 2011 will have class leading CO2
performance but that it would not be
able to offer the vehicle in the U.S.
market because it does not have other
vehicle models with which to average.
Similarly, Aston Martin commented that
it is of utmost importance that it is not
required to reduce emissions
significantly more than equivalent
vehicles from larger manufacturers,
which would render them
uncompetitive due purely to the size of
its business. Manufacturers also noted
that they launch new products less
frequently than larger manufacturers
(e.g., Ferrari noted that their production
period for models is 7–8 years), and that
suppliers serve large manufacturers first
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because they can buy in larger volumes.
Some manufacturers also noted that
they would be willing to purchase
credits at a reasonable price, but they
believed that credit availability from
other manufacturers was highly unlikely
due to the competitive nature of the
auto industry. Several of these
manufacturers provided confidential
business information indicating their
preliminary plans for reducing GHG
emissions across their product lines
through MY 2016 and beyond.
The Association of International
Automobile Manufacturers (AIAM) also
commented that, because of their
essential features, vehicles produced by
small volume manufacturers would not
be able to meet the proposed greenhouse
gas standards. AIAM commented that
‘‘while it is possible that these small
volume manufacturers (SVMs) might be
able to comply with greenhouse gas
standards by purchasing credits from
other manufacturers, this is far too
speculative a solution. The market for
credits is unpredictable at this point.
Other than exiting the U.S. market,
therefore, the only other possible
solution for an independent SVM would
be to sell an equity interest in the
company to a larger, full-line
manufacturer, so that the emissions of
the luxury vehicles could be averaged in
with the much larger volume of other
vehicles produced by the major
manufacturer. This cannot possibly be
the outcome EPA intends, especially
when measured against the minimal, if
any, environmental benefit that would
result.’’ AIAM commented further that
‘‘there is ample legal authority for EPA
to provide SVMs a more generous leadtime allowance or an alternative
standard. Indeed, EPA recognizes such
authority in the proposal for a small
entity exemption (for those companies
defined under the Small Business
Administration’s regulations), see 74 FR
at 49574, and in the TLAAS. These
provisions are consistent with previous
EPA rulemaking under the Clean Air
Act which offer relief to SVMs.’’ AIAM
recommended deferring standards for
SVMs to a future rulemaking, providing
EPA with adequate time to assess
relevant product plans and technology
feasibility information from SVMs,
conduct the necessary reviews and
modeling that may be needed, and
consult with the stakeholders.
These commenters noted that
standards for the smallest manufacturers
were deferred in the California program
until MY 2016 and that California’s
program would have established
standards for small volume
manufacturers in MY 2016 at a level
that would be technologically feasible.
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The commenters also suggested that
California’s approach is similar to the
approach being taken by EPA for small
business entities. Further, these
commenters noted that in Tier 2 and
other light-duty vehicle programs, EPA
has allowed small volume
manufacturers (SVMs) until the end of
the phase-in period to comply with
standards. The commenters
recommended that EPA should defer
standards for SVMs, and conduct a
future rulemaking to establish
appropriate standards for SVMs starting
in model year 2016. Alternatively, some
manufacturers recommended
establishing much less stringent
standards for SVMs as part of the
current rulemaking.
In summary, the manufacturers
commented that their range of products
was insufficient to allow them to meet
the standards in the time provided, even
with the proposed TLAAS program.
Many of these manufacturers have
baseline emissions significantly higher
than their larger-volume competitors,
and thus the CO2 reductions required
from baseline under the program are
larger for many of these companies than
for other companies. Although they are
investing substantial resources to reduce
CO2 emissions, they believe that they
will not be able to achieve the standards
under the proposed approach.
EPA also received comments urging
us not to expand the TLAAS program.
The commenters are concerned about
the loss of benefits that would occur
with any expansion.
EPA has considered the comments
carefully and concludes that additional
flexibility is needed for these
companies. After assessing the issues
raised by commenters, EPA believes
there are two groups of manufacturers
that need additional lead time. The first
group includes manufacturers with
annual U.S. sales of less than 5,000
vehicles per year. Standards for these
small volume manufacturers are being
deferred until a future rulemaking in the
2012 timeframe, as discussed in Section
III.B.6, below. This will allow EPA to
determine the appropriate level of
standards for these manufacturers, as
well as the small business entities, at a
later time. The second group includes
manufacturers with MY 2009 U.S. sales
of less than 50,000 vehicles but above
the 5,000 vehicle threshold being
established for small volume
manufacturers. EPA has selected a cut
point of 50,000 vehicles in order to limit
the additional flexibility to only the
smaller manufacturers with much more
limited product lines over which to
average. EPA has tailored these
provisions as narrowly as possible to
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provide additional lead time only as
needed by these smaller manufacturers.
We estimate that the TLAAS program,
including the changes below will result
in a total decrease in overall emissions
reductions of about one percent of the
total projected GHG program emission
benefits. These estimates are provided
in RIA Chapter 5 Appendix A.
For some of the companies, the
reduction from baseline CO2 emissions
required to meet the standards is clearly
greater than for other TLAAS-eligible
manufacturers. Compared with other
TLAAS-eligible manufacturers, these
companies also have more limited fleets
across which to average the standards.
Some companies have only a few
vehicle models all of a similar utility,
and thus their averaging abilities are
extremely limited posing lead time
issues of greater severity than other
TLAAS-eligible manufacturers. EPA’s
feasibility analysis provided in Section
III.D., shows that these companies face
a compliance shortfall significantly
greater than other TLAAS companies
(see Table III.D.6–4). This shortfall is
primarily due to their narrow product
lines and more limited ability to average
across their vehicle fleets. In addition,
with fewer models with which to
average, there is a higher likelihood that
phase-in requirements may conflict with
normal product redesign cycles.
Therefore, for manufacturers with MY
2009 U.S. sales of less than 50,000
vehicles, EPA is finalizing additional
TLAAS compliance flexibility through
model year 2016. These manufacturers
will be allowed to place up to 200,000
vehicles in the TLAAS program in MY
2012–2015 and an additional 50,000
vehicles in MY 2016. To be eligible for
the additional allotment above the base
TLAAS level of 100,000 vehicles,
manufacturers must annually
demonstrate that they have diligently
made a good faith effort to purchase
credits from other manufacturers in
order to comply with the base TLAAS
program, but that sufficient credits were
not available. Manufacturers must
secure credits to the extent they are
reasonably available from other
manufacturers to offset the difference
between their emissions reductions
obligations under the base TLAAS
program and the expanded TLAAS
program. Manufacturers must document
their efforts to purchase credits as part
of their end of year compliance report.
All other aspects of the TLAAS program
including the 1.25x adjustment to the
standards and the credits provision
restrictions remain the same as
described above for the same reasons.
This will still require the manufacturers
to reduce emissions significantly in the
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25419
2012–2016 time-frame and to meet the
final emissions standards in MY 2017.
The standards remain very challenging
for these manufacturers but these
additional provisions will allow them
the necessary lead time for
implementing their strategy for
compliance with the final, most
stringent standards.
The eligibility limit of 50,000 vehicles
will be treated in a similar way as the
400,000 vehicle eligibility limit is
treated, as described above.
Manufacturers with model year 2009
U.S. sales of less than 50,000 vehicles
are eligible for the expanded TLAAS
flexibility. Manufacturers whose sales
grow in later years above 50,000
vehicles without merger or acquisition
will continue to be eligible for the
expanded TLAAS program. However,
manufacturers that exceed the 50,000
vehicle limit through mergers or
acquisitions will not be eligible for the
expanded TLAAS program in the model
year following the merger or acquisition,
but may continue to be eligible for the
base TLAAS program if the MY 2009
sales of the new company would have
been below the 400,000 vehicle
eligibility cut point. The use of TLAAS
by all the entities within the company
in years prior to the merger must be
counted against the 100,000 vehicle
limit of the base program. If the 100,000
vehicle limit has been exceeded, the
company is no longer eligible for
TLAAS.
6. Deferment of CO2 Standards for Small
Volume Manufacturers With Annual
Sales Less Than 5,000 Vehicles
In the proposal, in the context of the
TLAAS program, EPA recognized that
there would be a wide range of
companies within the eligible
manufacturers with sales less than
400,000 vehicles in model year 2009. As
noted in the proposal, 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, such as Aston
Martin. EPA anticipated that there is a
small number of such smaller volume
manufacturers, which may face greater
challenges in meeting the standards due
to their limited product lines across
which to average. EPA requested
comment on whether the proposed
TLAAS program would provide
sufficient lead-time for these smaller
firms to incorporate the technology
needed to comply with the proposed
GHG standards. See 74 FR at 49524.
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EPA received comments from several
very small volume manufacturers that
the TLAAS program would not provide
sufficient lead time, as described above.
EPA agrees with comments that the
standards would be extremely
challenging and potentially infeasible
for these small volume manufacturers,
absent credits from other manufacturers,
and that credit availability at this point
is highly uncertain—although these
companies are planning to introduce
significant GHG-reducing technologies
to their product lines, they are still
highly unlikely to meet the standards by
MY 2016. Because the products
produced by these manufacturers are so
unique, these manufacturers were not
included in EPA’s OMEGA modeling
assessment of the technology feasibility
and costs to meet the proposed
standards. As noted above, these
manufacturers have only a few models
and have very high baseline emissions.
TLAAS manufacturers are projected to
be required to reduce emissions by up
to 39%, whereas SVMs in many cases
would need to cut their emissions by
more than half to comply with MY 2016
standards.
Given the unique feasibility issues
raised for these manufacturers, EPA is
deferring establishing CO2 standards for
manufacturers with U.S. sales of less
than 5,000 vehicles.188 This will
provide EPA more time to consider the
unique challenges faced by these
manufacturers. EPA expects to conduct
this rulemaking in the 2012 timeframe.
The deferment only applies to CO2
standards and SVMs must meet N2O
and CH4 standards. EPA plans to set
standards for these manufacturers as
part of a future rulemaking in the next
18 months. This future rulemaking will
allow EPA to fully examine the
technologies and emissions levels of
vehicles offered by small manufacturers
and to determine the potential
emissions control capabilities, costs,
and necessary lead time. This timing
may also allow a credits market to
develop, so that EPA may consider the
availability of credits during the
rulemaking process. See State of Mass.
v. EPA, 549 U.S. at 533 (EPA retains
discretion as to timing of any
regulations addressing vehicular GHG
emissions under section 202(a)(1)). We
expect that standards would begin to be
implemented in the MY 2016
timeframe. This approach is consistent
with that envisioned by California for
these manufacturers. EPA estimates that
eligible small volume manufacturers
currently comprise less than 0.1 percent
of the total light-duty vehicle sales in
188 See
final regulations at 40 CFR 86.1801–12(k).
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the U.S., and therefore the deferment
will have a very small impact on the
GHG emissions reductions from the
standards.
In addition to the 5,000 vehicle per
year cut point, to be eligible for
deferment each year, manufacturers
must also demonstrate due diligence in
attempting to secure credits from other
manufacturers. Manufacturers must
make a good faith effort to secure credits
to the extent they are reasonably
available from other manufacturers to
offset the difference between their
baseline emissions and what their
obligations would be under the TLAAS
program starting in MY 2012.
Eligibility will be determined
somewhat differently compared to the
TLAAS program. Manufacturers with
either MY 2008 or MY 2009 U.S. sales
of less than 5,000 vehicles will be
initially eligible. This includes ‘‘branded
sales’’ for companies that sold vehicles
under a larger manufacturer but has
become independent by the end of
calendar year 2010. EPA is including
MY 2008 as well as MY 2009 because
some manufacturers in this market
segment have such limited sales that
they often drop in and out of the market
from year to year.
In determining eligibility,
manufacturers must be aggregated
according to the provisions of 40 CFR
86.1838–01(b)(3), which requires the
sales of different firms to be aggregated
in various situations, including where
one firm has a 10% or more equity
ownership of another firm, or where a
third party has a 10% or more equity
ownership of two or more firms. EPA
received public comment from a
manufacturer requesting that EPA
should allow a manufacturer to apply to
EPA to establish small volume
manufacturer status based on the
independence of its research,
development, testing, design, and
manufacturing from another firm that
may have an ownership interest in that
manufacturer. EPA has reviewed this
comment, but is not finalizing such a
provision at this time. EPA believes that
this issue likely presents some
competitive issues, which we would
like to be fully considered through the
public comment process. Therefore,
EPA plans to consider this issue and
seek public comments in our proposal
for small volume manufacturer CO2
standards, which we expect to complete
within 18 months.
To remain eligible for the deferral
from standards, the rolling average of
three consecutive model years of sales
must remain below 5,000 vehicles. EPA
is establishing the 5,000 vehicle
threshold to allow for some sales growth
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by SVMs, as SVMs typically have
annual sales of below 2,000 vehicles.
However, EPA wants to ensure that
standards for as few vehicles as possible
are deferred and therefore believes it is
appropriate that manufacturers with
U.S. sales growing to above 5,000
vehicles per year be required to comply
with standards (including TLAAS, as
applicable). Manufacturers with
unusually strong sales in a given year
would still likely remain eligible, based
on the three year rolling average.
However, if a manufacturer takes steps
to expand in the U.S. market on a
permanent basis such that they
consistently sell more than 5,000
vehicles per year, they must meet the
TLAAS standards. EPA believes a
manufacturer will be able to consider
these provisions, along with other
factors, in its planning to significantly
expand in the U.S. market.
For manufacturers exceeding the
5,000 vehicle rolling average through
mergers or acquisitions of other
manufacturers, those manufacturers will
lose eligibility in the MY immediately
following the last year of the rolling
average. For manufacturers exceeding
this level through sales growth, but
remaining below a 50,000 vehicle
threshold, the manufacturer will lose
eligibility for the deferred standards in
the second model year following the last
year of the rolling average. For example,
if the rolling average of MYs 2009–2011
exceeded 5,000 vehicles but was below
50,000 vehicles, the manufacturer
would not be eligible for the deferred
standards in MY 2013. For
manufacturers with a 3-year rolling
average exceeding 50,000 vehicles, the
manufacturer would lose eligibility in
the MY immediately following the last
model year in the rolling average. For
example, if the rolling average of MYs
2009–2011 exceeded 50,000 vehicles,
the manufacturer would not be eligible
for the deferred standards in MY 2012.
Such manufacturers may continue to be
eligible for TLAAS, or the expanded
TLAAS program, per the provisions
described above. EPA believes these
provisions are needed to ensure that the
SVM deferment remains targeted to true
small volume manufacturers and does
not become available to larger
manufacturers through mergers or
acquisitions. EPA is including the
50,000 vehicle criteria to differentiate
between manufacturers that may slowly
gain more sales and manufacturers that
have taken major steps to significantly
increase their presence in the U.S.
market, such as by introducing new
vehicle models. EPA believes
manufacturers selling more than 50,000
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vehicles should not be able to take
advantage of the deferment, as they
should be able to meet the applicable
TLAAS standards through averaging
across their larger product line.
EPA is requiring that potential SVMs
submit a declaration to EPA containing
a detailed written description of how
the manufacturer qualifies as a small
volume manufacturer. The declaration
must contain eligibility information
including MY 2008 and 2009 U.S. sales,
the last three completed MYs sales
information, detailed information
regarding ownership relationships with
other manufacturers, and
documentation of efforts to purchase
credits from other manufacturers.
Because such manufacturers are not
automatically exempted from other EPA
regulations for light-duty vehicles and
light-duty trucks, entities are subject to
the greenhouse gas control requirements
in this program until such a declaration
has been submitted and approved by
EPA. The declaration must be submitted
annually at the time of vehicle
emissions certification under the EPA
Tier 2 program, beginning in MY 2012.
7. Nitrous Oxide and Methane
Standards
In addition to fleet-average CO2
standards, as proposed, EPA is
establishing separate per-vehicle
standards for nitrous oxide (N2O) and
methane (CH4) emissions.189 The
agency’s intention is to set emissions
standards that act to cap emissions to
ensure that future vehicles do not
increase their N2O and CH4 emissions
above levels typical of today’s vehicles.
EPA proposed to cap N2O at a level of
0.010 g/mi and to cap CH4 at a level of
0.03 g/mi. Both of these compounds are
more potent contributors to global
warming than CO2; N2O has a global
warming potential, or GWP, of 298 and
CH4 has a GWP of 25.190
EPA received many comments on the
proposed N2O and CH4 standards. A
range of stakeholders supported the
proposed approach of ‘‘cap’’ standards
and the proposed emission levels,
including most states and
environmental organizations that
addressed this topic, and the
Manufacturers of Emissions Control
Association. These commenters stated
that EPA needs to address all mobile
GHGs under the Clean Air Act, and N2O
and CH4 are both more potent
contributors to global warming than
CO2. The Center for Biological Diversity
189 See
final regulations at 40 CFR 86.1818–12(f).
190 The global warming potentials (GWP) used in
this rule are consistent with the Intergovernmental
Panel on Climate Change (IPCC) Fourth Assessment
Report (AR4).
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commented that in light of the potency
of these GHGs, EPA should develop
standards which reduce emissions over
current levels and that EPA had not
analyzed either the technologies or the
costs of doing so. EPA discusses these
comments and our responses below and
in the Response to Comments
Document.
Auto manufacturers generally did not
support standards for these GHGs,
stating that the levels of these GHGs
from current vehicles are too small to
warrant standards at this time. These
commenters also stated that if EPA were
to proceed with ‘‘cap’’ standards, the
stringency of the proposed levels could
restrict the introduction of some new
technologies. Commenters specifically
raised this concern with the examples of
diesel and lean-burn gasoline for N2O,
or natural gas and ethanol fueled
vehicles for CH4. Only one
manufacturer, Volkswagen, submitted
actual test data to support these claims;
very limited emission data on two
concept vehicles—a CNG vehicle and a
flexible-fuel vehicle—indicated
measured emission levels near or above
the proposed standards, but included no
indication of whether any technological
steps had been taken to reduce
emissions below the cap levels. Many
commenters support an approach of
establishing a CO2-equivalent standard,
where N2O and CH4 could be averaged
with CO2 emissions to result in an
overall CO2-equivalent compliance
value, similar to the approach California
has used for its GHG standards 191
Under such an approach, the auto
industry commenters supported using a
default value for N2O emissions in lieu
of a measured test value. Several auto
manufacturers also had concerns that a
new requirement to measure N2O would
require significant equipment and
facility upgrades and would create
testing challenges with new
measurement equipment with which
they have little experience.
EPA has considered these comments
and is finalizing the cap standards for
N2O and CH4 as proposed. EPA agrees
with the NGO, State, and other
commenters that light-duty vehicle
emissions are small but important
contributors to the U.S. N2O and CH4
inventories, and that in the absence of
a limitation, the potential for significant
emission increases exists with the
evolution of new vehicle and engine
technologies. (Indeed, the industry
191 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.
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commenters concede as much in stating
that they are contemplating introducing
vehicle technologies that could result in
emissions exceeding the cap standard
levels). EPA also believes that in most
cases N2O and CH4 emissions from
light-duty vehicles will remain well
below the cap standards. Therefore, we
are setting cap standards for these GHGs
at the proposed levels. However, as
described below, the agency is
incorporating several provisions
intended to address industry concerns
about technological feasibility and
leadtime, including an optional CO2equivalent approach and, for N2O, more
leadtime before testing will be required
to demonstrate compliance with the
emissions standard (in interim,
manufacturers may certify based on a
compliance statement based on good
engineering judgment).
a. Nitrous Oxide (N2O) Exhaust
Emission Standard
As stated above, N2O is a global
warming gas with a high global warming
potential.192 It accounts for about 2.3%
of the current greenhouse gas emissions
from cars and light trucks.193 EPA is
setting a per-vehicle N2O emission
standard of 0.010 g/mi, measured over
the traditional FTP vehicle laboratory
test cycles. The standard will become
effective in model year 2012 for all
light-duty cars and trucks. The standard
is designed to prevent increases in N2O
emissions from current levels; i.e., it is
a no-backsliding 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 for criteria pollutants. As
several auto manufacturer comments
noted, N2O is a more significant concern
with diesel vehicles, and potentially
future gasoline lean-burn engines,
equipped with advanced catalytic NOX
192 N O has a GWP of 298 according to the IPCC
2
Fourth Assessment Report (AR4).
193 See RIA Chapter 2.
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emissions control systems. In the
absence of N2O emission standards,
these systems could be designed in a
way that emphasizes efficient NOX
control while at the same time 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 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 setting an N2O emission
standard that the agency believes will be
met by current-technology gasoline
vehicles at essentially no cost. As just
noted, N2O formation in current catalyst
systems occurs, but the emission levels
are relatively 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 standard will
ensure that the design of advanced NOX
control systems, especially for future
diesel and lean-burn gasoline vehicles,
will control N2O emission levels. While
current NOX control approaches used on
current Tier 2 diesel vehicles do not
tend to favor the formation of N2O
emissions, EPA believes that this N2O
standard will discourage new emission
control designs that achieve criteria
emissions compliance at the cost of
increased N2O emissions. Thus, the
standard will 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 will
not increase their emission levels, and
that the cap will ensure that future
vehicle designs will be appropriately
controlled for N2O emissions.
The level of the N2O standard is
approximately two times the average
N2O level of current gasoline passenger
cars and light-duty trucks that meet the
Tier 2 NOX standards. EPA has not
previously regulated N2O emissions,
and available data on current vehicles is
limited. However, EPA derived the
standard from a combination of
emission factor values used in modeling
light duty vehicle emissions and limited
recent EPA test data.194 195 Because the
standard represents a level 100 percent
194 Memo
to docket ‘‘Derivation of Proposed N2O
and CH4 Cap Standards,’’ Tad Wysor, EPA,
November 19, 2009. Docket EPA–HQ–OAR–2009–
0472–6801.
195 Memo to docket ‘‘EPA NVFEL N O Test Data,’’
2
Tony Fernandez, EPA.
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higher than the average current N2O
level, we continue to believe that most
if not all Tier 2 compliant gasoline and
diesel vehicles will easily be able to
meet the standards. 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
EPA expects that manufacturers will use
a similar approach for N2O emission
compliance. EPA did not propose and is
not finalizing a more stringent standard
for current vehicles because we believe
that the stringent Tier 2 program and the
associated NOX fleet average
requirement already result in significant
N2O control, and the agency does not
expect current N2O levels to rise for
these vehicles. Moreover, EPA believes
that the CO2 standards will be
challenging for the industry and that
these standards should be the industry’s
chief focus in this first phase of
vehicular GHG emission controls. See
Massachusetts v. EPA, 549 U.S. at 533
(EPA has significant discretion as to
timing of GHG regulations); see also
Sierra Club v. EPA, 325 F. 3d 374, 379
(DC Cir. 2003) (upholding antibacksliding standards for air toxics
under technology-forcing section 202 (l)
because it is reasonable for EPA to
assess the effects of its other regulations
on the motor vehicle sector before
aggressively regulating emissions of
toxic vehicular air pollutants.
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 N2O
standard will likely require these
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.
In the proposal, EPA sought comment
on an approach of expressing N2O and
CH4 in common terms of CO2-equivalent
emissions and combining them into a
single standard along with CO2
emissions. 74 FR at 49524. California’s
‘‘Pavley’’ program adopted such a CO2equivalent emissions standards
approach to GHG emissions.196 EPA was
196 California Environmental Protection Agency
Air Resources Board, Staff Report: Initial Statement
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primarily concerned that such an
approach could undermine the
stringency of the CO2 standards, as the
proposed standards were designed to
‘‘cap’’ N2O and CH4 emissions, rather
than reflecting a level either that is the
industry fleet-wide average or that
would effect reductions in these GHGs.
As noted above, several auto
manufacturers expressed interest in
such a CO2-equivalent approach, due to
concerns that the caps could be limiting
for some advanced technology vehicles.
While we continue to believe that the
vast majority of light-duty vehicles will
be able to easily meet the standards, we
acknowledge that advanced diesel or
lean-burn gasoline vehicles of the future
may face slightly greater challenges.
Therefore, after considering these
comments, EPA is finalizing an optional
compliance approach to provide
flexibility for any advanced
technologies that may have challenges
in meeting the N2O or CH4 cap
standards.
In lieu of complying with the separate
N2O and CH4 cap standards, a
manufacturer may choose to comply
with a CO2-equivalent standard. A
manufacturer choosing this option will
convert its N2O and CH4 test results (or,
as described below, a default N2O value
for MY 2012–2014) into CO2-equivalent
values and add this sum to their CO2
emissions. This CO2-equivalent value
will still need to comply with the
manufacturer’s footprint-based CO2
target level. In other words, a
manufacturer could offset any N2O
emissions (or any CH4 emissions) by
taking steps to further reduce CO2. A
manufacturer choosing this option will
need to apply this approach to all of the
test groups in its fleet. This approach is
more environmentally protective overall
than the cap standard approach, since
the manufacturer will need to reduce its
CO2 emissions to offset the higher N2O
(or CH4) levels, but will not be allowed
to increase CO2 above its footprint target
level by reducing N2O (or CH4).
The compliance level in g/mi for the
optional CO2-equivalent approach for
gasoline vehicles is calculated as CO2 +
(CWF/0.273 × NMHC) + (1.571 × CO) +
(298 × N2O) + (25 × CH4).197 The N2O
and CH4 values are the measured
emission values for these GHGs, except
N2O in model years 2012 through 2014.
For these model years, manufacturers
may use a default N2O value of 0.010
of Reasons for Proposed Rulemaking Public Hearing
To Consider Adoption of Regulations To Control
Greenhouse Gas Emissions From Motor Vehicles,
August 6, 2004.
197 This equation will differ depending upon the
fuel; see the final regulations for equations for other
fuels.
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g/mi, the same value as the N2O cap
standard. For MY 2015 and later, the
manufacturer would need to provide
actual test data on the emission data
vehicle for each test group. (That is, N2O
data would not be required for each
model type, since EPA believes that
there will likely be little N2O variability
among model types within a test group.)
EPA believes that its selection of 0.010
g/mi as the N2O default value is an
appropriately protective level, on the
high end of current technologies, as
further discussed below. Consistent
with the other elements of the equation,
N2O and CH4 must be included at full
useful life deteriorated values. This
requires testing using the highway test
cycle in addition to the FTP during the
manufacturer’s deterioration factor (DF)
development program. However, EPA
recognizes that manufacturers may not
be able to develop DFs for N2O and CH4
for all their vehicles in the 2012 model
year, and thus EPA is allowing the use
of alternative values through the 2014
model year. For N2O the alternative
value is the DF developed for NOX
emissions, and for CH4 the alternative
value is the DF developed for NMOG
emissions. Finally, for manufacturers
using this option, the CO2-equivalent
emission level would also be the basis
for any credits that the manufacturer
might generate.
Manufacturers expressed concerns
about their ability to acquire and install
N2O analytical equipment. However, the
agency continues to believe that such
burdens, while not trivial, will also not
be excessive. While many
manufacturers do not appear to have
invested yet in adding N2O
measurement equipment to their test
facilities, EPA is not aware of any
information to indicate that that
suppliers will have difficulty providing
sufficient hardware, or that such
equipment is unusually expensive or
complex compared to existing
measurement hardware. EPA allows
N2O measurement using any of four
methods, all of which are commercially
available today. The costs of
certification and other indirect costs of
this rule are accounted for in the
Indirect Cost Multipliers, discussed in
Section III.H below.
Still, given the short lead-time for this
rule and the newness of N2O testing to
this industry, EPA proposed that
manufacturers be able to apply for a
certificate of conformity with the N2O
standard for model year 2012 provided
that they supply a compliance statement
based on good engineering judgment.
Under the proposal, beginning in MY
2013, manufacturers would have needed
to base certification on actual N2O
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testing data. This approach was
intended to reasonably ensure that the
emission standards are being met, while
allowing manufacturers lead-time to
purchase new N2O emissions
measurement equipment, modify
certification test facilities, and begin
N2O testing. After consideration of the
comments, EPA agrees with
manufacturers that one year of
additional lead-time to begin actual N2O
measurement across their vehicle fleets
may still be insufficient for
manufacturers to efficiently make the
necessary facility changes and
equipment purchases. Therefore, EPA is
extending the ability to certify based on
a compliance statement for two
additional years, through model year
2014. For 2015 and later model years,
manufacturers will need to submit
measurements of N2O for compliance
purposes.
b. Methane (CH4) Exhaust Emission
Standard
Methane (CH4) is a greenhouse gas
with a high global warming potential.198
It accounts for about 0.2% of the
greenhouse gases from cars and light
trucks.199
EPA is setting a CH4 emission
standard of 0.030 g/mi as measured on
the FTP, to apply beginning with model
year 2012 for both cars and trucks. EPA
believes that this level for the standard
will be met by current gasoline and
diesel vehicles, and will prevent large
increases in future CH4 emissions. This
is particularly a concern in the event
that alternative fueled vehicles with
high methane emissions, like some past
dedicated compressed natural gas (CNG)
vehicles and some flexible-fueled
vehicles when operated on E85 fuel,
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.200 However, CH4 emissions
levels in the gasoline and diesel car and
light truck fleet have nevertheless
generally been controlled by the Tier 2
standards for non-methane organic gases
(NMOG). However, without an emission
standard for CH4, there is no guarantee
that future emission levels of CH4 will
remain at current levels as vehicle
technologies and fuels evolve.
The standard will cap CH4 emission
levels, with the expectation that
emissions levels of current gasoline and
198 CH has a GWP of 25 according to the IPCC
4
Fourth Assessment Report (AR4).
199 See RIA Chapter 2.
200 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)).
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diesel vehicles meeting the Tier 2
emission standards will not increase.
The level of the standard will generally
be achievable for typical vehicles
through normal emission control
methods already required to meet the
Tier 2 emission standards for NMOG.
Also, since CH4 is already measured
under the current Tier 2 regulations (so
that it may be subtracted to calculate
non-methane hydrocarbons), we believe
that the standard will not result in any
additional testing costs. Therefore, EPA
is not attributing any costs to this part
of this program. Since CH4 is produced
during fuel combustion in gasoline and
diesel engines similarly to other
hydrocarbon components, controls
targeted at reducing overall NMOG
levels are generally also effective in
reducing CH4 emissions. Therefore, for
typical gasoline and diesel vehicles,
manufacturer strategies to comply with
the Tier 2 NMOG standards have to date
tended to prevent increases in CH4
emissions levels. The CH4 standard will
ensure that emissions will be addressed
if in the future there are increases in the
use of natural gas or other alternative
fuels or technologies that may result in
higher CH4 emissions.
As with the N2O standard, EPA is
setting the level of the CH4 standard to
be approximately two times the level of
average CH4 emissions from Tier 2
gasoline passenger cars and light-duty
trucks. EPA believes the standard will
easily be met by current gasoline
vehicles, and that flexible fuel vehicles
operating on ethanol can be designed to
resolve any potential CH4 emissions
concerns. Similarly, since current diesel
vehicles generally have even lower CH4
emissions than gasoline vehicles, EPA
believes that diesels will also meet the
CH4 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 and is inappropriate for that
reason (and untimely as well, given the
challenge of meeting the CO2 standards,
as noted above).
Some CNG-fueled vehicles have
historically produced significantly
higher CH4 emissions than gasoline or
diesel vehicles. This is because CNG
fuel is essentially methane and any
unburned fuel that escapes combustion
and is not oxidized by the catalyst is
emitted as methane. However, in recent
model years, the few dedicated CNG
vehicles sold in the U.S. meeting the
Tier 2 standards have had CH4 control
as effective as that of gasoline or diesel
vehicles. Still, even if these vehicles
meet the Tier 2 NMOG standard and
appear to have effective CH4 control by
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nature of the NMOG controls, Tier 2
standards do not require CH4 control.
Although EPA believes that in most
cases that the 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.
Some manufacturers have also
expressed some concerns about CH4
emissions from flexible-fueled vehicles
operating on E85 (85% ethanol, 15%
gasoline). However, we are not aware of
any information that would indicate
that if engine-out CH4 proves to be
higher than for a typical gasoline
vehicle, that such emissions could not
be managed by reasonably available
control strategies (perhaps similar to
those used in dedicated CNG vehicles).
As described above, in response to the
comments, EPA will also allow
manufacturers to choose to comply with
a CO2-equivalent standard in lieu of
complying with a separate CH4 cap
standard. A manufacturer choosing this
option would convert its N2O and CH4
test results into CO2-equivalent values
(using the respective GWP values), and
would then compare this value to the
manufacturer’s footprint-based CO2
target level to determine compliance.
However, as with N2O, this approach
will not permit a manufacturer to
increase its CO2 by reducing CH4; the
company’s footprint-based CO2 target
level would remain the same.
entities comprise less than 0.1 percent
of the total light-duty vehicle sales in
the U.S., and therefore the exemption
will have a negligible impact on the
GHG emissions reductions from the
standards.
To ensure that EPA is aware of which
companies would be exempt, EPA
proposed to require 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. EPA has reconsidered the need
for this additional submission under the
regulations and is deleting it as not
necessary. We already have information
on the limited number of small entities
that we expect would receive the
benefits of the exemption, and do not
need the proposed regulatory
requirement to be able to effectively
implement this exemption for those
parties who in fact meet its terms. 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 did not receive adverse
comments regarding the proposed small
entity exemption. EPA received
comments concerning whether or not
the small entity exemption applies to
foreign manufacturers. EPA clarifies that
foreign manufacturers meeting the SBA
size criteria are eligible for the
exemption, as was EPA’s intent during
the proposal.
8. Small Entity Exemption
As proposed, EPA is exempting from
GHG emissions standards small entities
meeting the Small Business
Administration (SBA) size criteria of a
small business as described in 13 CFR
121.201.201 EPA will instead consider
appropriate GHG standards for these
entities as part of a future regulatory
action. This includes both U.S.-based
and foreign small entities in three
distinct categories of businesses 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) size criterion of a
small business. EPA estimates there
currently are approximately two small
volume manufacturers, eight ICIs, and
three alternative fuel vehicle converters
in the light-duty vehicle market. Further
detail is provided in Section III.I.3,
below. EPA estimates that these small
C. Additional Credit Opportunities for
CO2 Fleet Average Program
The final standards represent a
significant multi-year challenge for
manufacturers, especially in the early
years of the program. Section III.B.4
above describes EPA’s provisions for
manufacturers to be able to generate
credits by achieving fleet average CO2
emissions below their fleet average
standard, and also how manufacturers
can use credits to comply with the
standards. As described in Section
III.B.4, credits can be carried forward
five years, carried back three years,
transferred between vehicle categories,
and traded between manufacturers. The
credits provisions described below
provide manufacturers with additional
ways to earn credits starting in MY
2012. EPA is also including early credits
provisions for the 2009–2011 model
years, as described below in Section
III.C.5.
The provisions described below
provide additional flexibility, especially
in the early years of the program. This
helps to address issues of lead-time or
201 See
final regulations at 40 CFR 86.1801–12(j).
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technical feasibility for various
manufacturers and in several cases
provides an incentive for promotion of
technology pathways that warrant
further development. EPA is finalizing 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
and are 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 incentives, to incentivize
the introduction of those vehicle
technologies) and are verifiable. In
addition, EPA believes that these credit
programs do not provide an opportunity
for manufacturers to earn ‘‘windfall’’
credits. Comments on the proposed EPA
credit programs are summarized below
along with EPA’s response, and are
detailed in the Response to Comments
document.
1. Air Conditioning Related Credits
Manufacturers will be able to generate
and use credits for improved air
conditioner (A/C) systems in complying
with the CO2 fleetwide average
standards described above (or otherwise
to be able to bank or trade the credits).
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
compliance using 2-cycle (city/highway)
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. 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 rule 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 5.1% 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.
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The emissions that are associated with
leakage reductions are the direct leakage
and the leakage associated with
maintenance and servicing. Together
these are equivalent to CO2 emissions of
approximately 13.6 g/mi per car and
light-truck. 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 GHG
emissions.202 This is equivalent to CO2
emissions of approximately 14.2 g/mi
per vehicle. The derivation of these
figures can be found in Chapter 2.2 of
the EPA RIA.
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 mechanical power to the A/C
system. With leakage, it is the high
global warming potential (GWP) of the
current automotive refrigerant (HFC–
134a, with a GWP of 1430) that results
in the CO2-equivalent impact of 13.6
g/mi.203 Due 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 reduce A/C
leakage emissions by using leak-tight
components. Also, manufacturers can
largely eliminate the global warming
impact of leakage emissions by adopting
systems that use an alternative, lowGWP refrigerant, as discussed below.204
The A/C system also contributes to
increased CO2 emissions through the
additional work required to operate the
compressor, fans, and blowers. This
202 See
Chapter 2, Section 2.2.1.2 of the RIA.
global warming potentials (GWP) used in
this rule are consistent with Intergovernmental
Panel on Climate Change (IPCC) Fourth Assessment
Report (AR4). (At this time, the IPCC Second
Assessment Report (SAR) GWP values are used in
the official U.S. greenhouse gas inventory
submission to the climate change framework.)
204 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.
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203 The
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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 the
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.205
Manufacturers can make very feasible
improvements to their A/C systems to
address A/C system leakage and
efficiency. EPA is finalizing two
separate credit approaches to address
leakage reductions and efficiency
improvements independently. A leakage
reduction credit will 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. An efficiency improvement credit
will account for the various types of
hardware and control of that hardware
available to increase the A/C system
efficiency. For purposes of use of A/C
credits at certification, manufacturers
will be required to attest to 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
205 We chose not to address 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 by the primary CO2 standards
(Section III.B above).
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25425
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
emission control technologies are
similar (including hose materials and
connections). There are, however, some
fundamental differences between the
systems that require a different
approach, both to controlling and to
documenting that control. The most
notable difference is that A/C systems
are completely closed systems and
always under significant pressure,
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. As a result, these
emissions are typically too low to
accurately measure in most current
SHED chambers designed for fuel
evaporative emissions measurement,
especially for A/C systems that are new
or early in life.
A few commenters suggested that we
allow manufacturers, as an option, to
use an industry-developed ‘‘mini-shed’’
test procedure (SAE J2763—Test
Procedure for Determining Refrigerant
Emissions from Mobile Air
Conditioning Systems) to measure and
report annual refrigerant leakage.206
However, while EPA generally prefers
performance testing, for an individual
vehicle A/C system or component, there
is not a strong inherent correlation
between a performance test using SAE
J2763 and the design-based approach we
are adopting (based on SAE J2727, as
discussed below).207 Establishing such a
correlation would require testing of a
fairly broad range of current-technology
systems in order to establish the effects
of such factors as production variability
and assembly practices (which are
included in J2727 scores, but not in
J2763 measurements). To EPA’s
knowledge, such a correlation study has
not been done. At the same time, as
discussed below, there are indications
that much of the industry will
eventually be moving toward alternative
refrigerants with very low GWPs. EPA
believes such a transition would
diminish the value of any correlation
206 Honeywell and Volvo supported this view;
most other commenters did not.
207 However, there is a correlation in the fleet
between J2763 measurements and J2727 scores.
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studies that might be done to confirm
the appropriateness of the SAE J2763
procedure as an option in this rule. For
these reasons, EPA is therefore not
adopting such an optional direct
measurement approach to addressing
refrigerant leakage at this time.
Instead, as proposed, EPA is adopting
a design-based method for
manufacturers to demonstrate
improvements in their A/C systems and
components.208 Manufacturers
implementing system designs expected
to result in reduced refrigerant leakage
will be eligible for credits that could
then be used to meet their CO2 emission
compliance requirements (or otherwise
banked or traded). The A/C Leakage
Credit provisions will generally assign
larger credits to system designs that
would result in greater leakage
reductions. In addition, proportionately
larger A/C Leakage Credits will be
available to manufacturers that
substitute a refrigerant with lower GWP
than the current HFC–134a refrigerant.
Our 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 approach, manufacturers will
choose from a menu of A/C equipment
and components used in their vehicles
in order to establish leakage scores
which will characterize their A/C
system leakage performance. Credits
will be generated from leakage
reduction improvements that exceed
average fleetwide leakage rates.
EPA believes that the design-based
approach will result in estimates of
leakage emissions reductions that will
be comparable to those that will
eventually result from performancebased testing. We believe that this
method appropriately approximates the
real-world leakage rates for the expected
MY 2012–2016 A/C systems.
The cooperative industry and
government Improved Mobile Air
Conditioning (IMAC) program 209 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
208 See
final regulations at 40 CFR 86.1866–12(b).
1–Refrigerant Leakage Reduction: Final
Report to Sponsors, SAE, 2007.
209 Team
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commercial use and exist on some of
today’s systems.
As proposed, a manufacturer wishing
to generate A/C Leakage Credits will
compare the components of its A/C
system with a set of leakage-reduction
technologies and actions based closely
on that developed through IMAC and
the Society of Automotive Engineers (as
SAE Surface Vehicle Standard J2727,
August 2008 version). The J2727
approach was 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 real-world
leakage in new vehicles. The EPA credit
approach addresses the same A/C
components as does SAE J2727 and
associates each component with the
same gram-per-year leakage rate as the
SAE method, although, as described
below, EPA limits the credits allowed
and also modifies it for other factors
such as alternative refrigerants.
A manufacturer choosing to generate
A/C Leakage Credits will sum the
leakage values for an A/C system for a
total A/C leakage score according to the
following formula. Because the primary
GHG program standards are expressed
in terms of vehicle exhaust CO2
emissions as measured in grams per
mile, the credits programs adopted in
this rule, including A/C related credits,
must ultimately be converted to a
common metric for proper calculation of
credits toward compliance with the
primary vehicle standards. This formula
describes the conversion of the gramsper-year leakage score to a grams-permile CO2eq value, taking vehicle miles
traveled (VMT) and the GWP of the
refrigerant into account:
A/C Leakage Credit = (MaxCredit) *
[1¥(LeakScore/AvgImpact) *
(GWPRefrigerant/1430)]
Where:
MaxCredit is 12.6 and 15.6 g/mi CO2eq for
cars and trucks, respectively. These
values become 13.8 and 17.2 for cars and
trucks, respectively, if low-GWP
refrigerants are used, since this would
generate additional credits from reducing
emissions during maintenance events,
accidents, and at end-of-life.
LeakScore is the leakage score of the A/C
system as measured according to the
EPA leakage method (based on the J2727
procedure, as discussed above) in units
of g/yr. The minimum score that EPA
considers feasible is fixed at 8.3 and 10.4
g/yr for cars and trucks respectively (4.1
and 5.2 g/yr for systems using electric
A/C compressors) as discussed below.
Avg Impact is the average current A/C
leakage emission rate, which is 16.6 and
20.7 g/yr for cars and trucks,
respectively.
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GWPRefrigerant is the global warming
potential (GWP) for direct radiative
forcing of the refrigerant. For purposes of
this rule, the GWP of HFC–134a is 1430,
the GWP of HFC–152a is 124, the GWP
of HFO–1234yf is 4, and the GWP of CO2
as a refrigerant is 1.
The EPA Final RIA elaborates further
on the development of each of the
values incorporated in the A/C Leakage
Credit formula above, as summarized
here. First, as proposed, EPA estimates
that leakage emission rates for systems
using the current refrigerant (HFC–134a)
could be feasibly reduced to rates no
less than 50% of current rates—or 8.3
and 10.4 g/yr for cars and trucks,
respectively—based on the conclusions
of the IMAC study as well as
consideration of refrigerant emissions
over the full life of the vehicle.
Also, some commenters noted that
A/C compressors powered by electric
motors (e.g. as used today in several
hybrid vehicle models) were not
included in the IMAC study and yet
allow for leakage emission rate
reductions beyond EPA’s estimates for
systems with conventional belt-driven
compressors. EPA agrees with these
comments, and we have incorporated
lower minimum emission rates into the
formula above—4.1 and 5.2 g/yr for cars
and trucks, respectively—in order to
allow additional leakage reduction
credits for vehicles that use sealed
electric A/C compressors. The
maximum available credits for these two
approaches are summarized in Table
III.C.1–1 below.
AIAM commented that EPA should
not set a lower limit on the leakage
score, even for non-electric
compressors. EPA has determined not to
do so. First, although there do exist
vehicles in the Minnesota data with
lower scores than our proposed (and
now final) minimum scores, there are
very few car models that have scores
less than 8.3, and these range from 7.0
to about 8.0 and the difference are small
compared to our minimum score.210
More important, lowering the leakage
limit would necessarily increase credit
opportunities for equipment design
changes, and EPA believes that these
changes could discourage the
environmentally optimal result of using
low GWP refrigerants. Introduction of
low GWP refrigerants could be
discouraged because it may be less
costly to reduce leakage than to replace
many of the A/C system components.
Moreover, due to the likelihood of inuse factors, even a leakless (according to
210 The Minnesota refrigerant leakage data can be
found at https://www.pca.state.mn.us/
climatechange/mobileair.html#leakdata.
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J2727) R134a system will have some
emissions due to manufacturing
variability, accidents, deterioration,
maintenance, and end of life emissions,
a further reason to cap the amount of
credits available through equipment
design. The only way to guarantee a
near zero emission system in-use is to
use a low GWP refrigerant. The EPA has
therefore decided for the purposes of
this final rule to not change the
minimum score for belt driven
compressors due to the reason cited
above and to the otherwise
overwhelming support for the program
as proposed from commenters.
In addition, as discussed above, EPA
recognizes that substituting a refrigerant
with a significantly lower GWP will be
a very effective way to reduce the
impact of all forms of refrigerant
emissions, including maintenance,
accidents, and vehicle scrappage. To
address future GHG regulations in
Europe and California, systems using
alternative refrigerants—including
HFO1234yf, with a GWP of 4 and CO2
with a GWP of 1—are under serious
development and have been
demonstrated in prototypes by A/C
component suppliers. The European
Union has enacted regulations phasing
in alternative refrigerants with GWP less
than 150 starting this year, and the State
of California proposed providing credits
for alternative refrigerant use in its GHG
rule. Within the timeframe of MYs
2012–2016, EPA is not expecting
widespread use of low-GWP
refrigerants. However, EPA believes that
these developments are promising, and,
as proposed, has included in the A/C
Leakage Credit formula above a factor to
account for the effective GHG
25427
reductions that could be expected from
refrigerant substitution. The A/C
Leakage Credits that will be available
will be a function of the GWP of the
alternative refrigerant, with the largest
credits being available for refrigerants
with GWPs at or approaching a value of
1. For a hypothetical alternative
refrigerant with a GWP of 1 (e.g., CO2 as
a refrigerant), effectively eliminating
leakage as a GHG concern, our credit
calculation method could result in
maximum credits equal to total average
emissions, or credits of 13.8 and 17.2
g/mi CO2eq for cars and trucks,
respectively, as incorporated into the
A/C Leakage Credit formula above as the
‘‘MaxCredit’’ term.
Table III.C.1–1 summarizes the
maximum A/C leakage credits available
to a manufacturer, according to the
formula above.
TABLE III.C.1–1—MAXIMUM LEAKAGE CREDIT AVAILABLE TO MANUFACTURERS
Car (g/mi)
R–134a refrigerant with belt-driven compressor .........................................................................................
R–134a refrigerant with electric motor-driven compressor .........................................................................
Lowest-GWP refrigerant (GWP=1) ..............................................................................................................
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It is possible that alternative
refrigerants could, without
compensating action by the
manufacturer, reduce the efficiency of
the A/C system (see related discussion
of the A/C Efficiency Credit below.)
However, as noted at proposal and
discussed further in the following
section, 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
due to the use of alternative refrigerants.
Beyond the comments mentioned
above, commenters generally supported
or were silent about EPA’s refrigerant
leakage methodology (as based on SAE
J2727), including the maximum leakage
credits available, the technologies
eligible for credit and their associated
leakage reduction values, and the
potential for alternative refrigerants. All
comments related to A/C credits are
addressed in the Response to Comments
Document.
b. A/C Efficiency Credits
Manufacturers that make
improvements in their A/C systems to
increase efficiency and thus reduce CO2
emissions due to A/C system operation
may be eligible for A/C Efficiency
Credits. As with A/C Leakage Credits,
manufacturers could apply A/C
Efficiency Credits toward compliance
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with their overall CO2 standards (or
otherwise bank and trade the credits).
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 RIA.
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
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6.3
9.5
13.8
7.8
11.7
17.2
motors, and system 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, realtime 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.1–2
below lists some of these technologies
and their respective efficiency
improvements.
As discussed in the proposal, EPA is
adopting a design-based ‘‘menu’’
approach for estimating efficiency
improvements and, thus, quantifying
A/C Efficiency Credits.211 However,
EPA’s ultimate preference is
performance-based standards and credit
mechanisms (i.e., using actual
measurements) as typically providing a
more accurate measure of performance.
However, EPA has concluded that a
practical, performance-based procedure
for the purpose of accurately
quantifying A/C-related CO2 emission
reductions, and thus efficiency
improvements for assigning credits, is
not yet available. Still, EPA is
introducing a new specialized
performance-based test for the more
limited purpose of demonstrating that
211 See
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actual efficiency improvements are
being achieved by the design
improvements for which a manufacturer
is seeking A/C credits. As discussed
below, beginning in MY 2014,
manufacturers wishing to generate A/C
Efficiency Credits will need to show
improvement on the new A/C Idle Test
in order to then use the ‘‘menu’’
approach to quantify the number of
credits attributable to those
improvements.
In response to comments concerning
the applicability and effectiveness of
technologies that were or were not
included in our analysis, we have made
several changes to the design-based
menu.212 First, we have separated the
credit available for ‘recirculated air’ 213
technologies into those with closed-loop
control of the air supply and those with
open-loop control. By ‘‘closed-loop’’
control, we mean a system that uses
feedback from a sensor, or sensors, (e.g.,
humidity, glass fogging, CO2, etc.) to
actively control the interior air quality.
For those systems that use ‘‘open-loop’’
control of the air supply, we project that
since this approach cannot precisely
adjust to varying ambient humidity or
passenger respiration levels, the relative
effectiveness will be less than that for
systems using closed-loop control.
Second, many commenters indicated
that the electronic expansion valve, or
EXV, should not be included in the
menu of technologies, as its
effectiveness may not be as high as we
projected. Commenters noted that the
SAE IMAC report stated efficiency
improvements for an EXV used in
conjunction with a more efficient
compressor, and not as a stand alone
technology and that no manufacturers
are considering this technology for their
products within the timeframe of this
rulemaking. We believe other
technologies (improved compressor
controls for example) can achieve the
same benefit as an EXV, without the
need for this unique component, and
therefore are not adopting it as an
option in the design menu of efficiencyimproving A/C technologies.
Third, many commenters requested
that an internal heat exchanger, or IHX,
be added to the design menu. EPA
initially considered adding this
technology, but in our initial review of
studies on this component, we had
understood that the value of the
technology is limited to systems using
the alternative refrigerant HFO–1234yf.
Some manufacturers, however,
commented that an IHX can also be
used with systems using the current
refrigerant HFC–134a to improve
efficiency, and that they plan on
implementing this technology as part
their strategy to improve A/C efficiency.
Based on these comments, and
projections in a more recent SAE
Technical Paper, we project that an IHX
in a conventional HFC–134a system can
improve system efficiency by 20%,
resulting in a credit of 1.1 g/mi.214
Further discussion of IHX technology
can be found in the RIA.
Fourth, we have modified the
definition of ‘improved evaporators and
condensers’ to recognize that improved
versions of these heat exchangers may
be used separately or in conjunction
with one another, and that an
engineering analysis must indicate a
COP improvement of 10% or better
when using either or both components
(and not a 10% COP improvement for
each component). Furthermore, we have
modified the regulation text to clarify
what is considered to be the ‘baseline’
components for this analysis. We
consider the baseline component to be
the version which a manufacturer most
recently had in production on the same
vehicle or a vehicle in a similar EPA
vehicle classification. The dimensional
characteristics (e.g. tube configuration/
thickness/spacing, and fin density) of
the baseline components are then
compared to the new components, and
an engineering analysis is required to
demonstrate the COP improvement.
For model years 2012 and 2013, a
manufacturer wishing to generate A/C
Efficiency Credits for a group of its
vehicles with similar A/C systems will
compare several of its vehicle A/Crelated components and systems with a
list of efficiency-related technology
improvements (see Table III.C.1–2
below). Based on the technologies the
manufacturer chooses, an A/C
Efficiency Credit value will be
established. This design-based approach
will recognize the relationships and
synergies among efficiency-related
technologies. Manufacturers could
receive credits 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 will be the
total of these values, up to a maximum
allowable credit of 5.7 g/mi CO2eq. This
will be the maximum improvement
from current average efficiencies for
A/C systems (see the RIA for a full
discussion of our derivation of the
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. A/C Efficiency Credits as
adopted may not exceed 5.7 g/mi CO2eq.
TABLE III.C.1–2—EFFICIENCY-IMPROVING A/C TECHNOLOGIES AND CREDITS
Estimated reduction in A/C CO2
emissions
(%)
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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 with closed-loop control of the air supply (sensor feedback to control interior air
quality) whenever the ambient temperature is 75 °F or higher (although deviations from this temperature are allowed if accompanied by an engineering analysis) ....................................................................
Default to recirculated air with open-loop control air supply (no sensor feedback) whenever the ambient
temperature 75 °F or higher lower temperatures are allowed ....................................................................
Blower motor controls which limit wasted electrical energy (e.g., pulse width modulated power controller)
Internal heat exchanger ...................................................................................................................................
Improved condensers and/or evaporators (with system analysis on the component(s) indicating a COP
improvement greater than 10%, when compared to previous industry standard designs) .........................
212 Commenters included the Alliance of
Automobile Manufacturers, Jaguar Land Rover,
Denso, and the Motor and Equipment
Manufacturers Association, among others.
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213 Recirculated air is defined as air present in the
passenger compartment of the vehicle (versus
outside air) available for the A/C system to cool or
condition.
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A/C efficiency
credit
(g/mi CO2)
30
1.7
20
1.1
30
1.7
20
15
20
1.1
0.9
1.1
20
1.1
214 Mathur, Gursaran D., ‘‘Experimental
Investigation with Cross Fluted Double-Pipe
Suction Line Heat Exchanger to Enhance A/C
System Performance,’’ SAE 2009–01–0970, 2009.
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25429
TABLE III.C.1–2—EFFICIENCY-IMPROVING A/C TECHNOLOGIES AND CREDITS—Continued
Estimated reduction in A/C CO2
emissions
(%)
Technology description
Oil separator (with engineering analysis demonstrating effectiveness relative to the baseline design) ........
A/C efficiency
credit
(g/mi CO2)
10
0.6
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The proposal requested comment on
adjusting the efficiency credit for
alternative refrigerants. Although a few
commenters noted that the efficiency of
an HFO1234yf system may differ from a
current HFC–134a system,215 we believe
that this difference does not take into
account any efficiency improvements
that may be recovered or gained when
the overall system is specifically
designed with consideration of the new
refrigerant properties (as compared to
only substituting the new refrigerant).
EPA is therefore not adjusting the
credits based on efficiency differences
for this rule.
As noted above, for model years 2014
and later, manufacturers seeking to
generate design-based A/C Efficiency
Credits will also need to use a specific
new EPA performance test to confirm
that the design changes are resulting in
improvements in A/C system efficiency
as integrated into the vehicle. As
proposed, beginning in MY 2014
manufacturers will need to perform an
A/C CO2 Idle Test for each A/C system
(family) for which it desires to generate
Efficiency Credits. Manufacturers will
need to demonstrate an improvement
over current average A/C CO2 levels
(21.3 g/minute on the Idle Test) to
qualify for the menu approach credits.
Upon qualifying on the Idle Test, the
manufacturer will be eligible to use the
menu approach above to quantify the
potential credits it could generate. To
earn the full amount of credits available
in the menu approach (limited to the
maximum), the test must demonstrate a
30% or greater improvement in CO2
levels over the current average.
For A/C systems that achieve an
improvement between 0-and-30% (or a
result between 21.3 and 14.9 g/minute
result on the A/C CO2 Idle Test), a credit
can still be earned, but a multiplicative
credit adjustment factor will be applied
to the eligible credits. As shown in
Figure III.C.1–1 this factor will be scaled
from 1.0 to 0, with vehicles
demonstrating a 30% or better
improvement (14.9 g/min or lower)
receiving 100% of the eligible credit
(adj. factor = 1.0), and vehicles
demonstrating a 0% improvement—21.3
g/min or higher result—receiving no
credit (adj. factor = 0). We adopted this
adjustment factor in response to
commenters who were concerned that a
vehicle which incorporated many
efficiency-improving technologies may
not achieve the full 30% improvement,
and as a result would receive no credit
(thus discouraging them from using any
of the technologies). Because there is
environmental benefit (reduced CO2)
from the use of even some of these
efficiency-improving technologies, EPA
believes it is appropriate to scale the
A/C efficiency credits to account for
these partial improvements.
215 Ford noted that ‘‘the physical properties of the
alternative refrigerant R1234yf could result in a
reduction of efficiency by 5 to 10 percent compared
to R134a in use today with a similar refrigerant
system and controls technology.’’
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EPA is adopting the A/C CO2 Idle Test
procedure as proposed in most respects.
This laboratory idle test is performed
while the vehicle is at idle, similar to
the idle carbon monoxide (CO) test that
was once a part of EPA vehicle
certification. The test determines the
additional CO2 generated at idle when
the A/C system is operated. The A/C
CO2 Idle Test will 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 test
includes tighter restrictions on test cell
temperatures and humidity levels than
apply for the basic FTP test procedure
in order to more closely control the
loads from operation of the A/C system.
EPA is also adopting additional
refinements to the required in-vehicle
blower fan settings for manually
controlled systems to more closely
represent ‘‘real world’’ usage patterns.
Many commenters questioned the
ability of this test to measure the
improved efficiency of certain A/C
technologies, and stated that the test
was not representative of real-world
driving conditions. However, although
EPA acknowledges that this test directly
simulates a relatively limited range of
technologies and conditions, we
determined that it is sufficiently robust
for the purpose of demonstrating that
the system design changes are indeed
implemented properly and are resulting
in improved efficiency of a vehicle’s
A/C system, at idle as well as under a
range of operating conditions. Further
details of the A/C Idle Test can be found
in the RIA and the regulations, as well
as in the Response to Comments
Document.
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 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. The Idle Test
will not be required in order to generate
A/C Efficiency Credits until MY 2014 to
allow sufficient time for manufacturers
to make the necessary facilities
improvements and to gain experience
with the test.
EPA also considered and invited
comment on 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
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improvements for many manufacturers.
EPA invited comment on using an
adapted version of the SCO3, an existing
test procedure that is part of the
Supplemental Federal Test Procedure.
EPA discussed and invited comment on
the various benefits and concerns
associated with using an adapted SCO3
test. There were many comments
opposed to this proposal, and very few
supporters. Most of the comments
opposing this approach echoed the
concerns made by in the NPRM. These
included excessive testing burden,
limited test facilities and the cost of
adding new ones, and the concern that
the SC03 test may not be sufficiently
representative of in use A/C usage.
Some commenters supported a
derivative of the SCO3 test or multiple
runs of other urban cycles (such as the
LA–4) for quantifying A/C system
efficiency. While EPA considers a test
cycle that covers a broader range of
vehicle speed and climatic conditions to
be ideal, developing such a
representative A/C test would involve
the work of many stakeholders, and
would require a significant amount of
time, exceeding the scope of this rule.
EPA expects to continue working with
industry, the California Air Resources
Board, and other stakeholders to move
toward increasingly robust performance
tests and methods for determining the
efficiency of mobile A/C systems and
the related impact on vehicle CO2
emissions, including a potential adapted
SC03 test.
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
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 A/C systems. The regulations
promulgated under section 609 (40 CFR
part 82, subpart B) establish standards
and requirements regarding the
servicing of A/C systems. These
regulations include establishing
standards for equipment that recovers
and recycles (or, for refrigerant blends,
only recovers) refrigerant from A/C
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25431
systems; 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 systems must have unique
fittings and a uniquely colored label for
the refrigerant being used in the system.
On September 14, 2006, EPA
proposed to approve R–744 (CO2) for
use in motor vehicle A/C systems (71 FR
55140) and on October 19, 2009, EPA
proposed to approve the low-GWP
refrigerant HFO–1234yf for these
systems (74 FR 53445), both subject to
certain requirements. Final action on
both of these proposals is expected later
this year. EPA previously issued a final
rule allowing the use of HFC–152a as a
refrigerant in motor vehicle A/C systems
subject to certain requirements (June 12,
2008; 73 FR 33304). As discussed above,
manufacturers transitioning to any of
the approved refrigerants would be
eligible for A/C Leakage Credits, the
value of which would depend on the
GWP of their refrigerant and the degree
of leakage reduction of their systems.
EPA views this 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 will
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 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 will not conflict
(or overlap) with the Title VI section
609 standards. EPA also believes the
menu of leak control technologies
described in this rule will complement
the section 612 requirements, because
these control technologies will help
ensure that HFC–134a (or other
refrigerants) will be used in a manner
that further minimizes potential adverse
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effects on human health and the
environment.
2. Flexible Fuel and Alternative Fuel
Vehicle Credits
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EPA is finalizing its proposal to allow
flexible-fuel vehicles (FFVs) and
alternative fuel vehicles to generate
credits for purposes of the GHG rule
starting in the 2012 model year. FFVs
are vehicles that can run on both an
alternative fuel and a conventional fuel.
Most FFVs are E85 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).
These credits are designed to
complement the treatment of FFVs
under CAFE, consistent with the
emission reduction objectives of the
CAA. As explained at proposal, EPCA
includes an incentive under the CAFE
program for production of dual-fueled
vehicles or FFVs, and dedicated
alternative fuel vehicles.216 For FFVs
and dual-fueled vehicles, the EPCA/
EISA credits have three elements: (1)
The assumption that the vehicle is
operated 50% of the time on the
conventional fuel and 50% of the time
on the alternative fuel, (2) that 1 gallon
of alternative fuel is treated as 0.15
gallon of fuel, essentially increasing the
fuel economy of a vehicle on alternative
fuel by a factor of 6.67, and (3) a ‘‘cap’’
provision that limits the maximum fuel
economy increase that can be applied to
a manufacturer’s overall CAFE
compliance value for all CAFE
compliance categories (i.e., domestic
passenger cars, import passenger cars,
and light trucks) to 1.2 mpg through
2014 and 1.0 mpg in 2015. 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.217 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.218 Under EPCA, for
dedicated alternative fuel vehicles, there
are no limits or phase-out. As proposed,
216 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. 32905(b). This is typically referred
to as an FFV credit.
218 49 U.S.C. 32906.
217 See
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FFV and Alternative Fuel Vehicle
Credits will 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).
Manufacturers supported the
inclusion of FFV credits in the program.
Chrysler noted that the credits
encourage manufacturers to continue
production of vehicles capable of
running on alternative fuels as the
production and distribution systems of
such fuels are developed. Chrysler
believes the lower carbon intensity of
such fuels is an opportunity for further
greenhouse gas reductions and
increased energy independence, and the
continuance of such incentives
recognizes the important potential of
this technology to reduce GHGs. Toyota
noted that because actions taken by
manufacturers to comply with EPA’s
regulation will, to a large extent, be the
same as those taken to comply with
NHTSA’s CAFE regulation, it is
appropriate for EPA to consider
flexibilities contained in the CAFE
program that clearly impact product
plans and technology deployment plans
already in place or nearly in place.
Toyota believes that adopting the FFV
credit for a transitional period of time
appears to recognize this reality, while
providing a pathway to eventually
phase-out the flexibility.
As proposed, electric vehicles (EVs)
or plug-in hybrid electric vehicles
(PHEVs) are not eligible to generate this
type of credit. These vehicles are
covered by the advanced technology
vehicle incentives 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
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 requiring for MY 2016 and later that
manufacturers will need to reliably
estimate the extent to which 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. Beginning in MY
2016, the FFV credits as described
above for MY 2012–2015 will no longer
be available for EPA’s GHG program.
Rather, GHG compliance values will be
based on actual emissions performance
of the FFV on conventional and
alternative fuels, weighted by the actual
use of these fuels in the FFVs.
As with the CAFE program, EPA will
base MY 2012–2015 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.219
In addition, the measured CO2
emissions on the alternative fuel will 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. For example, for a
flexible-fuel vehicle that emitted 330
g/mi CO2 operating on E85 and 350
g/mi CO2 operating on gasoline, the
resulting CO2 level to be used in the
manufacturer’s fleet average calculation
would be:
i. FFVs
For the GHG program, EPA is
allowing FFV credits corresponding to
the amounts allowed by the amended
EPCA but only during the period from
MYs 2012 to 2015. (As discussed below
in Section III.E., EPA is not allowing
CAFE-based FFV credits to be generated
as part of the early credits program.) As
noted at proposal, several manufacturers
have already taken the availability of
FFV credits into account in their nearterm future planning for CAFE and this
reliance indicates that these credits
need to be considered in assessing
necessary lead time for the CO2
standards. Manufacturers commented
that the credits are necessary in
allowing them to transition to the new
standards. EPA thus believes that
allowing these credits, in the near term,
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CO2 =
[(330 × 0.15) + 350]
= 199.8 g/mi
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.
EPA notes also that the above
equation and example are based on an
FFV that is an E85 vehicle. EPCA, as
amended by EISA, also establishes the
use of this approach, including the 0.15
factor, for all alternative fuels, not just
219 49
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E85.220 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 dual-fueled vehicles,
such as a vehicle able to operate on
gasoline and CNG.221 (For natural gas
dual-fueled vehicles, EPCA establishes a
factor of 0.823 gallons of fuel for every
100 cubic feet a natural gas used to
calculate a gallons equivalent.222) The
EISA’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 will use the 0.15
factor for all FFVs in order not to
disrupt manufacturers’ near-term
compliance planning and assure
sufficient lead time. EPA, in any case,
expects the vast majority of FFVs to be
E85 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 2015.223 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 proposed, but is not
adopting, credit limits based on the
overall industry average CO2 standards
for cars and trucks. EPA also requested
comments on basing the calculated CO2
credit limits on the individual
manufacturer fleet-average standards
calculated from the footprint curves.
EPA received comment from one
manufacturer supporting this approach.
EPA also received comments from
another manufacturer recommending
that the credit limits for an individual
manufacturer be based instead on that
manufacturer’s fleet average
performance. The commenter noted that
this approach is in line with how CAFE
FFV credit limits are applied. This is
due to the fact that the GHG-equivalent
of the CAFE 1.2 mpg cap will vary due
to the non-linear relationship between
fuel economy and GHGs/fuel
consumption. EPA agrees with this
approach since it best harmonizes how
credit limits are determined in CAFE.
EPA intended and continues to believe
it is appropriate to provide essentially
the same FFV credits under both
programs for MYs 2012–2015.
Therefore, EPA is finalizing FFV credits
limits for MY 2012–2015 based on a
manufacturer’s fleet-average
performance. For example, if a
manufacturer’s 2012 car fleet average
220 49
U.S.C. 32905(c).
U.S.C. 32905(d).
222 49 U.S.C. 32905(c).
223 49 U.S.C. 32906(a).
221 49
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emissions performance was 260 g/mile
(34.2 mpg), the credit limit in CO2 terms
would be 9.5 g/mile (34.2 mpg ¥ 1.2
mpg = 33.0 mpg = 269.5 g/mile) and if
it were 270 g/mile the limit would be
10.2 g/mile.
ii. Dedicated Alternative Fuel Vehicles
As proposed, EPA will 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
EPA is treating FFV credits the same
as under EPCA for model years 2012–
2015, but is applying a different
approach starting with model year 2016.
EPA recognizes that under EPCA
automatic FFV credits are entirely
phased out of the CAFE program by MY
2020, and apply in the prior model
years with certain limitations, but
without a requirement that the
manufacturers demonstrate actual use of
the alternative fuel. 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 will treat
FFVs for model years 2012–2015 the
same as under EPCA, as part of
providing sufficient lead time given
manufacturers’ compliance strategies
which rely on the existence of these
EPCA statutory credits, as explained
above.
Starting with model year 2016, as
proposed, EPA will no longer allow
manufacturers to base FFV emissions on
the use of the 0.15 factor credit
described above, and on the use of an
assumed 50% usage of alternative fuel.
Instead, EPA believes the appropriate
approach is to ensure that FFV
emissions are based on demonstrated
emissions performance. This will
promote the environmental goals of the
final program. EPA received several
comments in support of EPA’s proposal
to use this approach instead of the
EPCA approach for MY 2016 and later.
Under the EPA program in MY 2016 and
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later, manufacturers will be allowed to
base an FFV’s emissions compliance
value in part on the vehicle test values
run on the alternative fuel, for that
portion of its fleet for which the
manufacturer demonstrates utilized the
alternative fuel in the field. In other
words, the default is to assume FFVs
operate on 100% gasoline, and the
emissions value for the FFV vehicle will
be based on the vehicle’s tested value on
gasoline. However, if a manufacturer
can demonstrate that a portion of its
FFVs are using an alternative fuel in
use, then the FFV emissions compliance
value can be calculated based on the
vehicle’s tested value using the
alternative fuel, prorated based on the
percentage of the fleet using the
alternative fuel in the field. An example
calculation is described below. EPA
believes this approach will provide an
actual incentive to ensure that such
fuels are used. The incentive arises
since actual use of the flexible fuel
typically results in lower tailpipe GHG
emissions than use of gasoline and
hence improves the vehicles’
performance, making it more likely that
its performance will improve a
manufacturers’ average fleetwide
performance. Based on existing
certification data, E85 FFV CO2
emissions are typically about 5 percent
lower on E85 than CO2 emissions on
100 percent gasoline. Moreover,
currently there is little incentive to
optimize CO2 performance for vehicles
when running on E85. EPA believes the
above approach would provide such an
incentive to manufacturers and that E85
vehicles could be optimized through
engine redesign and calibration to
provide additional CO2 reductions.
Under the EPCA credit provisions,
there is an incentive to produce FFVs
but no actual incentive to ensure that
the alternative fuels are used, or that
actual vehicle fuel economy improves.
GHG and energy security benefits are
only achieved if the alternative fuel is
actually used and (for GHGs) that
performance improves, and EPA’s
approach for MY 2016 and beyond will
now provide such an incentive. This
approach will promote greater use of
alternative 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
basing the FFV program for MYs 2016
and thereafter 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.
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For 2016 and later model years, EPA
will therefore treat FFVs similarly to
conventional fueled vehicles in that
FFV emissions would be based on
actual CO2 results from emission testing
on the fuels on which it operates. In
calculating the emissions performance
of an FFV, manufacturers may base FFV
emissions on vehicle testing based on
the alternative fuel emissions, if they
can demonstrate that the alternative fuel
is actually being used in the vehicles.
Performance will otherwise be
calculated assuming use only of
conventional fuel. The manufacturer
must establish the ratio of operation that
is on the alternative fuel compared to
the conventional fuel. The ratio will be
used to weight the CO2 emissions
performance over the 2-cycle test on the
two fuels. The 0.15 conversion factor
will no longer be included in the CO2
emissions calculation. For example, for
a flexible-fuel vehicle that emitted 300
g/mi CO2 operating on E85 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,
where the manufacturer intends for its
performance to be calculated based on
some use of alternative fuels. One
option EPA is finalizing is establishing
a rebuttable presumption using a
national average approach based on
national E85 fuel use. Manufacturers
could use this value along with their
vehicle emissions results demonstrating
lower emissions on E85 to determine
the emissions compliance values for
FFVs sold by manufacturers under this
program. For example, national E85
volumes and national FFV sales may be
used to prorate E85 use by manufacturer
sales volumes and FFVs already in-use.
Upon a manufacturer’s written request,
EPA will conduct an analysis of vehicle
miles travelled (VMT) by year for all
FFVs using its emissions inventory
MOVES model. Using the VMT ratios
and the overall E85 sales, E85 usage will
be assigned to each vehicle. This
method accounts for the VMT of new
FFVs and FFVs already in the existing
fleet using VMT data in the model. The
model will then be used to determine
the ratio of E85 and gasoline for new
vehicles being sold. Fluctuations in E85
sales and FFV sales will be taken into
account to adjust the manufacturers’
E85 actual use estimates annually. EPA
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plans to make this assigned fuel usage
factor available through guidance prior
to the start of MY 2016 and adjust it
annually as necessary. EPA believes this
is a reasonable way to apportion E85 use
across the fleet.
If manufacturers decide not to use
EPA’s assigned fuel usage based on the
national average analysis, they have a
second option of presenting their own
data for consideration as the basis for
evaluating fuel usage. Manufacturers
have suggested demonstrations using
vehicle on-board data gathering through
the use of on-board 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. Manufacturers must
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 received comments that the 2016
and later FFV emissions performance
methodology should be based on the life
cycle emissions (i.e., including the
upstream GHG emissions associated
with fuel feedstocks, production, and
transportation) associated with the use
of the alternative fuel. Commenters are
concerned that the use of ethanol will
not result in lower GHGs on a lifecycle
basis. After considering these
comments, EPA is not including
lifecycle emissions in the calculation of
vehicle credits. EPA continues to
believe that it is appropriate to base
credits for MY 2012–2015 on the EPCA/
CAFE credits and to base compliance
values for MY 2016 on the demonstrated
tailpipe emissions performance on
gasoline and E85, and is finalizing this
approach as proposed. EPA recently
finalized its RFS2 rulemaking which
addresses lifecycle emissions from
ethanol and the upstream GHG benefits
of E85 use are already captured by this
program.224
ii. Dedicated Alternative Fuel Vehicles
As proposed, for model years 2016
and later dedicated alternative fuel
vehicles, CO2 will 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
224 75
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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 CO2 program. EPA did not
receive comments on this approach.
3. Advanced Technology Vehicle
Incentives for Electric Vehicles, Plug-in
Hybrids, and Fuel Cell Vehicles
EPA is finalizing provisions that
provide a temporary regulatory
incentive for the commercialization of
certain advanced vehicle power trains—
electric vehicles (EVs), plug-in hybrid
electric vehicles (PHEVs), and fuel cell
vehicles (FCVs)—for model year 2012–
2016 light-duty and medium-duty
passenger vehicles.225 The purpose of
these provisions is to provide a
temporary incentive to promote
technologies which have the potential to
produce very large GHG reductions in
the future, but which face major
challenges such as vehicle cost,
consumer acceptance, and the
development of low-GHG fuel
production infrastructure. The tailpipe
GHG emissions from EVs, PHEVs
operated on grid electricity, and
hydrogen-fueled FCVs are zero, and
traditionally the emissions of the
vehicle itself are all that EPA takes into
account for purposes of compliance
with standards set under section 202(a).
Focusing on vehicle tailpipe emissions
has not raised any issues for criteria
pollutants, as upstream emissions
associated with production and
distribution of the fuel are addressed by
comprehensive regulatory programs
focused on the upstream sources of
those emissions.226 At this time,
however, there is no such
comprehensive program addressing
upstream emissions of GHGs, and the
upstream GHG emissions associated
with production and distribution of
electricity are higher than the
corresponding upstream GHG emissions
of gasoline or other petroleum based
fuels. In the future, if there were a
program to comprehensively control
upstream GHG emissions, then the zero
tailpipe levels from these vehicles have
the potential to produce very large GHG
reductions, and to transform the
225 See
final regulations at 40 CFR 86.1866–12(a).
this section, ‘‘upstream’’ means all fuelrelated GHG emissions prior to the fuel being
introduced to the vehicle.
226 In
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transportation sector’s contribution to
nationwide GHG emissions.
This temporary incentive program
applies only for the model years 2012–
2016 covered by this final rule. EPA will
reassess the issue of how to address
EVs, PHEVs, and FCVs in rulemakings
for model years 2017 and beyond, based
on the status of advanced technology
vehicle commercialization, the status of
upstream GHG emissions control
programs, and other relevant factors.
In the Joint Notice of Intent, EPA
stated that ‘‘EPA is currently considering
proposing additional credit
opportunities to encourage the
commercialization of advanced GHG/
fuel economy control technology such
as electric vehicles and plug-in hybrid
electric vehicles. These ‘super credits’
could 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.’’ 227
Following through, EPA proposed two
mechanisms by which these vehicles
would earn credits: (1) A zero grams/
mile compliance value for EVs, FCVs,
and for PHEVs when operated on grid
electricity, and (2) a vehicle multiplier
in the range of 1.2 to 2.0.228
The zero grams/mile compliance
value for EVs (and for PHEVs when
operated on grid electricity, as well as
for FCVs which involve similar
upstream GHG issues with respect to
hydrogen production) is an incentive
that operates like a credit because, while
it accurately accounts for tailpipe GHG
emissions, it does not reflect the
increase in upstream GHG emissions
associated with the electricity used by
EVs compared to the upstream GHG
emissions associated with the gasoline
or diesel fuel used by conventional
vehicles.229 For example, based on GHG
emissions from today’s national average
electricity generation (including GHG
emissions associated with feedstock
extraction, processing, and
transportation) and other key
assumptions related to vehicle
electricity consumption, vehicle
charging losses, and grid transmission
losses, a midsize EV might have an
upstream GHG emissions of about 180
grams/mile, compared to the upstream
GHG emissions of a typical midsize
227 Notice of Upcoming Joint Rulemaking to
Establish Vehicle GHG Emissions and CAFE
Standards, 74 FR 24007, 24011 (May 22, 2009).
228 74 FR 49533–34.
229 See 74 FR 49533 (‘‘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’’).
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gasoline car of about 60 grams/mile.
Thus, the EV would cause a net
upstream GHG emissions increase of
about 120 grams/mile (in general, the
net upstream GHG increase would be
less for a smaller EV and more for a
larger EV). The zero grams/mile
compliance value provides an incentive
because it is less than the 120 grams/
mile value that would fully account for
the net increase in GHG emissions,
counting upstream emissions.230 The
net upstream GHG impact could change
over time, of course, based on changes
in electricity generation or gasoline
production.
The proposed vehicle multiplier
incentive would also have operated like
a credit as it would have allowed an EV,
PHEV, or FCV to count as more than one
vehicle in the manufacturer’s fleet
average. For example, combining a
multiplier of 2.0 with a zero grams/mile
compliance value for an EV would
allow that EV to be counted as two
vehicles, each with a zero grams/mile
compliance value, in the manufacturer’s
fleet average calculations. In effect, a
multiplier of 2.0 would double the
overall credit associated with an EV,
PHEV, or FCV.
EPA explained in the proposal that
the potential for large future emissions
benefits from these technologies
provides a strong reason for providing
incentives at this time to promote their
commercialization in the 2012–2016
model years. At the same time, EPA
acknowledged that the zero grams/mile
compliance value did not account for
increased upstream GHG emissions.
EPA requested comment on providing
some type of incentive, the
appropriateness of both the zero grams/
mile and vehicle multiplier incentive
mechanisms, and on any alternative
approaches for addressing advanced
technology vehicle incentives. EPA
received many comments on these
issues, which will be briefly
summarized below.
Although some environmental
organizations and State agencies
supported the principle of including
some type of regulatory incentive
mechanism, almost all of their
comments were opposed to the
combination of both the zero grams/mile
compliance value and multipliers in the
higher end of the proposed range of 1.2
230 This 120 grams/mile value for a midsize EV
is approximately similar to the compliance value
for today’s most efficient conventional hybrid
vehicle, so the EV would not be significantly more
‘‘GHG-positive’’ than the most efficient conventional
hybrid counterpart under a full accounting
approach. It should be noted that these emission
levels would still be well below the footprint targets
for the vehicles in question.
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to 2.0. The California Air Resources
Board stated that the proposed credits
‘‘are excessive’’ and the Union of
Concerned Scientists stated that it
‘‘strongly objects’’ to the approach that
lacks ‘‘technical justification’’ by not
‘‘accounting for upstream emissions.’’
The Natural Resources Defense Council
(NRDC) stated that the credits could
‘‘undermine the emissions benefits of
the program and will have the
unintended consequence of slowing the
development of conventional cleaner
vehicle emission reduction technologies
into the fleet.’’ NRDC, along with several
other commenters who made the same
point, cited an example based on
Nissan’s public statements that it plans
on producing up to 150,000 Nissan Leaf
EVs in the near future at its plant in
Smyrna, Tennessee.231 NRDC’s analysis
showed that if EVs were to account for
10% of Nissan’s car fleet in 2016, the
combination of the zero grams/mile and
2.0 multiplier would allow Nissan to
make only relatively small
improvements to its gasoline car fleet
and still be in compliance. NRDC
described a detailed methodology for
calculating ‘‘true full fuel cycle
emissions impacts’’ for EVs. The Sierra
Club suggested that the zero grams/mile
credit would ‘‘taint’’ EVs as the public
comes to understand that these vehicles
are not zero-GHG vehicles, and that the
zero grams/mile incentive would allow
higher gasoline vehicle GHG emissions.
Most vehicle manufacturers were
supportive of both the zero grams/mile
compliance value and a higher vehicle
multiplier. The Alliance of Automobile
Manufacturers supported zero grams/
mile ‘‘since customers need to receive a
clear signal that they have made the
right choice by preferring an EV, PHEV,
or EREV. * * * However, the Alliance
recognizes the need for a comprehensive
approach with shared responsibility in
order to achieve an overall carbon
reduction.’’ Nissan claimed that zero
grams/mile is ‘‘legally required,’’ stating
that EPA’s 2-cycle test procedures do
not account for upstream GHG
emissions, that accounting for upstream
emissions from electric vehicles but not
from other vehicles would be arbitrary,
and that including upstream GHG
would ‘‘disrupt the careful balancing
embedded into the National Program.’’
Several other manufacturers, including
Ford, Chrysler, Toyota, and Mitsubishi,
also supported the proposed zero grams/
mile compliance value. BMW suggested
a compliance value approach similar to
231 ‘‘Secretary Chu Announces Closing of $1.4
Billion Loan to Nissan,’’ Department of Energy,
January 28, 2010, https://www.energy.gov/news/
8581.htm. EPA Docket EPA–HQ–OAR–2009–0472.
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that used for CAFE compliance
(described below), which would yield a
very low, non-zero grams/mile
compliance value. Honda opposed the
zero grams/mile incentive. Honda
suggested that EPA should fully account
for upstream GHG and ‘‘should separate
incentives and credits from the
measurement of emissions.’’
Automakers universally supported
higher multipliers, many higher than
the maximum 2.0 level proposed by
EPA. Honda suggested a multiplier of
16.0 for FCVs. Mitsubishi supported the
concept of larger, temporary incentives
until advanced technology vehicle sales
achieved a 10% market share. Finally,
some commenters suggested that other
technologies should also receive
incentives, such as diesel vehicles,
hydrogen-fueled internal combustion
engines, and natural gas vehicles.
Based on a careful consideration of
these comments, EPA is modifying its
proposed advanced technology vehicle
incentive program for EVs, PHEVs, and
FCVs produced in 2012–2016. EPA is
not extending the program to include
additional technologies at this time. The
final incentive program, and our
rationale for it, are described below.
One, the incentive program retains the
zero grams/mile value for EVs and
FCVs, and for PHEVs when operated on
grid electricity, subject to vehicle
production caps discussed below. EPA
acknowledges that, based on current
electricity and hydrogen production
processes, that EVs, PHEVs, and FCVs
yield higher upstream GHG emissions
than comparable gasoline vehicles. But
EPA reiterates its support for
temporarily rewarding advanced
emissions control technologies by
foregoing modest emissions reductions
in the short term in order to lay the
foundation for the potential for much
larger emission reductions in the longer
term.232 EPA notes that EVs, PHEVs,
and FCVs are potential GHG ‘‘game
changers’’ if major cost and consumer
barriers can be overcome and if there is
a nationwide transformation to lowGHG electricity (or hydrogen, in the
case of FCVs).
Although EVs and FCVs will have
compliance values of zero grams/mile,
PHEV compliance values will be
determined by combining zero grams/
mile for grid electricity operation with
the GHG emissions from the 2-cycle test
results during operation on liquid fuel,
and weighting these values by the
percentage of miles traveled that EPA
232 EPA has adopted this strategy in several of its
most recent and important mobile source
rulemakings, such as its Tier 2 Light-Duty Vehicle,
2007 Heavy-Duty Highway, and Tier 4 Nonroad
Diesel rulemakings.
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believes will be performed on grid
electricity and on liquid fuel, which
will vary for different PHEVs. EPA is
currently considering different
approaches for determining the
weighting factor to be used in
calculating PHEV GHG emissions
compliance values. EPA will consider
the work of the Society of Automotive
Engineers Hybrid Technical Standards
Committee, as well as other relevant
factors. EPA will issue a final rule on
this methodology by the fall of 2010,
when EPA expects some PHEVs to
initially enter the market.
EPA agrees with the comments by the
environmental organizations, States,
and Honda that the zero grams/mile
compliance value will reduce the
overall GHG benefits of the program.
However, EPA believes these reductions
in GHG benefits will be relatively small
based on the projected production of
EVs, PHEVs, and FCVs during the 2012–
2016 timeframe, along with the other
changes that we are making in the
incentive program. EPA believes this
modest potential for reduction in nearterm emissions control is more than
offset by the potential for very large
future emissions reductions that
commercialization of these technologies
could promote.
Two, the incentive program will not
include any vehicle multipliers, i.e., an
EV’s zero grams/mile compliance value
will count as one vehicle in a
manufacturer’s fleet average, not as
more than one vehicle as proposed. EPA
has concluded that the combination of
the zero grams/mile and multiplier
credits would be excessive. Compared
to the maximum multiplier of 2.0 that
EPA had proposed, dropping this
multiplier reduces the aggregate impact
of the overall credit program by a factor
of two (less so for lower multipliers, of
course).
Three, EPA is placing a cumulative
cap on the total production of EVs,
PHEVs, and FCVs for which an
individual manufacturer can claim the
zero grams/mile compliance value
during model years 2012–2016. The
cumulative production cap will be
200,000 vehicles, except those
manufacturers that sell at least 25,000
EVs, PHEVs, and FCVs in MY 2012 will
have a cap of 300,000 vehicles for MY
2012–2016. This higher cap option is an
additional incentive for those
manufacturers that take an early
leadership role in aggressively and
successfully marketing advanced
technology vehicles. These caps are a
second way to limit the potential GHG
benefit losses associated with the
incentive program and therefore are
another response to the concerns that
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the proposed incentives were excessive
and could significantly undermine the
program’s GHG benefits. If, for example,
500,000 EVs were produced in 2012–
2016 that qualified for the zero grams/
mile compliance value, the loss in GHG
benefits due to this program would be
about 25 million metric tons, or less
than 3 percent of the total projected
GHG benefits of this program.233 The
rationale for these caps is that the
incentive for EVs, PHEVs, and FCVs is
most critical when individual
automakers are beginning to introduce
advanced technologies in the market,
and less critical once individual
automakers have successfully achieved
a reasonable market share and
technology costs decline due to higher
production volumes and experience.
EPA believes that cap levels of 200,000–
300,000 vehicles over a five model year
period are reasonable, as production
greater than this would indicate that the
manufacturer has overcome at least
some of the initial market barriers to
these advanced technologies. Further,
EPA believes that it is unlikely that
many manufacturers will approach
these cap levels in the 2012–2016
timeframe.234
Production beyond the cumulative
vehicle production cap for a given
manufacturer in MY 2012–2016 would
have its compliance values calculated
according to a methodology that
accounts in full for the net increase in
upstream GHG emissions. For an EV, for
example, this would involve: (1)
Measuring the vehicle electricity
consumption in watt-hours/mile over
the 2-cycle test (in the example
introduced earlier, a midsize EV might
have a 2-cycle test electricity
consumption of 230 watt-hours/mile),
(2) adjusting this watt-hours/mile value
upward to account for electricity losses
during transmission and vehicle
charging (dividing 230 watt-hours/mile
by 0.93 to account for grid/transmission
losses and by 0.90 to reflect losses
during vehicle charging yields a value of
275 watt-hours/mile), (3) multiplying
the adjusted watt-hours/mile value by a
233 See Regulatory Impact Analysis, Appendix
5.B. While it is, of course, impossible to predict the
number of EVs, PHEVs, and FCVs that will be
produced between 2012 and 2016 with absolute
certainty, EPA believes that 500,000 ‘‘un-capped’’
EVs is an optimistic scenario. Fewer EVs, or a
combination of 500,000 EVs and PHEVs, would
lessen the short-term reduction in GHG benefits.
Production of more than 500,000 ‘‘un-capped’’ EVs
would increase the short-term reduction in GHG
benefits.
234 Fundamental power train changes in the
automotive market typically evolve slowly over
time. For example, over ten years after the U.S.
introduction of the first conventional hybrid
electric vehicle, total hybrid sales are
approximately 300,000 units per year.
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nationwide average electricity upstream
GHG emissions rate of 0.642 grams/
watt-hour at the powerplant 235 (275
watt-hours/mile multiplied by 0.642
grams GHG/watt-hour yields 177 grams/
mile), and 4) subtracting the upstream
GHG emissions of a comparable midsize
gasoline vehicle of 56 grams/mile to
reflect a true net increase in upstream
GHG emissions (177 grams/mile for the
EV minus 56 grams/mile for the gasoline
vehicle yields a net increase and EV
compliance value of 121 grams/
mile).236 237 The full accounting
methodology for the portion of PHEV
operation on grid electricity would use
this same approach.
EPA projects that the aggregate impact
of the incentive program on advanced
technology vehicle GHG compliance
values will be similar to the way
advanced technologies are treated under
DOT’s CAFE program. In the CAFE
program, the mpg value for an EV is
determined using a ‘‘petroleum
equivalency factor’’ that has a 1/0.15
factor built into it similar to the flexible
fuel vehicle credit.238 For example,
under current regulations, an EV with a
2-cycle electricity consumption of 230
235 The nationwide average electricity upstream
GHG emissions rate of 0.642 grams GHG/watt-hour
was calculated from 2005 nationwide powerplant
data for CO2, CH4, and N2O emissions from
eGRID2007 (https://www.epa.gov/cleanenergy/
energy-resources/egrid/), converting to
CO2 -e using Global Warming Potentials of 25 for
CH4 and 298 for N2O, and multiplying by a factor
of 1.06 to account for GHG emissions associated
with feedstock extraction, transportation, and
processing (based on Argonne National Laboratory’s
The Greenhouse Gases, Regulated Emissions, and
Energy Use in Transportation (GREET) Model,
Version 1.8c.0, available at https://
www.transportation.anl.gov/modeling_simulation/
GREET/). EPA Docket EPA–HQ–OAR–2009–0472.
EPA recognizes that there are many issues involved
with projecting the electricity upstream GHG
emissions associated with future EV and PHEV use
including, but not limited to, average vs marginal,
daytime vs nighttime vehicle charging, geographical
differences, and changes in future electricity
feedstocks. EPA chose to use the 2005 national
average value because it is known and
documentable. Values appropriate for future vehicle
use may be higher or lower than this value. EPA
will reevaluate this value in future rulemakings.
236 A midsize gasoline vehicle with a footprint of
45 square feet would have a MY 2016 GHG target
of about 225 grams/mile; dividing 8887 grams CO2/
gallon of gasoline by 225 grams/mile yields an
equivalent fuel economy level of 39.5 mpg; and
dividing 2208 grams upstream GHG/gallon of
gasoline by 39.5 mpg yields a midsize gasoline
vehicle upstream GHG value of 56 grams/mile. The
2208 grams upstream GHG/gallon of gasoline is
calculated from 19,200 grams upstream GHG/
mmBtu (Renewable Fuel Standard Program,
Regulatory Impact Analysis, Section 2.5.8, February
2010) and multiplying by 0.115 mmBtu/gallon of
gasoline.
237 Manufacturers can utilize alternate calculation
methodologies if shown to yield equivalent or
superior results and if approved in advance by the
Administrator.
238 65 FR 36987 (June 12, 2000).
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watt-hours/mile would have a CAFE
rating of about 360 miles per gallon,
which would be equivalent to a gasoline
vehicle GHG emissions value of 25
grams/mile, which is close to EPA’s zero
grams/mile for EV production that is
below an individual automaker’s
cumulative vehicle production cap. The
exception would be if a manufacturer
exceeded its cumulative vehicle
production cap during MY 2012–2016.
Then, the same EV would have a GHG
compliance value of about 120 grams/
mile, which would be significantly
higher than the 25 gram/mile implied by
the 360 mile/gallon CAFE value.
EPA disagrees with Nissan that
excluding upstream GHGs is legally
required under section 202(a)(1). In this
rulemaking, EPA is adopting standards
under section 202(a)(1), which provides
EPA with broad discretion in setting
emissions standards. This includes
authority to structure the emissions
standards in a way that provides an
incentive to promote advances in
emissions control technology. This
discretion includes the adjustments to
compliance values adopted in the final
rule, the multipliers we proposed, and
other kinds of incentives. EPA
recognizes that we have not previously
made adjustments to a compliance value
to account for upstream emissions in a
section 202(a) vehicle emissions
standard, but that does not mean we do
not have authority to do so in this case.
In addition, EPA is not directly
regulating upstream GHG emissions
from stationary sources, but instead is
deciding how much value to assign to
a motor vehicle for purposes of
compliance calculations with the motor
vehicle standard. While the logical
place to start is the emissions level
measured under the test procedure,
section 202(a)(1) does not require that
EPA limit itself to only that level. For
vehicles above the production volume
cap described above, EPA will adjust
the measured value to a level that
reflects the net difference in upstream
GHG emissions compared to a
comparable conventional vehicle. This
will account for the actual GHG
emissions increase associated with the
use of the EV. As shown above,
upstream GHG emissions attributable to
increased electricity production to
operate EVs or PHEVs currently exceed
the upstream GHG emissions
attributable to gasoline vehicles. There
is a rational basis for EPA to account for
this net difference, as that best reflects
the real world effect on the air pollution
problem we are addressing. For vehicles
above the cap, EPA is reasonably and
fairly accounting for the incremental
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increase in upstream GHG emissions
from both the electric vehicles and the
conventional vehicles. EPA is not, as
Nissan suggested, arbitrarily counting
upstream emissions for electric vehicles
but not for conventional fuel vehicles.
EPA recognizes that every motor
vehicle fuel and fuel production process
has unique upstream GHG emissions
impacts. EPA has discretion in this
rulemaking under section 202(a) on
whether to account for differences in net
upstream GHG emissions relative to
gasoline produced from oil, and intends
to only consider upstream GHG
emissions for those fuels that have
significantly higher or lower GHG
emissions impacts. At this time, EPA is
only making such a determination for
electricity, given that, as shown above
in the example for a midsize car,
electricity upstream GHG emissions are
about three times higher than gasoline
upstream GHG emissions. For example,
the difference in upstream GHG
emissions for both diesel fuel from oil
and CNG from natural gas are relatively
small compared to differences
associated with electricity. Nor is EPA
arbitrarily ignoring upstream GHG
emissions of flexible fuel vehicles
(FFVs) that can operate on E85. Data
show that, on average, FFVs operate on
gasoline over 99 percent of the time, and
on E85 fuel less than 1 percent of the
time.239 EPA’s recently promulgated
Renewable Fuel Standard Program
shows that, with respect to aggregate
lifecycle emissions including nontailpipe GHG emissions (such as
feedstock growth, transportation, fuel
production, and land use), lifecycle
emissions for ethanol from corn using
advanced production technologies are
about 20 percent less GHG than gasoline
from oil.240 Given this difference, and
that E85 is used in FFVs less than 1
percent of the time, EPA has concluded
that it is not necessary to adopt a more
complicated upstream accounting for
FFVs. Accordingly, EPA’s incentive
approach here is both reasonable and
authorized under section 202(a)(1).
In summary, EPA believes that this
program for MY 2012–2016 strikes a
reasoned balance by providing a
temporary regulatory incentive to help
promote commercialization of advanced
vehicle technologies which are potential
game-changers, but which also face
major barriers, while effectively
minimizing potential GHG losses by
dropping the proposed multiplier and
adding individual automaker
239 Renewable Fuel Standard Program (RFS2),
Regulatory Impact Analysis, Section 1.7.4, February
2010.
240 75 FR 14670 (March 26, 2010).
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production volume caps. In the future,
if there were a program to control utility
GHG emissions, then these advanced
technology vehicles have the potential
to produce very large reductions in GHG
emissions, and to transform the
transportation sector’s contribution to
nationwide GHG emissions. EPA will
reassess the issue of how to address
EVs, PHEVs, and FCVs in rulemakings
for model years 2017 and beyond based
on the status of advanced vehicle
technology commercialization, the
status of upstream GHG control
programs, and other relevant factors.
Finally, the criteria and definitions for
what vehicles qualify for the advanced
technology vehicle incentives are
provided in Section III.E. These
definitions for EVs, PHEVs, and FCVs
ensure that only credible advanced
technology vehicles are provided the
incentives.
4. Off-Cycle Technology Credits
As proposed, EPA is adopting 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 significantly
captured over the 2-cycle test procedure
used to determine compliance with the
fleet average standards (i.e., ‘‘offcycle’’).241 Eligible innovative
technologies are 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 do not provide novel
approaches to reducing greenhouse gas
emissions. Manufacturers must obtain
EPA approval for new and innovative
technologies at the time of vehicle
certification in order to earn credits for
these technologies at the end of the
model year. This approval must include
the testing methodology to be used for
quantifying credits. Further, any credits
for these off-cycle technologies must be
based on real-world GHG reductions not
significantly captured on the current 2cycle 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 by increasing A/C efficiency,
eligible technologies would not be
primarily active during the 2-cycle test
and therefore the associated
improvements in CO2 emissions would
not be significantly captured. Because
these technologies are not nearly so well
developed and understood, EPA is not
241 See
final regulations at 40 CFR 86.1866–12(d).
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prepared to consider them in assessing
the stringency of 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 adequately
captured on the FTP or HFET. EPA
believes that manufacturers should be
able to generate credit for the emission
reductions these technologies actually
achieve, assuming these reductions can
be adequately demonstrated and
verified. 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, that bona fide reductions
from these technologies should be
considered in determining a
manufacturer’s fleet average, 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 received comments from a few
manufacturers that the ‘‘new and
innovative’’ criteria should be
broadened. The commenters pointed out
that there are technologies already in
the marketplace that would provide
emissions reductions off-cycle and that
their use should be incentivized. One
manufacturer suggested that off-cycle
credits should be given for start-stop
technologies. EPA does not agree that
this technology, which EPA’s modeling
projects will be widely used by
manufacturers in meeting the CO2
standards, should qualify for off-cycle
credits. Start-stop technology already
achieves a significant CO2 benefit on the
current 2-cycle tests, which is why
many manufacturers have announced
plans to adopt it across large segments
of the fleet. EPA recognizes there may
be additional benefits to start-stop
technology beyond the 2-cycle tests
(e.g., heavy idle use), and that this is
likely the case for other technologies
that manufacturers will rely on to meet
the MY 2012–2016 standards. EPA
plans to continue to assess the off-cycle
potential for these technologies in the
future. However, EPA does not believe
that off-cycle credits should be granted
for technologies which we expect
manufacturers to rely on in widespread
use throughout the fleet in meeting the
CO2 standards. Such credits could lead
to double counting, as there is already
significant CO2 benefit over the 2-cycle
tests. EPA expects that most if not all
technologies that reduce CO2 emission
on the 2-cycle test will also reduce CO2
emissions during the wide variety of in-
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use operation that is not directly
captured in the 2-cycle test. This is no
different than what occurs from the
control technology on vehicles for
criteria pollutants. We expect that the
catalytic converter and other emission
control technology will operate to
reduce emissions throughout in-use
driving, and not just when the vehicle
is tested on the specified test procedure.
The aim for this off-cycle credit
provisions is to provide an incentive for
technologies that normally would not be
chosen as a GHG control strategy, as
their GHG benefits are not measured on
the specified 2-cycle test. It is not
designed to provide credits for
technology that does provide significant
GHG benefits on the 2-cycle test and as
expected will also typically provide
GHG benefits in other kinds of
operation. Thus, EPA is finalizing the
‘‘new and innovative’’ criteria as
proposed. That is, the potential to earn
off-cycle credits will be limited to those
technologies that are new and
innovative, are introduced in only a
limited number of vehicle models (i.e.,
not in widespread use), and are not
captured on the current 2-cycle tests.
This approach will encourage future
innovation, which may lead to the
opportunity for future emissions
reductions.
As proposed, manufacturers would
quantify CO2 reductions associated with
the use of the innovative off-cycle
technologies such that the credits could
be applied on a g/mile equivalent basis,
as is the case with A/C system
improvements. Credits must be based on
real additional reductions of CO2
emissions and must be quantifiable and
verifiable with a repeatable
methodology. As proposed, 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 must
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 finalizing
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 must
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
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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 must
follow the procedures described below
(as codified in today’s rules). 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. As discussed
below, EPA is also providing
opportunity for public comment as part
of the approval process for such non-5cycle credits.
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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,242
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.
EPA continues to believe that the use
of these supplemental cycles may
provide a method by which
technologies not demonstrated on the
242 Fuel Economy Labeling of Motor Vehicles:
Revisions to Improve Calculation of Fuel Economy
Estimates; Final Rule (71 FR 77872, December 27,
2006).
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baseline 2-cycles can be quantified and
is finalizing this approach as proposed.
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.
Although A/C credits for efficiency
improvements will largely be captured
in the A/C credits provisions through
the credit menu of known efficiency
improving components and controls,
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.
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
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25439
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 regulatory
evaluation/approval process will be
relatively simple. The manufacturer will
simply test vehicles with and without
the technology installed or operating
and compare results. All 5-cycles must
be tested with the technology enabled
and disabled, and the test results will be
used to calculate a combined city/
highway CO2 value with the technology
and without the technology. These
values will then be compared to
determine the amount of the credit; the
combined city/highway CO2 value with
the technology operating will 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 will need to be performed in
order to achieve the necessary strong
degree of statistical significance of the
credit determination results. This will
have to be done for each model type for
which a credit is 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
will 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 will be multiplied
by the total production of vehicles
subject to that value to determine the
total number of credits.
EPA received a few comments
regarding the 5-cycle approach. While
not commenting directly on the 5-cycle
testing methodology, the Alliance raised
general concerns that the proposed
approach did not offer manufacturers
enough certainty with regard to credit
applications and testing in order to take
advantage of the credits. The Alliance
further commented that the proposal
did not provide a level playing field to
all manufacturers in terms of possible
credit availability. The Alliance
recommended that rather than
attempting to quantify CO2 reductions
with a prescribed test procedure on
unknown technologies, EPA should
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handle credit applications and testing
guidelines via future guidance letters, as
technologies emerge and are developed.
EPA believes that 5-cycle testing
methodology is one clear and objective
way to demonstrate certain off-cycle
emissions control technologies, as
discussed above. It provides certainty
with regard to testing, and is available
for all manufacturers. As discussed
below, there are also other options for
manufactures where the 5-cycle test is
not appropriate. EPA is retaining this as
a primary methodology for determining
off-cycle credits. For technologies not
able to be demonstrated on the 5-cycle
test, EPA is finalizing an approach that
will include a public comment
opportunity, as discussed below, which
we believe addresses commenter
concerns regarding maintaining a level
playing field.
b. Alternative Off-Cycle Credit
Methodologies
As proposed, in cases where the
benefit of a technological approach to
reducing CO2 emissions can not be
adequately represented using existing
test cycles, manufacturers will need to
develop test procedures and analytical
approaches to estimate the effectiveness
of the technology for the purpose of
generating credits. As discussed above,
the first step must be a thorough
assessment of whether the 5-cycle
approach can be used to demonstrate a
reduction in emissions. If EPA
determines that the 5-cycle process is
inadequate for the specific technology
being considered by the manufacturer
(i.e., the 5-cycle test does not
demonstrate any emissions reductions),
then an alternative approach may be
developed and submitted to EPA for
approval. The demonstration program
must 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
electrical power could be 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
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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
will be required to present a proposed
methodology to EPA. EPA will approve
the methodology and credits only if
certain criteria are met. Baseline
emissions and control emissions must
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. The analytical approach must be
robust, verifiable, and capable of
demonstrating the real-world emissions
benefit with strong statistical
significance. Data must be on a vehicle
model-specific basis unless a
manufacturer demonstrated model
specific data was not necessary.
Approval of the approach to
determining a CO2 benefit will not
imply approval of the results of the
program or methodology; when the
testing, modeling, or analyses are
complete the results will 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.
In addition, EPA received several
comments recommending that the
approval process include an
opportunity for public comment. As
noted above, some manufacturers are
concerned that there be a level playing
field in terms of all manufacturers
having a reasonable opportunity to earn
credits under an approved approach.
Commenters also want an opportunity
for input in the methodology to ensure
the accuracy of credit determinations for
these technologies. Commenters point
out that there are a broad number of
stakeholders with experience in the
issues pertaining to the technologies
that could add value in determining the
most appropriate method to assess these
technologies’ performance. EPA agrees
with these comments and is including
an opportunity for public comment as
part of the approval process. If and
when EPA receives an application for
off-cycle credits using an alternative
non 5-cycle methodology, EPA will
publish a notice of availability in the
Federal Register with instructions on
how to comment on draft off-cycle
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credit methodology. The public
information available for review will
focus on the methodology for
determining credits but the public
review obviously is limited to nonconfidential business information. The
timing for final approval will depend on
the comments received. EPA also
believes that a public review will
encourage manufacturers to be thorough
in their preparation prior to submitting
their application for credits to EPA for
approval. EPA will take comments into
consideration, and where appropriate,
work with the manufacturer to modify
their approach prior to approving any
off-cycle credits methodology. EPA will
give final notice of its determination to
the general public as well as the
applicant. Off-cycle credits would be
available in the model year following
the final approval. Thus, it will be
imperative for a manufacturer pursuing
this option to begin the process as early
as possible.
EPA also received comments that the
off-cycle credits highlights the
inadequacy of current test procedures,
and that there is a clear need for
updated certification test procedures. As
discussed in Section III. B., EPA
believes the current test procedures are
adequate for implementing the
standards finalized today. However,
EPA is interested in improving test
procedures in the future and believes
that the off-cycle credits program has
the potential to provide useful data and
insights both for the 5-cycle test
procedures and also other test
procedures that capture off-cycle
emissions.
5. Early Credit Options
EPA is finalizing a program to allow
manufacturers to generate early credits
in model years 2009–2011.243 As
described below, credits may be
generated through early additional fleet
average CO2 reductions, early A/C
system improvements, early advanced
technology vehicle credits, and early
off-cycle credits. As with other credits,
early credits are subject to a five year
carry-forward limit based on the model
year in which they are generated.
Manufacturers may transfer early credits
between vehicle categories (e.g.,
between the car and truck fleet). With
the exception of MY 2009 early program
credits, as discussed below, a
manufacturer may trade other early
credits to other manufacturers without
limits. The agencies note that CAFE
credits earned in MYs prior to MY 2011
will still be available to manufacturers
243 See
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for use in the CAFE program in
accordance with applicable regulations.
EPA is not adopting certification,
compliance, or in-use requirements for
vehicles generating early credits. Since
manufacturers are already certifying MY
2010 and in some cases even MY 2011
vehicles, doing so would make
certification, compliance, and in-use
requirements unworkable. As discussed
below, manufacturers are required to
submit an early credits report to EPA for
approval no later than 90 days after the
end of MY 2011. This report must
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.
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a. Credits Based on Early Fleet Average
CO2 Reductions
As proposed, EPA is finalizing
opportunities for early credit generation
in MYs 2009–2011 through overcompliance with a fleet average CO2
baseline established by EPA. EPA is
finalizing four pathways for doing so. In
order to generate early CO2 credits,
manufacturers must select one of the
four paths for credit generation for the
entire three year period and may not
switch between pathways for different
model years. For two pathways, EPA is
establishing the baseline 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,
include credits based on overcompliance with CAFE standards in
states that have not adopted the
California standards.
EPA received comments from
manufacturers in support of the early
credits program as a necessary
compliance flexibility. The Alliance
commented that the early credits reward
manufacturers for providing fleet
performance that exceeds California and
Federal standards and do not result in
a windfall. AIAM commented that early
credits are essential to assure the
feasibility of the proposed standards
and the need for such credits must be
evaluated in the context of the dramatic
changes the standards will necessitate
in vehicle design and the current
economic environment in which
manufacturers are called upon to make
the changes. Manufacturers also
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supported retaining all four pathways,
commenting that eliminating pathways
would diminish the flexibility of the
program. EPA also received comments
from many environmental organizations
and states that the program would
provide manufacturers with windfall
credits because manufacturers will not
have to take any steps to earn credits
beyond those that are already planned
and in some cases implemented. These
commenters were particularly
concerned that the California truck
standards in MY 2009 are not as
stringent as CAFE, so overcompliance
with the California standards could be
a windfall in MY 2009, and possibly
even MY 2010. These commenters
supported an early credits program
based on overcompliance with the more
stringent of either the CAFE or
California standards in any given year.
EPA is retaining the early credits
program because EPA judges that they
are not windfall credits, and
manufacturers in some cases have
reasonably relied on the availability of
these credits, and have based early
model year compliance strategies on
their availability so that the credits are
needed to provide adequate lead for the
initial years of the program. However, as
discussed below, EPA is restricting
credit trading for MY 2009 credits
earned under the California-based
pathways.
Manufacturers selecting Pathway 1
will generate credits by over-complying
with the California equivalent baseline
established by EPA over the
manufacturer’s fleet of vehicles sold
nationwide. Manufacturers selecting
Pathway 2 will generate credits against
the California equivalent baseline only
for the fleet of vehicles sold in
California and the CAA section 177
states.244 This approach includes all
CAA 177 states as of the date of
promulgation of the Final Rule in this
proceeding. Manufacturers are required
to include both cars and trucks in the
program. Under Pathways 1 and 2, EPA
is requiring manufacturers to cover any
deficits incurred against the baseline
levels established by EPA during the
244 CAA 177 states refers to states that have
adopted the California GHG standards. At present,
there are thirteen CAA 177 states: New York,
Massachusetts, Maryland, Vermont, Maine,
Connecticut, Arizona, New Jersey, New Mexico,
Oregon, Pennsylvania, Rhode Island, Washington,
as well as Washington, DC.
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25441
three year period 2009–2011 before
credits can 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 including 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. In its comments, California
supported such an approach.
Table III.C.5–1 provides the California
equivalent baselines EPA is finalizing to
be used as the basis for CO2 credit
generation under the California-based
pathways. These are the California GHG
standards for the model years shown.
EPA proposed to adjust the California
standards by 2.0 g/mile to account for
the exclusion of N2O and CH4, which
are included in the California GHG
standards, but not included in the
credits program. EPA received
comments from one manufacturer that
this adjustment is in error and should
not be made. The commenter noted that
EPA already includes total
hydrocarbons in the carbon balance
determination of carbon related exhaust
emissions and therefore already
accounts for CH4. EPA also includes CO
in the carbon related exhaust emissions
determination which acts to offset the
need for an N20 adjustment. The
commenter noted that THC and CO add
about 0.8 to 3.0 g/mile to the
determination of carbon related
emissions and therefore EPA should not
make the 2.0g/mile adjustment. The
commenter is correct, and therefore the
final levels shown in the table below are
2.0 g/mile higher than proposed. These
comments are further discussed in the
Response to Comments document.
Manufacturers will 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 Californiabased baseline levels are not footprintbased, but universal levels that all
manufacturers would use.
Manufacturers will need to achieve fleet
levels below those shown in the table in
order to earn credits, using the
California vehicle category definitions.
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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
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2009 .........................................................................................................................
2010 .........................................................................................................................
2011 .........................................................................................................................
Manufacturers using Pathways 1 or 2
above will use year-end car and truck
sales in each category. Although
production data is used for the program
starting in 2012, EPA is using sales data
for the early credits program in order to
apportion vehicles by State. This is
described further below. Manufacturers
must 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 are 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,
will be included in the fleet average
level determination. In model year 2009,
the California CO2 standard for cars (323
g/mi CO2) is equivalent to 323 g/mi CO2,
and the California light-truck 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 program categorize vehicles.
Manufacturers are required 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 received comments that this
approach will provide windfall credits
to manufacturers because the MY 2009
California light truck standards are less
stringent than the corresponding CAFE
standards. While this could be accurate
if credits were based on performance in
just MY 2009, that is not how credits are
determined. Credits are based on the
performance over a three model year
period, MY 2009–2011. As noted in the
proposal, 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
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323
301
267
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. Some
commenters were very concerned about
this issue and commented in support of
restricting credit trading between firms
of MY 2009 credits based on the
California program. EPA requested
comments on this approach and is
finalizing this credit trading restriction
based on continued concerns regarding
the issue of windfall credits. 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. Therefore,
manufacturers selecting Pathways 1, 2,
or 3 will not be allowed to trade any MY
2009 credits that they may generate.
Commenters also recommended
basing credits on the more stringent of
the standards between CAFE and CARB,
which for MY 2009, would be the CAFE
standards. However, EPA believes that
this would not be necessary in light of
the credit provisions requiring
manufacturers choosing the California
based pathways to use the California
pathway for all three MYs 2009–2011,
and the credit trading restrictions for
MY 2009 discussed above.
In addition, for Pathways 1 and 2,
EPA is allowing manufacturers to
include alternative compliance credits
earned per the California alternative
compliance program.245 These
alternative compliance credits are based
on the demonstrated use of alternative
fuels in flex fuel vehicles. As with the
245 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.
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Light trucks with a LVW
of 3,751 or more and a
GVWR of up to
8,500 lbs plus medium-duty
passenger vehicles
439
420
390
California program, the credits are
available beginning in MY 2010.
Therefore, these early alternative
compliance credits are available under
EPA’s program for the 2010 and 2011
model years. FFVs are otherwise
included in the early credit fleet average
based on their emissions on the
conventional fuel. This does not apply
to EVs and PHEVs. The emissions of
EVs and PHEVs are to be determined as
described in Section III.C.3.
Manufacturers may 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 finalizing 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 allows manufacturers to earn
credits as under Pathway 2, plus earn
CAFE-based credits in other states.
Credits may not be generated for cars
sold in California and CAA 177 states
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 is for manufacturers
choosing to forego California-based
early credits entirely and earn only
CAFE-based credits outside of California
and CAA 177 states. Manufacturers may
not include FFV credits under the
CAFE-based early credit pathways since
those credits do not automatically
reflect actual reductions in CO2
emissions.
The baselines for CAFE-based 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
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standards.246 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 will calculate a baseline
using the footprints and sales of
vehicles outside of California and CAA
177 states. The actual fleet CO2
performance calculation will also only
25443
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.
* Must be footprint-based standard for manufacturers selecting footprint option under CAFE.
For the CAFE-based pathways, EPA is
using 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 therefore
changes part way through the early
credits program. EPA further recognizes
that medium-duty passenger vehicles
(MDPVs) are not part of the CAFE
program until the 2011 model year, and
therefore are not 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
requires 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 the country.247
As with NLEV, the determination is to
be based on where the completed
vehicles are delivered as a point of first
sale, which in most cases would be the
dealer.248
As noted above, manufacturers
choosing to generate early CO2 credits
must select one of the four pathways for
the entire early credits program and
would not be able to switch among
them. Manufacturers must submit their
early credits report to EPA when they
submit their final CAFE report for MY
2011 (which is required to be submitted
no later than 90 days after the end of the
model year). Manufacturers will have
until then to decide which pathway to
select. This gives 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 finalizing:
TABLE III.C.5–3—SUMMARY OF 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.
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Pathway 4: Only CAFE-based Credits outside of California plus CAA 177 States.
246 74
FR 14196, March 30, 2009.
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—Manufacturers 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.
FR 31211, June 6, 1997.
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248 62
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FR 31212, June 6, 1997.
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b. Early A/C Credits
As proposed, EPA is finalizing
provisions allowing manufacturers to
earn early A/C credits in MYs 2009–
2011 using the same A/C system designbased EPA provisions being finalized for
MYs commencing in 2012, as described
in Section III.C.1, above. Manufacturers
will be able to earn early A/C CO2equivalent 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 must be included in one of the
California-based early credit pathways
described above in III.C.5.a. EPA is
finalizing 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 must fold the A/C credits
into the fleet average CO2 calculations
under the California-based pathway. For
example, the MY 2009 California-based
program car baseline would be 323
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 12 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. The
early A/C credits for vehicles sold
outside of California and 177 states are
based on the NHTSA vehicle categories
established for the model year in which
early A/C credits are being earned.
c. Early Advanced Technology Vehicle
Incentive
As discussed in Section III.C.3, above,
EPA is finalizing an incentive for sales
of advanced technology vehicles
including EVs, PHEVs, and fuel cell
vehicles. EPA is not including a
multiplier for these vehicles. However,
EPA is allowing the use of the 0 g/mile
value for electricity operation for up to
200,000 vehicles per manufacturer (or
300,000 vehicles for any manufacturer
that sells 25,000 or more advanced
technology vehicles in MY 2012). EPA
believes that providing an incentive for
the sales of such vehicles prior to MY
2012 is consistent with the goal
encouraging the introduction of such
vehicles as early as possible. Therefore,
manufacturers may use the 0 g/mile
value for vehicles sold in MY 2009–
2011 consistent with the approach being
finalized for MY 2012–2016. Any
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vehicles sold prior to MY 2012 under
these provisions must be counted
against the cumulative sales cap of
200,000 (or 300,000, if applicable)
vehicles. Manufacturers selling such
vehicles in MY 2009–2011 have the
option of either folding them into the
early credits calculation under
Pathways 1 through 4 described in
III.C.5.a above, or tracking the sales of
these vehicles separately for use in their
fleetwide average compliance
calculation in MY 2012 or later years,
but may not do both as this would lead
to double counting. Manufacturers
tracking the sales of vehicles not folded
into Pathways 1–4, may choose to use
the vehicle counts along with the
0 g/mi emissions value (up to the
applicable vehicle sales cap) to comply
with 2012 or later standards. For
example, if a manufacturer sells 1,000
EVs in MY 2011, the manufacturer
would then be able to include 1,000
vehicles at 0 g/mile in their MY 2012
fleet to decrease the fleet average for
that model year. Again, these 1,000
vehicles would be counted against the
cumulative cap of 200,000 or 300,000,
as applicable, vehicles. Also, these
1,000 EVs would not be included in the
early credit pathways discussed above
in Section III.C.5.a, otherwise the
vehicles would be double counted. As
with early credits, these early advanced
technology vehicles will be tracked by
model year (2009, 2010, or 2011) and
subject to the 5-year carry-forward
restrictions.
d. Early Off-Cycle Credits
EPA’s is finalizing off-cycle
innovative technology credit provisions,
as described in Section III.C.4. EPA
requested 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. EPA
is finalizing this approach for early offcycle credits as a way to encourage
innovation to lower emissions as early
as possible, including the requirements
for public review described in Section
III.C.4. Upon EPA approval of a
manufacturer’s application for credits,
the credits may be earned retroactively.
EPA did not receive comments
specifically on early off-cycle credits.
D. Feasibility of the Final CO2
Standards
This final rule 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 for MY 2012–2016
vehicles. As in many prior mobile
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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 factors 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) To transport the
vehicle, its passengers and its contents
(and any towed loads), and (2) to
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, and the proposed and now final
standards reflect this basic paradigm. 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 as well.
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
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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, but this is not a
necessary consequence of the rule but
rather a matter of automaker choice.
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
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 final 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 set of 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
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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. The
Center for Biological Diversity
commented on EPA’s assumptions on
redesign cycles, and these comments are
addressed in Section III.D.7 below.
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
packaging in the vehicle, changes in
vehicle shape to improve aerodynamic
efficiency and the application of
aluminum (and other lightweight
materials) 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 final 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 final rule
with the requirements of this final rule
in mind. In fact, the lead time available
for the start of model year 2012 (January
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25445
2011) is relatively short, less than a
year. The time between this final rule
and the start of 2013 model year
(January 2012) production is under 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 final 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 uses
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 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 final rule
is commercially available and already
being employed to a limited extent
across the fleet (although the final rule
will necessitate far wider penetration of
these technologies throughout the fleet).
The vast majority of the emission
reductions which will result from this
final rule will be produced from the
increased use of these technologies. EPA
also believes that this final rule will
encourage the development and limited
use of more advanced technologies,
such as PHEVs and EVs, and the final
rule is structured to facilitate this result.
In developing the final 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
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Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
require for the subset of vehicles sold in
California under Pavley 1. In essence,
EPA developed an assessment of an
equivalent national new vehicle fleetwide 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 RIA. 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 will
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 (described in more detail below),
and the car and truck footprint curves’
relative stringency discussed in Section
II to determine what technology will 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 light-duty
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 final MY 2012–2016 standards is
described below. EPA has also
evaluated a set of alternative standards
for these model years, one that is more
stringent than the final 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
into their products, and the appropriate
lead time needed to employ the
technology over the product line of the
industry must be considered.
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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.
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 final 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
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 will add technology
to their vehicles in order to comply with
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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 Joint Technical
Support Document as well as EPA’s
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 final rule, it is necessary to project
the GHG emissions characteristics of the
future vehicle fleet absent this
regulation. This is called the ‘‘reference’’
fleet. EPA and NHTSA develop this
reference fleet using a three step
process. Step one develops a set of
detailed vehicle characteristics and
sales for a specific model year (in this
case, 2008). This is called the baseline
fleet. Step two adjusts the sales of these
vehicles using projections made by AEO
and CSM to account for expected
changes in market conditions. Step
three applies fuel saving and emission
control technology to these vehicles to
the extent necessary for manufacturers
to comply with the MY 2011 CAFE
standards. Thus, the reference fleet
differs from the MY 2008 baseline fleet
in both the level of technology utilized
and in terms of the sales of any
particular vehicle.
EPA and NHTSA perform steps one
and two in an identical manner. The
development of the characteristics of the
baseline 2008 fleet and the adjustment
of sales to match AEO and CSM
forecasts is described in detail in
Section II.B above. The two agencies
perform step three in a conceptually
identical manner, but each agency
utilizes its own vehicle technology and
emission model to project the
technology needed to comply with the
2011 CAFE standards. The agencies use
the same two models to project the
technology and cost of the 2012–2016
standards. Use of the same model for
both pre-control and post-control costs
ensures consistency.
The agencies received one comment
from the Center for Biological Diversity
that the use of 2008 vehicles in our
baseline and reference fleets inherently
includes vehicle models which already
have or will be discontinued by the time
this rule takes effect and will be
replaced by more advanced vehicle
models. This is true. However, we
believe that the use of 2008 vehicle
designs is still the most appropriate
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approach available. First, as discussed
in Section II.B above, the designs of
these new vehicles at the level of detail
required for emission and cost modeling
are not publically available. Even the
confidential descriptions of these
vehicle designs are usually not of
sufficient detail to facilitate the level of
technology and emission modeling
performed by both agencies. Second,
steps two and three of the process used
to create the reference fleet adjust both
the sales and technology of the 2008
vehicles. Thus, our reference fleet
reflects the extent that completely new
vehicles are expected to shift the light
vehicle market in terms of both segment
and manufacturer. Also, by adding
technology to facilitate compliance with
the 2011 CAFE standards, we account
for the vast majority of ways in which
these new vehicles will differ from their
older counterparts.
The agencies also received a comment
that some manufacturers have already
announced plans to introduce
technology well beyond that required by
the 2011 MY CAFE standards. This
commenter indicated that the agencies’
approach over-estimated the technology
and cost required by the proposed
standards and resulted in less stringent
standards being proposed than a more
realistic reference fleet would have
supported. First, the agencies agree that
limiting the application of additional
technology beyond that already on 2008
vehicles to only that required by the
2011 CAFE standards could underestimate the use of such technology
absent this rule. However, it is difficult,
if not impossible, to separate future fuel
economy improvements made for
marketing purposes from those designed
to facilitate compliance with anticipated
CAFE or CO2 emission standards. For
example, EISA was signed over two
years ago, which contained specific
minimum limits on light vehicle fuel
economy in 2020, while also requiring
ratable improvements in the interim.
NHTSA proposed fuel economy
standards for the 2012–2015 model
years under the EISA provisions in
April of 2008, although NHTSA
finalized only 2011 standards for
passenger vehicles. It is also true that
manufacturers can change their plans
based on market conditions and other
factors. Thus, announcements of future
plans are not certain. As mentioned
above, these plans do not include
specific vehicle characteristics. Thus, in
order to avoid under-estimating the cost
associated with this rule, the agencies
have limited the fuel economy
improvements in the reference fleet to
those projected to result from the
existing CAFE standards. We disagree
with the commenter that this has caused
the standards being promulgated today
to be less stringent than would have
been the case had we been able to
confidently predict additional fuel
economy and CO2 emission
improvements which will occur absent
this rule. The inclusion of such
technology in the reference fleet would
certainly have reduced the cost of this
final rule, as well as the benefits, but
would not have changed the final level
of technology required to meet the final
standards. Also, we believe that the
same impacts would apply to our
evaluations of the two alternative sets of
standards, the 4% per year and 6% per
year standards. We are confident that
the vast majority of manufacturers
would not comply with the least
stringent of these standards (the 4% per
year standards) in the absence of this
rule. Thus, changes to the reference fleet
would not have affected the differences
in technology, cost or benefits between
the final standards and the two
alternatives. As described below, our
25447
rejection of the two alternatives in favor
of the final standards is based primarily
on the relative technology, cost and
benefits associated with the three sets of
standards than the absolute cost or
benefit relative to the reference fleet.
Thus, we do not agree with the
commenter that our choice of reference
fleet adversely impacted the
development of the final standards
being promulgated today.
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 final CO2
emission standards. In summary, the
reference fleet represents vehicle
characteristics and sales in the 2012 and
later model years absent this final rule.
Technology is then added to these
vehicles in order to reduce CO2
emissions to achieve compliance with
the final CO2 standards. As noted above,
EPA did not factor in any changes to
vehicle utility or characteristics, or sales
in projecting manufacturers’ compliance
with this final rule.
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.
These groupings are the same as those
used in the NPRM.
TABLE III.D.1–1—VEHICLE GROUPINGS a
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Vehicle description
Vehicle type
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 ................................................
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16
12
9
7
8
5
7
12
4
3
13
10
6
12
5
13
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Vehicle description
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 ..........................................
Sfmt 4700
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Vehicle type
1
19
14
13
10
18
12
11
7
12
8
7
17
14
13
10
16
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Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
TABLE III.D.1–1—VEHICLE GROUPINGS a—Continued
Vehicle description
Vehicle type
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 ...........................
10
6
12
8
5
3
6
12
4
7
2
13
6
8
4
Vehicle description
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 ......................................................
Vehicle type
12
9
7
12
8
5
7
12
16
12
7
13
10
12
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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
final rule is the impact of the 2011 MY
CAFE standards. 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 cartruck transfer is limited to 1.0 mpg in
2011, and EISA increases this to 1.5
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.
As was done for the NPRM, EPA has
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 cartruck credit trading provisions
consistently with the other EISAmandated changes in the CAFE
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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 final standards. In our
analysis of this final 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 onroad fuel economy
that would occur absent this final rule
is reduced. As this final rule eliminates
the FFV credit (for purposes of CO2
emission compliance) starting in 2016,
the net result is to increase the projected
level of fuel savings from our final
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 final 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 final 2012 and later CO2
standards. The description of this
process is described in the following
four sections and is essentially the same
process used for the NPRM.
A more detailed description of the
methodology used to develop these
sales projections can be found in the
Joint TSD. Detailed sales projections by
model year and manufacturer can also
be found in the TSD.
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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 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
RIA.
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
RIA, though these savings are not
included in our final cost estimates for
the final rule. 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
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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 RIA. As
demonstrated in the IMAC study (and
described in Section III.C as well as the
RIA), these levels are feasible and
achievable with technologies that are
available and cost-effective 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
final rule. 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.1 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 RIA.
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 ..........................................................................................................................
Incremental compliance costs
7.5 g/mi 249 .......
5.7 g/mi .............
$17
53
TABLE III.D.2–2—A/C RELATED TECHNOLOGY PENETRATION AND CREDIT LEVELS EXPECTED TO BE EARNED
Technology
penetration
(percent)
2012
2013
2014
2015
2016
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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
‘‘packages’’ to capture synergistic aspects
and reflect progressively larger CO2
reductions with additions or changes to
any given package. In addition,
manufacturers typically apply new
technologies in packages during model
redesigns that occur approximately once
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, as explained at proposal,
the approach taken here is to group
technologies into packages of increasing
249 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.
250 We assume slightly higher A/C penetration in
2012 than was assumed in the proposal to correct
for rounding that occurred in the curve setting
process.
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Car
250 28
.........................................................................................
.........................................................................................
.........................................................................................
.........................................................................................
.........................................................................................
3. How can technologies be combined
into ‘‘packages’’ and what is the cost and
effectiveness of packages?
Average credit over entire fleet
3.4
4.8
7.2
9.6
10.2
40
60
80
85
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
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
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Truck
Fleet average
3.8
5.4
8.1
10.8
11.5
3.5
5.0
7.5
10.0
10.6
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
configuration. Note also that these 19
vehicle types span the range of vehicle
footprint (smaller footprints for smaller
vehicles and larger footprints for larger
vehicles) which serve as the basis for
the standards being promulgated today.
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
resulting in increasing effectiveness.
Important to note 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
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accessories, and low drag brakes.251
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 is 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, EPA calculated the cost and
effectiveness for the package. The first
step 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. This is
accomplished by incorporating more
ratio selections and a wider ratio span
into the transmissions. Some of the
engine technologies have the same goal,
such as cylinder deactivation, advanced
valvetrains, and turbocharging. 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 that can
be applied to vehicles with several types
of automatic transmissions.
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 1 of the RIA.
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 Joint TSD.
TABLE III.D.3–1—REDUCTION IN EFFECTIVENESS FOR SELECTED TECHNOLOGY PAIRS
Reduction in
combined
effectiveness
(percent)
Engine technology
Transmission technology
Intake cam phasing .................................................................
Coupled cam phasing ..............................................................
Coupled cam phasing ..............................................................
Cylinder deactivation ...............................................................
Cylinder deactivation ...............................................................
5 speed automatic ...................................................................
5 speed automatic ...................................................................
Aggressive shift logic ..............................................................
5 speed automatic ...................................................................
Aggressive shift logic ..............................................................
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
0.5
0.5
0.5
1.0
0.5
costs and effectiveness estimates for
each of those packages are discussed in
detail in Chapter 3 of the Joint TSD.
TABLE III.D.3–2—CO2 REDUCING TECHNOLOGY VEHICLE PACKAGES FOR A LARGE CAR EFFECTIVENESS AND COSTS IN
2016
[Costs in 2007 dollars]
Transmission
technology
Additional
technology
3.3L V6 ...........................................
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Engine technology
4 speed automatic .........................
None ...............................................
3.0L V6 + GDI + CCP ....................
3.0L V6 + GDI + CCP + Deac .......
2.2L I4 + GDI + Turbo + DCP ........
6 speed automatic .........................
6 speed automatic .........................
6 speed DCT ..................................
3% Mass Reduction .......................
5% Mass Reduction .......................
10% Mass Reduction Start-Stop ...
251 When making reference to low friction
lubricants, the technology being referred to is the
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engine changes and possible durability testing that
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CO2 reduction
Package cost
Baseline
17.9%
20.6%
34.3%
$985
1,238
1,903
would be done to accommodate the low friction
lubricants, not the lubricants themselves.
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4. Manufacturer’s 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.252 In following
with these industry practices, EPA has
created set of vehicle technology
packages that represent the entire light
duty fleet.
In evaluating needed lead time, EPA
has historically authorized
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
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’
252 The
Center for Biological Diversity submitted
comments disputing this distinction as well as the
need for lead time. These comments are addressed
in Section III.D.7.
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product plans indicate that vehicles are
usually redesigned every 5 years on
average.253 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 are already 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 final 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 final rule
with the requirements of this final 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 final
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, 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 emission-reducing technologies by
the 2016 model year. Less intrusive
technologies can be introduced into
essentially all of 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,254 as well as IMA, powersplit
253 See discussion in Section III.D.7 with
references.
254 While diesel engines are a mature technology
and not ‘‘advanced’’, the aftertreatment systems
necessary for them in the U.S. market are advanced.
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and 2-mode hybrids) had a 15%
penetration cap.
This is the same approach as was
taken in the NPRM. EPA received
several comments commending it on its
approach to establishing technical
feasibility via its use of the OMEGA
model. The only adverse comment
received regarding the application of
technology was from the Center for
Biological Diversity (CBD), which
criticized EPA’s use of the 5-year
redesign cycle. CBD argued that
manufacturers occasionally redesign
vehicles sooner than 5 years and that
EPA did not quantify the cost of
shortening the redesign cycle to less
than 5 years and compare this cost to
the increased benefit of reduced CO2
emissions. CBD also noted that
manufacturers have been recently
dropping vehicle lines and entire
divisions with very little leadtime,
indicating their ability to change
product plans much quicker than
projected above.
EPA did not explicitly evaluate the
cost of reducing the average redesign
cycle to less than 5 years for two
reasons. One, in the past, manufacturers
have usually shortened the redesign
cycle to address serious problems with
the current design, usually lower than
anticipated sales. However, the
amortized cost of the capital necessary
to produce a new vehicle design will
increase by 23%, from one-fifth of the
capital cost to one-fourth (and assuming
a 3% discount rate). This would be on
top of the cost of the emission control
equipment itself. The only benefit of
this increase in societal cost will be
earlier CO2 emission reductions (and the
other benefits associated with CO2
emission control). The capital costs
associated with vehicle redesign go
beyond CO2 emission control and
potentially involve every aspect of the
vehicle and can represent thousands of
dollars. We believe that it would be an
inefficient use of societal resources to
incur such costs when they can be
obtained much more cost effectively just
one year later.
Two, the examples of manufacturers
dropping vehicle lines and divisions
with very short lead time is not relevant
to the redesign of vehicles. There is no
relationship between a manufacturer’s
ability to stop selling a vehicle model or
to close a vehicle division and a
manufacturer’s ability to redesign a
vehicle. A company could decide to
stop selling all of its products within a
few weeks—but it would still take a firm
approximately 5 years to introduce a
major new vehicle line. It is relatively
easy to stop the manufacture of a
particular product (though this too can
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incur some cost—such as plant winddown costs, employee layoff or
relocation costs, and dealership related
costs). It is much more difficult to
perform the required engineering design
and development, design, purchase, and
install the necessary capital equipment
and tooling for components and vehicle
manufacturing and develop all the
processes associated with the
application of a new technology.
Further discussion of the CBD
comments can be found in III.D.7 below.
5. How is EPA projecting that a
manufacturer decides between options
to improve CO2 performance to meet a
fleet average standard?
EPA is generally taking the same
approach to projecting the application
of technology to vehicles as it did for
the NPRM. With the exception of two
comments, all commenters agreed with
the modeling approach taken in the
NPRM. One of these two comments is
addressed is Section III.D.1 above, while
the other is addressed in Section III.D.3.
above.
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. As noted earlier,
EPA developed a new vehicle model,
the OMEGA model 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
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
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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 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 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 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 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 final 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 final CO2 standard which will 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,
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
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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
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 grouping are described in Table
III.D.1–1. Thus, the fourth step is to
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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 final
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 final 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
final regulations which 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 final CO2 standards, the
OMEGA model was run only for MY
2016. OMEGA is designed to evaluate
technology addition over a complete
redesign cycle and 2016 represents the
final year of a redesign cycle starting
with the first year of the final 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 RIA to this final rule. When
evaluating the 2016 standards using the
OMEGA model, the final CO2 standard
which manufacturers will 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 will 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.
As noted above, EPA estimated
separately the cost of the improved
A/C systems required to generate the 11
g/mi credit. This is consistent with our
final A/C credit procedures, which will
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 ‘‘manufacturerbased net cost-effectiveness factor’’ to
rank the technology packages in the
order in which a manufacturer is likely
25453
to 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
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:
PP
Where
ManufCostEff = Manufacturer-Based Cost
Effectiveness (in dollars per kilogram
CO2),
TechCost = Marked up cost of the technology
(dollars),
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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,
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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, and
1- Gap = Ratio of onroad fuel economy to
two-cycle (FTP/HFET) fuel economy.
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ManufCostEff =
1
(1 − Gap )
i =1
i + 35
1
∑ [[dCO 2] ×VMTi ] × (1 − Gap)
i
TechCost − ∑ [ dFSi × VMTi ] ×
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The OMEGA model does not
currently allow for the VMT used in
determining the various technology
ranking factors to be a function of the
rebound factor. If the user believed that
the consideration of rebound VMT was
important, they could increase their
estimate of the payback period to
simulate the impact of the rebound
VMT.
EPA describes the technology ranking
methodology and manufacturer-based
cost effectiveness metric in greater
detail in a technical memo to the Docket
for this final 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 final
rule, 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
when the vehicle is five years old. As
discussed in Chapter 1 of the RIA, 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 will retain this same
percentage of value when the vehicle is
five years old. However, it is less clear
whether first purchasers, and thus,
manufacturers consider this residual
value when ranking technologies and
making vehicle purchases, respectively.
For this final rule, this factor was not
included in our determination of
manufacturer-based net costeffectiveness in the analyses performed
in support of this final rule.
The values of manufacturer-based net
cost-effectiveness for specific
technologies will vary from vehicle to
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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 on incremental reduction in
fuel consumption depends on the CO2
level of the vehicle prior to adding the
technology. Chapter 1 of the RIA of this
final rule contains further detail on the
values of manufacturer-based net costeffectiveness for the various technology
packages.
6. Why are the final CO2 standards
feasible?
The finding that the final standards
are technically feasible is based
primarily on two factors. One is the
level of technology needed to meet the
final standards. The other is the cost of
this technology. The focus is on the
final 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., power-split hybrid
and 2-mode hybrid) and diesel,255
whose application was limited to 15%.
255 While
diesel engines are not an ‘‘advanced
technology’’ per se, diesel engines that can meet
EPA’s light duty Tier 2 Bin 5 NOX standards have
advanced (and somewhat costly) aftertreatment
systems on them that make this technology
penetration cap appropriate in addition to their
relatively high incremental costs.
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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 final 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 as allowed
under the applicable MY 2011 CAFE
regulations. 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 to overhead
cam engines (OHC–DEAC), adding a
turbocharger and downsizing the engine
(Turbo), diesel engine technology,
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 an intermediate or strong
hybrid design. This last category
includes three current hybrid designs:
Integrated motor assist (IMA), powersplit (PS), 2-mode hybrids and electric
vehicles.256
256 EPA did not project reliance on the use of any
plug-in hybrid or battery electric vehicles when
projecting manufacturers’ compliance with the 2016
standards. However, BMW did sell a battery electric
vehicle in the 2008 model year, so these sales are
included in the technology penetration estimates
for the reference case and the final and alternative
standards evaluated for 2016.
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TABLE III.D.6–1—PENETRATION OF TECHNOLOGY IN 2008 VEHICLES WITH 2016 SALES: CARS AND TRUCKS
[Percent of sales]
GDI
BMW ................................
Chrysler ............................
Daimler .............................
Ford ..................................
General Motors ................
Honda ...............................
Hyundai ............................
Kia ....................................
Mazda ..............................
Mitsubishi .........................
Nissan ..............................
Porsche ............................
Subaru ..............................
Suzuki ..............................
Tata ..................................
Toyota ..............................
Volkswagen ......................
Overall ..............................
OHC–DEAC
7.5
0.0
0.0
0.4
3.1
1.4
0.0
0.0
13.6
0.0
0.0
58.6
0.0
0.0
0.0
6.8
50.6
3.8
Turbo
0.0
0.0
0.0
0.0
0.0
7.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.8
As can be seen, all of these
technologies were already being used on
some 2008 MY vehicles, with the
exception of direct injection gasoline
engines with either cylinder
deactivation or turbocharging and
downsizing. Transmissions with more
gearsets 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
6 Speed
auto trans
Diesel
6.1
0.5
6.5
2.2
1.4
1.4
0.0
0.0
13.6
0.0
0.0
14.9
9.8
0.0
17.3
0.0
39.5
2.6
0.0
0.1
5.6
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
0.1
Dual clutch
trans
86
14
76
29
15
0
3
0
26
10
0
49
0
0
99
21
69
19.1
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
also shown. The last row in Table
III.D.6–2 shows the increase in projected
technology penetration due to
0.9
0.0
7.5
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
13.1
0.5
Start-stop
Hybrid
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.0
0.1
0.0
0.0
0.0
0.3
2.1
0.0
0.0
0.0
0.0
0.8
0.0
0.0
0.0
0.0
11.6
0.0
2.2
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, NHTSA
projected that Porsche would achieve a
CO2 emission level of 304.3 g/mi instead
of the required 284.8 g/mi level (29.2
mpg instead of 31.2 mpg), and pay fines
in lieu of further control.
TABLE III.D.6–2—PENETRATION OF TECHNOLOGY UNDER 2011 MY CAFE STANDARDS IN 2016 SALES: CARS AND
TRUCKS
[Percent of sales]
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GDI
BMW ........................................................
Chrysler ....................................................
Daimler .....................................................
Ford ..........................................................
General Motors ........................................
Honda .......................................................
Hyundai ....................................................
Kia ............................................................
Mazda ......................................................
Mitsubishi .................................................
Nissan ......................................................
Porsche ....................................................
Subaru ......................................................
Suzuki ......................................................
Tata ..........................................................
Toyota ......................................................
Volkswagen ..............................................
Overall ......................................................
Increase over 2008 MY ...........................
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OHC–DEAC
44
0
23
0
3
2
0
0
13
32
0
92
0
70
85
7
89
10
6
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0
22
0
0
6
0
0
0
0
0
0
0
0
54
0
5
2
1
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auto trans
Turbo
30
0
8
3
1
2
0
0
13
2
0
75
9
0
20
0
81
7
4
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Dual clutch
trans
53
18
52
27
15
0
3
0
20
25
0
5
0
3
27
19
14
16
¥3
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0
34
0
0
0
0
0
0
35
0
55
0
67
73
0
78
7
6
07MYR2
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13
0
26
0
0
0
0
0
0
0
0
38
0
67
73
0
18
3
3
Mass reduction
2
0
2
0
0
0
0
0
0
1
0
4
0
3
6
0
3
0
0
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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. The projected MY 2016
fraction of automatic transmission with
more gearsets actually decreases slightly
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 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 lower cost mature technology
projected to be available by 2016, these
manufacturers would likely find it in
their best interest to improve their fuel
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 and no
hybrid vehicles were projected. Most
manufacturers do not require the level
of CO2 emission control associated with
either of these technologies. The few
manufacturers that would were
projected to choose to pay CAFE fines
in 2011 in lieu of adding diesel or
hybrid technologies.
This 2008 baseline fleet, modified to
meet 2011 standards, becomes our
‘‘reference’’ case. See Section II.B above.
This is the fleet against which the final
2016 standards are compared. Thus, it is
also the fleet that is 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 EPA RIA.
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 projected technology that
could be added will be slightly
different. The differences, however, are
relatively small since most
manufacturers only require modest
addition of technology to meet the 2011
CAFE standards.
EPA then used the OMEGA model
once again to project the level of
technology needed to meet the final
2016 CO2 emission standards. Using the
results of the OMEGA model, every
manufacturer was projected to be able to
meet the final 2016 standards with the
technology described above except for
four: BMW, VW, Porsche and Tata
(which is comprised of Jaguar and Land
Rover vehicles in the U.S. fleet). For
these manufacturers, the results
presented below are those with the fully
allowable application of technology
available in EPA’s OMEGA modeling
analysis and not for the technology
projected to enable compliance with the
final 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 final
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.257
TABLE III.D.6–3—FINAL PENETRATION OF TECHNOLOGY FOR 2016 CO2 STANDARDS: CARS AND TRUCKS
[Percent of sales]
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GDI
BMW ........
Chrysler ....
Daimler .....
Ford ..........
General
Motors ...
Honda .......
Hyundai ....
Kia ............
Mazda ......
Mitsubishi
Nissan ......
Porsche ....
Subaru ......
Suzuki ......
Tata ..........
Toyota ......
Volkswagen ...
Overall ......
Increase
over
2011
CAFE ....
OHC–DEAC
Turbo
Dual clutch
trans
Start-stop
Mass
Reduction
Hybrid
80
79
76
84
21
13
30
21
61
17
53
19
6
0
5
0
13
31
12
27
63
52
72
60
65
54
67
61
14
0
14
0
5
6
5
6
67
43
59
33
60
74
66
83
60
77
85
26
25
6
0
0
0
0
7
15
0
0
55
7
14
2
1
1
14
33
11
62
9
0
27
3
0
0
0
0
1
0
0
8
0
0
0
0
8
0
8
0
17
14
2
5
0
10
14
13
61
49
52
52
47
74
62
45
58
67
70
40
61
18
32
4
41
74
58
62
44
67
70
7
0
2
0
0
0
0
1
15
0
0
15
12
6
3
3
2
4
6
5
4
3
4
5
2
82
60
18
13
71
15
11
1
10
12
68
55
60
42
15
4
4
4
49
11
9
1
¥4
48
39
2
4
257 Many of the technologies shown in this table
are mutually exclusive. Thus, 85% penetration
might not be possible. For example, any use of
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hybrids will reduce the DEAC, Turbo, 6SPD, DCT,
and 42V S–S technologies. Additionally, not every
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type.
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Table III.D.6–4 shows the 2016
standards, as well as the achieved CO2
emission levels for the five
manufacturers which are not able to
meet these standards under the
premises of our modeling. It should be
noted that the two sets of combined
emission levels shown in Table III.D.6–
4 are based on sales weighting car and
truck emission levels.
TABLE III.D.6–4—EMISSIONS OF MANUFACTURERS UNABLE TO MEET FINAL 2016 STANDARDS (G/MI CO2)
Achieved emissions
2016 Standards
Shortfall
Manufacturer
Car
BMW ..........................................
Tata ............................................
Daimler .......................................
Porsche ......................................
Volkswagen ................................
Truck
236.3
258.6
246.3
244.1
223.5
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As can be seen, BMW and Daimler
have the smallest shortfalls, 5–6 g/mi,
while Porsche has the largest, 40 g/mi.
On an industry average basis, the
technology penetrations are very similar
to those projected in the proposal. There
is a slight shift from the use of cylinder
deactivation to the two advanced
transmission technologies. This is due
to the fact that the estimated costs for
these three technologies have been
updated, and thus, their relative cost
effectiveness when applied to specific
vehicles have also shifted. The reader is
referred to Section II.E of this preamble
as well as Chapter 3 of the Joint TSD for
a detailed description of the cost
estimates supporting this final rule and
to the RIA for a description of the
selection of technology packages for
specific vehicle types. The other
technologies shown in Table III.D.6–4
changed by 2 percent or less between
the proposal and this final rule.
As can be seen, the overall average
reduction in vehicle weight is projected
to be 4 percent. This reduction varies
across the two vehicle classes and
vehicle base weight. For cars below
2,950 pounds curb weight, the average
reduction is 2.8 percent (75 pounds),
while the average was 4.3 percent (153
pounds) for cars above 2,950 curb
weight. For trucks below 3,850 pounds
curb weight, the average reduction is 4.7
percent (163 pounds), while it was 5.1
percent (240 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 4.4 percent (186 pounds),
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Combined
278.7
323.6
297.8
332.0
326.6
248.5
284.2
262.6
273.4
241.6
Car
228.4
249.9
238.3
206.1
218.6
while it was 7.0 percent (376 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
indicated in Table III.D.6–1. The
projected levels of requisite technology
to enable compliance with the final
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 technologies. 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 does not
matter whether this technology was
present in 2008 or whether it would be
added in order to comply with the
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Truck
Combined
282.5
272.5
294.3
286.9
292.7
243.9
258.8
256.1
233.0
231.6
Combined
4.6
25.4
6.5
40.4
10.0
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 final CO2 emission
standards adjust the required CO2 level
according to a vehicle’s footprint,
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 final 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.
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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
differences exist. Two well-known
factors affecting vehicle fuel efficiency
are vehicle weight and acceleration
performance (henceforth referred to as
‘‘performance’’). The footprint-based
form of the final 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 twocycle fuel economy test procedure. So
manufacturers with higher average
performance levels will tend to have
higher average CO2 emissions for any
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given footprint. This variability at any
given footprint contributes to much of
the scatter in the data (shown for
example on plots like Figures II.C.1–3
through II.C.1–6).
We developed a methodology to
assess the impact of these two factors on
each manufacturer’s projected
compliance with the 2016 standards.
First, we had to remove (or isolate) the
effect of CO2 control technology already
being employed on 2008 vehicles. As
described above, 2008 vehicles exhibit a
wide range of control technology and
leaving these impacts in place would
confound the assessment of
performance and weight on CO2
emissions. Thus, the first step was to
estimate each vehicle’s ‘‘no technology’’
CO2 emissions. To do this, we used the
EPA lumped parameter model
(described in the TSD) to estimate the
overall percentage reduction in CO2
emissions associated with technology
already on the vehicle and then backed
out this effect mathematically. Second,
we performed a least-square linear
regression of these no technology CO2
levels against curb weight and the ratio
of rated engine horsepower to curb
weight simultaneously. The ratio of
rated engine horsepower to curb weight
is a good surrogate for acceleration
performance and the data is available
for all vehicles, whereas the zero to
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sixty time is not. Both factors were
found to be statistically significant at
the 95% confidence level. Together,
they explained over 80% of the
variability in vehicles’ CO2 emissions
for cars and over 70% for trucks. Third,
we determined the sales-weighted
average curb weight per footprint for
cars and trucks, respectively, for the
fleet as a whole. We also determined the
sales-weighted average of the ratio of
rated engine horsepower to curb weight
for cars and trucks, respectively, for the
fleet as a whole. Fourth, we adjusted
each vehicle’s ‘‘no technology’’ CO2
emissions to eliminate the degree to
which the vehicle had higher or lower
acceleration performance or curb weight
per footprint relative to the car or truck
fleet as a whole. For example, if a car’s
ratio of horsepower to weight was 0.007
and the average ratio for all cars was
0.006, then the vehicle’s ‘‘no
technology’’ CO2 emission level was
reduced by the difference between these
two values (0.001) times the impact of
the ratio of horsepower to weight on car
CO2 emissions from the above linear
regression. Finally, we substituted these
performance and weight adjusted CO2
emission levels for the original, ‘‘no
technology’’ CO2 emission levels shown
in Figure III.D.6–1. The results are
shown in Figure III.D.6–2.
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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 variability among the manufacturers’
CO2 emissions. Most of the
manufacturers with high positive 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
reasons for the differences in technology
penetrations shown for the various
manufacturers in Table III.D.6–3 are
weight and acceleration 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 straightforward. Some consumers
desire high-acceleration performance
and some manufacturers orient their
sales towards these consumers.
However, the cost in terms of CO2
emissions is clear. Manufacturers
producing relatively heavy or high
performance vehicles presently (with
concomitant increased CO2 emissions)
will require greater levels of technology
in order to meet the final CO2 standards
in 2016.
As can be seen from Table III.D.6–3
above, widespread use of several
technologies is projected due to the final
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 6+ 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.
In their comments, Porsche stated that
their vehicles have twice the power-toweight ratio as the fleet average and that
their vehicles presently have a high
degree of technology penetration, which
allows them to meet the 2009 CAFE
standards. Porsche also commented that
the 2016 standards are not feasible for
their firm, in part due to the high level
of technologies already present in their
vehicles and due to their ‘‘very long
production life cycles’’. BMW in their
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comments stated that their vehicles are
‘‘feature-dense’’ thus ‘‘requiring
additional efforts to comply’’ with future
standards.258 Ferrari, in their comments,
states that the standards are not feasible
for high-performance sports cars
without compromising on their
‘‘distinctiveness’’. They also state that
because they already have many
technologies on the vehicles, ‘‘there are
limited possibilities for further
improvements.’’ Finally Ferrari states
that smaller volume manufacturers have
higher costs ‘‘because they can be
distributed over very limited production
volumes’’, and they have longer product
lifecycles. The latter view was also
shared by Lotus. These comments will
be addressed below, but are cited here
as supporting the conclusions from the
above analysis that high-performance
and feature-dense vehicles have a
greater challenge meeting the 2016
standards. In general, other
manufacturers covering the rest of the
fleet and other commenters agreed with
EPA’s analysis in the proposal of
projected technology usage, and
supported the view that the 2016 model
year standards were feasible in the leadtime provided.
In response to the comments above,
EPA foresees no significant technical or
engineering issues with the projected
deployment of these technologies across
the fleet by MY 2016, with their
incorporation being folded into the
vehicle redesign process (with the
exception of some of the small volume
manufacturers). All of these
technologies are commercially available
now. The automotive industry has
already begun to convert its port fuelinjected 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
based on a 42-volt architecture also
represent a challenge because of the
complications involved in a changeover
to a higher voltage electrical
architecture. However, with appropriate
capital investments (which are captured
258 As a side note, one of the benefits for the offcycle technology credits allowed in this final rule
is the opportunity this flexibility provides for some
of these ‘feature-dense’ vehicles to generate such
credits to assist, to some extent, in the companies’
ability to comply.
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in the EPA estimated 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% of sales, with some
manufacturers projected to use higher
levels.
Most manufacturers are not projected
to hybridize any vehicles to comply
with the final standards. The hybrids
shown for Toyota are projected to be
sold even in the absence of the final
standards. However the relatively high
hybrid penetrations (14–15%) 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 timeframe,
which is 15 percent.
As discussed in the EPA RIA, a
maximum 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.
Hybrids are a relatively costly
technology option which requires
significant changes to a vehicle’s
powertrain design, and EPA estimates
that manufacturers will require a
significant amount of lead time and
capital investment to introduce this
technology into the market in very large
numbers. Thus the EPA captures this
significant change in production
facilities with a lower penetration cap.
A more thorough discussion of lead
time limitations can be found below and
in Section III.B.5.
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 4 percent,
compared with 3 percent in the
reference case. This 4 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 final
TLAAS provisions will provide
significant needed lead time to these
manufacturers for pre-2016 compliance,
since all qualified companies are able to
take advantage of these provisions.
By 2016, it is likely that these
manufacturers would also be able to
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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
mass reduction, electric and/or plug-in
hybrid vehicles 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
(while the 15% cap on the application
of hybrid technology is reasonable for
the industry as a whole, higher
percentages are certainly possible for
individual manufacturers, particularly
those with small volumes). 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 with other manufacturers.
EPA believes it is likely that there will
be certain high volume manufacturers
that will earn a significant amount of
early GHG credits starting in 2010 that
would expire 5 years later, by 2015,
unused. It is possible that these
manufacturers may be willing to sell
these credits to manufacturers with
whom there is little or no direct
competition.259 Furthermore, a large
number of manufacturers have also
stated publicly that they support the
2016 standards. 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, Nissan, 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
model year 2016 non-compliance for
BMW, Daimler, and Volkswagen is
based on an inability of our model at
this time 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 manufacturers 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 (feature dense) 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 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 final standards.
Comments from the manufacturers
provided broad support for this
conclusion. A limited number of
commenters presented specific concerns
about their technology opportunities,
and EPA has described above (and
elsewhere in the rule) the paths
available for them to comply.
In sum, EPA believes that the
emissions reductions called for by the
final 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
associated with the final 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.260
TABLE III.D.6–4—COST OF TECHNOLOGY PER VEHICLE IN 2016 ($2007)
2011 MY CAFE standards, relative to
2008 MY
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Cars
BMW ........................................................
Chrysler ....................................................
Daimler .....................................................
Ford ..........................................................
General Motors ........................................
Honda .......................................................
Hyundai ....................................................
Kia ............................................................
Mazda ......................................................
Mitsubishi .................................................
Nissan ......................................................
Porsche ....................................................
Subaru ......................................................
Suzuki ......................................................
Tata ..........................................................
Toyota ......................................................
Volkswagen ..............................................
$346
33
468
73
31
0
0
0
0
328
0
473
68
49
611
0
228
259 For example, a manufacturer that only sells
electric vehicles may very well sell the credits they
earn to another manufacturer that does not sell any
electric vehicles.
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Trucks
Final 2016 CO2 standards, relative to
2011 MY CAFE standards
All
$423
116
683
161
181
0
69
42
0
246
61
706
62
232
1,205
0
482
Cars
$368
77
536
106
102
0
10
7
0
295
18
550
66
79
845
0
272
260 Note that the actual cost of the A/C technology
is estimated at $71 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
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Trucks
$1,558
1,129
1,536
1,108
899
635
802
667
855
817
686
1,506
962
1,015
1,181
381
1,848
$1,195
1,501
931
1,442
1,581
473
425
247
537
1,218
1,119
759
790
537
680
609
972
All
$1,453
1,329
1,343
1,231
1,219
575
745
594
808
978
810
1,257
899
937
984
455
1,694
of the technology when spread across the entire
fleet is $60 per vehicle ($71 × 85% = $60).
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25463
TABLE III.D.6–4—COST OF TECHNOLOGY PER VEHICLE IN 2016 ($2007)—Continued
2011 MY CAFE standards, relative to
2008 MY
Cars
Overall ......................................................
Trucks
63
As can be seen, the industry average
cost of complying with the 2011 MY
CAFE standards is quite low, $89 per
vehicle. This cost is $11 per vehicle
higher than that projected in the NPRM.
This change is very small and is due to
several factors, mainly changes in the
projected sales of each manufacturer’s
specific vehicles, and changes in
estimated technology costs. Similar to
the costs projected in the NPRM, the
range of costs across manufacturers is
quite large. Honda, Mazda and Toyota
are projected to face no cost. In contrast,
Mitsubishi, Porsche, Tata and
Volkswagen face costs of at least $272
per vehicle. As described above, three of
these last four manufacturers (all but
Mitsubishi) face high costs to meet even
the 2011 MY CAFE standards due to
either their vehicles’ weight per unit
footprint or performance. Porsche
would have been projected to face lower
costs in 2016 if they were not expected
to pay CAFE fines in 2011.
As shown in the last row of Table
III.D.6–4, the average cost of technology
to meet the final 2016 standards for cars
and trucks combined relative to the
2011 MY CAFE standards is $948 per
vehicle. This is $103 lower than that
projected in the NPRM, due primarily to
lower technology cost projections for
the final rule compared to the NPRM for
certain technologies. (See Chapter 1 of
the Joint TSD for a detailed description
of how our technology costs for the final
rule differ from those used in the
NPRM). As was the case in the NPRM,
Table III.D.6–4 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 $948 per
vehicle cost is significant, representing
3.4 percent of the total cost of a new
Final 2016 CO2 standards, relative to
2011 MY CAFE standards
All
138
Cars
89
vehicle. However, as discussed below,
the fuel savings associated with the final
standards exceed this cost significantly.
In general, commenters supported EPA’s
cost projections, as discussed in Section
II.
While the CO2 emission compliance
modeling using the OMEGA model
focused on the final 2016 MY standards,
the final standards for 2012–2015 are
also feasible. As discussed above,
manufacturers develop their future
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
final 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 final 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
could utilize the debit carry-forward
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
Trucks
870
All
1,099
948
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
manufacture could take advantage of the
many optional credit generation
provisions contained in this final rule,
including early-credit generation for
model years 2009–2011, credits for
advanced technology vehicles, and
credits for the application of technology
which result in off-cycle GHG
reductions. Finally, 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 final standards for 2012–
2016 would be feasible. Further
discussion of the technical feasibility of
the interim year standards, including for
smaller volume manufacturers can be
found in Section III.B, in the discussion
on the Temporary Leadtime Allowance
Alternative Standards.
7. What other fleet-wide CO2 levels
were considered?
Two alternative sets of CO2 standards
were considered. One set would reduce
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 final 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 projected CO2 standards in
2016 for each manufacturer under these
two alternative scenarios and under the
final rule are shown in Table III.D.7–1.
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TABLE III.D.7–1—OVERALL AVERAGE CO2 EMISSION STANDARDS BY MANUFACTURER IN 2016
4% per year
BMW ................................................................................................................................
Chrysler ............................................................................................................................
Daimler .............................................................................................................................
Ford ..................................................................................................................................
General Motors ................................................................................................................
Honda ..............................................................................................................................
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248
270
260
261
275
248
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266
256
257
271
244
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224
245
236
237
250
224
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TABLE III.D.7–1—OVERALL AVERAGE CO2 EMISSION STANDARDS BY MANUFACTURER IN 2016—Continued
4% per year
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
Final Rule
234
239
232
244
250
237
238
222
263
249
236
254
6% per year
231
236
228
239
245
233
234
218
259
245
232
250
212
217
210
219
226
213
214
199
239
225
213
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
[In percent]
OHC–
DEAC
GDI
BMW ...........................
Chrysler ......................
Daimler * .....................
Ford ............................
General Motors ..........
Honda .........................
Hyundai ......................
Kia ..............................
Mazda .........................
Mitsubishi ...................
Nissan ........................
Porsche * ....................
Subaru ........................
Suzuki .........................
Tata * ..........................
Toyota ........................
Volkswagen * ..............
Overall ........................
Increase over 2011
CAFE ......................
* These
Turbo
6 Speed
auto trans
Diesel
Dual clutch
trans
Start-stop
Mass
reduction
(%)
Hybrid
80
67
76
77
62
44
52
37
79
85
69
83
72
70
85
15
82
56
21
13
30
18
24
6
0
0
0
0
7
15
0
0
55
7
18
13
61
17
53
16
11
2
1
1
14
31
11
62
9
0
27
0
71
14
6
0
5
0
0
0
0
0
1
0
0
8
0
0
0
0
11
1
13
26
12
25
7
0
3
0
17
16
2
5
0
3
14
13
10
11
63
52
72
58
57
49
52
57
66
72
64
45
70
67
70
30
68
53
65
54
67
59
57
15
28
0
60
72
61
62
37
67
70
7
60
41
14
0
14
0
0
2
0
0
0
0
1
15
0
0
15
12
15
4
5
6
5
5
5
2
3
2
5
6
6
4
3
3
5
1
4
4
46
11
7
1
¥5
46
38
2
4
manufacturers were unable to meet the final 2016 standards with the imposed caps on technology.
TABLE III.D.7–3—TECHNOLOGY PENETRATION—6% PER YEAR ALTERNATIVE STANDARDS IN 2016: CARS AND TRUCKS
COMBINED
[In percent]
OHC–
DEAC
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GDI
BMW * .........................
Chrysler ......................
Daimler * .....................
Ford* ...........................
General Motors ..........
Honda .........................
Hyundai ......................
Kia ..............................
Mazda .........................
Mitsubishi * .................
Nissan ........................
Porsche * ....................
Subaru ........................
Suzuki .........................
Tata * ..........................
Toyota ........................
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80
85
76
85
85
68
73
62
85
85
85
83
84
85
85
71
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Turbo
21
13
30
13
25
6
1
0
0
4
8
15
0
0
55
7
PO 00000
6 Speed
auto trans
Diesel
61
50
53
57
43
10
12
1
19
42
38
62
18
85
27
5
Frm 00142
Dual clutch
trans
Start-stop
13
3
12
4
2
1
9
0
4
4
0
5
3
0
14
20
63
82
72
74
83
65
64
62
80
75
78
45
79
85
70
49
65
83
67
75
83
65
64
61
82
75
81
62
80
85
70
47
6
0
5
0
0
0
0
0
1
0
0
8
1
0
0
0
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07MYR2
Hybrid
14
2
14
10
2
2
0
0
0
10
4
15
0
0
15
12
Mass
reduction
(%)
5
8
5
7
8
6
5
5
7
7
8
4
6
8
5
4
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TABLE III.D.7–3—TECHNOLOGY PENETRATION—6% PER YEAR ALTERNATIVE STANDARDS IN 2016: CARS AND TRUCKS
COMBINED—Continued
[In percent]
OHC–
DEAC
GDI
Volkswagen * ..............
Overall ........................
Increase over 2011
CAFE ......................
Turbo
6 Speed
auto trans
Diesel
Dual clutch
trans
Start-stop
Mass
reduction
(%)
Hybrid
82
79
18
12
71
33
11
1
10
7
68
69
60
69
15
6
4
6
69
10
26
1
¥9
62
66
4
6
* These manufacturers were unable to meet the final 2016 standards with the imposed caps on technology.
With respect to the 4 percent per year
standards, the levels of requisite control
technology are lower than those under
the final standards, as would be
expected. Industry-wide, the largest
decreases were a 7 percent decrease in
use of gasoline direct injection engines,
a 4 percent decrease in the use of dual
clutch transmissions, and a 2 percent
decrease in the application of start-stop
technology. On a manufacturer specific
basis, the most significant decreases
were a 10 percent or larger decrease in
the use of stop-start technology for
Honda, Kia, Mitsubishi and Suzuki and
a 12 percent drop in turbocharger use
for Mitsubishi. 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 final standards in 2016.
Porsche, Tata and Volkswagen continue
to be unable to comply with the CO2
standards in 2016, even under the 4
percent per year standard scenario.
BMW just complied under this scenario,
so its costs and technology penetrations
are the same as under the final
standards.
With respect to the 6 percent per year
standards, the levels of requisite control
technology increased substantially
relative to those under the final
standards, as again would be expected.
Industry-wide, the largest increase was
a 25 percent increase in the application
of start-stop technology and 13–17
percent increases in the use of gasoline
direct injection engines, turbocharging
and dual clutch transmissions. On a
manufacturer specific basis, the most
significant increases were a 10 percent
increase in hybrid penetration for Ford
and Mitsubishi. These are more
significant changes and are due to the
fact that the 6 percent per year
standards require 20 g/mi CO2 more
control than the final standards in 2016.
Our projections for BMW, Porsche, Tata
and Volkswagen continue to show they
are unable to comply with the CO2
standards in 2016, so our projections for
these manufacturers do not differ
relative to the final standards, though
the amount of short-fall for each firm
increases significantly, by an additional
20 g/mi CO2 per firm. However, Ford
and Mitsubishi join this list as can be
seen from Figure III.D.6–2. The CO2
emissions from Ford’s cars are very
similar to those of the industry when
adjusted for technology, weight and
performance. However, their trucks emit
more than 25% more CO2 per mile than
the industry average. It is possible that
addressing this issue would resolve
their difficulty in complying with the 6
percent per year scenario. Both
Mitsubishi’s cars and truck emit roughly
10% more than the industry average
vehicles after adjusting for technology,
weight and performance. Again,
addressing this issue could resolve their
difficulty in complying with the 6
percent per year scenario. Five
manufacturers are projected to need to
increase their use of start-stop
technology by at least 30 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, relative to 2011
MY CAFE standards
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Cars
BMW ........................................................
Chrysler ....................................................
Daimler .....................................................
Ford ..........................................................
General Motors ........................................
Honda .......................................................
Hyundai ....................................................
Kia ............................................................
Mazda ......................................................
Mitsubishi .................................................
Nissan ......................................................
Porsche ....................................................
Subaru ......................................................
Suzuki ......................................................
Tata ..........................................................
Toyota ......................................................
Volkswagen ..............................................
Overall ......................................................
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Trucks
$1,558
1,111
1,536
1,013
834
598
769
588
766
733
572
1,506
962
1,015
1,181
323
1,848
811
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Frm 00143
All
$1,195
1,236
931
1,358
1,501
411
202
238
537
1,164
1,119
759
616
179
680
560
972
1,020
Fmt 4701
Sfmt 4700
$1,453
1,178
1,343
1,140
1,148
529
684
527
733
906
729
1,257
836
879
984
400
1,694
883
6 Percent per year standards, relative to 2011
MY CAFE standards
Cars
Trucks
$1,558
1,447
1,536
1,839
1,728
894
1,052
1,132
1,093
1,224
1,151
1,506
1,173
1,426
1,181
747
1,848
1,296
E:\FR\FM\07MYR2.SGM
07MYR2
$1,195
2,156
931
2,090
2,030
891
1,251
247
1,083
1,840
1,693
759
1,316
1,352
680
906
972
1,538
All
$1,453
1,827
1,343
1,932
1,870
893
1,082
979
1,092
1,471
1,306
1,257
1,225
1,414
984
799
1,694
1,379
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As can be seen, the average cost of the
4 percent per year standards is only $65
per vehicle less than that for the final
standards. This incremental cost is very
similar to that projected in the NPRM.
In contrast, the average cost of the 6
percent per year standards is over $430
per vehicle more than that for the final
standards, which is $80 less than that
projected in the NPRM (again due to
lower technology costs). Compliance
costs are entering the region of nonlinearity. The $65 cost savings of the 4
percent per year standards relative to
the final rule represents $19 per g/mi
CO2 increase. The $430 cost increase of
the 6 percent per year standards relative
to the final rule represents a 25 per g/
mi CO2 increase. More importantly, two
additional manufacturers, Ford and
Mitsubishi, are projected to be unable to
comply with the 6% per year standards.
In addition, under the 6% per year
standards, four manufacturers (Chrysler,
General Motors, Suzuki and Nissan) are
within 2 g/mi CO2 of the minimum
achievable levels projected by EPA’s
OMEGA model analysis for 2016.
EPA does not believe the 4% per year
alternative is an appropriate standard
for the MY 2012–2016 time frame. As
discussed above, the 250 g/mi final rule
is technologically feasible in this time
frame at reasonable costs, and provides
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
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 final standards. In
absolute percent increases in the
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technology penetration, compared to the
final 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 final standards. At the
same time, CO2 emissions would be
reduced by about 8%, compared to the
250 g/mi target level.
As noted above, EPA’s OMEGA model
predicts that for model year 2016, Ford,
Mitsubishi, Mercedes, BMW,
Volkswagen, Jaguar-Land Rover, and
Porsche do not meet their target under
the 6 percent per year scenario. In
addition, Chrysler, General Motors,
Suzuki and Nissan all are within 2
grams/mi CO2 of maximizing the
applicable technology allowed under
EPA’s OMEGA model—that is, these
companies have almost no head-room
for compliance. In total, these 11
companies represent more than 58
percent of total 2016 projected U.S.
light-duty vehicle sales. This provides a
strong indication that the 6 percent per
year standard is much more stringent
than the final standards, and presents a
significant risk of non-compliance for
many firms, including four of the seven
largest firms by U.S. sales.
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
final 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 years 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 now and
over the next few years, under the final
standards. EPA believes that the final
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rule (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 Joint Technical Support
Document and the 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 reduction 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. The 6% per year alternative
standard would impose significantly
increased pressure on capital and other
resources, indicating it is 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.
Jaguar/Land Rover, in their
comments, agreed that the more
stringent standards would not be
economically practicable, and several
automotive firms indicated that the
proposed standards, while feasible,
would be overly challenging.261 On the
other hand, the Center for Biological
Diversity (henceforth referred to here as
CBD), strongly urged EPA to adopt more
261 See
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stringent standards. CBD gives examples
of higher standards in other nations to
support their contention that the
standards should be more stringent.
CBD also claims that the agencies are
‘‘setting standards that deliberately
delay implementation of technology that
is available now’’ by setting lead time for
the rule greater than 18 months. CBD
also accuses the agencies of arbitrarily
‘‘adhering to strict five-year
manufacturer ‘redesign cycles.’ ’’ CBD
notes that the agencies have stated that
all of the ‘‘technologies are already
available today,’’ and EPA 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.’’
Based on the agencies’ previous
statements, CBD concludes that the fleet
can meet the 250 g/mi target in 2010.
EPA believes that in all cases, CBD’s
analysis for feasibility and necessary
lead time is flawed.
Other countries’ absolute fleetwide
standards are not a reliable or directly
relevant comparison. The fleet make-up
in other nations is quite different than
that of the United States. CBD primarily
cites the European Union and Japan as
examples. Both of these regions have a
large fraction of small vehicles (with
lower average weight, and footprint
size) when compared to vehicles in the
U.S. Also the U.S. has a much greater
fraction of light-duty trucks. In
particular in Europe, there is a much
higher fraction of diesel vehicles in the
existing fleet, which leads to lower CO2
emissions in the baseline fleet as
compared to the U.S. This is in large
part due to the significantly different
fuel prices seen in Europe as compared
to the U.S. The European fleet also has
a much higher penetration of manual
transmission than the U.S., which also
results in lower CO2 emissions.
Moreover, these countries use different
test cycles, which bias CO2 emissions
relative to the EPA 2 cycle test cycles.
When looked at from a technology-basis,
with the exception of the existing large
penetration of diesels and manual
transmissions in the European fleet—
there is no ‘‘magic’’ in the European and
Japanese markets which leads to lower
fleet-wide CO2 emissions. In fact, from
a technology perspective, the standards
contained in this final rule are premised
to a large degree on the same
technologies which the European and
Japanese governments have relied upon
to establish their CO2 and fuel economy
limits for this same time frame and for
the fleet mixes in their countries. That
is for example, large increases in the use
of 6+ speed transmissions, automated
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manual transmissions, gasoline direct
injection, engine downsizing and
turbocharging, and start-stop systems.
CBD has not provided any detailed
analysis of what technologies are
available in Europe which EPA is not
considering—and there are no such
‘‘magic’’ technologies. The vast majority
of the differences between the current
and future CO2 performance of the
Japanese and European light-duty
vehicle fleets are due to differences in
the size and current composition of the
vehicle fleets in those two regions—not
because EPA has ignored technologies
which are available for application to
the U.S. market in the 2012–2016 time
frame.
If CBD is advocating a radical
reshifting of domestic fleet composition,
(such as requiring U.S. consumers to
purchase much smaller vehicles and
requiring U.S. consumers to purchase
vehicles with manual transmissions), it
is sufficient to say that standards forcing
such a result are not compelled under
section 202(a), where reasonable
preservation of consumer choice
remains a pertinent factor for EPA to
consider in balancing the relevant
statutory factors. See also International
Harvester (478 F. 2d at 640
(Administrator required to consider
issues of basic demand for new
passenger vehicles in making technical
feasibility and lead time
determinations). Thus EPA believes that
the standard is at the proper level of
stringency for the projected domestic
fleet in the 2012–2016 model years
taking into account the wide variety of
consumer choice that is reflected in this
projection of the domestic fleet.
As mentioned earlier (in III.D.4),
CBD’s comments on available lead time
also are inaccurate. Under section
202(a), standards are to take effect only
‘‘after providing such period as the
Administrator finds necessary to permit
the development and application of the
requisite technology, giving appropriate
consideration to the cost of compliance
within such period.’’ Having sufficient
lead time includes among other things,
the time required to certify vehicles. For
example, model year 2012 vehicles will
be tested and certified for the EPA
within a short time after the rule is
finalized, and this can start as early as
calendar year 2010, for MY 2012
vehicles that can be produced in
calendar year 2011. In addition, these
2012 MY vehicles have already been
fully designed, with prototypes built
several years earlier. It takes several
years to redesign a vehicle, and several
more to design an entirely new vehicle
not based on an existing platform. Thus,
redesign cycles are an inextricable
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25467
component of adequate lead time under
the Act. A full line manufacturer only
has limited staffing and financial
resources to redesign vehicles, therefore
the redesigns are staggered throughout a
multi-year period to optimize human
capital.262 Furthermore, redesigns
require a significant outlay of capital
from the manufacturer. This includes
research and development, material and
equipment purchasing, overhead,
benefits, etc. These costs are significant
and are included in the cost estimates
for the technologies in this rule. Because
of the manpower and financial capital
constraints, it would only be possible to
redesign all the vehicles across a
manufacturer’s line simultaneously if
the manufacturer has access to
tremendous amounts of ready capital
and an unrealistically large engineering
staff. However no major automotive firm
in the world has the capability to
undertake such an effort, and it is
unlikely that the supplier basis could
support such an effort if it was required
by all major automotive firms. Even if
this unlikely condition were possible,
the large engineering staff would then
have to be downsized or work on the
next redesign of the entire line another
few years later. This would have the
effect of increasing the cost of the
vehicles.
There is much evidence to indicate
that the average redesign cycle in the
industry is about 5 years.263 There are
some manufacturers who have longer
cycles (such as smaller manufacturers
described above), and there are others
who have shorter cycles for some of
their products. EPA believes that there
are no full line manufacturers who can
maintain significant redesigns of
vehicles (with relative large sales) in 1
or 2 years, and CBD has provided no
evidence indicating this is technically
feasible. A complete redesign of the
entire U.S. light-duty fleet by model
year 2012 is clearly infeasible, and EPA
believes that several model years
additional lead time is necessary in
order for the manufacturers to meet the
standards. The graduated increase in the
stringency of the standards from MYs
2012 through 2016 accounts for this
needed lead time.
There are other reasons that the fleet
cannot meet the 250g/mi CO2 target in
2012 (much less in 2010). The
commenter reasons that if technology is
in use now—even if limited use—it can
262 See for example ‘‘How Automakers Plan Their
Products’’, Center for Automotive Research, July
2007.
263 See for example ‘‘Car Wars 2010–2013, The
U.S. automotive product pipeline’’, John Murphy,
Research Analyst, Bank of America/Merrill Lynch
research paper, July 15, 2009.
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Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
be utilized across the fleet nearly
immediately. This is not the case. An
immediate demand from original
equipment manufacturers (OEMs) to
supply 100% of the fleet with these
technologies in 2012 would cause their
suppliers to encounter the same lead
time issues discussed above. Suppliers
have limited capacity to change their
current production over to the newer
technologies quickly. Part of this reason
is due to engineering, cost and
manpower constraints as described
above, but additionally, the suppliers
face an issue of ‘‘stranded capital’’. This
is when the basic tooling and machines
that produce the technologies in
question need to be replaced. If these
tools and machines are replaced before
they near the end of their useful life, the
suppliers are left with ‘‘stranded capital’’
i.e., a significant financial loss because
they are replacing perfectly good
equipment with newer equipment. This
situation can also occur for the OEMs.
In an extreme example, a plant that
switches over from building port fuel
injected gasoline engines to building
batteries and motors, will require a
nearly complete retooling of the plant.
In a less extreme example, a plant that
builds that same engine and switches
over to suddenly building smaller
turbocharged direct injection engines
with starter alternators might have
significant retooling costs as well as
stranded capital. Finally, it takes a
significant amount of time to retool a
factory and smoothly validate the
tooling and processes to mass produce
a replacement technology. This is why
most manufacturers do this process over
time, replacing equipment as they wear
out. CBD has not accounted for any of
these considerations. EPA believes that
attempting to force the types of massive
technology penetration needed in the
early model years of the standard to
achieve the 2016 standards would be
physically and cost prohibitive.
A number of automotive firms and
associations (including the Alliance of
Automobile Manufacturers, Mercedes,
and Toyota) commented that the
standards during the early model years,
in particular MY 2012, are too stringent,
and that a more linear phase-in of the
standards beginning with the MY 2011
CAFE standards and ending with the
250 gram/mi proposed EPA projected
fleet-wide level in MY 2016 is more
appropriate. In the May 19, 2009 Joint
Notice of Intent, EPA and NHTSA stated
that the standards would have ‘‘* * * a
generally linear phase-in from MY 2012
through to model year 2016.’’ (74 FR
24008). The Alliance of Automobile
Manufacturers stated that the phase-in
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of the standards is not linear, and they
proposed a methodology for the CAFE
standards to be a linear progression
from MY 2011 to MY 2016. The
California Air Resources Board
commented that the proposed level of
stringency, including the EPA proposed
standards for MY 2012–2015, were
appropriate and urged EPA to finalize
the standards as proposed and not
reduce the stringency in the early model
years as this would result in a large loss
of the GHG reductions from the National
Program. EPA agrees with the comments
from CARB, and we have not reduced
the stringency of the program for the
early model years. While some
automotive firms indicated a desire to
see a linear transition from the Model
Year 2011 CAFE standards, our
technology and cost analysis indicates
that our standards are appropriate for
these interim years. As shown in
Section III.H of this final rule, the final
standards result in significant GHG
reductions, including the reductions
from MY 2012–2015, and at reasonable
costs, providing appropriate lead time.
The automotive industry commenters
did not point to a specific technical
issue with the standards, but rather their
desire for a linear phase-in from the
existing 2011 CAFE standards.
In summary, the EPA believes that the
MY 2012–2016 standards finalized are
feasible and that there are compelling
reasons not to adopt more stringent
standards, based on a reasonable
weighing of the statutory factors,
including available technology, its cost,
and the lead time necessary to permit its
development and application. For
further discussion of these issues, see
Chapter 4 of the RIA as well as the
response to comments.
E. Certification, Compliance, and
Enforcement
1. Compliance Program Overview
This section describes EPA’s
comprehensive program to ensure
compliance with 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 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
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data set to satisfy both the new GHG and
Corporate Average Fuel Economy
(CAFE) testing and reporting
requirements. The EPA and NHTSA
programs recognize, and replicate 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
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.
Today’s rule establishes fleet average
greenhouse gas 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 establishing in-use standards that
apply throughout a vehicle’s useful life,
with the in-use standard determined by
adding an adjustment factor to the
emission results used to calculate the
fleet average. EPA’s program will thus
not only assess compliance with the
fleet average standards described in
Section III.B, but will also assess
compliance with the in-use standards.
As it does now, EPA will use a variety
of compliance mechanisms to conduct
these assessments, including preproduction certification and postproduction, in-use monitoring once
vehicles enter customer service.
Specifically, EPA is establishing 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 an
assessment of compliance with the inuse standards concurrent with existing
EPA and manufacturer Tier 2 emission
compliance testing programs. Under this
compliance program manufacturers will
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 received broad comment from
regulated industry and from the public
interest community supporting this
overall compliance program structure.
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The compliance program is outlined in
further detail below.
be implemented in the certification
process.
2. Compliance With Fleet-Average CO2
Standards
a. Compliance Determinations
As described in Section III.B above,
the fleet average standards will be
determined on a manufacturer by
manufacturer basis, separately for cars
and trucks, using the footprint attribute
curves. EPA will 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 will then compare the
actual fleet average to the
manufacturer’s footprint standard to
determine compliance, taking into
consideration use of averaging and
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 received considerable comment
about the need for transparency in its
implementation of the greenhouse gas
program and specifically about the need
for public access to information about
Agency compliance determinations.
Many comments emphasized the
importance of making greenhouse gas
compliance information publicly
available to ensure such transparency.
EPA also received comment from
industry about the need to protect
confidential business information. Both
transparency and protection of
confidential information are
longstanding EPA practices, and both
will remain priorities in EPA’s
implementation of the greenhouse gas
program. EPA periodically provides
mobile source emissions and fuel
economy information to the public, for
example through the annual
Compliance Report 265 and Fuel
Economy Trends Report.266 As
proposed, EPA plans to expand these
reports to include GHG performance
and compliance trends information,
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Fleet average emission levels can only
be determined when a complete fleet
profile becomes available at the close of
the model year. Therefore, EPA will
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
will be based on actual production
figures for each model and on modellevel emissions data collected through
testing over the course of the model
year. Manufacturers will 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’s proposal to
extend this approach to the GHG
program received overwhelming
support from vehicle manufacturers.
EPA is finalizing GHG requirements
under which manufacturers will
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.264 Manufacturers will
submit one data set in satisfaction of
both CAFE and GHG requirements such
that EPA’s program will not impose
additional 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.
Now manufacturers will also submit
CO2 values for the same vehicles.
Section III.E.3 discusses how this will
264 As discussed in Section III.B.1, vehicle and
fleet average compliance will be based on a
combination of CO2, HC, and CO emissions. This
is consistent with the carbon balance methodology
used to determine fuel consumption for the labeling
and CAFE programs. The final regulations account
for these total carbon emissions appropriately and
refer to the sum of these emissions as the ‘‘carbonrelated exhaust emissions’’ (CREE). Although
regulatory text uses the more accurate term ‘‘CREE’’
to represent the CO2-equivalent sum of carbon
emissions, the term CO2 is used as shorthand
throughout Section III.E as a more familiar term for
most readers.
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265 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.
266 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.
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such as annual status of credit balances
or debits, use of various credit
programs, attained fleet average
emission levels compared with
standards, and final compliance status
for a model year after credit
reconciliation occurs. EPA intends to
regularly disseminate non-confidential,
model-level and fleet information for
each manufacturer after the close of the
model year. EPA will reassess data
release needs and opportunities once
the program is underway.
Beyond transparency in reporting
emissions data and compliance status,
EPA is concerned, as a matter of
principle moving into a new era of
greenhouse gas control, that greenhouse
gas reductions reported for purposes of
compliance with the standards adopted
in this rule will be reflected in the real
world and not just as calculated fleet
average emission levels or measured
certification test results. Therefore EPA
will pay close attention to technical
details behind manufacturer reports. For
example, EPA intends to look closely at
each manufacturer’s certification testing
procedures, GHG calculation
procedures, and laboratory correlation
with EPA’s laboratory, and to carefully
review manufacturer pre-production,
production, and in-use testing programs.
In addition, EPA plans to monitor GHG
performance through its own in-use
surveillance program in the coming
years. This will ensure that the
environmental benefits of the rule are
achieved as well as ensure a level
playing field for all.
b. Required Minimum Testing for Fleet
Average CO2
EPA received no public comment on
provisions that would extend current
CAFE testing requirements and
flexibilities to the GHG program, and is
finalizing as proposed minimum testing
requirements for fleet average CO2
determination. EPA will require and use
the same test data to determine a
manufacturer’s compliance with both
the CAFE standard and 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.267 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
267 See
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vehicles, at their option. As described
above, EPA will 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 fleet average
standard.
EPA will 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.
EPA will continue to accept use of
substituted data in the GHG program,
but only when the substituted data are
also used for CAFE purposes.
EPA regulations for CAFE testing
permit the use of analytically derived
fuel economy data in lieu of conducting
actual fuel economy tests in certain
situations.268 Analytically derived data
are generated mathematically using
expressions determined by EPA and are
allowed on a limited basis when a
manufacturer has not tested a specific
vehicle configuration. This has been
done as a way 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 derived data and that
specifies the conditions when
analytically derived fuel economy data
may be used. EPA will apply the same
guidance to the GHG program and will
allow any analytically derived data used
for CAFE to also satisfy the GHG data
reporting requirements. EPA will revise
the terms in the current equations for
analytically derived fuel economy to
specify them in terms of CO2.
Analytically derived CO2 data will 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.
268 40
CFR 600.006–08(e).
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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.269
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.270 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.271
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 with
the fleet average 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 fleet-wide 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
269 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.
271 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.
270 The
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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 will similarly condition each
certificate of conformity for the GHG
program upon a manufacturer’s
demonstration of compliance with the
manufacturer’s fleet-wide average CO2
standard. The following discussion
explains how EPA will integrate the
new GHG vehicle certification program
into the existing certification program.
a. Compliance Plans
In an effort to expedite the Tier 2
program certification process and
facilitate early resolution of any
compliance related concerns, EPA
conducts annual reviews of each
manufacturer’s certification, in-use
compliance and fuel economy plans for
upcoming model year vehicles. EPA
meets with each manufacturer
individually, typically before the
manufacturer begins to submit
applications for certification for the new
model year. Discussion topics include
compliance plans for the upcoming
model year, any new product offerings/
new technologies, certification and/or
testing issues, phase-in and/or ABT
plans, and a projection of potential EPA
confirmatory test vehicles. EPA has
been conducting these compliance
preview meetings for more than 10 years
and has found them to be very useful for
both EPA and manufacturers. Besides
helping to expedite the certification
process, certification preview meetings
provide an opportunity to resolve
potential issues before the process
begins. The meetings give EPA an early
opportunity to assess a manufacturer’s
compliance strategy, which in turn
enables EPA to address any potential
concerns before plans are finalized. The
early interaction reduces the likelihood
of unforeseen issues occurring during
the actual certification of a test group
which can result in the delay or even
termination of the certification process.
For the reasons discussed above,
along with additional factors, EPA
believes it is appropriate for
manufacturers to include their GHG
compliance plan information as part of
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the new model year compliance preview
process. This requirement is both
consistent with existing practice under
Tier 2 and very similar to the pre-model
year report required under existing and
new CAFE regulation. Furthermore, in
light of the production weighted fleet
average program design in which the
final compliance determination cannot
be made until after the end of the model
year, EPA believes it is especially
important for manufacturers to
demonstrate that they have a credible
compliance plan prior to the beginning
of certification.
Several commenters raised concerns
about EPA’s proposal for requiring
manufacturers to submit GHG
compliance plans. AIAM stated that
EPA did not identify a clear purpose for
the review of the plans, criteria for
evaluating the plans, or consequences if
EPA found the plans to be unacceptable.
AIAM also expressed concern over the
appropriateness of requiring
manufacturers to prepare regulatory
compliance plans in advance, since
vicissitudes of the market and other
factors beyond a manufacturer’s direct
control may change over the course of
the year and affect the model year
outcome. Finally, AIAM commented
that EPA should not attempt to take any
enforcement action based on an asserted
inadequacy of a plan. The comments
stated that compliance should be
determined only after the end of a
model year and the subsequent credit
earning period. The Alliance
commented that there was an
inconsistency between the proposed
preamble language and the regulatory
language in 600.514–12(a)(2)(i). The
preamble language indicated that the
compliance report should be submitted
prior to the beginning of the model year
and prior to the certification of any test
group, while the regulatory language
stated that the pre-model year report
must be submitted during the month of
December. The Alliance pointed out
that if EPA wanted GHG compliance
plan information before the certification
of any test groups, the regulatory
language would need to be corrected.
EPA understands that a
manufacturer’s plan may change over
the course of a model year and that
compliance information manufacturers
present prior to the beginning of a new
model year may not represent the final
compliance outcome. Rather, EPA views
the compliance plan as a manufacturer’s
good-faith projection of strategy for
achieving compliance with the
greenhouse gas standard. It is not EPA’s
intent to base compliance action solely
on differences between projections in
the compliance plan and end of year
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results. EPA understands that
compliance with the GHG program will
be determined at the end of the model
year after all appropriate credits have
been taken into consideration.
As stated earlier, a requirement to
include GHG compliance information in
the new model year compliance preview
meetings is consistent with long
standing EPA policy. The information
will provide EPA with an early
overview of the manufacturer’s GHG
compliance plan and allow EPA to make
an early assessment as to possible
issues, questions, or concerns with the
program in order to expedite the
certification process and help
manufacturers better understand overall
compliance provisions of the GHG
program. Therefore, EPA is finalizing
revisions to 40 CFR 600.514–12 which
will require manufacturers to submit a
compliance plan to EPA prior to the
beginning of the model year and prior
to the certification of any test group.
The compliance plan must, at a
minimum, include a manufacturer’s
projected footprint profile, projected
total and model-level production
volumes, projected fleet average and
model-level CO2 emission values,
projected fleet average CO2 standards
and projected fleet average CO2 credit
status. In addition, EPA will expect the
compliance plan to explain the various
credit, transfer and trading options that
will be used to comply with the
standard, including the amount of credit
the manufacturer intends to generate for
air conditioning leakage, air
conditioning efficiency, off-cycle
technology, and various early credit
programs. The compliance plan should
also indicate how and when any deficits
will be paid off through accrual of
future credits.
EPA has corrected the inconsistency
between the proposed preamble and
regulatory language with respect to
when the compliance report must be
submitted and what level of information
detail it must contain. EPA is finalizing
revisions to 40 CFR 600.514–12 which
require the compliance plan to be
submitted to EPA prior to the beginning
of the model year and prior to the
certification of any test group. Today’s
action will also finalize simplified
reporting requirements as discussed
above.
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
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25471
system designs expected to have similar
emissions performance.272 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.273 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 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 affect CO2
generation and emissions but are not
included in EPA’s test group criteria.274
Most important among these may be
vehicle weight, horsepower,
aerodynamics, vehicle size, and
performance features.
As described in the proposal, EPA
considered but did not propose 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
272 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).
274 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).
273 EPA
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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.
For these reasons, EPA will retain the
current Tier 2 test group structure for
cars and light trucks in the certification
requirements for CO2. EPA believes that
the current test group concept is also
appropriate for N20 and CH4 because the
technologies that are employed to
control N2O and CH4 emissions will
generally be the same as those used to
control the criteria pollutants. Vehicle
manufacturers agreed with this
assessment and universally supported
the use of current Tier 2 test groups in
lieu of developing separate CO2 test
groups.
At the time of certification,
manufacturers may 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 further
testing will generally be required for
compliance with the fleet average CO2
standard as described below. EPA’s
issuance of a certificate will 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.
As just discussed, the ‘‘worst case’’
Emissions Data Vehicle selected 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 emits 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 CO2
specific 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
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criteria pollutants. Vehicle
manufacturers expressed concern with
this approach as well, and EPA
ultimately rejected this approach
because it could have required
manufacturers 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 proposed and will adopt
provisions that allow a single Emission
Data Vehicle to represent the test group
for both Tier 2 and CO2 certification.
The manufacturer will 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 will
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
will become the official certification test
results (as per the conditioned
certificate) and will 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
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.
Manufacturers will be subject to two
standards, 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 applied to each model. For
each model, the in-use standard will
generally be set at 10% higher than the
level used for that model in calculating
the fleet average (see Section III.E.4).275
The certificate will cover both of these
275 In cases where configuration or subconfiguration level data exist, the in-use standard
will be set at 10% higher than those emissions test
results. See Section III.E.4.
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standards, and the manufacturer will
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 will
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 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.7 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, and any other carboncontaining exhaust components such as
aldehyde emissions from alcohol-fueled
vehicles. 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
hydrocarbon compounds being
accounted for). Thus, EPA will calculate
the carbon-related exhaust emissions,
also known as ‘‘CREE,’’ of each test
vehicle according to the following
formula, where HC, CO, and CO2 are in
units of grams per mile:
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carbon-related exhaust emissions
(grams/mile) = CWF*HC +
1.571*CO + CO2
Where:
CWF = the carbon weight fraction of the test
fuel.
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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 rule, EPA will
add CO2, N2O, and CH4 to the emissions
measured in the course of Tier 2 and
CAFE confirmatory testing. The N2O
and methane measurement
requirements will begin for model year
2015, when requirements for
manufacturer measurement to comply
with the standard also take effect. The
emission values measured at the EPA
laboratory will continue to stand as
official, as under existing regulatory
programs.
Under current practice, if during
EPA’s confirmatory fuel economy
testing, the EPA fuel economy value
differs from the manufacturer’s value by
more than 3%, manufacturers can
request a re-test. The re-test results
stand as official, even if they differ by
more than 3% from the manufacturer’s
value. EPA proposed extending this
practice to CO2 results, but
manufacturers commented that this
could lead to duplicative testing and
increased test burden. EPA agrees that
the close relationship between CO2 and
fuel economy precludes the need to
conduct additional confirmatory tests
for both fuel economy and CO2 to
resolve potential discrepancies.
Therefore EPA will continue to allow a
re-test request based on a 3% or greater
disparity in manufacturer and EPA
confirmatory fuel economy test values,
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).
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 NOX
fleet average standards and the new 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
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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 276 or
120,000 miles with an optional 15 year
or 150,000 mile provision. A similar
approach is used for heavy-duty
engines, however a specific Family
Emissions Level is assigned to the
engine family at certification, as
compared to a pre-defined bin
emissions level as in Tier 2.
As noted above, the in-use CO2
standard under the greenhouse gas
program, like Tier 2, will apply to
individual vehicles and is separate from
the fleet-average standard. However,
unlike the Tier 2 program and other
EPA fleet average standards, the modellevel CO2 test results are themselves
used to calculate the fleet average
standard for compliance purposes. This
is consistent with the current CAFE
practice, but it means the fleet average
standard and the emission test results
used to calculate compliance with the
fleet average standard do not take into
account test-to-test variability and
production variability that can affect inuse levels. Since the CO2 fleet average
uses the model level emissions test
results themselves for purposes of
calculating the fleet average, EPA
proposed an adjustment factor for the
in-use standard to provide some margin
for production and test-to-test
variability that could result in
differences between the initial emission
test results used to calculate the fleet
average and emission results obtained
during subsequent in-use testing. EPA
proposed that each model’s in-use CO2
standard would be the model specific
level used in calculating the fleet
average, adjusted to be 10% higher.
EPA received significant comment
from industry expressing concern with
the in-use standard. The comments
focused on concerns about manufacturer
liability for in-use CO2 performance and
for the most part did not address the
proposed 10% adjustment level or even
the need for an adjustment to account
for variability. Some comments
suggested that an in-use standard is not
necessary because in-use testing is not
mandated in the CAA. Others stated that
since there is no evidence that CO2
emission levels increase over time, there
is no need for an in-use standard.
Finally, there was a general concern that
failure to meet the in-use standard
would result in recall liability and that
recall can only be used in cases where
it can be demonstrated that a ‘‘repair’’
can remedy the nonconformity. One
276 11 years for heavy-light-duty trucks, ref. 40
CFR 86.1805–12.
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manufacturer provided comments
supporting the use of a 10% adjustment
factor for the in-use standard. These
comments also recommended that the
10% adjustment factor be applied to
configuration or subconfiguration data
rather than to model-level data unless
the lower-level data were not available.
Finally, the manufacturer expressed
concern that a straight 10% adjustment
would result in inequity between highand low-emitting vehicles.
Section 202(a)(1) specifies that
emissions standards are to be applicable
for the useful life of the vehicle. The inuse emissions standard for CO2
implements this provision. While EPA
agrees that the CAA does not require the
Agency to perform in-use testing to
monitor compliance with in-use
standards, the Act clearly authorizes inuse testing. EPA has a long tradition of
performing in-use testing and has found
it to be an effective tool in the overall
light-duty vehicle compliance program.
EPA continues to believe that it is
appropriate to perform in-use testing
and that the evaluation of individual
vehicle performance for all regulated
emission constituents, including CO2,
N2O and CH4, is necessary to ensure
compliance with all light-duty
requirements. EPA also believes that the
CAA clearly mandates that all emission
standards apply for a vehicle’s useful
life and that an in-use standard is
therefore necessary.
EPA agrees with industry commenters
that there is little evidence to indicate
that CO2 emission levels from currenttechnology vehicles increase over time.
However, as stated above, the CAA
mandates that all emission standards
apply for a vehicle’s useful life
regardless of whether the emissions
increase over time. In addition, there are
factors other than emission deterioration
over time that can cause in-use
emissions to be greater than emission
standards. The most obvious are
component defects, production
mistakes, and the stacking of component
production and design tolerances. Any
one of these can cause an exceedance of
emission standards for individual
vehicles or whole model lines. Finally
EPA believes that it is essential to
monitor in-use GHG emissions
performance of new technologies, for
which there is currently no in-use
experience, as they enter the market.
Thus EPA believes that the value in
establishing an in-use standard extends
beyond just addressing emission
deterioration over time from current
technology vehicles.
The concern over recall liability in
cases where there is no effective repair
remedy has some legitimate basis. For
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example, EPA agrees there would be a
concern if a number of vehicles for a
particular model were to have in-use
emissions that exceed the in-use
standard, with no effective repair
available to remedy the noncompliance.
However, EPA does not anticipate a
scenario involving exceedance of the inuse standard that would cause the
Agency to pursue a recall unless there
is a repairable cause of the exceedance.
At the same time, failures to emissionrelated components, systems, software,
and calibrations do occur that could
result in a failure of the in-use CO2
standard. For example, a defective
oxygen sensor that causes a vehicle to
burn excessive fuel could result in
higher CO2 levels that would exceed the
in-use standard. While it is likely that
such a problem would affect other
emissions as well, there would still be
a demonstratable, repairable problem
such that a recall might be valid.
Therefore, EPA believes that a CO2 inuse standard is statutorily required and
can serve as a useful tool for
determining compliance with the GHG
program.
EPA agrees with the industry
comment that it is appropriate where
possible to apply the 10% adjustment
factor to the vehicle-level emission test
results, rather than to a model-type
value that includes production
weighting factors. If no subconfiguration
test data are available, then the
adjustment factor will be applied to the
model-type value. Therefore, EPA is
finalizing an in-use standard based on a
10% multiplicative adjustment factor
but the adjustment will be applied to
emissions test results for the vehicle
subconfiguration if such data exist, or to
the model-type emissions level used to
calculate the fleet average if
subconfiguration test data are not
available.
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
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 will be expected to
sustain the same emissions profile over
their full useful life.
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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 has therefore
determined that an assigned
deterioration factor be applied at the
time of certification. At this time EPA
will use an additive assigned
deterioration factor of zero, or a
multiplicative factor of one. EPA
anticipates that the deterioration factor
will 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 will explore
with each manufacturer any new
technologies that could warrant use of a
different deterioration factor. For any
vehicle model determined likely to
experience increases in CO2 emissions
over the vehicle’s useful life,
manufacturers will not be allowed to
use the assigned deterioration factor but
rather will be required to establish an
appropriate factor. If such an instance
were to occur, EPA would allow
manufacturers to use the whole-vehicle
mileage accumulation method currently
offered in EPA’s regulations.277
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. EPA recognizes that manufacturers
have not been required to account for
durability effects of N2O and CH4 prior
to now. EPA also realizes that industry
will need sufficient time to explore
durability options and become familiar
with procedures for determining
deterioration of N2O and CH4.
Therefore, until the 2015 model year,
277 40
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rather than requiring manufacturers to
establish a durability program for N2O
and CH4, EPA will allow manufacturers
to attest that vehicles meet the
deteriorated, full useful life standard. If
manufacturers choose to comply with
the optional CO2 equivalent standard,
EPA will allow the use of the
manufacturer’s existing NOX
deterioration factor for N2O and the
existing NMOG deterioration factor for
CH4.
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 adjusting a
manufacturer’s credit balance to the
voluntary or mandatory recall of
noncompliant vehicles. These potential
remedies provide 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 fourth 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.278 The emissions data
collected from IUVP serve several
purposes. IUVP results provide 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
manufacturer 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, onboard refueling vapory
recovery (ORVR) emissions and onboard diagnostics (OBD) data.
Manufacturers are required to provide
data for all regulated criteria pollutants.
Some manufacturers have voluntarily
submitted CO2 data as part of IUVP.
EPA proposed that manufacturers
provide CO2, N2O, and CH4 data as part
of the IUVP. EPA also proposed that in
order to adequately analyze and assess
278 64
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in-use CO2 results, which are based on
the combination of FTP and highway
cycle test results, the highway fuel
economy test would also need to be part
of IUVP. The University of California,
Santa Barbara expressed support for
including N2O and CH4 emissions as
part of the IUVP. Manufacturer
comments were almost unanimously
opposed to including any GHG as part
of the IUVP. Specifically, industry
commented that CO2 emissions do not
deteriorate over time and in some cases
actually improve. Ford provided data
for several 2004 through 2007 model
year vehicles that indicate CO2
emissions improved an average of
1.42% when vehicles were tested over
5,000 miles. Manufacturers commented
that the inclusion of a greenhouse gas
emissions requirement and the highway
test cycle as part of the IUVP would
unnecessarily increase burden on
manufacturers and provide no benefit,
since CO2 emissions do not deteriorate
over time. Manufacturers also
commented that N2O and CH4 emissions
are very low and by EPA’s own account
only represent about 1% of total lightduty vehicle GHG emissions. They also
expressed concern over the cost and
burden of measuring N2O for IUVP,
since many manufacturers use
contractor laboratories to assist in their
IUVP testing and many of these facilities
do not have the necessary equipment to
measure N2O. They stated that since it
was unnecessary to include CO2
emissions as part of IUVP and since N2O
and CH4 were such small contributors to
GHG emissions, it did not make sense
to include N2O and CH4 as part of the
IUVP either. They felt that N2O and CH4
could be more appropriately handled
through attestation or an annual
unregulated emissions report.
As discussed above, although EPA
shares the view expressed in
manufacturer comments that historical
data demonstrate little CO2
deterioration, in-use emissions can
increase for a number of reasons other
than deterioration over time. For
example, production or design errors
can result in increased GHG emissions.
Components that aren’t built as they
were designed or vehicles inadvertently
assembled improperly or with the
wrong parts or with parts improperly
designed can result in GHG emissions
greater than those demonstrated to EPA
during the certification process and
used in calculating the manufacturer’s
fleet average. The ‘‘stacking’’ of
component design and production
tolerances can also result in in-use
emissions that are greater than those
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used in calculating a manufacturer’s
fleet average.
EPA believes IUVP testing is also
important to monitor in-use versus
certification emission levels. Because
the emphasis of the GHG program is on
a manufacturer’s fleet average standard,
it is difficult for EPA to make an
assessment as to whether
manufacturer’s vehicles are actually
producing the GHG levels claimed in
their fleet average without some in-use
data for comparison. For example, EPA
has expressed concern that with the inuse standard based on a 10%
adjustment factor, there would be an
incentive for manufacturers to develop
their fleet average utilizing the full
range of the 10% in-use standard. The
only way for EPA to assess whether
manufacturers are designing and
producing vehicles that meet their
respective fleet average standards is for
EPA to be able to review in-use GHG
emissions from the IUVP.
Finally EPA does have some concern
about potential CO2 emissions
deterioration in advanced technologies
for which we currently have no in-use
experience or data. Since CAFE has
never had an in-use requirement and
today’s final regulations are the first
ever GHG standards, there has been no
need to focus on GHG emissions in-use
as there will be with the new GHG
standards. Many of the advanced
technologies that EPA expects
manufacturers to use to meet the GHG
standards have been introduced in
production vehicles, but until now not
for the purpose of controlling
greenhouse gas emissions. For example,
advanced dual-clutch or seven-speed
automatic transmissions, and start-stop
technologies have not been broadly
tested in the field for their long-term
CO2 performance. In-use GHG
performance information for vehicles
using these technologies is needed for
many reasons, including evaluation of
whether allowing use of assigned
deterioration factors for CO2 in lieu of
actual deterioration factors will
continue to be appropriate.
Therefore, EPA is finalizing the
requirement that all manufacturers must
provide IUVP emissions data for CO2.
EPA will also require manufacturers to
perform the highway test cycle as part
of IUVP. Since the CO2 standard reflects
a combined value of FTP and highway
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
understands that requiring
manufacturers to also measure N2O and
CH4 will be initially challenging, since
many manufacturer facilities do not
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currently have the proper analytical
equipment. To be consistent with timing
of the N2O and CH4 emissions standards
for this rule, N2O and CH4 will not be
required for IUVP until the 2015 model
year.
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 for vehicles tested in the
IUVP 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 substance. EPA proposed to
exclude IUVP data for CO2, N2O, and
CH4 emissions from the IUCP
thresholds. EPA felt that there was not
sufficient data to determine if the
existing IUCP thresholds were
appropriate or even applicable to those
emissions. The University of California,
Santa Barbara disagreed with EPA’s
concerns and recommended that CO2,
N2O, and CH4 emissions all be subject
to the IUVP threshold criteria.
Manufacturers commented that since
CO2 performance is a function of vehicle
design and cannot be remedied in the
field with the addition or replacement
of emissions control devices like
traditional criteria pollutants, it would
not be appropriate or necessary to
include IUCP threshold criteria for GHG
emissions.
EPA continues to believe that the
IUCP is an important part of EPA’s inuse compliance program for traditional
criteria pollutants. For GHG emissions,
EPA believes the IUCP will also be a
valuable future tool for achieving
compliance. However, there are
insufficient data today to determine
whether the current IUCP threshold
criteria are appropriate for GHG
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. Therefore, for
today’s final action, EPA will exclude
IUVP data for CO2, N2O, and CH4
emissions from the IUCP thresholds.
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.
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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 will 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
standard used for fleet average
calculation are the same. In-use
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
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, it would be
inappropriate to compare an individual
vehicle to the fleet average, since that
vehicle could have been certified to an
emission level that is different than the
fleet average level.
This will also be true for the CO2 fleet
average standard. Therefore, to ensure
that an individual vehicle complies
with the CO2 standards in-use, it is
necessary to compare the vehicle’s inuse 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 CO2 standards and Tier 2
standards. For Tier 2, the standard level
used for the fleet average calculation is
one of eight different emission levels, or
‘‘bins,’’ whereas for the CO2 fleet average
standard, the standard level used for the
fleet average calculation is the modellevel 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.279 In contrast, the CO2 fleet
279 In a similar fashion, the fleet average for
heavy-duty engines is calculated using a Family
Emission Level, determined by the manufacturer,
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average standard will be calculated
using the actual vehicle model-level
CO2 values from the certification test
vehicles. With a specified certification
emission standard, such as the Tier 2
‘‘bins,’’ manufacturers typically attempt
to over-comply 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 CO2
standards, the emission level used to
calculate the fleet average 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 value used for
calculating the fleet average.
The CO2 fleet average standard is
based on the performance of preproduction technology that is
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-totest 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 proposed an in-use
standard that was 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
certification 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 inuse, since the in-use standards are
typically the levels used to calculate the
fleet average. 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.
which is different from the emission level of the test
engine.
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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 a reasonable cushion for
in-use variability that is beyond a
manufacturer’s control. EPA proposed a
factor of 10% that would 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 model-level in-use
standard.
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%.280 However, there are
some fundamental differences between
CO2 emissions and other criteria
pollutants in the magnitude of the
compounds. 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.
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
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
280 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.
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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 calculation of the fleet
average, EPA will discuss the matter
with the manufacturer and consider
possible resolutions such as changes to
ensure that the emissions test data more
accurately reflect the emissions level of
vehicles at the time of production,
increased EPA confirmatory testing, and
other similar measures.
Commenters generally did not
comment on whether 10% was the
appropriate level for the adjustment
factor. Honda did support use of the
proposed 10% adjustment factor for the
in-use standard. But Honda also
recommended that the 10% adjustment
factor be applied to subconfiguration
data rather than the model-level data
unless there was no subconfiguration
data available. Honda also expressed
some concern over the inequity a
straight 10% adjustment would incur
between high- and low-emitting
vehicles. They suggested that rather
than using an across-the-board 10%
multiplicative adjustment factor applied
to the model-level CO2 value for all
vehicles, it would be more equitable to
take the sum of a 5% multiplicative
factor applied to the model-level CO2
value and a 5% factor applied to the
manufacturer’s fleet CO2 target.
EPA understands that use of a
multiplicative adjustment factor would
result in a higher absolute in-use value
for a vehicle that has higher CO2 than
for a vehicle with a lower CO2.
However, this difference is not relevant
to the purpose of the adjustment factor,
which is to provide some cushion for
test and production variability. EPA
does not believe the difference would be
great enough to confer the higheremitting vehicles with an unfair
advantage with respect to emissions
variability.
Given that the purpose of the in-use
standard is to enable a fair comparison
between certification and in-use
emission levels, EPA agrees that it is
appropriate to apply the 10%
adjustment factor to actual emission test
results rather than to model-type
emission levels which are production
weighted. Therefore, EPA is finalizing
an in-use standard that applies a
multiplicative 10% adjustment factor to
the subconfiguration emissions values,
if such are available. (For flexible-fuel
and dual-fuel vehicles the
multiplicative factor will be applied to
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the test results on each fuel. In other
words, these vehicles will have two
applicable in-use emission standards;
one for operation on the conventional
fuel and one for operation on the
alternative fuel.) If no emissions data
exist at the subconfiguration level the
adjustment will be applied to the
model-type value as originally
proposed. If the in-use emission result
for a vehicle exceeds the emissions
level, as applicable, adjusted as just
described by 10%, then the vehicle will
have exceeded the in-use emission
standard. The in-use standard will
apply to all in-use compliance testing
including IUVP, selective enforcement
audits, and EPA’s internal test program.
5. Credit Program Implementation
As described in Section III.E.2 above,
for each manufacturer’s model year
production, the manufacturer will
average the CO2 emissions within each
of the two averaging sets (passenger cars
and trucks) and compare that with its
respective fleet average standards
(which in turn will have been
determined from the appropriate
footprint curve applicable to that model
year). In addition to this withincompany averaging, when a
manufacturer’s fleet average CO2 values
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 sell or otherwise distribute to
another manufacturer (trading). Section
III.C discusses opportunities for
manufacturers to improve their fleet
average, beyond the credits that are
simply calculated by over-achieving
their applicable fleet average 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.
EPA is promulgating two broad types
of credit programs under this
rulemaking. One type of credit directly
lowers a manufacturer’s actual fleet
average by virtue of being applied
within the methodology for calculating
the fleet average emissions. Examples of
this type of credit include the credits
available for alternative fuel vehicles
and the advanced technology vehicle
provisions. 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
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(or debits). Using a fictional example,
the remainder of this section reviews
the different types of credits and shows
where and how they are calculated and
how they impact a manufacturer’s
available credits.
a. Basic Credits: Fleet Average
Emissions Are Below the Standard
As just noted, basic credits are earned
by a manufacturer’s fleet that performs
better than the applicable fleet average
standard. Manufacturers will calculate
their fleet average standards (separate
standards are calculated for cars and
trucks) using the footprint-based
equations described in Section III.B. A
manufacturer’s actual end-of-year fleet
average 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. As part of this rulemaking, EPA has
amended key subparts and sections of
Part 600 to require that fleet average CO2
emissions be calculated in a manner
parallel to the way CAFE values are
calculated. First, manufacturers will
determine a CO2-equivalent value for
each model type. The CO2-equivalent
value is a summation of the carboncontaining constituents of the exhaust
emissions on a CO2-equivalent basis.
For gasoline and diesel vehicles this
simply involves measurement of total
hydrocarbons and carbon monoxide in
addition to CO2. The calculation
becomes somewhat more complex for
alternative fuel vehicles due to the
different nature of their exhaust
emissions. For example, for ethanolfueled vehicles, the emission tests must
measure ethanol, methanol,
formaldehyde, and acetaldehyde in
addition to CO2. However, all these
measurements are currently necessary to
determine fuel economy for the labeling
and CAFE programs, and thus no new
testing or data collection will be
required.281 Second, manufacturers will
calculate a fleet average by weighting
the CO2 value for each model type by
the production of that model type, as
they currently do for the CAFE program.
Again, this will be done separately for
cars and trucks. Finally, the
manufacturer will compare the
calculated standard with the fleet
average that is actually achieved to
determine the credits (or debits) that are
generated. Both the determination of the
applicable standard and the actual fleet
average will be done after the model
281 Note that the final rule also provides an option
for manufacturers to incorporate N2O and CH4 in
this calculation at their CO2-equivalent values.
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year is complete and using final model
year vehicle production data.
Consider a basic hypothetical
example where Manufacturer ‘‘A’’ has
calculated a car fleet average standard of
300 grams/mile and a car fleet average
of 290 grams/mile (Table 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 manufacturer’s production of
500,000. This result is then multiplied
by the assigned lifetime vehicle miles
travelled (for cars this is 195,264 miles,
as discussed in Joint TSD Chapter 4),
then finally divided by 1,000,000 to
convert from grams to total megagrams.
The result is the total number of
megagrams of credit generated by the
manufacturer’s car fleet. The same
methodology is used to calculate the
total number of megagrams of deficit, if
the manufacturer was not able to
comply with the fleet average standard.
In this example, the result is 976,320
megagrams of credits, as shown in Table
III.E.5–1.
TABLE III.E.5–1—SUMMARY FOR MANUFACTURER A: EARNING BASIC CREDITS
CO2
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Total production ................................
Fleet average standard .....................
Fleet average ....................................
Credits ...............................................
Conventional: 500,000 .................................................................................
......................................................................................................................
......................................................................................................................
[(300¥290) × 500,000 × 195,264] ÷ 1,000,000 ..........................................
b. Interim Advanced Technology
Vehicle Provisions
The lower exhaust greenhouse gas
emissions of some advanced technology
vehicles can directly benefit a
manufacturer’s fleet average, thus
increasing the amount of fleet averagebased credits they earn (or reducing the
amount of debits that would otherwise
accrue). Manufacturers that produce
electric vehicles, plug-in hybrid electric
vehicles, or fuel cell electric vehicles
will include these vehicles in the fleet
average calculation with their model
type emission values. As described in
detail in Section III.C.3, the emissions
from electric vehicles and plug-in
hybrid electric vehicles when operating
on electricity will be accounted for by
assuming zero emissions (0 g/mi CO2)
for a limited number of vehicles through
the 2016 model year. This interim
limited use of 0 g/mi will be allowed for
the technologies specifically noted
above and as defined in the regulations,
with the limitation that the vehicles
must be certified to Tier 2 Bin 5
emission standards or cleaner (i.e.,
advanced technology vehicles must
contribute to criteria pollutant
reductions as well as to greenhouse gas
emission reductions).
EPA proposed specific definitions for
the vehicle technologies eligible for
these provisions. One manufacturer
suggested the following changes in their
comments:
• Insert an additional criterion for
electric vehicles that specifically states
that an electric vehicle may not have an
onboard combustion engine/generator
system.
• A minor deletion of text from the
definition for ‘‘Fuel cell.’’
• The deletion of the requirement that
a PHEV have an equivalent all-electric
range of more than 10 miles.
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EPA agrees with the first comment. As
written in the proposal, a vehicle with
an onboard combustion engine that
serves as a generator would not have
been excluded from the definition of
electric vehicle. However, EPA believes
it should be. Although such a vehicle
might be propelled by an electric motor
directly, if the indirect source of
electricity is an onboard combustion
engine then the vehicle is
fundamentally not an electric vehicle.
EPA is also adopting the commenter’s
proposed rephrasing of the definition
for ‘‘Fuel cell,’’ which is simpler and
clearer. Finally, in the context of the
advanced technology incentive
provisions in this final rule, EPA
concurs with the commenter that the
requirement that a PHEV have an
equivalent all-electric range of at least
ten miles is unnecessary. In the context
of the proposed credit multiplier EPA
was concerned that some vehicles could
install a charging system on a limited
battery and gain credit beyond what the
limited technology would deserve
simply by virtue of being defined as a
PHEV. However, because EPA is not
finalizing the proposed multiplier
provisions (see Section III.C.3) and is
instead using as the sole incentive the
zero emission tailpipe level as the
compliance value for a manufacturer’s
fleetwide average, this concern is no
longer valid. Since EPA is not
promulgating multipliers, the concern
expressed at proposal no longer applies,
and each PHEV will get a benefit from
electricity commensurate with its
measured use of grid electricity, thus
EPA is no longer concerned about the
multiplier effect. Thus, EPA is finalizing
the following definitions in the
regulations:
• Electric vehicle means a motor
vehicle that is powered solely by an
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290 g/mi
300 g/mi
290 g/mi
500,000
=
954,855 Mg
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 Recharge energy must be drawn
from a source off the vehicle, such as
residential electric service;
Æ The vehicle must be certified to the
emission standards of Bin #1 of Table
S04–1 in paragraph (c)(6) of § 86.1811;
and
Æ The vehicle does not have an
onboard combustion engine/generator
system as a means of providing
electrical energy.
• 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
non-combustion reaction of a
consumable fuel, typically hydrogen.
• Plug-in hybrid electric vehicle
(PHEV) means a hybrid electric vehicle
that 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.
With some simplifying assumptions,
assume that 25,000 of Manufacturer A’s
fleet are now plug-in hybrid electric
vehicles with a calculated CO2 value of
80 g/mi, and the remaining 475,000 are
conventional technology vehicles with
an average CO2 value of 290 grams/mile.
By including the advanced technology
PHEVs in their fleet, Manufacturer A
now has more than 2.9 million credits
(Table III.E.5–2).
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TABLE III.E.5–2—SUMMARY FOR MANUFACTURER A: EARNING BASIC AND INTERIM ADVANCED TECHNOLOGY CREDITS
CO2
Total production ..............................
Fleet average standard ...................
Fleet average ..................................
Credits .............................................
Conventional: 475,000 .............................................................................
PHEV: 25,000 ...........................................................................................
...................................................................................................................
[(475,000 × 290) + (25,000 × 80)] ÷ [500,000] ........................................
[(300¥280) × 500,000 × 195,264] ÷ 1,000,000 ......................................
c. Flexible-Fuel Vehicle Credits
As noted in Section III.C, treatment of
flexible-fuel vehicle (FFV) credits differs
between model years 2012–2015 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 final
regulations have been modified as
needed to do the calculations in terms
of grams per mile of CO2 values rather
than miles per gallon. These credits are
integral to the fleet average calculation
and allow the vehicles to be represented
by artificially reduced emissions. To use
this credit program, the CO2 values of
FFVs will be represented by the average
of two things: the CO2 value while
operating on gasoline and the CO2 value
while operating on the alternative fuel
multiplied by 0.15.
For MY 2012 to 2015 for example,
Manufacturer A makes 30,000 FFVs
with CO2 values of 280 g/mi using
gasoline and 260 g/mi using E85. The
Totals
290 g/mi
80 g/mi
300 g/mi
280 g/mi
500,000
=
1,952,640 Mg
CO2 value 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
Including these FFVs with the
applicable credit in Manufacturer A’s
fleet average, as shown below in Table
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.
TABLE III.E.5–3 SUMMARY FOR MANUFACTURER A: EARNING BASIC, INTERIM ADVANCED TECHNOLOGY, AND FLEXIBLE
FUEL VEHICLE CREDITS
CO2
Total production ..............................
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Fleet average standard ...................
Fleet average ..................................
Credits .............................................
Conventional: 445,000 .............................................................................
PHEV: 25,000 ...........................................................................................
FFV: 30,000 .............................................................................................
...................................................................................................................
[(445,000 × 290) + (25,000 × 80) + 30,000 × 160] ÷ [500,000] ..............
[(300 ¥ 272) × 500,000 × 195,264] ÷ 1,000,000 ....................................
In the 2016 and later model years, the
calculation of FFV emissions differ
substantially from prior years in that the
determination of the CO2 value to
represent an FFV model type will be
based upon the actual use of the
alternative fuel and on actual 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 will
apply to an FFV by default would be the
value determined for operation on
conventional fuel. However, if the
manufacturer believes that the
alternative fuel is used in real-world
driving and that accounting for this use
could improve the fleet average, the
manufacturer has two options. First, the
regulations 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 realworld use of the conventional fuel.
Section III.C describes how EPA might
make this determination. Any value
determined by EPA will be published by
EPA, and that weighting value would be
available for all manufacturers to use for
that fuel. The second option allows a
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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 must be approved by
EPA before their use is allowed. In
either case, whether EPA supplies the
weighting factors or EPA approves a
manufacturer’s alternative fuel
weighting factors, 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. In the example
above, for instance, the default CO2 value
for the fictional FFV described above
would be the gasoline value of 280 g/mi,
and the resulting fleet average and total
credits would be 279 g/mi and 2,050,272
megagrams, respectively. However, if the
EPA determines that real-world ethanol
use amounts to 40 percent of driving,
then using the equation above the FFV
would be included in the fleet average
calculation with a CO2 value of 272 g/mi,
resulting in an overall fleet average of
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Totals
290 g/mi
80 g/mi
160 g/mi
300 g/mi
272 g/mi
500,000
=
2,733,696 Mg
278 g/mi and total credit accumulation
of 2,147,904 megagrams.
d. Dedicated Alternative Fuel Vehicle
Credits
Like the FFV credit program
described above, these credits will be
treated differently in the first years of
the program than in the 2016 and later
model years. In fact, these credits are
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
(Table III.E.5–4). Prior to the 2016
model year the CO2 emissions
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representing these CNG vehicles will be
33 grams/mile (220 × 0.15).
TABLE III.E.5–4—SUMMARY FOR MANUFACTURER A: EARNING BASIC, ADVANCED TECHNOLOGY, FLEXIBLE FUEL VEHICLE,
AND DEDICATED ALTERNATIVE FUEL VEHICLE CREDITS
CO2
Total production ..............................
Fleet average standard ...................
Fleet average ..................................
Credits .............................................
Conventional: 425,000 ............................................................................
PHEV: 25,000 ..........................................................................................
FFV: 30,000 .............................................................................................
CNG: 20,000 ...........................................................................................
..................................................................................................................
[(425,000 × 290) + (25,000 × 80) + (30,000 × 160) + (20,000 × 33)] ÷
[500,000].
[(300¥261) × 500,000 × 195,264] ÷ 1,000,000 .....................................
The calculation for 2016 and later will
be the same except the 0.15 credit
adjustment factor is removed from the
equation, and the CNG vehicles in this
example would simply be productionweighted in the equation using their
actual emissions value of 220 grams/
mile instead of the ‘‘credited’’ value of
33 grams/mile.
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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 or fleet average
standard. 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 average calculations shown above.
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 can
generate credits for reducing the leakage
of refrigerant from their air conditioning
systems. To do this the manufacturer
will identify an air conditioning system
improvement, indicate that they 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
regulations. Air conditioning credits
will be determined separately for cars
and trucks using the car and truckspecific equations described in Section
III.C.
In order to put these credits on the
same basis as the basic and other credits
described above, the air conditioning
leakage credits will need to be
calculated separately for cars and
trucks. Thus, the resulting grams per
mile credit determined from the
appropriate car or truck equation will be
multiplied by the lifetime VMT assigned
by EPA (195,264 for cars; 225,865 for
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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 will 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 × 850/1,430)] = 7.9
g/mi.
Total megagrams of credits would
then be:
[7.9 × 250,000 × 195,264] ÷ 1,000,000 =
385,646 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 4,193,294
megagrams of credits.
f. Air Conditioning Efficiency Credits
As noted in Section III.C.1.b,
manufacturers may 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
credit balance or offset a deficit, but
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Totals
290 g/mi
80 g/mi
160 g/mi
33 g/mi
300 g/mi
261 g/mi
500,000
=
3,807,648 Mg
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
efficiency credits are calculated
separately for cars and trucks. Thus, the
resulting grams per mile credit
determined in the above equation is
multiplied by the lifetime VMT, and
then divided by 1,000,000 to get the
total megagrams of efficiency 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 will determine their
credit based on selections from a menu
of technologies, each of which provides
a gram per mile credit amount. The
credits will be summed for all the
technologies implemented by the
manufacturer, but cannot 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 × 195,264] ÷ 1,000,000 =
278,251 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 4,471,545
megagrams of credits.
g. Off-Cycle Technology Credits
As described in Section III.C, these
credits will be available for certain new
or innovative technologies that achieve
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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 CO2-reducing impact of the
technology, the manufacturer could
propose and use, with EPA approval, a
different analytical approach to
determining the credit amount. Like the
air conditioning credits above, these
credits will 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 is
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 GHG regulations contain
provisions that describe how to
calculate 5-cycle CO2 values (see 40 CFR
600.114–08). The manufacturer will
have to design a test program that
accounts for vehicle differences if the
technology is installed in different
vehicle types, and enough data will
have to be collected to address data
uncertainty issues. Manufacturers
seeking to generate off-cycle credits
based on a 5-cycle analysis will be
required to submit a description of their
test program and the results to EPA for
approval.
As noted in Section III.C.4, a
manufacturer-developed testing, data
collection, and analysis program will
require additional EPA approval and
oversight. EPA received considerable
comment from environmental and
public interest organizations suggesting
that EPA’s decisions about which
technologies merit off-cycle credit
should be open and public. EPA agrees
that a public process will help ensure a
fair review and alleviate concerns about
potential misuse of the off-cycle credit
flexibility. Therefore EPA intends to
seek public comment on manufacturer
proposals for off-cycle credit that do not
use the 5-cycle approach to quantify
emission reductions. EPA will consider
any comments it receives in
determining whether and how much
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credit is appropriate. Manufacturers
should submit proposals well in
advance of their desired decision date to
allow time for these public and EPA
reviews.
Once the demonstration of the CO2
reduction of an off-cycle technology is
complete, 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 will determine the total
credit value by multiplying the gram per
mile per vehicle credit by the
production 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 4.4 grams/mile and that is
installed in 175,000 cars would generate
credits as follows:
[4.4 × 175,000 × 195,264] ÷ 1,000,000 =
150,353 Mg.
h. End-of-Year Reporting
In general, implementation of the
averaging, banking, and trading (ABT)
program, including the calculation of
credits and deficits, will be
accomplished via existing reporting
mechanisms. EPA’s existing regulations
define how manufacturers calculate
fleet average miles per gallon for CAFE
compliance purposes. Today’s action
modifies 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
will now require a similar report that
includes fleet average CO2 levels and
related information. That can be
integrated with the CAFE report at the
manufacturer’s option. In addition to
requiring reporting of the actual fleet
average achieved, this end-of-year report
will 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 will be required to
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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, the number of credits bought
or sold, and the resulting balance of
credits or debits.
Because of the multitude of credit
programs that are available under the
greenhouse gas program, the end-of-year
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
report will 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 will be required to
identify the number and type of these
vehicles and the effect of these credits
on their fleet average. The same will be
true for credits due to flexible-fuel and
alternative-fuel vehicles, although for
2016 and later flexible-fuel credits
manufacturers may 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 will have to
include a summary of their use of such
credits that will include which air
conditioning systems were 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
procedure, and reporting will have to
detail compliance with the phase-in as
well as the test results and the resulting
efficiency credits generated. Similar
reporting requirements will also apply
to the variety of possible off-cycle credit
options, where manufacturers will 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
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manufacturers, EPA will expect
manufacturers to 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 will be
required to submit projections of all of
the elements described above, plus any
projected credit trading transactions
(described below).
Finally, to the extent that there are
any credit transactions, the
manufacturer will have to detail in the
end-of-year report documentation on all
credit transactions that the
manufacturer has engaged in.
Information for each transaction will
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. The
final report is due to EPA within 90
days of the end of the model year, or no
later than March 31 in the calendar year
after the calendar year named for the
model year. For example, the final GHG
report for the 2012 model year is due no
later than March 31, 2013. Failure by
the manufacturer to submit the annual
report in the specified time period will
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,
manufacturers will report to EPA their
fleet average and 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 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 will review the annual
reports, figures, and calculations
submitted by the manufacturer to
determine any nonconformance.
Each certificate, required prior to
introduction into commerce, will be
conditioned upon the manufacturer
attaining the CO2 fleet average standard.
If a manufacturer fails to meet this
condition and has 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 will review the
manufacturer’s production for the
model year in which the deficit
originated and designate which vehicles
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caused the fleet average standard to be
exceeded.
EPA proposed that the vehicles that
would be identified as nonconforming
would come from the most recent model
year, and some comments pointed out
that this was inconsistent with how the
NLEV and Tier 2 programs were
structured. EPA agrees with these
comments and is finalizing an
enforcement structure that is essentially
identical to the one in place for existing
programs. 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. 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 produced 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.
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
rule.282 This section of the 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.
Manufacturer comments expressed
concern about potential enforcement
action for violations of the greenhouse
gas standards, and the circumstances
under which EPA would impose
penalties. Manufacturers also suggested
that EPA should adopt a penalty
structure similar to the one in place
under CAFE.
The CAA specifies different civil
penalty provisions for noncompliance
than EPCA does, and EPA cannot
therefore adopt the CAFE penalty
structure. However, 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 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.283 The underlying
principle of this penalty factor is to
operate as a safety mechanism when
necessary to prevent injustice.284
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.
282 42 U.S.C. 7524(a), Civil Monetary Penalty
Inflation Adjustment, 69 FR 7121 (Feb. 13, 2004)
and Civil Monetary Penalty Inflation Adjustment
Rule, 73 FR 75340 (Dec. 11, 2008).
283 In re Spang & Co., 6 E.A.D. 226, 249 (EAB
1995).
284 B.J. Carney Industries, 7 E.A.D. 171, 232, n. 82
(EAB 1997).
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7. Prohibited Acts in the CAA
Section 203 of the Clean Air Act
describes acts that are prohibited by
law. This section and associated
regulations apply equally to the
greenhouse gas standards as to any other
regulated emission. Acts that are
prohibited by section 203 of the Clean
Air Act include the introduction into
commerce or the sale of a vehicle
without a certificate of conformity,
removing or otherwise defeating
emission control equipment, the sale or
installation of devices designed to
defeat emission controls, and other
actions. EPA proposed to include in the
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regulations a new section that details
these prohibited acts. Prior regulations,
such as the NLEV program, had
included such a section, and although
there is no burden associated with the
regulations or any specific need to
repeat what is in the Clean Air Act, EPA
believes that including this language in
the regulations provides clarity and
improves the ease of use and
completeness of the regulations. No
comments were received on the
proposal, and EPA is finalizing the
section on prohibited acts (see 40 CFR
86.1854–12).
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 will also apply
this policy 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 have
done so for CAFE purposes.
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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 rule. 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 rule is
not known. EPA will assess its
compliance testing and other activities
associated with the rule and may amend
its fees regulations in the future to
include any warranted new costs.
c. Small Entity Exemption
EPA is exempting small entities, and
these entities (necessarily) would not be
subject to the certification requirements
of this rule.
As discussed in Section III.B.8,
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
GHG requirements, pending future
regulatory action. EPA proposed that
such entities instead be required to
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
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121.201. EPA has reconsidered the need
for this additional submission under the
regulations and is deleting it as not
necessary. We already have information
on the limited number of small entities
that we expect would receive the
benefits of the exemption, and do not
need the proposed regulatory
requirement to be able to effectively
implement this exemption for those
parties who in fact meet its terms. 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.
As discussed in detail in Section
III.B.6, small volume manufacturers
with annual sales volumes of less than
5,000 vehicles will also be deferred from
the CO2 standards, pending future
regulatory action. These manufacturers
would still be required to meet N2O and
CH4 standards, however. To qualify for
CO2 standard deferral, manufacturers
would need to submit a declaration to
EPA, and would also be required to
demonstrate due diligence in having
attempted to first secure credits from
other manufacturers. 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 volume manufacturer status is
requested, but 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 volume
manufacturer declaration would be due
in September, 2011. If 2012 model year
vehicles are not planned for
introduction until March, 2012, then the
declaration would have to be submitted
in December, 2011. Such manufacturers
are not automatically exempted from
other EPA regulations for light-duty
vehicles and light-duty trucks; therefore,
absent this annual declaration EPA
would assume that each manufacturer
was not deferred from compliance with
the 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.285
Specifically, the OBD system is required
to monitor catalysts, oxygen sensors,
engine misfire, evaporative system
285 40
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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 did not
propose that CO2 emissions would
become one of the applicable standards
required to be monitored by the OBD
system. EPA did not propose CO2
become an applicable standard for OBD
because it was confident that many of
the emission-related 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 did not have data on the
feasibility or effectiveness of monitoring
various emission systems and
components for CO2 emissions and did
not believe that it would be prudent to
include CO2 emissions without such
information.
EPA did not address whether N2O or
CH4 emissions should become
applicable standards for OBD
monitoring in the proposal. Several
manufacturers felt that EPA’s silence on
this issue implied that EPA was
proposing that N2O and CH4 emissions
become applicable OBD standards. They
commented that EPA should not
include them as part of OBD. They felt
that adding N2O and CH4 would
significantly increase OBD development
burden, without significant benefit,
since any malfunctions that increase
N2O and CH4 would likely be caught by
current OBD system designs. EPA agrees
with the manufacturer’s comments on
including N2O and CH4 as applicable
standards. Therefore, at this time, EPA
is not requiring CO2, N2O, and CH4
emissions as one of the applicable
standards required for the OBD
monitoring threshold. EPA plans to
evaluate OBD monitoring technology,
with regard to monitoring these GHG
emissions-related systems and
components, and may choose to propose
to include CO2, N2O, and CH4 emissions
as part of the OBD requirements in a
future regulatory action.
CFR 86.1806–04.
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e. Applicability of Current High
Altitude Provisions to Greenhouse
Gases
Vehicles covered by this rule must
meet the CO2, N2O and CH4 standard at
altitude. The CAA requires emission
standards under section 202 for lightduty vehicles and trucks to apply at all
altitudes.286 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 will retain its current
high altitude regulations so
manufacturers will not normally be
required to submit vehicle CO2 test data
for high altitude. Instead, they must
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 will 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 will be required to include
emissions data to allow EPA evaluate
and quantify any emission impact and
validity of the AECD.
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f. Applicability of Standards to
Aftermarket Conversions
With the exception of the small entity
and small volume exemptions, EPA’s
emission standards, including
greenhouse gas standards, will continue
to apply as stated in the applicability
sections of the relevant regulations. The
greenhouse gas standards are being
incorporated into 40 CFR part 86,
subpart S, which includes 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
85.502. EPA expects that some
aftermarket conversion companies will
qualify for and seek the small entity
and/or small volume exemption, but
those that do not qualify will be
required to meet the applicable
emission standards, including the
greenhouse gas standards.
286 See
CAA 206(f).
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g. Geographical Location of Greenhouse
Gas Fleet Vehicles
One manufacturer commented that
the CAFE sales area location defined by
Department of Transportation
regulations is different than the EPA
sales area location defined by the CAA.
DOT regulations require CAFE
compliance 287 in the 50 states, the
District of Columbia, and Puerto Rico.
However, EPA emission certification
regulations require emission
compliance 288 in the 50 states, the
District of Columbia, the Puerto Rico,
the Virgin Islands, Guam, American
Samoa and the Commonwealth of the
Northern Mariana Islands.
The comment stated that EPA has the
discretion under the CAA to align the
sales area location of production
vehicles for the greenhouse gas fleet
with the sales area location for the
CAFE fleet and recommended that EPA
amend the definitions in 40 CFR
86.1803 accordingly. This would
exclude from greenhouse gas
requirements production vehicles that
are introduced into commerce in the
Virgin Islands, Guam, American Samoa,
and the Commonwealth of the Northern
Mariana.
Although EPA has tried to harmonize
greenhouse gas and CAFE requirements
in this rule to the extent possible, EPA
believes that the approach suggested in
comment would be contrary to the
requirements of the Act. EPA does not
believe that the Agency has discretion
under the CAA to exclude from
greenhouse gas requirements production
vehicles introduced into commerce in
the Virgin Islands, Guam, American
Samoa, and the Commonwealth of the
Northern Mariana Islands. In addition,
this change would introduce an
undesirable level of complexity into the
287 DOT regulations at 49 CFR 525.4(a)(5) read
‘‘The term customs territory of the United States is
used as defined in 19 U.S.C. 1202.’’ Section 19
U.S.C. 1202 has been replaced by the Harmonized
Tariff Schedule of the United States. The
Harmonized Tariff Schedule reads in part that ‘‘The
term ‘customs territory of the United States’ * * *
includes only the States, the District of Columbia,
and Puerto Rico.’’
288 Section 216 of the Clean Air Act defines the
term commerce to mean ‘‘(A) commerce between
any place in any State and any place outside
thereof; and (B) commerce wholly within the
District of Columbia.’’
Section 302(d) of the Clean Air Act reads ‘‘The
term ‘State’ means a State, the District of Columbia,
the Commonwealth of Puerto Rico, the Virgin
Islands, Guam, and American Samoa and includes
the Commonwealth of the Northern Mariana
Islands.’’ In addition, 40 CFR 85.1502(14) regarding
the importation of motor vehicles and motor vehicle
engines defines the United States to include ‘‘the
States, the District of Columbia, the Commonwealth
of Puerto Rico, the Commonwealth of the Northern
Mariana Islands, Guam, American Samoa, and the
U.S. Virgin Islands.’’
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certification process and result in
confusion due to vehicles intended for
commerce in separate geographical
locations being covered under a single
certificate. For these reasons, EPA will
retain the proposed greenhouse gas
production vehicle sales area location as
defined in the CAA.
9. Miscellaneous Revisions to Existing
Regulations
a. Revisions and Additions to
Definitions
EPA has amended its definitions of
‘‘engine code,’’ ‘‘transmission class,’’ and
‘‘transmission configuration’’ in its
vehicle certification regulations (part
86) to conform to 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 will not determine which vehicle
is 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). Since
the same vehicles tested to determine
corporate average fuel economy will
also be tested to determine fleet average
CO2, the same definitions will apply.
Thus EPA has amended its part 86
definitions of the above terms to
conform to the definitions in part 600.
Two provisions have been amended
to bring EPA’s fuel economy regulations
in Part 600 into conformity with the
fleet average CO2 requirement contained
in this rulemaking and with NHTSA’s
reform truck regulations. First, the
definition of ‘‘footprint’’ in this rule is
also being added 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 amending 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
included in this rule for fleet average
CO2 and fuel economy compliance.
b. Addition of Ethanol Fuel Economy
Calculation Procedures
EPA has amended part 600 to add
calculation procedures for determining
the carbon-related exhaust emissions
and calculating the fuel economy of
vehicles operating on ethanol fuel.
Manufacturers have been using these
procedures as needed, but the regulatory
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language—which specifies how to
determine the fuel economy of gasoline,
diesel, compressed natural gas, and
methanol fueled vehicles—has not
previously been updated to specify
procedures for vehicles operating on
ethanol. Under today’s rule EPA is
requiring use of a carbon balance
approach for ethanol-fueled vehicles
that is similar to the way carbon-related
exhaust emissions are calculated for
vehicles operating on other fuels for the
purpose of determining fuel economy
and for compliance with the fleet
average CO2 standards. The carbon
balance formula is similar to the one in
place for methanol, except that ethanol
and acetaldehyde emissions must also
be measured for ethanol-fueled vehicles.
The 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 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.
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.289 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 1980 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
produces fewer than 10,000 vehicles of
all kinds worldwide. EPA believes that
this exemption language is no longer
appropriate and is deleting it from the
289 45
FR 49256, July 24, 1980.
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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
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
has revised 40 CFR Part 600
applicability regulations such that these
electric vehicle exemptions are deleted
starting with the 2012 model year.
d. Miscellaneous Conforming
Regulatory Amendments
EPA has made a number of minor
amendments to update the regulations
as needed or to ensure that the
regulations are consistent with changes
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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 applicable 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 regulatory text to ensure a
complete understanding of the
regulatory changes being promulgated
by EPA.
In the process of amending
regulations that vary in applicability by
model year, EPA has several approaches
that can be taken. The first option is to
amend an existing section of the
regulations. For example, EPA did this
in the final regulations with § 86.111–
94. In this case EPA chose to directly
amend this section—which applies to
1994 and later model years as indicated
by the suffix after the hyphen—but
ensure that the model year of
applicability of the amendments (2015
and later for N2O measurement) is stated
clearly in the regulatory text. A second
option is to create a new section with
specific applicability to the 2012 and
later model years; i.e., a section number
with a ‘‘12’’ following the hyphen. This
approach typically involves pulling
forward all the language from an earlier
model year section, then amending as
needed (but it could also involve a
wholesale revision and replacement
with entirely new language). For
example, EPA took this approach with
§ 86.1809–12. Although only paragraphs
(d) and (e) contain revisions pertaining
to this greenhouse gas rule, the
remainder of the section is ‘‘pulled
forward’’ from a prior model year
section (in this case, § 86.1809–10) for
completeness. Thus paragraphs (a)
through (c) are unchanged relative to the
prior model year section. Readers
should therefore be aware that sections
that are indicated as taking effect in the
2012 model year may differ in only
subtle ways from the prior model year
section being superseded. A third
approach (not used in this regulation) is
to use the ‘‘Reserved. For guidance see
* * *’’ technique. For example, in the
§ 86.1809–12, rather than bring forward
the existing language from paragraphs
(a) through (c), EPA could have simply
put a statement in the regulations
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directing the reader to refer back to
§ 86.1809–10 for those requirements.
This method has been used in the past,
but is not being used in this regulation.
10. Warranty, Defect Reporting, and
Other Emission-Related Components
Provisions
As outlined in the proposal, Section
207(a) of the Clean Air Act (CAA)
requires manufacturers to provide a
defect warranty that warrants a vehicle
is designed to comply with emission
standards and will be free from defects
that may cause noncompliance over the
specified warranty period which is 2
years/24,000 miles (whichever is first)
or, for major emission control
components, 8 years/80,000 miles. The
warranty covers parts which must
function properly to assure continued
compliance with emission standards.
The proposal explained that under the
greenhouse gas rule, this coverage
would include compliance with the
proposed CO2, CH4, and N2O standards.
The proposal did not discuss the CAA
Section 207(b) performance warranty.
EPA proposed to include air
conditioning system components under
the CAA section 207(a) emission
warranty in cases where manufacturers
use air conditioning leakage and
efficiency credits to comply with the
proposed fleet average CO2 standards.
The warranty period of 2 years/24,000
miles would apply. EPA requested
comments as to whether any other parts
or components should be designated as
‘‘emission related parts’’ and thus
subject to warranty and defect reporting
provisions under this rule.
The Alliance of Automobile
Manufacturers (Alliance), Toyota and
the State of New Jersey provided
comments. The State of New Jersey
supported EPA’s proposal to include
motor vehicle air conditioning system
components under the emission
warranty provisions. Both the Alliance
and Toyota commented that emission
warranty requirements are not
appropriate for mobile air conditioners
because (1) in-use performance of the air
conditioning system at levels
comparable to a new vehicle is not
needed to achieve the emission levels
targeted by EPA and (2) manufacturer
general warranties already cover air
conditioning systems and are typically
longer than the two-year/24,000 mile
proposed emissions warranty period.
Regarding direct emissions
(refrigerant leakage), the Alliance and
Toyota commented that warranty
requirements are unnecessary for
refrigerants with a global warming
potential (GWP) below 150 because the
environmental impact is negligible even
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if refrigerants are released from the
system. Regarding indirect emissions
(fuel consumed to power the air
conditioning system), the Alliance
commented that EPA should not require
warranty coverage of the air
conditioning system because in the vast
majority of air conditioning failure
modes, the system stops cooling and
ceases operation—either because the
critical moving parts stop moving or
because the system is switched off—
thereby actually reducing the indirect
CO2 emissions.
EPA received no comments regarding
(1) other parts or components which
should be designated as ‘‘emission
related parts’’ subject to warranty
requirements, (2) defect reporting
requirements, or (3) other requirements
associated with warranty and defect
reporting requirements (e.g., voluntary
emission-related recall reporting
requirements, performance warranty
requirements, voluntary aftermarket
parts certification requirements or
tampering requirements.
Defect Warranty. EPA’s current policy
for defect warranty requirements is
provided in Section 207 of the Act.
There are currently no defect warranty
regulations. Congress provided under
Section 207(a) and (b) of the CAA that
emission-related components shall be
covered under the 207(a) defect
warranty and the 207(b) performance
warranty for the warranty period
outlined in section 207(i) of the CAA.
For example, section 207(a) reads in
part:
‘‘* * * the manufacturer of each new motor
vehicle and new motor vehicle engine shall
warrant to the ultimate purchaser and each
subsequent purchaser that such vehicle or
engine is (A) designed, built and equipped so
as to conform at the time of sale with
applicable regulations under section 202, and
(B) free from defects in materials and
workmanship which cause such vehicle or
engine to fail to conform with applicable
regulations for its useful life (as determined
under sec. 202(d)). In the case of vehicles and
engines manufactured in the model year 1995
and thereafter such warranty shall require
that the vehicle or engine is free from any
such defects for the warranty period
provided under subsection (i).’’
Section 207(i) reads in part:
‘‘(i) Warranty Period.—
(1) In General.—For purposes of subsection
(a)(1) and subsection (b), the warranty period,
effective with respect to new light-duty
trucks and new light-duty vehicles and
engines, manufactured in model year 1995
and thereafter, shall be the first 2 years or
24,000 miles of use (whichever first occurs),
except as provided in paragraph (2). For the
purposes of subsection (a)(1) and subsection
(b), for other vehicles and engines the
warranty period shall be the period
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established by the Administrator by
regulation (promulgated prior to the
enactment of the Clean Air Act Amendments
of 1990) for such purposes unless the
Administrator subsequently modifies such
regulation.
(2) In the case of a specified major
emission control component, the warranty
period for new light-duty trucks and new
light-duty vehicles manufactured in the
model year 1995 and thereafter for purposes
of subsection (a)(1) and subsection (b) shall
be 8 years or 80,000 miles of use (whichever
first occurs). As used in this paragraph, the
term ‘specified major emission control
component’ means only a catalytic converter,
an electronic emissions control unit, and an
onboard emissions diagnostic device, except
that the Administrator may designate any
other pollution control device or component
as a specified major emission control
component if—(A) the device or component
was not in general use on vehicles and
engines manufactured prior to the model year
1990; and (B) the Administrator determines
that the retail cost (exclusive of installation
costs) of such device or component exceeds
$200 (in 1989 dollars, adjusted for inflation
or deflation) as calculated by the
Administrator at the time of such
determination * * *’’
Thus, the CAA provides the basis of
the warranty requirements contained in
today’s final rule, which will cover
‘‘emission related parts’’ necessary to
provide compliance with CO2, CH4, and
N2O standards. Emission related parts
would include those parts, systems,
components and software installed for
the specific purpose of controlling
emissions or those components,
systems, or elements of design which
must function properly to assure
continued vehicle emission compliance,
including compliance with CO2, CH4,
and N2O standards; (similar to the
current definition of ‘‘emission related
parts’’ provided in 40 CFR 85.2102(14)
for performance warranty requirements).
For example, today’s action will extend
defect warranty requirements to
emission-related components on
advanced technology vehicles such as
cylinder deactivation components or
batteries used in hybrid-electric
vehicles.
Under today’s rule, EPA will extend
the defect warranty requirement to
emission-related components necessary
to meet CO2, CH4, and N2O standards,
including emission-related components
which are used to obtain optional
credits for (1) certification of advanced
technology vehicles, (2) credits for
reduction of air conditioning refrigerant
leakage, (3) credits for improving air
conditioning system efficiency, (4)
credits for off-cycle CO2 reducing
technologies, and (5) optional early
credits for 2009–2011 model year
vehicles outlined in the provisions of 40
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CFR 86.1867–12 (which are required to
be reported to EPA after the 2011 model
year).
Regarding the comments received by
the Alliance and Toyota, that warranty
coverage is not needed for air
conditioning components, EPA believes
that the Clean Air Act requires warranty
coverage on components used to
demonstrate compliance with the
emission standards, including
components used in the optional credit
programs for reduction of air
conditioning refrigerant leakage and air
conditioning efficiency improvements.
EPA does not have the discretion to
forgo warranty requirements by
regulation in today’s final rule. Thus,
the Agency is adopting defect warranty
requirements for air conditioning
components as proposed.
Effective date of Warranty for
Components used to Obtain Early
Credits. Regarding the defect warranty
for emission-related components used to
obtain optional early credits for 2009–
2011 vehicles, the defect warranty
should provide coverage for these
components at the time the early credits
report is submitted to EPA (e.g., no later
than 90 days after the end of the 2011
model year). For example, the defect
warranty for early credit components
does not have to apply retroactively
(before the manufacturer declares the
credits to EPA). The Agency believes
this approach is reasonable, because (1)
manufacturer’s early credit plans may
not be finalized until after vehicles have
been produced; (2) manufacturers will
be provided satisfactory lead time to
provide warranty requirements to
customers; and (3) the manufacturer’s
basic (bumper-to-bumper) warranty for
air conditioning and other early credit
components are typically longer than
the two-year/24,000 mile proposed
warranty period which will be
applicable to most early credit
components.
Performance Warranty. EPA did not
propose any changes to the current
performance warranty requirements,
because the performance warranty
preconditions outlined in section 207(b)
of the CAA have not been satisfied. For
example, section 207(b) of the CAA
comes into play if EPA issues
performance warranty short test
regulations and determines that there
are inspection facilities available in the
field to determine when vehicles do not
comply with greenhouse gas emission
standards. Once EPA issues
performance warranty short test
regulations, then the CAA performance
warranty provisions require the
manufacturer to pay for emissionrelated repairs if a vehicle is properly
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maintained and used, and fails the short
test and is required to repair the vehicle.
Currently the provisions of 85.2207 and
85.2222 provide performance warranty
short test (commonly called an
inspection and maintenance or I/M test).
The provisions of 85.2207 and 85.2222
provide an I/M test procedure and
failure criteria based on an inspection of
the onboard diagnostic (OBD) system of
the vehicle. The OBD inspection
procedure in 85.2222 is currently used
in most areas of the country where I/M
tests are required. For example, a
vehicle fails the OBD test procedure
outlined in 85.2222 if the vehicle’s MIL
is commanded to be ‘‘on’’ during the
I/M test procedure.
Although most areas of the country
which require I/M testing use the OBD
test procedure outlined in 40 CFR
85.2207 and 85.2222, the NPRM did not
propose that the OBD system would be
required to monitor CO2, CH4 or N2O
emission performance, ref 74 FR 49574
and 74 FR 49755. Therefore, the
performance warranty preconditions in
201(b) of the CAA are not currently in
effect for greenhouse gas CO2 emissions.
The performance warranty continues to
apply for criteria pollutants but not for
greenhouse emissions.
Defect Reporting and Voluntary
Emission-related Recall Reporting
Requirements. EPA did not propose any
changes to the current defect reporting
and voluntary emission-related recall
reporting requirements outlined in the
provisions of 40 CFR 85.1901–1909.
Although EPA requested comments, we
did not receive any comments on defect
reporting and voluntary emissionrelated recall reporting requirements.
Current regulations require
manufacturers to submit a defect report
to EPA whenever an emission-related
defect exists in 25 or more in-use
vehicles or engines of the same model
year. The defect report is required to be
submitted to EPA within 15 working
days of the time the manufacturer
becomes aware of a defect that affects 25
or more vehicles. Current regulations
require manufacturers to submit to EPA
voluntary emission-related recall reports
within 15 working days of the date
when owner notification begins.
Similar to the performance warranty
requirements outlined above, the
Agency believes that as proposed, defect
reporting and voluntary emissionrelated recall reporting requirements
would apply to emission-related
components necessary to meet CO2, CH4,
and N2O standards for the useful life of
the vehicle, including emission-related
components that are used to obtain
optional credits for (1) certification of
advanced technology vehicles, (2)
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25487
credits for reduction of air conditioning
refrigerant leakage, (3) credits for
improving air conditioning system
efficiency, and (4) credits for off-cycle
CO2 reducing technologies, and (5)
optional early credits for 2009–2011
model year vehicles outlined in the
provisions of 40 CFR 86.1867–12 (which
are required to be reported to EPA after
the 2011 model year). For early credit
components, defect reporting
requirements and voluntary emissionrelated recall reporting requirements
become effective at the time the early
credits report is submitted to EPA (e.g.,
no later than 90 days after the end of the
2011 model year).
The final rule includes a minor
clarification to the provisions of 40 CFR
85.1902 (b) and (d) to clarify that
beginning with the 2012 model year,
manufacturers are required to report
emission-related defects and voluntary
emission recalls to EPA, including
emission-related defects and voluntary
emission recalls related to greenhouse
gas emissions (CH4, N2O and CO2).
11. Light Duty Vehicles and Fuel
Economy Labeling
American consumers need accurate
and meaningful information about the
environmental and fuel economy
performance of new light duty vehicles.
EPA believes it is important that the
fuel-economy label affixed to the new
vehicles provide consumers with the
critical information they need to make
smart purchase decisions, especially 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.
Therefore, in proposing this
greenhouse gas action, EPA sought
comment on issues surrounding
consumer vehicle labeling in general,
and labeling of advanced technology
vehicles in particular. EPA specifically
asked for input as to whether today’s
miles per gallon fuel economy metric
provides adequate information to
consumers.
EPA received considerable public
input in response to the request for
comment in the proposal. Since the
greenhouse gas rule was proposed in
September, 2009, EPA has initiated a
separate rulemaking to explore in detail
the information displayed on the fuel
economy label and the methodology for
deriving that information. The purpose
of the vehicle labeling rulemaking is to
ensure that American consumers
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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.
EPA will consider all vehicle labeling
comments received in response to the
greenhouse gas proposal in its
development of the new labeling rule in
coming months. We encourage the
interested public to stay engaged and
continue to provide input on this issue
in the context of the vehicle labeling
rulemaking.
F. How will this final rule 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 CO2-equivalent basis
for calendar years 2010, 2020, 2030,
2040 and 2050. As shown below, U.S.
GHGs are estimated to make up roughly
17 percent of total worldwide emissions
in 2010, and the contribution of direct
emissions from cars and light-trucks to
this U.S. share is growing over time,
reaching an estimated 19 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
[MMTCO2eq]
2010
All Sectors (Worldwide) a .........................................................................
All Sectors (U.S. Only) a ..........................................................................
U.S. Cars/Light Truck Only b ....................................................................
a ADAGE
2020
41,016
7,118
1,243
2030
48,059
7,390
1,293
52,870
7,765
1,449
2040
56,940
8,101
1,769
2050
60,209
8,379
2,219
model projections, U.S. EPA.290
(2010), OMEGA Model (2020–50) U.S. EPA. See RIA Chapter 5.3 for modeling details.
b MOVES2010
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EPA’s GHG rule 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 rule
is part of a joint National Program such
that a large majority of the projected
benefits would be achieved jointly with
NHTSA’s CAFE standards, which are
described in detail in Section IV. EPA
estimates the reductions attributable to
the GHG program over time assuming
the model year 2016 standards continue
indefinitely post-2016,291 compared to a
reference 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-eq emissions by 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
‘‘upstream’’ emission reductions from
290 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 (https://www.epa.gov/climatechange/
economics/economicanalyses.html). ADAGE model
projections of worldwide and U.S. totals include
EISA, and are provided for context.
291 This analysis does not include the EISA
requirement for 35 MPG through 2020 or
California’s Pavley 1 GHG standards. The standards
are intended to supersede these requirements, and
the baseline case for comparison are the emissions
that would result without further action above the
currently promulgated fuel economy standards.
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gasoline extraction, production and
distribution processes as a result of
reduced gasoline demand associated
with this rule. Some of the overall
emission reductions also come from
projected improvements 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 program would be 307 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 approximately
50 million cars and light trucks from the
road in this timeframe.292
EPA projects the total reduction of the
program over the full life of model year
2012–2016 vehicles to be about 960
MMTCO2eq, with fuel savings of 78
292 Estimated using MOVES2010, the average
vehicle in the light duty fleet emitted 5.1 tons of
CO2 during calendar year 2008.
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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 standards.
The impacts on global mean
temperature and global mean sea level
rise resulting from these emission
reductions are discussed in Section
III.F.3.
1. Impact on GHG Emissions
This action 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 subject to 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 the emission caps set forth in
this rule, which are meant to prevent
emission backsliding and to bring diesel
vehicles equipped with advanced
technology aftertreatment, and other
advanced technology vehicles such as
lean-burn gasoline vehicles, into
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alignment with current gasoline vehicle
emissions.293
No substantive comments were
received on the emissions modeling
methods or on the greenhouse gas
inventories presented in the proposal.
These analyses are updated here to
include model revisions and more
recent economic analysis, including
revised estimates of future vehicle sales,
fuel prices, and vehicle miles traveled.
The primary source for these data is the
AEO 2010 preliminary release.294 For
more details, please see the TSD and
RIA Chapter 5.
As detailed in the RIA, EPA estimated
calendar year tailpipe CO2 reductions
based on pre- and post-control CO2 gram
per mile levels from EPA’s OMEGA
model and assumed to continue
indefinitely into the future, coupled
with VMT projections derived from
AEO 2010 Early Release. 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, the
TLAAS program and FFV credits. EPA
also estimated full lifetime reductions
for model years 2012–2016 using preand 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 rule allows 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 50 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 Chapter 5 of the RIA. These
25489
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 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 RIA.
a. Calendar Year Reductions for Future
Years
Table III.F.1–1 shows reductions
estimated from these GHG standards
assuming a pre-control case of 2011 MY
standards continuing indefinitely
beyond 2011, and a post-control case in
which 2016 MY GHG standards
continue indefinitely beyond 2016.295
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 307 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 GHG REDUCTIONS
[MMTCO2eq per year]
Calendar year
2020
Net Reduction * ................................................................................................
Net CO2 ....................................................................................................
Net other GHG .........................................................................................
Downstream Reduction ...................................................................................
CO2 (excluding A/C) .................................................................................
A/C—indirect CO2 .....................................................................................
A/C—direct HFCs .....................................................................................
CH4 (rebound effect) ................................................................................
N2O (rebound effect) ................................................................................
Upstream Reduction ........................................................................................
CO2 ...........................................................................................................
CH4 ...........................................................................................................
N4O ...........................................................................................................
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 ..........................................
156.4
139.1
17.3
125.2
101.2
10.6
13.3
0.0
0.0
31.2
27.2
3.9
0.1
12.1%
2.1%
0.3%
2030
2040
307.0
273.3
33.7
245.7
199.5
20.2
26.0
0.0
¥0.1
61.3
53.5
7.6
0.3
21.2%
4.0%
0.6%
401.5
360.4
41.1
320.7
263.2
26.5
30.9
0.0
¥0.1
80.8
70.6
10.0
0.3
22.7%
5.0%
0.7%
2050
505.9
458.7
47.2
403.0
335.1
33.8
34.2
0.0
¥0.1
102.9
89.9
12.7
0.4
22.8%
6.0%
0.8%
mstockstill on DSKB9S0YB1PROD with RULES2
* Includes impacts of 10% VMT rebound rate presented in Table III.F.1–3.
293 EPA is adopting a compliance option whereby
manufacturers can comply with a CO2 equivalent
standard in lieu of meeting the CH4 and N2O
standards. This should have no effect on the
estimated GHG reductions attributable to the rule
since a condition of meeting that alternative
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standard is that the fleetwide CO2 target remains in
place.
294 Energy Information Administration. Annual
Energy Outlook 2010 Early Release. https://
www.eia.doe.gov/oiaf/aeo/.
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295 Legally, the 2011 CAFE standards only apply
to the 2011 model year and no standards apply to
future model years. However, we do not believe that
it would be appropriate to assume that no CAFE
standards would apply beyond the 2011 model year
when projecting the impacts of this rule.
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b. Lifetime Reductions for 2012–2016
Model Years
EPA also analyzed the emission
reductions over the full life of the 2012–
lifetime reductions of about 960
MMTCO2eq, with fuel savings of 78
billion gallons (1.8 billion barrels) of
gasoline.
2016 model year cars and trucks
affected by this program.296 These
results, including both upstream and
downstream GHG contributions, are
presented in Table III.F.1–2, showing
TABLE III.F.1–2—PROJECTED NET GHG REDUCTIONS
[MMTCO2eq per year]
Lifetime GHG reduction
(MMT CO2 EQ)
Model year
2012
2013
2014
2015
2016
Lifetime Fuel
savings
(billion gallons)
.................................................................................................................................................................
.................................................................................................................................................................
.................................................................................................................................................................
.................................................................................................................................................................
.................................................................................................................................................................
88.9
130.2
174.2
244.2
324.6
7.3
10.5
13.9
19.5
26.5
Total Program Benefit ..............................................................................................................................
962.0
77.7
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 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 25.0
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 vehicle GHG standards are
attributed solely to this rebound effect.
TABLE III.F.1–3—GHG IMPACT OF 10% VMT REBOUND a
[MMTCO2eq per year]
2020
Total GHG Increase .........................................................................................
Tailpipe & Indirect A/C CO2 ......................................................................
Upstream GHGs b ................................................................................
Tailpipe CH4 .............................................................................................
Tailpipe N2O .............................................................................................
2030
13.0
10.2
2.8
0.0
0.0
2040
25.0
19.6
5.4
0.0
0.1
2050
32.9
25.8
7.1
0.0
0.1
41.9
32.8
9.1
0.0
0.1
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 GHG emission standards. In
addition to this annual increase, EPA
assumed that 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 253 g/mile CO2eq
(4%), and 230 g/mile CO2eq (6%) in
2016.
As in the primary scenario, EPA
assumed that the fleet complied with
the standards. For full details on
modeling assumptions, please refer to
RIA Chapter 5. EPA’s assessment of
these alternative standards, including
our response to public comments, is
discussed in Section III.D.
TABLE III.F.1–4—CALENDAR YEAR IMPACTS OF ALTERNATIVE SCENARIOS
Calendar year
Scenario
CY 2020
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Total GHG Reductions (MMT CO2 eq) ...........................
Fuel Savings (Billion Gallons Gasoline Equivalent) .......
296 As detailed in the RIA Chapter 5 and TSD
Chapter 4, for this analysis the full life of the
vehicle is represented by average lifetime mileages
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Primary ...............................
4% ......................................
6% ......................................
Primary ...............................
4% ......................................
6% ......................................
¥156.4
¥141.9
¥202.6
¥12.6
¥11.3
¥16.7
for cars (195,000 miles) and trucks (226,000 miles)
averaged over calendar years 2012 through 2030, a
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CY 2030
¥307.0
¥286.2
¥403.4
¥24.7
¥22.9
¥33.2
CY 2040
¥401.5
¥375.4
¥529.3
¥32.6
¥30.3
¥43.9
CY 2050
¥505.8
¥472.9
¥668.7
¥41.5
¥38.6
¥55.9
function of how far vehicles drive per year and
scrappage rates.
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TABLE III.F.1–5—MODEL YEAR IMPACTS OF ALTERNATIVE SCENARIOS
Model year lifetime
Scenario
MY 2012
Fuel Savings (Billion Gallons Gasoline Equivalent).
mstockstill on DSKB9S0YB1PROD with RULES2
2. Overview of Climate Change Impacts
From GHG Emissions
Once emitted, GHGs that are the
subject of this regulation can remain in
the atmosphere for decades to centuries,
meaning that (1) their concentrations
become well-mixed throughout the
global atmosphere regardless of
emission origin, and (2) their effects on
climate are long lasting. GHG emissions
come mainly from the combustion of
fossil fuels (coal, oil, and gas), with
additional contributions from the
clearing of forests and agricultural
activities. The transportation sector
represents a significant portion, 28%, of
U.S. GHG emissions.297
This section provides a summary of
observed and projected changes in GHG
emissions and associated climate
change impacts. The source document
for the section below is the Technical
Support Document (TSD) 298 for EPA’s
Endangerment and Cause or Contribute
Findings Under the Clean Air Act.299
Below is the Executive Summary of the
TSD which provides technical support
for the endangerment and cause or
contribute analyses concerning GHG
emissions under section 202(a) of the
Clean Air Act. The 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 action
and other U.S. and global actions. The
TSD was updated and revised based on
expert technical review and public
comment as part of EPA’s rulemaking
process for the final Endangerment
Findings. The key findings synthesized
here and the information throughout the
TSD are primarily drawn from the
297 U.S. EPA (2009) Inventory of U.S. Greenhouse
Gas Emissions and Sinks: 1990–2007. EPA–430–R–
09–004, Washington, DC.
298 ‘‘Technical Support Document for
Endangerment and Cause or Contribute Findings for
Greenhouse Gases Under Section 202(a) of the
Clean Air Act.’’ Docket: EPA–HQ–OAR–2009–0472–
11292.
299 See 74 FR 66496 (Dec. 15, 2009).
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MY 2014
MY 2015
MY 2016
Primary .......................
4% ..............................
6% ..............................
Primary .......................
¥88.8
¥39.9
¥61.7
¥7.3
¥130.2
¥96.6
¥146.5
¥10.5
¥174.2
¥155.4
¥237.0
¥13.9
¥244.2
¥226.5
¥332.2
¥19.5
¥324.6
¥303.6
¥427.6
¥26.5
¥962.0
¥822.0
¥1,204.9
¥77.7
4% ..............................
6% ..............................
Total GHG Reductions (MMT CO2 eq) ...........
MY 2013
¥2.9
¥4.9
¥7.1
¥12.0
¥12.2
¥19.4
¥18.0
¥27.3
¥24.6
¥35.6
¥64.8
¥99.1
assessment reports of the
Intergovernmental Panel on Climate
Change (IPCC), the U.S. Climate Change
Science Program (CCSP), the U.S. Global
Change Research Program (USGCRP),
and the National Research Council
(NRC).300
a. Observed Trends in Greenhouse Gas
Emissions and Concentrations
The primary long-lived GHGs directly
emitted by human activities include
carbon dioxide (CO2), methane (CH4),
nitrous oxide (N2O), hydrofluorocarbons
(HFCs), perfluorocarbons (PFCs), and
sulfur hexafluoride (SF6). Greenhouse
gases have a warming effect by trapping
heat in the atmosphere that would
otherwise escape to space. In 2007, U.S.
GHG emissions were 7,150 teragrams 301
of CO2 equivalent 302 (TgCO2eq). The
dominant gas emitted is CO2, mostly
from fossil fuel combustion. Methane is
the second largest component of U.S.
emissions, followed by N2O and the
fluorinated gases (HFCs, PFCs, and SF6).
Electricity generation is the largest
emitting sector (34% of total U.S. GHG
emissions), followed by transportation
(28%) and industry (19%).
Transportation sources under Section
202(a) 303 of the Clean Air Act
(passenger cars, light duty trucks, other
trucks and buses, motorcycles, and
300 For a complete list of core references from
IPCC, USGCRP/CCSP, NRC and others relied upon
for development of the TSD for EPA’s
Endangerment and Cause or Contribute Findings
see section 1(b), specifically, Table 1.1 of the TSD.
301 One teragram (Tg) = 1 million metric tons.
1 metric ton = 1,000 kilograms = 1.102 short tons
= 2,205 pounds.
302 Long-lived GHGs are compared and summed
together on a CO2-equivalent basis by multiplying
each gas by its global warming potential (GWP), as
estimated by IPCC. In accordance with United
Nations Framework Convention on Climate Change
(UNFCCC) reporting procedures, the U.S. quantifies
GHG emissions using the 100-year timeframe values
for GWPs established in the IPCC Second
Assessment Report.
303 Source categories under Section 202(a) of the
Clean Air Act are a subset of source categories
considered in the transportation sector and do not
include emissions from non-highway sources such
as boats, rail, aircraft, agricultural equipment,
construction/mining equipment, and other off-road
equipment.
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Total
passenger cooling) emitted 1,649
TgCO2eq in 2007, representing 23% of
total U.S. GHG emissions. U.S.
transportation sources under Section
202(a) made up 4.3% of total global
GHG emissions in 2005,304 which, in
addition to the United States as a whole,
ranked only behind total GHG emissions
from China, Russia, and India but ahead
of Japan, Brazil, Germany, and the rest
of the world’s countries. In 2005, total
U.S. GHG emissions were responsible
for 18% of global emissions, ranking
only behind China, which was
responsible for 19% of global GHG
emissions. The scope of this action
focuses on GHG emissions under
Section 202(a) from passenger cars and
light duty trucks source categories (see
Section III.F.1).
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. The global
atmospheric concentration of CH4 has
increased by 149% since pre-industrial
levels (through 2007); and the N2O
concentration has increased by 23%
(through 2007). The observed
concentration increase in these gases
can also be attributed primarily to
anthropogenic emissions. The industrial
fluorinated gases, HFCs, PFCs, and SF6,
have relatively low atmospheric
concentrations but the total radiative
forcing due to these gases is increasing
rapidly; these gases are almost entirely
anthropogenic in origin.
Historic data show that current
atmospheric concentrations of the two
most important directly emitted, longlived GHGs (CO2 and CH4) are well
above the natural range of atmospheric
concentrations compared to at least the
last 650,000 years. Atmospheric GHG
concentrations have been increasing
because anthropogenic emissions have
been outpacing the rate at which GHGs
are removed from the atmosphere by
304 More recent emission data are available for the
United States and other individual countries, but
2005 is the most recent year for which data for all
countries and all gases are available.
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natural processes over timescales of
decades to centuries.
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b. Observed Effects Associated With
Global Elevated Concentrations of GHGs
Current ambient air concentrations of
CO2 and other GHGs remain well below
published exposure thresholds for any
direct adverse health effects, such as
respiratory or toxic effects.
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. This total net heating effect,
referred to as forcing, is estimated to be
+1.6 (+0.6 to +2.4) watts per square
meter (W/m2), with much of the range
surrounding this estimate due to
uncertainties about the cooling and
warming effects of aerosols. However, as
aerosol forcing has more regional
variability than the well-mixed, longlived GHGs, the global average might
not capture some regional effects. The
combined radiative forcing due to the
cumulative (i.e., 1750 to 2005) increase
in atmospheric concentrations of CO2,
CH4, and N2O is estimated to be +2.30
(+2.07 to +2.53) W/m2. The rate of
increase in positive radiative forcing
due to these three GHGs during the
industrial era is very likely to have been
unprecedented in more than 10,000
years.
Warming of the climate system is
unequivocal, as is now evident from
observations of increases in global
average air and ocean temperatures,
widespread melting of snow and ice,
and rising global average sea level.
Global mean surface temperatures have
risen by 1.3 ± 0.32 °F (0.74 °C ± 0.18 °C)
over the last 100 years. Eight of the 10
warmest years on record have occurred
since 2001. 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.
Most of the observed increase in
global average temperatures since the
mid-20th century is very likely due to
the observed increase in anthropogenic
GHG concentrations. Climate model
simulations suggest natural forcing
alone (i.e., changes in solar irradiance)
cannot explain the observed warming.
U.S. temperatures also warmed during
the 20th and into the 21st century;
temperatures are now approximately 1.3
°F (0.7 °C) warmer than at the start of
the 20th century, with an increased rate
of warming over the past 30 years. Both
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the IPCC 305 and the CCSP reports
attributed recent North American
warming to elevated GHG
concentrations. In the CCSP (2008)
report,306 the authors find that for North
America, ‘‘more than half of this
warming [for the period 1951–2006] is
likely the result of human-caused
greenhouse gas forcing of climate
change.’’
Observations show that changes are
occurring in the amount, intensity,
frequency and type of precipitation.
Over the contiguous United States, total
annual precipitation increased by 6.1%
from 1901 to 2008. It is likely that there
have been increases in the number of
heavy precipitation events within many
land regions, even in those where there
has been a reduction in total
precipitation amount, consistent with a
warming climate.
There is strong evidence that global
sea level gradually rose in the 20th
century and is currently rising at an
increased rate. It is not clear whether
the increasing rate of sea level rise is a
reflection of short-term variability or an
increase in the longer-term trend. Nearly
all of the Atlantic Ocean shows sea level
rise during the last 50 years with the
rate of rise reaching a maximum (over
2 millimeters [mm] per year) in a band
along the U.S. east coast running eastnortheast.
Satellite data since 1979 show that
annual average Arctic sea ice extent has
shrunk by 4.1% per decade. The size
and speed of recent Arctic summer sea
ice loss is highly anomalous relative to
the previous few thousands of years.
Widespread changes in extreme
temperatures have been observed in the
last 50 years across all world regions,
including the United States. Cold days,
cold nights, and frost have become less
frequent, while hot days, hot nights, and
heat waves have become more frequent.
Observational evidence from all
continents and most oceans shows that
many natural systems are being affected
by regional climate changes, particularly
temperature increases. However,
305 Hegerl, G.C. et al. (2007) Understanding and
Attributing Climate Change. In: 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.
306 CCSP (2008) Reanalysis of Historical Climate
Data for Key Atmospheric Features: Implications for
Attribution of Causes of Observed Change. A Report
by the U.S. Climate Change Science Program and
the Subcommittee on Global Change Research
[Randall Dole, Martin Hoerling, and Siegfried
Schubert (eds.)]. National Oceanic and Atmospheric
Administration, National Climatic Data Center,
Asheville, NC, 156 pp.
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directly attributing specific regional
changes in climate to emissions of GHGs
from human activities is difficult,
especially for precipitation.
Ocean CO2 uptake has lowered the
average ocean pH (increased acidity)
level by approximately 0.1 since 1750.
Consequences for marine ecosystems
can include reduced calcification by
shell-forming organisms, and in the
longer term, the dissolution of carbonate
sediments.
Observations show that climate
change is currently affecting U.S.
physical and biological systems in
significant ways. The consistency of
these observed changes in physical and
biological systems and the observed
significant warming likely cannot be
explained entirely due to natural
variability or other confounding nonclimate factors.
c. Projections of Future Climate Change
With Continued Increases in Elevated
GHG Concentrations
Most future scenarios that assume no
explicit GHG mitigation actions (beyond
those already enacted) project
increasing global GHG emissions over
the century, with climbing GHG
concentrations. Carbon dioxide is
expected to remain the dominant
anthropogenic GHG over the course of
the 21st century. The radiative forcing
associated with the non-CO2 GHGs is
still significant and increasing over
time.
Future warming over the course of the
21st century, even under scenarios of
low-emission growth, is very likely to be
greater than observed warming over the
past century. According to climate
model simulations summarized by the
IPCC,307 through about 2030, the global
warming rate is affected little by the
choice of different future emissions
scenarios. By the end of the 21st
century, projected average global
warming (compared to average
temperature around 1990) varies
significantly depending on the emission
scenario and climate sensitivity
assumptions, ranging from 3.2 to 7.2 °F
(1.8 to 4.0 °C), with an uncertainty range
of 2.0 to 11.5 °F (1.1 to 6.4 °C).
All of the United States is very likely
to warm during this century, and most
areas of the United States are expected
to warm by more than the global
307 Meehl, G.A. et al. (2007) Global Climate
Projections. In: 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.
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average. The largest warming is
projected to occur in winter over
northern parts of Alaska. In western,
central and eastern regions of North
America, the projected warming has less
seasonal variation and is not as large,
especially near the coast, consistent
with less warming over the oceans.
It is very likely that heat waves will
become more intense, more frequent,
and longer lasting in a future warm
climate, whereas cold episodes are
projected to decrease significantly.
Increases in the amount of
precipitation are very likely in higher
latitudes, while decreases are likely in
most subtropical latitudes and the
southwestern United States, continuing
observed patterns. The mid-continental
area is expected to experience drying
during summer, indicating a greater risk
of drought.
Intensity of precipitation events is
projected to increase in the United
States and other regions of the world.
More intense precipitation is expected
to increase the risk of flooding and
result in greater runoff and erosion that
has the potential for adverse water
quality effects.
It is likely that hurricanes will
become more intense, with stronger
peak winds and more heavy
precipitation associated with ongoing
increases of tropical sea surface
temperatures. Frequency changes in
hurricanes are currently too uncertain
for confident projections.
By the end of the century, global
average sea level is projected by IPCC 308
to rise between 7.1 and 23 inches (18
and 59 centimeter [cm]), relative to
around 1990, in the absence of
increased dynamic ice sheet loss. Recent
rapid changes at the edges of the
Greenland and West Antarctic ice sheets
show acceleration of flow and thinning.
While an understanding of these ice
sheet processes is incomplete, their
inclusion in models would likely lead to
increased sea level projections for the
end of the 21st century.
Sea ice extent is projected to shrink in
the Arctic under all IPCC emissions
scenarios.
d. Projected Risks and Impacts
Associated With Future Climate Change
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Risk to society, ecosystems, and many
natural Earth processes increase with
308 IPCC (2007) Summary for Policymakers. In:
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.
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increases in both the rate and magnitude
of climate change. Climate warming
may increase the possibility of large,
abrupt regional or global climatic events
(e.g., disintegration of the Greenland Ice
Sheet or collapse of the West Antarctic
Ice Sheet). The partial deglaciation of
Greenland (and possibly West
Antarctica) could be triggered by a
sustained temperature increase of 2 to 7
°F (1 to 4 °C) above 1990 levels. Such
warming would cause a 13 to 20 feet (4
to 6 meter) rise in sea level, which
would occur over a time period of
centuries to millennia.
The CCSP 309 reports that climate
change has the potential to accentuate
the disparities already evident in the
American health care system, as many
of the expected health effects are likely
to fall disproportionately on the poor,
the elderly, the disabled, and the
uninsured. The IPCC 310 states with very
high confidence that climate change
impacts on human health in U.S. cities
will be compounded by population
growth and an aging population.
Severe heat waves are projected to
intensify in magnitude and duration
over the portions of the United States
where these events already occur, with
potential increases in mortality and
morbidity, especially among the elderly,
young, and frail.
Some reduction in the risk of death
related to extreme cold is expected. It is
not clear whether reduced mortality
from cold will be greater or less than
increased heat-related mortality in the
United States due to climate change.
Increases in regional ozone pollution
relative to ozone levels without climate
change are expected due to higher
temperatures and weaker circulation in
the United States and other world cities
relative to air quality levels without
climate change. Climate change is
expected to increase regional ozone
pollution, with associated risks in
respiratory illnesses and premature
death. In addition to human health
309 Ebi, K.L., J. Balbus, P.L. Kinney, E. Lipp, D.
Mills, M.S. O’Neill, and M. Wilson (2008) Effects of
Global Change on Human Health. In: 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, pp. 2–1
to 2–78.
310 Field, C.B. et al. (2007) North America. In:
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.
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effects, tropospheric ozone has
significant adverse effects on crop
yields, pasture and forest growth, and
species composition. The directional
effect of climate change on ambient
particulate matter levels remains
uncertain.
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
one or a few resources. Thus, the
potential impacts of climate change
raise environmental justice issues.
The CCSP 311 concludes 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 in some areas, 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.
Climate change has very likely
increased the size and number of forest
fires, insect outbreaks, and tree
mortality in the interior West, the
Southwest, and Alaska, and will
continue to do so. Over North America,
forest growth and productivity have
been observed to increase since the
middle of the 20th century, in part due
to observed climate change. Rising CO2
will very likely increase photosynthesis
for forests, but the increased
photosynthesis will likely only increase
wood production in young forests on
fertile soils. The combined effects of
expected increased temperature, CO2,
nitrogen deposition, ozone, and forest
311 Backlund, P., A. Janetos, D.S. Schimel, J.
Hatfield, M.G. Ryan, S.R. Archer, and D.
Lettenmaier (2008) Executive Summary. In: The
Effects of Climate Change on Agriculture, Land
Resources, Water Resources, and Biodiversity in the
United States. A Report by the U.S. Climate Change
Science Program and the Subcommittee on Global
Change Research. Washington, DC., USA, 362 pp.
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disturbance on soil processes and soil
carbon storage remain unclear.
Coastal communities and habitats will
be increasingly stressed by climate
change impacts interacting with
development and pollution. Sea level is
rising along much of the U.S. coast, and
the rate of change will very likely
increase in the future, exacerbating the
impacts of progressive inundation,
storm-surge flooding, and shoreline
erosion. Storm impacts are likely to be
more severe, especially along the Gulf
and Atlantic coasts. Salt marshes, other
coastal habitats, and dependent species
are threatened by sea level rise, fixed
structures blocking landward migration,
and changes in vegetation. Population
growth and rising value of infrastructure
in coastal areas increases vulnerability
to climate variability and future climate
change.
Climate change will likely further
constrain already overallocated water
resources in some regions of the United
States, increasing competition among
agricultural, municipal, industrial, and
ecological uses. Although water
management practices in the United
States are generally advanced,
particularly in the West, the reliance on
past conditions as the basis for current
and future planning may no longer be
appropriate, as climate change
increasingly creates conditions well
outside of historical observations. Rising
temperatures will diminish snowpack
and increase evaporation, affecting
seasonal availability of water. In the
Great Lakes and major river systems,
lower water levels are likely to
exacerbate challenges relating to water
quality, navigation, recreation,
hydropower generation, water transfers,
and binational relationships. Decreased
water supply and lower water levels are
likely to exacerbate challenges relating
to aquatic navigation in the United
States.
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.
Ocean acidification is projected to
continue, resulting in the reduced
biological production of marine
calcifiers, including corals.
Climate change is likely to affect U.S.
energy use and energy production and
physical and institutional
infrastructures. It will also likely
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interact with and possibly exacerbate
ongoing environmental change and
environmental pressures in settlements,
particularly in Alaska where indigenous
communities are facing major
environmental and cultural impacts.
The U.S. energy sector, which relies
heavily on water for 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 stormwater management systems,
will be at greater risk of flooding, sea
level rise and storm surge, low flows,
and other factors that could impair
performance.
Disturbances such as wildfires and
insect outbreaks are increasing in the
United States and are likely to intensify
in a warmer future with warmer
winters, 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 and constraints from
development, habitat fragmentation,
invasive species, and broken ecological
connections will alter ecosystem
structure, function, and services.
Climate change impacts will vary in
nature and magnitude across different
regions of the United States.
• Sustained high summer
temperatures, heat waves, and declining
air quality are projected in the
Northeast,312 Southeast,313
Southwest,314 and Midwest.315
Projected climate change would
continue to cause loss of sea ice, glacier
retreat, permafrost thawing, and coastal
erosion in Alaska.
• Reduced snowpack, earlier spring
snowmelt, and increased likelihood of
seasonal summer droughts are projected
312 Northeast includes West Virginia, Maryland,
Delaware, Pennsylvania, New Jersey, New York,
Connecticut, Rhode Island, Massachusetts,
Vermont, New Hampshire, and Maine.
313 Southeast includes Kentucky, Virginia,
Arkansas, Tennessee, North Carolina, South
Carolina, southeast Texas, Louisiana, Mississippi,
Alabama, Georgia, and Florida.
314 Southwest includes California, Nevada, Utah,
western Colorado, Arizona, New Mexico (except the
extreme eastern section), and southwest Texas.
315 The Midwest includes Minnesota, Wisconsin,
Michigan, Iowa, Illinois, Indiana, Ohio, and
Missouri.
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in the Northeast, Northwest,316 and
Alaska. More severe, sustained droughts
and water scarcity are projected in the
Southeast, Great Plains,317 and
Southwest.
• The Southeast, Midwest, and
Northwest in particular are expected to
be impacted by an increased frequency
of heavy downpours and greater flood
risk.
• Ecosystems of the Southeast,
Midwest, Great Plains, Southwest,
Northwest, and Alaska are expected to
experience altered distribution of native
species (including local extinctions),
more frequent and intense wildfires,
and an increase in insect pest outbreaks
and invasive species.
• Sea level rise is expected to
increase storm surge height and
strength, flooding, erosion, and wetland
loss along the coasts, particularly in the
Northeast, Southeast, and islands.
• Warmer water temperatures and
ocean acidification are expected to
degrade important aquatic resources of
islands and coasts such as coral reefs
and fisheries.
• A longer growing season, low levels
of warming, and fertilization effects of
carbon dioxide may benefit certain crop
species and forests, particularly in the
Northeast and Alaska. Projected summer
rainfall increases in the Pacific islands
may augment limited freshwater
supplies. Cold-related mortality is
projected to decrease, especially in the
Southeast. In the Midwest in particular,
heating oil demand and snow-related
traffic accidents are expected to
decrease.
Climate change impacts in certain
regions of the world may exacerbate
problems that raise humanitarian, trade,
and national security issues for the
United States. The IPCC 318 identifies
the most vulnerable world regions as the
Arctic, because of the effects of high
rates of projected warming on natural
systems; Africa, especially the subSaharan region, because of current low
adaptive capacity as well as climate
change; small islands, due to high
exposure of population and
infrastructure to risk of sea level rise
316 The Northwest includes Washington, Idaho,
western Montana, and Oregon.
317 The Great Plains includes central and eastern
Montana, North Dakota, South Dakota, Wyoming,
Nebraska, eastern Colorado, Nebraska, Kansas,
extreme eastern New Mexico, central Texas, and
Oklahoma.
318 Parry, M.L. et al. (2007) Technical Summary.
In: 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, pp.
23–78.
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and increased storm surge; and Asian
mega-deltas, such as the GangesBrahmaputra and the Zhujiang, due to
large populations and high exposure to
sea level rise, storm surge and river
flooding. Climate change has been
described as a potential threat
multiplier with regard to national
security issues.
3. Changes in Global Climate Indicators
Associated With the Rule’s GHG
Emissions Reductions
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EPA examined 319 the reductions in
CO2 and other GHGs associated with
this action and analyzed the projected
effects on global mean surface
temperature and sea level, two common
indicators of climate change. The
analysis projects that this action 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 commenter agreed that
the modeling results showed small, but
quantifiable, reductions in the global
atmospheric CO2 concentration, as well
as a reduction in projected global mean
surface temperature and sea level rise,
from implementation of this action,
across all climate sensitivities. As such,
the commenter encourages the agencies
to move forward with this action while
continuing to develop additional, more
stringent vehicle standards beyond
2016.
Another commenter indicated that the
projected changes in climate impacts
resulting from this action are small and
therefore not meaningful. EPA disagrees
with this view as the reductions may be
small in overall magnitude, but in the
global climate change context, they are
quantifiable showing a clear directional
signal across a range of climate
sensitivities.320 321 EPA therefore
determines that the projected reductions
in atmospheric CO2, global mean
temperature and sea level rise are
meaningful in the context of this rule.
EPA addresses this point further in the
Response to Comments document. For
the final rule, EPA provides an
additional climate change impact
analysis for projected changes in ocean
319 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 RIA
for additional information.
320 The National Research Council (NRC) 2001
study, Climate Change Science: An Analysis of
Some Key Questions, defines climate sensitivity as
the sensitivity of the climate system to a forcing is
commonly expressed in terms of the global mean
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pH in the context of this action. In
addition, EPA updated the modeling
analysis based on the revised GHG
emission reductions provided in Section
III.F.1; however, the change in modeling
results was very small in magnitude.
Based on the reanalysis the results for
projected atmospheric CO2
concentrations are estimated to be
reduced by an average of 2.9 ppm
(previously 3.0 ppm), global mean
temperature is estimated to be reduced
by 0.006 to 0.015 °C by 2100 (previously
0.007 to 0.016 °C) and sea-level rise is
projected to be reduced by
approximately 0.06–0.14cm by 2100
(previously 0.06–0.15cm).
a. Estimated Projected Reductions in
Atmospheric CO2 Concentration, Global
Mean Surface Temperatures Sea Level
Rise and Ocean pH
EPA estimated changes in the
atmospheric CO2 concentration, global
mean surface temperature and sea level
to 2100 resulting from the emissions
reductions in this action 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.1 were applied as net
reductions to a peer reviewed global
reference case (or baseline) emissions
scenario to generate an emissions
scenario specific to this action. For the
scenario related to this action, 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 for 2020 and then
continuing to 2100. Details about the
reference case scenario and how the
emissions reductions were applied to
generate the scenario can be found in
the RIA Chapter 7.
Changes in atmospheric CO2
concentration, temperature, and seatemperature change that would be expected after a
time sufficiently long enough for both the
atmosphere and ocean to come to equilibrium with
the change in climate forcing.
321 To capture some of the uncertainty in the
climate system, the changes in atmospheric CO2,
projected temperatures and sea level were estimated
across the most current Intergovernmental Panel on
Climate Change (IPCC) range of climate
sensitivities, 1.5 °C to 6.0 °C.
322 In IPCC reports, equilibrium climate
sensitivity refers to the equilibrium change in the
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25495
level for both the reference case and the
emissions scenarios associated with this
action were computed using MAGICC.
To compute the reductions in the
atmospheric CO2 concentrations as well
as in temperature and sea level resulting
from this action, the output from the
scenario associated with this final rule
was subtracted from an existing Global
Change Assessment Model (GCAM,
formerly MiniCAM) reference 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).322 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 RIA
Chapter 7.4.
The results of this modeling,
summarized in Table III.F.3–1, show
small, but quantifiable, reductions in
atmospheric CO2 concentrations,
projected global mean surface
temperature and sea level resulting from
this action, across all climate
sensitivities. As a result of the emission
reductions from this action, the
atmospheric CO2 concentration is
projected to be reduced by an average of
2.9 parts per million (ppm), the global
mean temperature is projected to be
reduced by approximately 0.006–
0.015°C by 2100, and global mean sea
level rise is projected to be reduced by
approximately 0.06–0.14cm 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 this rule and therefore does
not come from previously published
work. Further discussion of EPA’s
modeling analysis is found in the final
RIA.
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/.
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TABLE III.F.3–1—EFFECT OF GHG EMISSIONS REDUCTIONS ON PROJECTED CHANGES IN GLOBAL CLIMATE FOR THE
FINAL VEHICLES RULEMAKING
[For climate sensitivities ranging from 1.5–6 °C]
Measure
Units
Atmospheric CO2 Concentration ...............................................................
Global Mean Surface Temperature ...........................................................
Sea Level Rise ..........................................................................................
Ocean pH ...................................................................................................
ppm ..................................................
°C ....................................................
Cm ...................................................
pH units ...........................................
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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
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 action) across all
climate sensitivities.
The IPCC 323 has noted that ocean
acidification due to the direct effects of
elevated CO2 concentrations will impair
a wide range of planktonic and other
marine organisms that use aragonite to
make their shells or skeletons. EPA used
the Program CO2SYS,324 version 1.05 to
estimate projected changes in tropical
ocean pH based on the atmospheric CO2
concentration reductions resulting from
this action and other specified input
conditions (e.g., sea surface temperature
characteristic of tropical waters). The
program performs calculations relating
parameters of the carbon dioxide (CO2)
system in seawater. EPA used the
program to calculate ocean pH as a
function of atmospheric CO2, among
other specified input conditions. Based
on the projected atmospheric CO2
concentration reductions (average of 2.9
ppm by 2100) that would result from
this rule, the program calculates an
increase in ocean pH of about 0.0014 pH
units in 2100. Thus, this analysis
indicates the projected decrease in
atmospheric CO2 concentrations from
today’s rule would result in an increase
in ocean pH.
323 Fischlin, A. et al. (2007) Ecosystems, their
Properties, Goods, and Services. In: 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.
324 Lewis, E., and D. W. R. Wallace. 1998.
Program Developed for CO2 System Calculations.
ORNL/CDIAC–105. Carbon Dioxide Information
Analysis Center, Oak Ridge National Laboratory,
U.S. Department of Energy, Oak Ridge, Tennessee.
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EPA’s analysis of the rule’s effect on
global climate conditions is intended to
quantify these potential reductions
using the best available science. While
EPA’s modeling results of the effect of
this rule alone show small differences in
climate effects (CO2 concentration,
temperature, sea-level rise, ocean pH),
when expressed in terms of global
climate endpoints and global GHG
emissions, they yield results that are
repeatable and consistent within the
modeling frameworks used.
G. How will the standards impact nonGHG emissions and their associated
effects?
In addition to reducing the emissions
of greenhouse gases, this rule will
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 GHG
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) and the effects of our
assumptions about ethanol-blended fuel
(E10), as discussed below. 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 in the proposal, for this analysis
we attribute decreased fuel
consumption from this program to
gasoline only, while assuming no effect
on volumes of ethanol and other
renewable fuels because they are
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Year
2100
2100
2100
2100
Projected change
¥2.7–3.1
¥0.006–0.015
¥0.06–0.14
0.0014
mandated under the Renewable Fuel
Standard (RFS2). However, because this
rule does not assume RFS2 volumes of
ethanol in the baseline, the result is a
greater projected market share of E10 in
the control case.325 In fact, the GHG
standards will not be affecting the
market share of E10, because EPA’s
analysis for the RFS2 rule predicts
100% E10 penetration by 2014.326
The amount of E10 affects
downstream non-GHG emissions. In the
proposal, EPA stated these same fuel
assumptions and qualitatively noted
that there were likely unquantified
impacts on non-GHG emissions between
the two cases. In DRIA Chapter 5, EPA
indicated its plans to quantify these
impacts in the air quality modeling and
in the final rule inventories. Upstream
emission impacts depend only on fuel
volumes, so the impacts presented here
reflect only the reduced gasoline
consumption.
The inventories presented in this
rulemaking include an analysis of these
fuel effects which was conducted using
EPA’s Motor Vehicle Emission
Simulator (MOVES2010). The most
notable impact, although still relatively
slight, is a 2.2 percent increase in 2030
in national acetaldehyde emissions over
the baseline scenario. It should be noted
that these emission impacts are not due
to the new GHG vehicle standards.
These impacts are instead a
consequence of the assumed ethanol
volumes. This program does not
mandate an increase in E10, nor any
particular fuel blend. The emission
impact of this shift was also modeled in
the RFS2 rule.
As shown in Table III.G–1, EPA
estimates that this program would result
in reductions of NOX, VOC, PM and
325 When this rule’s analysis was initiated, the
RFS2 rule was not yet final. Therefore, it assumes
the ethanol volumes in Annual Energy Outlook
2007 (U.S. Energy Information Administration,
Annual Energy Outlook 2007, Transportation
Demand Sector Supplemental Table. https://
www.eia.doe.gov/oiaf/archive/aeo07/supplement/
index.html)
326 EPA 2010, Renewable Fuel Standard Program
(RFS2) Regulatory Impact Analysis. EPA–420–R–
10–006. February 2010. Docket EPA–HQ–OAR–
2009–0472–11332. See also 75 FR 14670, March 26,
2010.
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SOX, but would increase CO emissions.
For NOX, VOC, and PM we estimate net
reductions because the emissions
reductions from upstream sources are
larger than the emission increases due
to downstream sources. In the case of
CO, we estimate slight emission
increases, because there are relatively
small reductions in upstream emissions,
and thus the projected downstream
emission increases are greater than the
projected emission decreases due to
reduced fuel production. For SOX,
downstream emissions are roughly
proportional to fuel consumption,
therefore a decrease is seen in both
upstream and downstream sources.
For all criteria pollutants the overall
impact of the program would be
relatively small compared to total U.S.
inventories across all sectors. In 2030,
EPA estimates the program would
reduce total NOX, PM and SOX
inventories by 0.1 to 0.8 percent and
reduce the VOC inventory by 1.0
percent, while increasing the total
national CO inventory by 0.6 percent.
As shown in Table III.G–2, EPA
estimates that the GHG program would
result in small changes for air toxic
emissions compared to total U.S.
inventories across all sectors. In 2030,
EPA estimates the program would
reduce total benzene and 1,3 butadiene
emissions by 0.1 to 0.3 percent. Total
acrolein and formaldehyde emissions
would increase by 0.1 percent.
Acetaldehyde emissions would increase
by 2.2 percent.
One commenter requested that EPA
present emission inventories for
additional air toxics. EPA is presenting
inventories for certain air toxic
emissions which were identified as key
national and regional-scale cancer and
noncancer risk drivers in past National
Air Toxics Assessments (NATA). For
additional details, please refer to the
Response to Comments document.327
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
25497
of this program to be negligible on nonGHG emission rates per mile.
• The potential for increased market
penetration of diesel vehicles; because
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. EPA
does not project increased penetration
of diesels as necessary to meet the GHG
standards.
• Early introduction of electric
vehicles and plug-in hybrid electric
vehicles, which would reduce criteria
emissions in cases where those vehicles
are able to be certified to lower
certification standards. This 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 rule.
TABLE III.G–1—ANNUAL CRITERIA EMISSION IMPACTS OF PROGRAM
[Short tons]
Total impacts
2020
VOC .................................................................................
% of total inventory ...................................................
CO ....................................................................................
% of total inventory ...................................................
NOX ..................................................................................
% of total inventory ...................................................
PM2.5 ................................................................................
% of total inventory ...................................................
SOX ..................................................................................
% of total inventory ...................................................
¥60,187
¥0.51%
3,992
0.01%
¥5,881
¥0.02
¥2,398
¥0.03%
¥13,832
¥0.41%
Upstream impacts
2030
2020
¥115,542
¥1.01%
170,675
0.56%
¥21,763
¥0.07%
¥4,564
¥0.05%
¥27,443
¥0.82%
¥64,506
¥0.55%
¥6,165
¥0.02%
¥19,291
¥0.06%
¥2,629
¥0.03%
¥11,804
¥0.35%
2030
¥126,749
¥1.11%
¥12,113
¥0.04%
¥37,905
¥0.12%
¥5,165
¥0.06%
¥23,194
¥0.69%
Downstream impacts
2020
2030
4,318
0.04%
10,156
0.01%
13,410
0.04%
231.0
0.00%
¥2,027
¥0.06%
11,207
0.01%
182,788
0.6%
16,143
0.05%
602.3
0.01%
¥4,249
¥0.13%
TABLE III.G–2—ANNUAL AIR TOXIC EMISSION IMPACTS OF PROGRAM
[Short tons]
Total impacts
Upstream impacts
Downstream impacts
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2020
1,3-Butadiene ...................................................................
% of total inventory ...................................................
Acetaldehyde ...................................................................
% of total inventory ...................................................
Acrolein ............................................................................
% of total inventory ...................................................
Benzene ...........................................................................
% of total inventory ...................................................
Formaldehyde ..................................................................
% of total inventory ...................................................
2030
2020
2030
2020
2030
¥95
¥0.38%
760
2.26%
1
0.01%
¥890
¥0.48%
¥49
¥0.06%
¥21
¥0.10%
668
2.18%
5
0.07%
¥523
¥0.29%
15
0.02%
¥1.5
¥0.01%
¥6.8
¥0.02%
¥0.9
¥0.01%
¥139.6
¥0.08%
¥51.4
¥0.06%
¥3.0
¥0.01%
¥13.4
¥0.04%
¥1.8
¥0.03%
¥274.3
¥0.15%
¥101.0
¥0.12%
¥93.6
¥0.37%
766.9
2.28%
1.7
0.03%
¥750.0
¥0.40%
2.1
0.00%
¥18.1
¥0.09%
681.5
2.22%
6.5
0.10%
¥248.3
¥0.14%
116.3
0.14%
327 U.S. EPA. National Air Toxics Assessment.
2002, 1999, and 1996. Available at: https://
www.epa.gov/nata/.
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1. Upstream Impacts of Program
No substantive comments were
received on the upstream inventory
modeling used in the proposal. The
rulemaking inventories were updated
with the revised estimates of fuel
savings as detailed in Section III.F.
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 127,000 tons, NOX by
38,000 tons, and PM2.5 by 5,000 tons.
Table III.G–2 shows the corresponding
impacts on upstream air toxic emissions
in 2030. Formaldehyde decreases by 101
tons, benzene by 274 tons, acetaldehyde
by 13 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
DOE’s Argonne National Laboratory,328
but in some cases the GREET values
were modified or updated by EPA to be
consistent with the National Emission
Inventory (NEI).329 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
328 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/.
329 U.S. EPA. 2002 National Emissions Inventory
(NEI) Data and Documentation, https://www.epa.gov/
ttn/chief/net/2002inventory.html.
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formaldehyde. The development of
these emission factors is detailed in RIA
Chapter 5.
2. Downstream Impacts of Program
No substantive comments were
received on the emission modeling or
emission inventories presented in this
section. However, two changes in
modeling differentiate the analysis
presented here from that presented in
the proposal. Economic inputs such as
fuel prices and vehicle sales were
updated from AEO 2009 to AEO 2010
Early Release, and as described above,
the effects of ethanol volume
assumptions were explicitly modeled.
Thus, the primary differences in nonGHG emissions between the proposed
rule and final rule are attributed more
to these changes in analytic inputs, and
less to changes in the GHG standards
program.
Downstream emission impacts
attributable to this program are due to
the VMT rebound effect and the ethanol
volume assumptions. 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 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 approximately a 1
percent increase in VMT.
As detailed in the introduction to this
section, fuel composition also has
effects on vehicle emissions and
particularly air toxics. The relationship
between fuel composition and emission
impacts used in MOVES2010 and
applied in this analysis match those
developed for the recent Renewable
Fuels Standard (RFS2) requirement, and
are extensively documented in the RFS2
RIA and supporting documents.330
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 impacts from the
rebound effect and the change in fuel
supply grow over time as the fleet turns
over to cleaner CO2 vehicles, so that by
2030 VOC would increase by 11,000
tons, NOX by 16,000 tons, and PM2.5 by
600 tons. Table III.G–2 shows the
corresponding impacts on air toxic
emissions. These impacts in 2030
include 18 fewer tons of 1,3-butadiene,
330 EPA 2010, Renewable Fuel Standard Program
(RFS2) Regulatory Impact Analysis. EPA–420–R–
10–006. February 2010. Docket EPA–HQ–OAR–
2009–0472–11332. See also 75 FR 14670, March 26,
2010.
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668 additional tons of acetaldehyde, 248
fewer tons of benzene, 116 additional
tons of formaldehyde, and 6.5
additional tons of acrolein.
For this analysis, MOVES2010 was
used to estimate base VOC, CO, NOX,
PM and air toxics emissions for both
control and reference cases. Rebound
emissions from light duty cars and
trucks were then calculated using the
OMEGA model post-processor and
added to the control case. A more
complete discussion of the inputs,
methodology, and results is contained
in RIA Chapter 5.
3. Health Effects of Non-GHG Pollutants
In this section we discuss health
effects associated with exposure to some
of the criteria and air toxics impacted by
the vehicle standards; PM, ozone, NOX
and SOX, CO and air toxics. No
substantive comments were received on
the health effects of non-GHG
pollutants.
a. Particulate Matter
i. Background
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
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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 Integrated
Science Assessment for Particulate
Matter (ISA).331 Further discussion of
health effects associated with PM can
also be found in the RIA for this rule.
The ISA summarizes evidence
associated with PM2.5, PM10-2.5, and
ultrafine particles (UFPs).
The ISA concludes that health effects
associated with short-term exposures
(hours to days) to ambient PM2.5 include
non-fatal cardiovascular effects,
mortality, and respiratory effects, such
as exacerbation of asthma symptoms in
children and hospital admissions and
emergency department visits for chronic
obstructive pulmonary disease (COPD)
and respiratory infections.332 The ISA
notes that long-term exposure to PM2.5
(months to years) is associated with the
development/progression of
cardiovascular disease, premature
mortality, and respiratory effects,
including reduced lung function
growth, increased respiratory
symptoms, and asthma development.333
The ISA concludes that that the
currently available scientific evidence
from epidemiologic, controlled human
exposure studies, and toxicological
studies supports that a causal
association exists between short- and
long-term exposures to PM2.5 and
cardiovascular effects and mortality.
Furthermore, the ISA concludes that the
collective evidence supports likely
causal associations between short- and
long-term PM2.5 exposures and
respiratory effects. The ISA also
concludes that the evidence is
suggestive of a causal association for
reproductive and developmental effects
and cancer, mutagenicity, and
genotoxicity and long-term exposure to
PM2.5.334
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331 U.S.
EPA (2009) Integrated Science
Assessment for Particulate Matter. EPA 600/R–08/
139F, Docket EPA–HQ–OAR–2009–0472–11295.
332 U.S. EPA (2009). Integrated Science
Assessment for Particulate Matter (Final Report).
U.S. Environmental Protection Agency,
Washington, DC, EPA/600/R–08/139F, 2009.
Section 2.3.1.1.
333 U.S. EPA (2009). Integrated Science
Assessment for Particulate Matter (Final Report).
U.S. Environmental Protection Agency,
Washington, DC, EPA/600/R–08/139F, 2009. page
2–12, Sections 7.3.1.1 and 7.3.2.1.
334 U.S. EPA (2009). Integrated Science
Assessment for Particulate Matter (Final Report).
U.S. Environmental Protection Agency,
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For PM10-2.5, the ISA concludes that
the current evidence is suggestive of a
causal relationship between short-term
exposures and cardiovascular effects,
such as hospitalization for ischemic
heart disease. There is also suggestive
evidence of a causal relationship
between short-term PM10-2.5 exposure
and mortality and respiratory effects.
Data are inadequate to draw conclusions
regarding the health effects associated
with long-term exposure to PM10-2.5.335
For UFPs, the ISA concludes that
there is suggestive evidence of a causal
relationship between short-term
exposures and cardiovascular effects,
such as changes in heart rhythm and
blood vessel function. It also concludes
that there is suggestive evidence of
association between short-term
exposure to UFPs and respiratory
effects. Data are inadequate to draw
conclusions regarding the health effects
associated with long-term exposure to
UFP’s.336
b. Ozone
i. Background
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.337 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
Washington, DC, EPA/600/R–08/139F, 2009.
Section 2.3.2.
335 U.S. EPA (2009). Integrated Science
Assessment for Particulate Matter (Final Report).
U.S. Environmental Protection Agency,
Washington, DC, EPA/600/R–08/139F, 2009.
Section 2.3.4, Table 2–6.
336 U.S. EPA (2009). Integrated Science
Assessment for Particulate Matter (Final Report).
U.S. Environmental Protection Agency,
Washington, DC, EPA/600/R–08/139F, 2009.
Section 2.3.5, Table 2–6.
337 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. Docket EPA–HQ–OAR–2009–0472–0099
through –0101.
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25499
transported hundreds of miles
downwind from precursor emissions,
resulting in elevated ozone levels even
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.338 339 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.340 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
338 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.
339 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. Docket EPA–HQ–
OAR–2009–0472–0105 through –0106.
340 National Research Council (NRC), 2008.
Estimating Mortality Risk Reduction and Economic
Benefits from Controlling Ozone Air Pollution. The
National Academies Press: Washington, DC Docket
EPA–HQ–OAR–2009–0472–0322.
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time spent outdoors (e.g., children and
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.
Information on the health effects of
NO2 can be found in the EPA Integrated
Science Assessment (ISA) for Nitrogen
Oxides.341 The EPA has concluded that
the findings of epidemiologic,
controlled human exposure, and animal
iii. Health Effects of SO2
Information on the health effects of
SO2 can be found in the EPA Integrated
Science Assessment for Sulfur
Oxides.342 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,
341 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. Docket EPA–HQ–OAR–2009–0472–
0350.
342 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. Docket EPA–HQ–OAR–2009–0472–0335.
ii. Health Effects of NO2
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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
following 30-minute exposures of
asthmatics to NO2 concentrations as low
as 0.26 ppm. In addition, small but
significant increases in non-specific
airway hyperresponsiveness were
reported following 1-hour exposures of
asthmatics to 0.1 ppm NO2. 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.
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asthmatics may 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
Information on the health effects of
carbon monoxide (CO) can be found in
the EPA Integrated Science Assessment
(ISA) for Carbon Monoxide.343 The ISA
concludes that ambient concentrations
of CO are associated with a number of
adverse health effects.344 This section
provides a summary of the health effects
associated with exposure to ambient
concentrations of CO.345
Human clinical studies of subjects
with coronary artery disease show a
decrease in the time to onset of exerciseinduced angina (chest pain) and
electrocardiogram changes following CO
exposure. In addition, epidemiologic
studies show associations between
short-term CO exposure and
cardiovascular morbidity, particularly
increased emergency room visits and
hospital admissions for coronary heart
disease (including ischemic heart
disease, myocardial infarction, and
angina). Some epidemiologic evidence
is also available for increased hospital
admissions and emergency room visits
for congestive heart failure and
cardiovascular disease as a whole. The
ISA concludes that a causal relationship
is likely between short-term exposures
to CO and cardiovascular morbidity. It
also concludes that available data are
inadequate to conclude that a causal
343 U.S. EPA, 2010. Integrated Science
Assessment for Carbon Monoxide (Final Report).
U.S. Environmental Protection Agency,
Washington, DC, EPA/600/R–09/019F, 2010.
https://cfpub.epa.gov/ncea/cfm/
recordisplay.cfm?deid=218686.
344 The ISA evaluates the health evidence
associated with different health effects, assigning
one of five ‘‘weight of evidence’’ determination:
causal relationship, likely to be a causal
relationship, suggestive of a causal relationship,
inadequate to infer a causal relationship, and not
likely to be a causal relationship. For definitions of
these levels of evidence, please refer to Section 1.6
of the ISA.
345 Personal exposure includes contributions from
many sources, and in many different environments.
Total personal exposure to CO includes both
ambient and nonambient components; and both
components may contribute to adverse health
effects.
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relationship exists between long-term
exposures to CO and cardiovascular
morbidity.
Animal studies show various
neurological effects with in-utero CO
exposure. Controlled human exposure
studies report inconsistent neural and
behavioral effects following low-level
CO exposures. The ISA concludes the
evidence is suggestive of a causal
relationship with both short- and longterm exposure to CO and central
nervous system effects.
A number of epidemiologic and
animal toxicological studies cited in the
ISA have evaluated associations
between preterm birth and cardiac birth
defects and CO exposure. The
epidemiologic studies provide limited
evidence of a CO-induced effect on preterm births and birth defects, with weak
evidence for a decrease in birth weight.
Animal toxicological studies have found
associations between perinatal CO
exposure and decrements in birth
weight, as well as other developmental
outcomes. The ISA concludes these
studies are suggestive of a causal
relationship between long-term
exposures to CO and developmental
effects and birth outcomes.
Epidemiologic studies provide
evidence of effects on respiratory
morbidity such as changes in
pulmonary function, respiratory
symptoms, and hospital admissions
associated with ambient CO
concentrations. A limited number of
epidemiologic studies considered
copollutants such as ozone, SO2, and
PM in two-pollutant models and found
that CO risk estimates were generally
robust, although this limited evidence
makes it difficult to disentangle effects
attributed to CO itself from those of the
larger complex air pollution mixture.
Controlled human exposure studies
have not extensively evaluated the effect
of CO on respiratory morbidity. Animal
studies at levels of 50–100 ppm CO
show preliminary evidence of altered
pulmonary vascular remodeling and
oxidative injury. The ISA concludes that
the evidence is suggestive of a causal
relationship between short-term CO
exposure and respiratory morbidity, and
inadequate to conclude that a causal
relationship exists between long-term
exposure and respiratory morbidity.
Finally, the ISA concludes that the
epidemiologic evidence is suggestive of
a causal relationship between short-term
exposures to CO and mortality.
Epidemiologic studies provide evidence
of an association between short-term
exposure to CO and mortality, but
limited evidence is available to evaluate
cause-specific mortality outcomes
associated with CO exposure. In
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addition, the attenuation of CO risk
estimates which was often observed in
copollutant models contributes to the
uncertainty as to whether CO is acting
alone or as an indicator for other
combustion-related pollutants. The ISA
also concludes that there is not likely to
be a causal relationship between
relevant long-term exposures to CO and
mortality.
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
exposure to the class of pollutants
known collectively as ‘‘air toxics’’.346
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.347 Emissions and
ambient concentrations of compounds
are discussed in the RIA chapters 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.348 349 350 EPA
states in its IRIS database that data
346 U.S. EPA. 2002 National-Scale Air Toxics
Assessment. https://www.epa.gov/ttn/atw/
nata12002/risksum.html. Docket EPA–HQ–OAR–
2009–0472–11322.
347 U.S. EPA. 2009. National-Scale Air Toxics
Assessment for 2002. https://www.epa.gov/ttn/atw/
nata2002/. Docket EPA–HQ–OAR–2009–0472–
11321.
348 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. Docket EPA–HQ–OAR–2009–0472–1659.
349 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.
Docket EPA–HQ–OAR–2009–0472–0366.
350 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. Docket EPA–HQ–OAR–2009–
0472–0370.
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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.351 352
A number of adverse noncancer
health effects including blood disorders,
such as preleukemia and aplastic
anemia, have also been associated with
long-term exposure to benzene.353 354
The most sensitive noncancer effect
observed in humans, based on current
data, is the depression of the absolute
lymphocyte count in blood.355 356 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 known.357 358 359 360 EPA’s
351 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. Docket EPA–
HQ–OAR–2009–0472–0366.
352 U.S. Department of Health and Human
Services National Toxicology Program 11th Report
on Carcinogens available at: https://
ntp.niehs.nih.gov/go/16183.
353 Aksoy, M. (1989). Hematotoxicity and
carcinogenicity of benzene. Environ. Health
Perspect. 82: 193–197. Docket EPA–HQ–OAR–
2009–0472–0368.
354 Goldstein, B.D. (1988). Benzene toxicity.
Occupational medicine. State of the Art Reviews. 3:
541–554. Docket EPA–HQ–OAR–2009–0472–0325.
355 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.
Docket EPA–HQ–OAR–2009–0472–0326.
356 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. Docket
EPA–HQ–OAR–2009–0472–0327.
357 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. Docket
EPA–HQ–OAR–2009–0472–0328.
358 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.
Docket EPA–HQ–OAR–2009–0472–0329.
359 Lan, Qing, Zhang, L., Li, G., Vermeulen, R., et
al. (2004) Hematotoxically in Workers Exposed to
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IRIS program has not yet evaluated
these new data.
ii. 1,3-Butadiene
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EPA has characterized 1,3-butadiene
as carcinogenic to humans by
inhalation.361 362 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.363 364 There
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.365
Low Levels of Benzene. Science 306: 1774–1776.
Docket EPA–HQ–OAR–2009–0472–0330.
360 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. Docket EPA–HQ–OAR–
2009–0472–0385.
361 U.S. EPA (2002) Health Assessment of 1,3Butadiene. 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. Docket EPA–HQ–OAR–2009–0472–
0386.
362 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.
Docket EPA–HQ–OAR–2009–0472–1660
363 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. Docket EPA–HQ–OAR–2009–0472–0387.
364 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.
365 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. Docket EPA–HQ–OAR–2009–
0472–0388.
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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.373 374
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.366 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.367 368 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.369 A recent National
Institute of Occupational Safety and
Health (NIOSH) study of garment
workers also found increased risk of
death due to leukemia among workers
exposed to formaldehyde.370 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.371
Recently, the IARC re-classified
formaldehyde as a human carcinogen
(Group 1).372
Formaldehyde exposure also causes a
range of noncancer health effects,
including irritation of the eyes (burning
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.375 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
the IARC.376 377 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.378 In short-term (4
week) rat studies, degeneration of
olfactory epithelium was observed at
various concentration levels of
366 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.
Docket EPA–HQ–OAR–2009–0472–0389.
367 Hauptmann, M.; Lubin, J.H.; Stewart, P.A.;
Hayes, R.B.; Blair, A. 2003. Mortality from
lymphohematopoetic malignancies among workers
in formaldehyde industries. Journal of the National
Cancer Institute 95: 1615–1623. Docket EPA–HQ–
OAR–2009–0472–0336.
368 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.
Docket EPA–HQ–OAR–2009–0472–0337.
369 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. Docket EPA–HQ–OAR–2009–0472–0338.
370 Pinkerton, L.E. 2004. Mortality among a cohort
of garment workers exposed to formaldehyde: an
update. Occup. Environ. Med. 61: 193–200. Docket
EPA–HQ–OAR–2009–0472–0339.
371 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. Docket EPA–
HQ–OAR–2009–0472–0340.
372 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. Docket EPA–HQ–OAR–2009–0472–1164.
373 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
Docket EPA–HQ–OAR–2009–0472–1191.
374 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. Docket EPA–
HQ–OAR–2009–0472–1199.
375 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. Docket EPA–HQ–OAR–2009–
0472–0390.
376 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.
377 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.
Docket EPA–HQ–OAR–2009–0472–0387.
378 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.
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acetaldehyde exposure.379 380 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.381 The agency
is currently conducting a reassessment
of the health hazards from inhalation
exposure to acetaldehyde.
v. Acrolein
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Acrolein is extremely acrid and
irritating to humans when inhaled, with
acute exposure resulting in upper
respiratory tract irritation, mucus
hypersecretion and congestion. 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.382 These data and additional
studies regarding acute effects of human
exposure to acrolein are summarized in
EPA’s 2003 IRIS Human Health
Assessment for acrolein.383 Evidence
available from studies in humans
indicate that levels as low as 0.09 ppm
(0.21 mg/m3) for five minutes may elicit
subjective complaints of eye irritation
with increasing concentrations leading
to more extensive eye, nose and
respiratory symptoms.384 Lesions to the
lungs and upper respiratory tract of rats,
rabbits, and hamsters have been
observed after subchronic exposure to
acrolein.385 Acute exposure effects in
379 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.
380 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. Docket EPA–HQ–OAR–2009–0472–0392.
381 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.
Docket EPA–HQ–OAR–2009–0472–0408.
382 Sim VM, Pattle RE. Effect of possible smog
irritants on human subjects JAMA165: 1980–2010,
1957. Docket EPA–HQ–OAR–2009–0472–0395.
383 U.S. EPA (U.S. Environmental Protection
Agency). (2003) Toxicological review of acrolein in
support of summary information on Integrated Risk
Information System (IRIS) National Center for
Environmental Assessment, Washington, DC. EPA/
635/R–03/003. Available online at: https://
www.epa.gov/ncea/iris.
384 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 Docket EPA–HQ–OAR–
2009–0472–0394.
385 Integrated Risk Information System File of
Acrolein. Office of Research and Development,
National Center for Environmental Assessment,
Washington, DC. This material is available at https://
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animal studies report bronchial hyperresponsiveness.386 In a recent study, the
acute respiratory irritant effects of
exposure to 1.1 ppm acrolein were more
pronounced in mice with allergic
airway disease by comparison to nondiseased mice which also showed
decreases in respiratory rate.387 Based
on these animal data and demonstration
of similar effects in humans (e.g.,
reduction in respiratory rate),
individuals with compromised
respiratory function (e.g., emphysema,
asthma) are expected to be at increased
risk of developing adverse responses to
strong respiratory irritants such as
acrolein.
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.388 The IARC
determined in 1995 that acrolein was
not classifiable as to its carcinogenicity
in humans.389
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
www.epa.gov/iris/subst/0364.htm. Docket EPA–
HQ–OAR–2009–0472–0391.
386 U.S. EPA (U.S. Environmental Protection
Agency). (2003) Toxicological review of acrolein in
support of summary information on Integrated Risk
Information System (IRIS) National Center for
Environmental Assessment, Washington, DC. EPA/
635/R–03/003. Available online at: https://
www.epa.gov/ncea/iris.
387 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. Docket EPA–HQ–OAR–2009–
0472–0396.
388 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.
389 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. Docket EPA–HQ–OAR–
2009–0472–0393.
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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
three.390 391 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.392 The draft reassessment
completed external peer review.393
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. 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.394
California EPA has released a new risk
assessment for naphthalene, and the
390 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.
Docket EPA–HQ–OAR–2009–0472–0372.
391 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. Docket EPA–HQ–
OAR–2009–0472–0373.
392 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. Docket EPA–HQ–OAR–2009–
0472–0272.
393 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. Docket
EPA–HQ–OAR–2009–0472–0273.
394 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.
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IARC has reevaluated naphthalene and
re-classified it as Group 2B: possibly
carcinogenic to humans.395 Naphthalene
also causes a number of chronic noncancer effects in animals, including
abnormal cell changes and growth in
respiratory and nasal tissues.396
viii. Other Air Toxics
In addition to the compounds
described above, other compounds in
gaseous hydrocarbon and PM emissions
from vehicles will be affected by this
final rule. Mobile source air toxic
compounds that would potentially be
impacted include ethylbenzene,
propionaldehyde, toluene, and xylene.
Information regarding the health effects
of these compounds can be found in
EPA’s IRIS database.397
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f. Exposure and Health Effects
Associated With Traffic
Populations who live, work, or attend
school near major roads experience
elevated exposure concentrations to a
wide range of air pollutants, as well as
higher risks for a number of adverse
health effects. While the previous
sections of this preamble have focused
on the health effects associated with
individual criteria pollutants or air
toxics, this section discusses the
mixture of different exposures near
major roadways, rather than the effects
of any single pollutant. As such, this
section emphasizes traffic-related air
pollution, in general, as the relevant
indicator of exposure rather than any
particular pollutant.
Concentrations of many trafficgenerated air pollutants are elevated for
up to 300–500 meters downwind of
roads with high traffic volumes.398
Numerous sources on roads contribute
to elevated roadside concentrations,
including exhaust and evaporative
emissions, and resuspension of road
dust and tire and brake wear.
Concentrations of several criteria and
hazardous air pollutants are elevated
near major roads. Furthermore, different
395 International Agency for Research on Cancer
(IARC). (2002). Monographs on the Evaluation of
the Carcinogenic Risk of Chemicals for Humans.
Vol. 82. Lyon, France. Docket EPA–HQ–OAR–
2009–0472–0274.
396 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.
397 U.S. EPA Integrated Risk Information System
(IRIS) database is available at: https://www.epa.gov/
iris.
398 Zhou, Y.; Levy, J.I. (2007) Factors influencing
the spatial extent of mobile source air pollution
impacts: a meta-analysis. BMC Public Health 7: 89.
doi:10.1186/1471–2458–7–89.
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semi-volatile organic compounds and
chemical components of particulate
matter, including elemental carbon,
organic material, and trace metals, have
been reported at higher concentrations
near major roads.
Populations near major roads
experience greater risk of certain
adverse health effects. The Health
Effects Institute published a report on
the health effects of traffic-related air
pollution.399 It concluded that evidence
is ‘‘sufficient to infer the presence of a
causal association’’ between traffic
exposure and exacerbation of childhood
asthma symptoms. The HEI report also
concludes that the evidence is either
‘‘sufficient’’ or ‘‘suggestive but not
sufficient’’ for a causal association
between traffic exposure and new
childhood asthma cases. A review of
asthma studies by Salam et al. (2008)
reaches similar conclusions.400 The HEI
report also concludes that there is
‘‘suggestive’’ evidence for pulmonary
function deficits associated with traffic
exposure, but concluded that there is
‘‘inadequate and insufficient’’ evidence
for causal associations with respiratory
health care utilization, adult-onset
asthma, COPD symptoms, and allergy. A
review by Holguin (2008) notes that the
effects of traffic on asthma may be
modified by nutrition status, medication
use, and genetic factors.401
The HEI report also concludes that
evidence is ‘‘suggestive’’ of a causal
association between traffic exposure and
all-cause and cardiovascular mortality.
There is also evidence of an association
between traffic-related air pollutants
and cardiovascular effects such as
changes in heart rhythm, heart attack,
and cardiovascular disease. The HEI
report characterizes this evidence as
‘‘suggestive’’ of a causal association, and
an independent epidemiological
literature review by Adar and Kaufman
(2007) concludes that there is
‘‘consistent evidence’’ linking trafficrelated pollution and adverse
cardiovascular health outcomes.402
Some studies have reported
associations between traffic exposure
399 HEI Panel on the Health Effects of Air
Pollution. (2010) Traffic-related air pollution: a
critical review of the literature on emissions,
exposure, and health effects. [Online at https://
www.healtheffects.org].
400 Salam, M.T.; Islam, T.; Gilliland, F.D. (2008)
Recent evidence for adverse effects of residential
proximity to traffic sources on asthma. Current
Opin Pulm Med 14: 3–8.
401 Holguin, F. (2008) Traffic, outdoor air
pollution, and asthma. Immunol Allergy Clinics
North Am 28: 577–588.
402 Adar, S.D.; Kaufman, J.D. (2007)
Cardiovascular disease and air pollutants:
evaluating and improving epidemiological data
implicating traffic exposure. Inhal Toxicol 19: 135–
149.
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and other health effects, such as birth
outcomes (e.g., low birth weight) and
childhood cancer. The HEI report
concludes that there is currently
‘‘inadequate and insufficient’’ evidence
for a causal association between these
effects and traffic exposure. A review by
Raaschou-Nielsen and Reynolds (2006)
concluded that evidence of an
association between childhood cancer
and traffic-related air pollutants is weak,
but noted the inability to draw firm
conclusions based on limited
evidence.403
There is a large population in the U.S.
living in close proximity of major roads.
According to the Census Bureau’s
American Housing Survey for 2007,
approximately 20 million residences in
the U.S., 15.6% of all homes, are located
within 300 feet (91 m) of a highway
with 4+ lanes, a railroad, or an
airport.404 Therefore, at current
population of approximately 309
million, assuming that population and
housing similarly distributed, there are
over 48 million people in the U.S. living
near such sources. The HEI report also
notes that in two North American cities,
Los Angeles and Toronto, over 40% of
each city’s population live within 500
meters of a highway or 100 meters of a
major road. It also notes that about 33%
of each city’s population resides within
50 meters of major roads. Together, the
evidence suggests that a large U.S.
population lives in areas with elevated
traffic-related air pollution.
People living near roads are often
socioeconomically disadvantaged.
According to the 2007 American
Housing Survey, a renter-occupied
property is over twice as likely as an
owner-occupied property to be located
near a highway with 4+ lanes, railroad
or airport. In the same survey, the
median household income of rental
housing occupants was less than half
that of owner-occupants ($28,921/
$59,886). Numerous studies in
individual urban areas report higher
levels of traffic-related air pollutants in
areas with high minority or poor
populations.405 406 407
403 Raaschou-Nielsen, O.; Reynolds, P. (2006) Air
pollution and childhood cancer: A review of the
epidemiological literature. Int J Cancer 118: 2920–
2929.
404 U.S. Census Bureau (2008) American Housing
Survey for the United States in 2007. Series H–150
(National Data), Table 1A–6. [Accessed at https://
www.census.gov/hhes/www/housing/ahs/ahs07/
ahs07.html on January 22, 2009]
405 Lena, T.S.; Ochieng, V.; Carter, M.; Holguın´
Veras, J.; Kinney, P.L. (2002) Elemental carbon and
PM2.5 levels in an urban community heavily
impacted by truck traffic. Environ Health Perspect
110: 1009–1015.
406 Wier, M.; Sciammas, C.; Seto, E.; Bhatia, R.;
Rivard, T. (2009) Health, traffic, and environmental
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Students may also be exposed in
situations where schools are located
near major roads. In a study of nine
metropolitan areas across the U.S.,
Appatova et al. (2008) found that on
average greater than 33% of schools
were located within 400 m of an
Interstate, U.S., or State highway, while
12% were located within 100 m.408 The
study also found that among the
metropolitan areas studied, schools in
the Eastern U.S. were more often sited
near major roadways than schools in the
Western U.S.
Demographic studies of students in
schools near major roadways suggest
that this population is more likely than
the general student population to be of
non-white race or Hispanic ethnicity,
and more often live in low
socioeconomic status locations.409 410 411
There is some inconsistency in the
evidence, which may be due to different
local development patterns and
measures of traffic and geographic scale
used in the studies.408
4. Environmental Effects of Non-GHG
Pollutants
In this section we discuss some of the
environmental effects of PM and its
precursors such as visibility
impairment, atmospheric deposition,
and materials damage and soiling, as
well as environmental effects associated
with the presence of ozone in the
ambient air, such as impacts on plants,
including trees, agronomic crops and
urban ornamentals, and environmental
effects associated with air toxics. No
substantive comments were received on
the environmental effects of non-GHG
pollutants.
a. Visibility
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Visibility can be defined as the degree
to which the atmosphere is transparent
justice: collaborative research and community
action in San Francisco, California. Am J Public
Health 99: S499–S504.
407 Forkenbrock, D.J. and L.A. Schweitzer,
Environmental Justice and Transportation
Investment Policy. Iowa City: University of Iowa,
1997.
408 Appatova, A.S.; Ryan, P.H.; LeMasters, G.K.;
Grinshpun, S.A. (2008) Proximal exposure of public
schools and students to major roadways: a
nationwide U.S. survey. J Environ Plan Mgmt
409 Green, R.S.; Smorodinsky, S.; Kim, J.J.;
McLaughlin, R.; Ostro, B. (2004) Proximity of
California public schools to busy roads. Environ
Health Perspect 112: 61–66.
410 Houston, D.; Ong, P.; Wu, J.; Winer, A. (2006)
Proximity of licensed child care facilities to nearroadway vehicle pollution. Am J Public Health 96:
1611–1617.
411 Wu, Y.; Batterman, S. (2006) Proximity of
schools in Detroit, Michigan to automobile and
truck traffic. J Exposure Sci Environ Epidemiol 16:
457–470.
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to visible light.412 Visibility impairment
is caused by light scattering and
absorption by suspended particles and
gases. 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 2009 PM ISA.413
EPA is pursuing a two-part strategy to
address visibility. First, EPA has
concluded that PM2.5 causes adverse
effects on visibility in various locations,
depending on PM concentrations and
factors such as chemical composition
and average relative humidity, and has
set secondary PM2.5 standards.414 The
secondary PM2.5 standards act in
conjunction with the regional haze
program. The regional haze rule (64 FR
35714) was put in place in July 1999 to
protect the visibility in mandatory class
I Federal areas. There are 156 national
parks, forests and wilderness areas
categorized as mandatory class I Federal
areas (62 FR 38680–81, July 18,
1997).415 Visibility can be said to be
impaired in both PM2.5 nonattainment
areas and mandatory class I Federal
areas.
b. Plant and Ecosystem Effects of Ozone
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
412 National Research Council, 1993. Protecting
Visibility in National Parks and Wilderness Areas.
National Academy of Sciences Committee on Haze
in National Parks and Wilderness Areas. National
Academy Press, Washington, DC. Docket EPA–HQ–
OAR–2005–0161. This book can be viewed on the
National Academy Press Web site at https://
www.nap.edu/books/0309048443/html/.
413 U.S. EPA (2009). Integrated Science
Assessment for Particulate Matter (Final Report).
U.S. Environmental Protection Agency,
Washington, DC, EPA/600/R–08/139F, 2009. Docket
EPA–HQ–OAR–2009–0472–11295.
414 The existing annual primary and secondary
PM2.5 standards have been remanded and are being
addressed in the currently ongoing PM NAAQS
review.
415 These areas are defined in CAA section 162 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.
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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
Air Quality Criteria Document presents
more detailed 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.416
Adverse impacts on water quality can
occur when atmospheric contaminants
deposit to the water surface or when
416 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. Docket EPA–HQ–OAR–2009–
0472–0091.
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material deposited on the land enters a
waterbody through runoff. Potential
impacts of atmospheric deposition to
waterbodies 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 toxics may lead to the human
ingestion of contaminated fish,
impairment of drinking 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.417 418 419 420 421
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
417 U.S. EPA (2004) National Coastal Condition
Report II. Office of Research and Development/
Office of Water. EPA–620/R–03/002. Docket EPA–
HQ–OAR–2009–0472–0089.
418 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. Docket EPA–HQ–OAR–2009–0472–11297.
419 Kim, G., N. Hussain, J.R. Scudlark, and T.M.
Church. 2000. Factors influencing the atmospheric
depositional fluxes of stable Pb, 210Pb, and 7Be
into Chesapeake Bay. J. Atmos. Chem. 36: 65–79.
Docket EPA–HQ–OAR–2009–0472–11299.
420 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.
Docket EPA–HQ–OAR–2009–0472–11296.
421 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. Docket EPA–HQ–OAR–
2009–0472–11300.
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(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 leads to
nutrient enrichment and altered
biogeochemical cycling. In aquatic
systems increased nitrogen can alter
species assemblages and cause
eutrophication. In terrestrial systems
nitrogen loading can lead to loss of
nitrogen sensitive lichen species,
decreased biodiversity of grasslands,
meadows and other sensitive habitats,
and increased potential for invasive
species. For a broader explanation of the
topics treated here, refer to the
description in Section 7.1.2 of the RIA.
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
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).
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.424
Research suggests an adverse impact
of vehicle exhaust on plants, which has
in some cases been attributed to
aromatic compounds and in other cases
to nitrogen oxides.425 426 427 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.
d. Environmental Effects of Air Toxics
Pollut. 124:341–343. Docket EPA–HQ–OAR–2009–
0472–0357.
424 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. Docket EPA–HQ–OAR–2009–
0472–0357.
425 Viskari E–L. 2000. Epicuticular wax of Norway
spruce needles as indicator of traffic pollutant
deposition. Water, Air, and Soil Pollut. 121:327–
337. Docket EPA–HQ–OAR–2009–0472–1128.
426 Ugrekhelidze D, F Korte, G Kvesitadze. 1997.
Uptake and transformation of benzene and toluene
by plant leaves. Ecotox. Environ. Safety 37:24–29.
Docket EPA–HQ–OAR–2009–0472–1142.
427 Kammerbauer H, H Selinger, R Rommelt, A
Ziegler-Jons, D Knoppik, B Hock. 1987. Toxic
components of motor vehicle emissions for the
spruce Picea abies. Environ. Pollut. 48:235–243.
Docket EPA–HQ–OAR–2009–0472–0358.
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.422 In
laboratory experiments, a wide range of
tolerance to VOCs has been observed.423
422 U.S. EPA. 1991. Effects of organic chemicals
in the atmosphere on terrestrial plants. EPA/600/3–
91/001. Docket EPA–HQ–OAR–2009–0472–0401.
423 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.
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5. Air Quality Impacts of Non-GHG
Pollutants
Air quality modeling was performed
to assess the impact of the vehicle
standards on criteria and air toxic
pollutants. In this section, we present
information on current modeled levels
of pollution as well as projections for
2030, with respect to ambient PM2.5,
ozone, selected air toxics, visibility
levels and nitrogen and sulfur
deposition. The air quality modeling
results indicate that the GHG standards
have relatively small but measureable
impacts on ambient concentrations of
these pollutants. The results are
discussed in more detail below and in
Section 7.2 of the RIA. No substantive
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comments were received on our plans
for non-GHG air quality modeling that
were detailed in the proposal for this
rule.
We used the Community Multi-scale
Air Quality (CMAQ) photochemical
model, version 4.7.1, for our analysis.
This version of CMAQ includes a
number of improvements to previous
versions of the model. These
improvements are discussed in Section
7.2 of the RIA.
attain the 1997 annual PM2.5 standard of
15 μg/m3 and 26 counties with a
population of over 41 million may not
attain the 2006 24-hour PM2.5 standard
of 35 μg/m3. These numbers do not
account for those areas that are close to
(e.g., within 10 percent of) the PM2.5
standards. These areas, although not
violating the standards, will also benefit
from any reductions in PM2.5 ensuring
long-term maintenance of the PM2.5
NAAQS.
a. Particulate Matter
iii. Projected Levels With This Rule
Air quality modeling performed for
this final rule shows that in 2030 the
majority of the modeled counties will
see decreases of less than 0.05 μg/m3 in
their annual PM2.5 design values. The
decreases in annual PM2.5 design values
that we see in some counties are likely
due to emission reductions related to
lower gasoline production at existing oil
refineries; reductions in direct PM2.5
emissions and PM2.5 precursor
emissions (NOX and SOX) contribute to
reductions in ambient concentrations of
both direct PM2.5 and secondarilyformed PM2.5. The maximum projected
decrease in an annual PM2.5 design
value is 0.07 μg/m3 in Harris County,
TX. There are also a few counties that
are projected to see increases of no more
than 0.01 μg/m3 in their annual PM2.5
design values. These small increases in
annual PM2.5 design values are likely
related to downstream emission
increases. On a population-weighted
basis, the average modeled 2030 annual
PM2.5 design value is projected to
decrease by 0.01 μg/m3 due to this final
rule. Those counties that are projected
to be above the annual PM2.5 standard
in 2030 will see slightly larger
population-weighted decreases of 0.03
μg/m3 in their design values due to this
final rule.
In addition to looking at annual PM2.5
design values, we also modeled the
impact of the standards on 24-hour
PM2.5 design values. Air quality
modeling performed for this final rule
shows that in 2030 the majority of the
modeled counties will see changes of
between -0.05 μg/m3 and +0.05 μg/m3 in
their 24-hour PM2.5 design values. The
decreases in 24-hour PM2.5 design
values that we see in some counties are
likely due to emission reductions
related to lower gasoline production at
existing oil refineries; reductions in
direct PM2.5 emissions and PM2.5
precursor emissions (NOX and SOX)
contribute to reductions in ambient
concentrations of both direct PM2.5 and
secondarily-formed PM2.5. The
maximum projected decrease in a 24hour PM2.5 design value is 0.21 μg/m3 in
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i. Current Levels
PM2.5 concentrations exceeding the
level of the PM2.5 NAAQS occur in
many parts of the country. In 2005, EPA
designated 39 nonattainment areas for
the 1997 PM2.5 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
revised in 2006 and the 2006 24-hour
PM2.5 NAAQS became effective on
December 18, 2006. On October 8, 2009,
the EPA issued final nonattainment area
designations for the 2006 24-hour PM2.5
NAAQS (74 FR 58688, November 13,
2009). These designations include 31
areas composed of 120 full or partial
counties with a population of over 70
million. In total, there are 54 PM2.5
nonattainment areas composed of 243
counties with a population of almost
102 million people.
ii. Projected Levels Without This Rule
States with PM2.5 nonattainment areas
are required to take action to bring those
areas into compliance in the future.
Areas designated as not attaining the
1997 PM2.5 NAAQS will need to attain
the 1997 standards in the 2010 to 2015
time frame, and then maintain them
thereafter. The 2006 24-hour PM2.5
nonattainment areas will be required to
attain the 2006 24-hour PM2.5 NAAQS
in the 2014 to 2019 time frame and then
be required to maintain the 2006 24hour PM2.5 NAAQS thereafter. The
vehicle standards finalized in this
action become effective in 2012 and
therefore may be useful to states in
attaining or maintaining the PM2.5
NAAQS.
EPA has already adopted many
emission control programs that are
expected to reduce ambient PM2.5 levels
and which will assist in reducing the
number of areas that fail to achieve the
PM2.5 NAAQS. Even so, our air quality
modeling projects that in 2030, with all
current controls but excluding the
impacts of the vehicle standards
adopted here, at least 9 counties with a
population of almost 28 million may not
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Harris County, TX. There are also some
counties that are projected to see
increases of less than 0.05 μg/m3 in their
24-hour PM2.5 design values. These
small increases in 24-hour PM2.5 design
values are likely related to downstream
emission increases. On a populationweighted basis, the average modeled
2030 24-hour PM2.5 design value is
projected to decrease by 0.01 μg/m3 due
to this final rule. Those counties that are
projected to be above the 24-hour PM2.5
standard in 2030 will see slightly larger
population-weighted decreases of 0.05
μg/m3 in their design values due to this
final rule.
b. Ozone
i. Current Levels
8-hour ozone concentrations
exceeding the level of the ozone
NAAQS occur in many parts of the
country. In 2008, the EPA amended the
ozone NAAQS (73 FR 16436, March 27,
2008). The final 2008 ozone NAAQS
rule set forth revisions to the previous
1997 NAAQS for ozone to provide
increased protection of public health
and welfare. EPA recently proposed to
reconsider the 2008 ozone NAAQS (75
FR 2938, January 19, 2010). Because of
the uncertainty the reconsideration
proposal creates regarding the
continued applicability of the 2008
ozone NAAQS, EPA has used its
authority to extend by 1 year the
deadline for promulgating designations
for those NAAQS (75 FR 2936, January
19, 2010). The new deadline is March
12, 2011. EPA intends to complete the
reconsideration by August 31, 2010. If
EPA establishes new ozone NAAQS as
a result of the reconsideration, they
would replace the 2008 ozone NAAQS
and requirements to designate areas and
implement the 2008 NAAQS would no
longer apply.
As of January 6, 2010 there are 51
areas designated as nonattainment for
the 1997 8-hour ozone NAAQS,
comprising 266 full or partial counties
with a total population of over 122
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. Table III.G.5–1
provides an estimate, based on 2005–07
air quality data, of the counties with
design values greater than the 2008 8hour ozone NAAQS of 0.075 ppm.
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TABLE III.G.5–1—COUNTIES WITH DESIGN VALUES GREATER THAN THE OZONE NAAQS
Number of
counties
Population a
1997 Ozone Standard: Counties within the 54 areas currently designated as nonattainment (as of 1/6/10)
2008 Ozone Standard: Additional counties that would not meet the 2008 NAAQS (based on 2006–2008
air quality data) b ..........................................................................................................................................
266
122,343,799
156
36,678,478
Total ..........................................................................................................................................................
422
159,022,277
NOTES:
a Population numbers are from 2000 census data.
b Area designations for the 2008 ozone NAAQS have not yet been made. Nonattainment for the 2008 Ozone NAAQS would be based on three
years of air quality data from later years. Also, the county numbers in this row include only the counties with monitors violating the 2008 Ozone
NAAQS. The numbers in this table may be an underestimate of the number of counties and populations that will eventually be included in areas
with multiple counties designated nonattainment.
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ii. Projected Levels Without This Rule
States with 8-hour ozone
nonattainment areas are required to take
action to bring those areas into
compliance in the future. Based on the
final rule designating and classifying 8hour ozone nonattainment areas for the
1997 standard (69 FR 23951, April 30,
2004), most 8-hour ozone nonattainment
areas will be required to attain the
ozone NAAQS in the 2007 to 2013 time
frame and then maintain the NAAQS
thereafter. As noted, EPA is
reconsidering the 2008 ozone NAAQS.
If EPA promulgates different ozone
NAAQS in 2010 as a result of the
reconsideration, these standards would
replace the 2008 ozone NAAQS and
there would no longer be a requirement
to designate areas for the 2008 NAAQS.
EPA would designate nonattainment
areas for a potential new 2010 primary
ozone NAAQS in 2011. The attainment
dates for areas designated
nonattainment for a potential new 2010
primary ozone NAAQS are likely to be
in the 2014 to 2031 timeframe,
depending on the severity of the
problem.428
EPA has already adopted many
emission control programs that are
expected to reduce ambient ozone levels
and assist in reducing the number of
areas that fail to achieve the ozone
NAAQS. Even so, our air quality
modeling projects that in 2030, with all
current controls but excluding the
impacts of the vehicle standards, up to
16 counties with a population of almost
35 million may not attain the 2008
ozone standard of 0.075 ppm (75 ppb).
These numbers do not account for those
areas that are close to (e.g., within 10
percent of) the 2008 ozone standard.
These areas, although not violating the
standards, will also be impacted by
changes in ozone as they work to ensure
long-term maintenance of the ozone
NAAQS.
iii. Projected Levels With This Rule
We do not expect this rule to have a
meaningful impact on ozone
concentrations, given the small
magnitude of the ozone impacts and the
fact that much of the impact is due to
ethanol assumptions that are
independent of this rule. Our modeling
projects increases in ozone design value
concentrations in many areas of the
country and decreases in ozone design
value concentrations in a few areas.
However, the increases in ozone design
values are not due to the standards
finalized in this rule, but are related to
our assumptions about the volume of
ethanol that will be blended into
gasoline. The ethanol volumes will be
occurring as a result of the recent
Renewable Fuel Standards (RFS2)
rule.429
The ethanol volume assumptions are
discussed in the introduction to Section
III.G of this preamble. We attribute
decreased fuel consumption and
production from this program to
gasoline only, while assuming constant
ethanol volumes in our reference and
control cases. Holding ethanol volumes
constant while decreasing gasoline
volumes increases the market share of
10% ethanol (E10) in the control case.
However, the increased E10 market
share is projected to occur regardless of
this rule; in the RFS2 analysis we
project 100% E10 by 2014. The air
quality impacts of this effect are
included in our analyses for the recent
RFS2 rule. As the RFS2 analyses
indicate, increasing usage of E10 fuels
(when compared with E0 fuels) can
increase NOX emissions and thereby
increase ozone concentrations,
especially in NOX-limited areas where
428 U.S. EPA 2010, Fact Sheet Revisions to Ozone
Standards. https://www.epa.gov/groundlevelozone/
pdfs/fs20100106std.pdf.
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429 EPA 2010, Renewable Fuel Standard Program
(RFS2) Regulatory Impact Analysis. EPA–420–R–
10–006, February 2010. Docket EPA–HQ–OAR–
2009–0472–11332. See also 75 FR 14670, March 26,
2010.
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relatively small amounts of NOX enable
ozone to form rapidly.430
The majority of the ozone design
value increases are less than 0.1 ppb.
The maximum projected increase in an
8-hour ozone design value is 0.25 ppb
in Richland County, South Carolina. As
mentioned above there are some areas
which see decreases in their ozone
design values. The decreases in ambient
ozone concentration are likely due to
projected upstream emissions decreases
in NOX and VOCs from reduced
gasoline production. The maximum
decrease projected in an 8-hour ozone
design value is 0.22 ppb in Riverside
County, California. On a populationweighted basis, the average modeled 8hour ozone design values are projected
to increase by 0.01 ppb in 2030 and the
design values for those counties that are
projected to be above the 2008 ozone
standard in 2030 will see populationweighted decreases of 0.10 ppb.
c. Air Toxics
i. Current Levels
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.431 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 most recent Mobile
Source Air Toxics Rule.432 According to
the National Air Toxic Assessment
430 Sections 3.4.2.1.2 and 3.4.3.3 of the Renewable
Fuel Standard Program (RFS2) Regulatory Impact
Analysis, EPA–420–R–10–006, February 2010.
Docket EPA–HQ–OAR–2009–0472–11332.
431 U.S. EPA (2009) 2002 National-Scale Air
Toxics Assessment. https://www.epa.gov/ttn/atw/
nata2002/. Docket EPA–HQ–OAR–2009–0472–
11321.
432 U.S. Environmental Protection Agency (2007).
Control of Hazardous Air Pollutants from Mobile
Sources; Final Rule. 72 FR 8434, February 26, 2007.
Docket EPA–HQ–OAR–2009–0472–0271, 0271.1
and 0271.2.
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(NATA) for 2002,433 mobile sources
were responsible for 47 percent of
outdoor toxic emissions, over 50 percent
of the cancer risk, and over 80 percent
of the noncancer hazard. Benzene is the
largest contributor to cancer risk of all
124 pollutants quantitatively assessed in
the 2002 NATA and mobile sources
were responsible for 59 percent of
benzene emissions in 2002. Over the
years, EPA has implemented a number
of mobile source and fuel controls
resulting in VOC reductions, which also
reduce benzene and other air toxic
emissions.
ii. Projected Levels
Our modeling indicates that the GHG
standards have relatively little impact
on national average ambient
concentrations of the modeled air
toxics. Additional detail on the air
toxics results can be found in Section
7.2.2.3 of the RIA.
d. Nitrogen and Sulfur Deposition
i. Current Levels
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Over the past two decades, the EPA
has undertaken numerous efforts to
reduce nitrogen and sulfur deposition
across the U.S. Analyses of long-term
monitoring data for the U.S. show that
deposition of both nitrogen and sulfur
compounds has decreased over the last
17 years although many areas continue
to be negatively impacted by deposition.
Deposition of inorganic nitrogen and
sulfur species routinely measured in the
U.S. between 2004 and 2006 were as
high as 9.6 kilograms of nitrogen per
hectare per year (kg N/ha/yr) and 21.3
kilograms of sulfur per hectare per year
(kg S/ha/yr). The data show that
reductions were more substantial for
sulfur compounds than for nitrogen
compounds. These numbers are
generated by the U.S. national
monitoring network and they likely
underestimate nitrogen deposition
because neither ammonia nor organic
nitrogen is measured. In the eastern
U.S., where data are most abundant,
total sulfur deposition decreased by
about 44% between 1990 and 2007,
while total nitrogen deposition
decreased by 25% over the same time
frame.434
433 U.S. EPA (2009) 2002 National-Scale Air
Toxics Assessment. https://www.epa.gov/ttn/atw/
nata2002/. Docket EPA–HQ–OAR–2009–0472–
11321.
434 U.S. EPA. U.S. EPA’s 2008 Report on the
Environment (Final Report). U.S. Environmental
Protection Agency, Washington, DC, EPA/600/R–
07/045F (NTIS PB2008–112484). Docket EPA–HQ–
OAR–2009–0472–11298. Updated data available
online at: https://cfpub.epa.gov/eroe/
index.cfm?fuseaction=detail.viewInd&ch=46&
subtop=341&lv=list.listByChapter&r=201744.
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ii. Projected Levels
Our air quality modeling does not
show substantial overall nationwide
impacts on the annual total sulfur and
nitrogen deposition occurring across the
U.S. as a result of the vehicle standards
required by this rule. For sulfur
deposition the vehicle standards will
result in annual percent decreases of
0.5% to more than 2% in locations with
refineries as a result of the lower output
from refineries due to less gasoline
usage. These locations include the
Texas and Louisiana portions of the
Gulf Coast; the Washington DC area;
Chicago, IL; portions of Oklahoma and
northern Texas; Bismarck, North
Dakota; Billings, Montana; Casper,
Wyoming; Salt Lake City, Utah; Seattle,
Washington; and San Francisco, Los
Angeles, and San Luis Obispo,
California. The remainder of the country
will see only minimal changes in sulfur
deposition, ranging from decreases of
less than 0.5% to increases of less than
0.5%. For a map of 2030 sulfur
deposition impacts and additional
information on these impacts, see
Section 7.2.2.5 of the RIA. The impacts
of the vehicle standards on nitrogen
deposition are minimal, ranging from
decreases of up to 0.5% to increases of
up to 0.5%.
e. Visibility
i. Current Levels
As mentioned in Section III.G.5.a,
millions of people live in nonattainment
areas for the PM2.5 NAAQS. These
populations, as well as large numbers of
individuals who travel to these areas,
are likely to experience visibility
impairment. In addition, while visibility
trends have improved in mandatory
class I Federal areas, the most recent
data show that these areas continue to
suffer from visibility impairment. In
summary, visibility impairment is
experienced throughout the U.S., in
multi-State regions, urban areas, and
remote mandatory class I Federal areas.
ii. Projected Levels
Air quality modeling conducted for
this final rule was used to project
visibility conditions in 138 mandatory
class I Federal areas across the U.S. in
2030. The results show that all the
modeled areas will continue to have
annual average deciview levels above
background in 2030.435 The results also
435 The level of visibility impairment in an area
is based on the light-extinction coefficient and a
unitless visibility index, called a ‘‘deciview’’, which
is used in the valuation of visibility. The deciview
metric provides a scale for perceived visual changes
over the entire range of conditions, from clear to
hazy. Under many scenic conditions, the average
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25509
indicate that the majority of the
modeled mandatory class I Federal areas
will see no change in their visibility, but
some mandatory class I Federal areas
will see improvements in visibility due
to the vehicle standards and a few
mandatory class I Federal areas will see
visibility decreases. The average
visibility at all modeled mandatory class
I Federal areas on the 20% worst days
is projected to improve by 0.002
deciviews, or 0.01%, in 2030. Section
7.2.2.6.2 of the RIA contains more detail
on the visibility portion of the air
quality modeling.
H. What are the estimated cost,
economic, and other impacts of the
program?
In this section, EPA presents the costs
and impacts of EPA’s 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 average fuel economy increases 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.
These costs and benefits are
appropriately analyzed separately by
each agency and should not be added
together.
This section outlines the basis for
assessing the benefits and costs of the
GHG 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 upfront 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, because they
affect people in ways other than the
effect on the market for and use of new
vehicles and are generally not taken into
account by the purchaser of the vehicle.
The external effects include the climate
impacts, the effects on non-GHG
pollutants, energy security impacts, 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
person can generally perceive a change of one
deciview. The higher the deciview value, the worse
the visibility. Thus, an improvement in visibility is
a decrease in deciview value.
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role of private benefits in assessing the
benefits and costs of the program: If
consumers optimize their purchases of
fuel economy, with full information and
perfect foresight, in perfectly efficient
markets, it is possible that they have
already considered these benefits in
their vehicle purchase decisions. If so,
then no net private benefits would
result from the program, because
consumers would already buy vehicles
with the amount of fuel economy that is
optimal for them; requiring additional
fuel economy would alter both the
purchase prices of new cars and their
lifetime streams of operating costs in
ways that will inevitably reduce
consumers’ well-being. If these
conditions do not hold, then the private
benefits and costs would both count
toward the program’s benefits. Section
III.H.1 discusses this issue more fully.
The net benefits of EPA’s final
program consist of the effects of the
program on:
• 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, and other flexibilities built
into the final program),
• Fuel savings associated with
reduced fuel usage resulting from the
program,
• Greenhouse gas emissions,
• Other pollutants,
• Noise, congestion, accidents,
• Energy security impacts,
• Reduced refueling events
• Increased driving due to the
‘‘rebound’’ effect.
EPA also presents the cost-effectiveness
of the standards.
The total monetized benefits
(excluding fuel savings) under the
program are projected to be $17.5 to
$41.8 billion in 2030, using a 3 percent
discount rate applied to the valuation of
PM2.5-related premature mortality and
depending on the value used for the
social cost of carbon. The total
monetized benefits (excluding fuel
savings) under the program are
projected to be $17.4 to $41.7 billion in
2030, using a 7 percent discount rate
applied to the valuation of PM2.5-related
premature mortality and depending on
the value used for the social cost of
carbon. These benefits are summarized
below in Table III.H.10–2. The costs of
the program in 2030 are estimated to be
approximately $15.8 billion for new
vehicle technology less $79.8 billion in
savings realized by consumers through
fewer fuel expenditures (calculated
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For this 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 an
economic conundrum. On the one hand,
consumers are expected to gain
significantly from the rules, as the
increased cost of fuel efficient cars
appears to be far smaller than the fuel
savings. Yet these technologies are
readily available; financially savvy
consumers could have sought vehicles
with improved fuel efficiency, and auto
makers seeking those customers could
have offered them. Assuming full
information, perfect foresight, perfect
competition, and financially rational
consumers and producers, standard
economic theory suggests that normal
market operations would have provided
the private net gains to consumers, and
the only benefits of the rule would be
due to external benefits. If our analysis
projects net private benefits that
consumers have not realized in this
perfectly functioning market, then
increased fuel economy should be
accompanied by a corresponding loss in
consumer welfare. This calculation
assumes that consumers accurately
predict and act on all the benefits they
will get from a new vehicle, and that
producers market products providing
those benefits. The existence of large
private net benefits from this rule, then,
suggests either that the assumptions
noted above do not hold, or that EPA’s
analysis has missed some factor(s) tied
to improved fuel economy that reduce(s)
consumer welfare.
With respect to the latter, EPA
believes the costs of the technologies
developed for this rule take into account
the cost needed to ensure that all
vehicle qualities (including
performance, reliability, and size) stay
constant, except for fuel economy and
vehicle price. As a result, there would
need to be some other changed qualities
that would reduce the benefits
consumers receive from their vehicles.
Changing circumstances (e.g., increased
demand for horsepower in response to
a drop in fuel prices), and any changes
in vehicle attributes that manufacturers
elect to make may result in additional
private impacts to vehicle buyers from
requiring increased fuel economy. Most
comments generally supported the cost
estimates and the maintenance of
vehicle quality, though two comments
expressed concern over unspecified
losses to vehicle quality. Even if there
is some such unidentified loss (which,
given existing evidence and modeling
capabilities, is very difficult to
quantify), EPA believes that under
realistic assumptions, the private gains
from the rule, together with the social
gains (in the form of reduction of
externalities), will continue to
substantially outweigh the costs.
The central conundrum has been
referred to as the Energy Paradox in this
setting (and in several others).437 In
short, the problem is that consumers
appear not to purchase products that are
in their economic self-interest. There are
436 See Memorandum to Docket, ‘‘Economy-Wide
Impacts of Proposed Greenhouse Gas Tailpipe
Standards,’’ March 4, 2010. Docket EPA–HQ–OAR–
2009–0472.
437 Jaffe, A.B., and Stavins, R.N. (1994). The
Energy Paradox and the Diffusion of Conservation
Technology. Resource and Energy Economics, 16(2),
91–122. Docket EPA–HQ–OAR–2009–0472–11415.
using pre-tax fuel prices). These costs
are summarized below in Table
III.H.10–1. The estimates developed
here use as a baseline for comparison
the fuel economy associated with MY
2011 vehicles. To the extent that greater
fuel economy improvements than those
assumed to occur under the baseline
may have occurred due to market forces
alone (absent the rule), the analysis
overestimates private and social net
benefits.
EPA has undertaken an analysis of the
economy-wide impacts of the GHG
tailpipe standards as an exploratory
exercise that EPA believes could
provide additional insights into the
potential impacts of the program.436
These results were not a factor regarding
the appropriateness of the GHG tailpipe
standards. It is important to note that
the results of this modeling exercise are
dependent on the assumptions
associated with how producers will
make fuel economy improvements and
how consumers will respond to
increases in higher vehicle costs and
improved vehicle fuel economy as a
result of the program. 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 rule are summarized in the
following sections and are presented in
more detail in the RIA for this
rulemaking.
1. Conceptual Framework for Evaluating
Consumer Impacts
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strong theoretical reasons why this
might be so: 438
• Consumers might be myopic and
hence undervalue the long-term.
• Consumers might lack information
or a full appreciation of information
even when it is presented.
• Consumers might be especially
averse to the short-term losses
associated with the higher prices of
energy efficient products relative to the
uncertain future fuel savings, even if the
expected present value of those fuel
savings exceeds the cost (the behavioral
phenomenon of ‘‘loss aversion’’)
• Even if consumers have relevant
knowledge, the benefits of energyefficient vehicles might not be
sufficiently salient to them at the time
of purchase, and the lack of salience
might lead consumers to neglect an
attribute that it would be in their
economic interest to consider.
• In the case of vehicle fuel
efficiency, and perhaps as a result of
one or more of the foregoing factors,
consumers may have relatively few
choices to purchase vehicles with
greater fuel economy once other
characteristics, such as vehicle class, are
chosen.439
A great deal of work in behavioral
economics identifies and elaborates
factors of this sort, which help account
for the Energy Paradox.440 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.441 For example, it
might well be questioned whether
significant reductions in refueling time,
and corresponding private savings, are
fully internalized when consumers are
making purchasing decisions.
438 For
an overview, see id.
instance, the range of fuel economy
(combined city and highway) available among all
listed 2010 6-cylinder minivans is 18 to 20 miles
per gallon. With a manual-transmission 4-cylinder
minivan, it is possible to get 24 mpg. See https://
www.fueleconomy.gov, which is jointly maintained
by the U.S. Department of Energy and the EPA. For
recent but unpublished evidence, see Allcott, Hunt,
and Nathan Wozny, ‘‘Gasoline Prices, Fuel
Economy, and the Energy Paradox’’ (2010), available
at https://web.mit.edu/allcott/www/Allcott%20
and%20Wozny%202010%20-%20Gasoline%20
Prices,%20Fuel%20Economy,%20and%20the%20
Energy%20Paradox.pdf.
440 Jaffe, A.B., and Stavins, R.N. (1994). The
Energy Paradox and the Diffusion of Conservation
Technology. Resource and Energy Economics, 16(2),
91–122. Docket EPA–HQ–OAR–2009–0472–11415.
See also Allcott and Wozny, supra note.
441 For example, it might be maintained that, at
the time of purchase, consumers take full account
of the time spent refueling 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.
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439 For
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Considerable research findings
indicate that the Energy Paradox is real
and significant but the literature has not
reached a consensus about the reasons
for its existence. Several researchers
have found evidence suggesting that
consumers do not give full or
appropriate weight to fuel economy in
purchasing decisions. For example,
Sanstad and Howarth 442 argue that
consumers optimize behavior without
full information by resorting to
imprecise but convenient rules of
thumb. Some studies find that a
substantial portion of this
undervaluation can be explained by
inaccurate assessments of energy
savings, or by uncertainty and
irreversibility of energy investments due
to fluctuations in energy prices.443 For
a number of reasons, consumers may
undervalue future energy savings due to
routine mistakes in how they evaluate
these trade-offs. For instance, the
calculation of fuel savings is complex,
and consumers may not make it
correctly.444 The attribute of fuel
economy may be insufficiently salient,
leading to a situation in which
consumers pay less than $1 for an
expected $1 benefit in terms of
discounted gasoline costs.445 Larrick
442 Sanstad, A., and R. Howarth (1994). ‘‘ ‘Normal’
Markets, Market Imperfections, and Energy
Efficiency.’’ Energy Policy 22(10): 811–818 (Docket
EPA–HQ–OAR–2009–0472–11416).
443 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 (Docket EPA–HQ–OAR–2009–0472–11538);
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 (Docket EPA–HQ–OAR–2009–0472–11539);
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 (Docket EPA–HQ–OAR–
2009–0472–11540); Hassett, K., and G. Metcalf
(1995), ‘‘Energy Tax Credits and Residential
Conservation Investment: Evidence from Panel
Data,’’ Journal of Public Economics 57: 201–217
(Docket EPA–HQ–OAR–2009–0472–11543);
Metcalf, G., and K. Hassett (1999), ‘‘Measuring the
Energy Savings from Home Improvement
Investments: Evidence from Monthly Billing Data,’’
The Review of Economics and Statistics 81(3): 516–
528 (Docket EPA–HQ–OAR–2009–0472–0051); van
Soest D., and E. Bulte (2001), ‘‘Does the EnergyEfficiency Paradox Exist? Technological Progress
and Uncertainty.’’ Environmental and Resource
Economics 18: 101–12 (Docket EPA–HQ–OAR–
2009–0472–11542).
444 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–2009–0472–0041).
445 Allcott, Hunt, and Nathan Wozny, ‘‘Gasoline
Prices, Fuel Economy, and the Energy Paradox’’
(2010), available at https://web.mit.edu/allcott/www/
Allcott%20and%20Wozny%202010%20-
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and Soll (2008) find 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).446 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. Cost calculations based on the
average do not distinguish between
those that may gain or lose as a result
of the policy.447 Studies regularly show
that fuel economy plays a role in
consumers’ vehicle purchases, but
modeling that role is still in
development, and there is no consensus
that most consumers make fully
informed tradeoffs.448
Some studies find that a substantial
portion of the Energy Paradox can be
explained in models of consumer
behavior. For instance, one set of
studies finds that accounting for
uncertainty in fuel savings over time
due to unanticipated changes in fuel
prices goes a long way toward
explaining this paradox. In this case,
consumers give up some uncertain
future fuel savings to avoid higher
upfront costs.
A recent review commissioned by
EPA supports the finding of great
variability, by looking at one key
parameter: The role of fuel economy in
consumers’ vehicle purchase
decisions.449 The review finds no
%20Gasoline%20Prices,%20
Fuel%20Economy,%20and%
20the%20Energy%20Paradox.pdf (Docket EPA–
HQ–OAR–2009–0472–11554).
446 Sanstad, A., and R. Howarth (1994). ‘‘ ‘Normal’
Markets, Market Imperfections, and Energy
Efficiency.’’ Energy Policy 22(10): 811–818 (Docket
EPA–HQ–OAR–2009–0472–11415); Larrick, R. P.,
and J.B. Soll (2008). ‘‘The MPG illusion.’’ Science
320: 1593–1594 (Docket EPA–HQ–OAR–2009–
0472–0043).
447 Hausman J., Joskow P. (1982). ‘‘Evaluating the
Costs and Benefits of Appliance Efficiency
Standards.’’ American Economic Review 72: 220–25
(Docket EPA–HQ–OAR–2009–0472–11541).
448 E.g., Goldberg, Pinelopi Koujianou, ‘‘Product
Differentiation and Oligopoly in International
Markets: The Case of the U.S. Automobile
Industry,’’ Econometrica 63(4) (July 1995): 891–951
(Docket EPA–HQ–OAR–2009–0472–0021);
Goldberg, Pinelopi Koujianou, ‘‘The Effects of the
Corporate Average Fuel Efficiency Standards in the
U.S.,’’ Journal of Industrial Economics 46(1) (March
1998): 1–33 (Docket EPA–HQ–OAR–2009–0472–
0017); 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–
0472–0044).
449 Greene, David L. ‘‘How Consumers Value Fuel
Economy: A Literature Review.’’ EPA Report EPA–
420–R–10–008, March 2010 (Docket EPA–HQ–
OAR–2009–0472–11575).
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consensus on the role of fuel economy
in consumer purchase decisions. Of 27
studies, significant numbers of them
find that consumers undervalue,
overvalue, or value approximately
correctly the fuel savings that they will
receive from improved fuel economy.
The variation in the value of fuel
economy in these studies is so high that
it appears to be inappropriate to identify
one central estimate from the literature.
Thus, estimating consumer response to
higher vehicle fuel economy is still
unsettled science.
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, and poor ability to calculate
savings. Also as noted, fuel economy
may not be as salient as other vehicle
characteristics when a consumer is
considering vehicles. If these arguments
are valid, then there will be significant
gains to consumers of the government
mandating additional fuel economy.
EPA requested and received a number
of comments discussing the role of the
Energy Paradox in consumer vehicle
purchase decisions. Ten commenters,
primarily from a number of academic
and non-governmental organizations,
argued that there is a gap between the
fuel economy that consumers purchased
and the cost-effective amount, due to a
number of market and behavioral
phenomena. These include consumers
having inadequate information about
future fuel savings relative to up-front
costs; imperfect competition among auto
manufacturers; lack of choice over fuel
economy within classes; lack of salience
of fuel economy relative to other vehicle
features at the time of vehicle purchase;
consumer use of heuristic decisionmaking processes or other rules of
thumb, rather than analyzing fuel
economy decisions; consumer risk and
loss aversion leading to more attention
to up-front costs than future fuel
savings; and consumer emphasis on
visible, status-providing features of
vehicles more than on relatively
invisible features such as fuel economy.
The RIA, Chapter 8.1.2, includes further
discussion of these phenomena.
Because of the gap between the fuel
economy consumers purchase and the
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cost-effective amount, those and
additional commenters support using
the full value of fuel savings as a benefit
of the rule. A few asserted, in addition,
that auto companies would benefit from
offering vehicles with improved fuel
economy. Automakers might
underprovide fuel economy because
they believe consumers would not buy
it, or that it is not as salient as price
when consumers are buying a vehicle.
The commenters who supported the
existence of the gap cite these
phenomena as a basis for regulation of
fuel economy. In contrast, two
commenters (the United Auto Workers
and one nonprofit research
organization) argued that the market for
fuel economy works efficiently;
consumers reveal through their
purchase decisions that additional fuel
economy is not important for them.
These commenters expressed concern
that regulation to promote more fuel
economy would limit consumers’
choices as well as the value of the
vehicles to consumers. Yet other
commenters (including some states)
noted that the rule protects the existing
variety and choice of vehicles in the
market; for this reason, the value of
vehicles to consumers should not suffer
as a result of the rule.
While acknowledging the diversity of
perspectives, EPA continues to include
the full fuel savings as private benefits
of the rule. Improved fuel economy will
significantly reduce consumer
expenditures on fuel, thus benefiting
consumers. It is true that limitations in
modeling affect our ability to estimate
how much of these savings would have
occurred in the absence of the rule. For
example, some of the technologies
predicted to be adopted in response to
the rule may already be developing due
to shifts in consumer demand for fuel
economy. It is possible that some of
these savings would have occurred in
the absence of the rule. To the extent
that greater fuel economy improvements
than those assumed to occur under the
baseline may have occurred due to
market forces alone (absent the rule), the
analysis overestimates private and
social net benefits. In the absence of
robust means to identify the changes in
fuel economy that would have occurred
without the rule, we estimate the
benefits and costs under the assumption
that the rule will lead to more fuelefficient vehicles than would have
occurred without the rule. As discussed
below, limitations in modeling also
affect our ability to estimate the effects
of the rule on net benefits in the market
for vehicles.
Consumer vehicle choice models
estimate what vehicles consumers buy
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based on vehicle and consumer
characteristics. In principle, such
models could provide a means of
understanding both the role of fuel
economy in consumers’ purchase
decisions and the effects of this rule on
the benefits that consumers will get
from vehicles. The NPRM included a
discussion of the wide variation in the
structure and results of these models.
Models or model results have not
frequently been systematically
compared to each other. When they
have, the results show large variation
over, for instance, the value that
consumers place on additional fuel
economy. As a result, EPA found that
further assessment needed to be done
before adopting a consumer vehicle
choice model. In the NPRM, EPA asked
for comment on the state of the art of
consumer vehicle choice modeling and
whether it is sufficiently developed for
use in regulatory analysis.
The responses were varied. Of the six
commenters on this issue, five
supported EPA’s performing consumer
vehicle choice modeling, but only in
general terms; they did not provide
recommendations for how to evaluate
the quality of different models or
identify a model appropriate for EPA’s
purposes. One commenter argued that,
if key differences across models were
controlled, then different models would
produce similar results, but there were
no suggestions for what choices to make
to control the key differences. One
commenter specifically asked for
estimates that quantify losses to
consumer welfare. Two commenters
mentioned the importance of taking into
account any losses in vehicle attributes
due to increasing fuel economy, but
without specific guidance for how to do
so. Some commenters, including some
who supported the use of these models,
highlighted some of the models’
potential limitations. Two commenters
noted the challenges of modeling for
vehicles that are not yet in the market.
Most consumer vehicle choice models
are based on existing vehicle fleets.
Future vehicles will present
combinations of vehicle characteristics
not previously seen in markets, such as
higher fuel economy and higher price
with other characteristics constant; the
existing models may not do well in
predicting consumer responses to these
changes. One comment suggested that
the models might be sufficient for
predicting changes in consumer
purchase patterns, but not for
calculating the welfare gains and losses
to consumers of the changes.
EPA has not used a consumer vehicle
choice model for the final rule analysis,
due to concerns we explained in the
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proposal (and discussed in Chapter 8.1
of the RIA), and because no new
information became available to resolve
those concerns. It is likely that variation
exists in measuring consumer response
to changes in fuel economy as well as
other vehicle characteristics, such as
performance. Thus, there does not
appear to be evidence at this time to
develop robust estimates of consumer
welfare effects of changes in vehicle
attributes. As noted earlier, EPA’s and
NHTSA’s cost estimates are based on
maintaining these other vehicle
attributes. Comments generally
supported the finding that our cost and
technology estimates succeeded in
maintaining these other attributes.
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
program. These issues are discussed in
detail in RIA Chapter 8.1.2.
The next issue is the potential for loss
in consumer welfare due to the rule. As
mentioned above (and discussed more
thoroughly in Section III.D of this
preamble), the technology cost estimates
developed here take into account the
costs to hold other vehicle attributes,
such as size and performance, constant.
In addition, the analysis assumes that
the full technology costs are passed
along to consumers. With these
assumptions, because welfare losses are
monetary estimates of how much
consumers would have to be
compensated to be made as well off as
in the absence of the change,450 the
price increase measures the loss to the
consumer.451 Assuming that the full
technology cost gets passed along to the
consumer as an increase in price, the
technology cost thus measures the
welfare loss to the consumer. Increasing
fuel economy would have to lead to
other changes in the vehicles that
consumers find undesirable for there to
450 This approach describes the economic concept
of compensating variation, a payment of money
after a change that would make a consumer as well
off after the change as before it. A related concept,
equivalent variation, estimates the income change
that would be an alternative to the change taking
place. The difference between them is whether the
consumer’s point of reference is her welfare before
the change (compensating variation) or after the
change (equivalent variation). In practice, these two
measures are typically very close together.
451 Indeed, it is likely to be an overestimate of the
loss to the consumer, because the consumer has
choices other than buying the same vehicle with a
higher price; she could choose a different vehicle,
or decide not to buy a new vehicle. The consumer
would choose one of those options only if the
alternative involves less loss than paying the higher
price. Thus, the increase in price that the consumer
faces would be the upper bound of loss of consumer
welfare, unless there are other changes to the
vehicle due to the fuel economy improvements that
make the vehicle less desirable to consumers.
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be additional losses not included in the
technology costs.
At this time EPA has no available
methods to estimate potential additional
effects on consumers not included in
the technology cost estimates, e.g., due
to changes in vehicles that consumers
find undesirable, shifts in consumer
demand for other attributes, and
uncertainties about the long term
reliability of new technologies.
Comments on the rule generally
supported EPA’s analysis of the
technology costs and the assumption
that other vehicle characteristics were
not adversely affected. Any consumer
welfare loss cannot be quantified at this
time. For reasons stated above, EPA
believes that any such loss is likely far
smaller than the private gains, including
fuel savings and reduced refueling time.
Chapter 8.1 of the RIA discusses in
more depth the research on the Energy
Paradox and the state of the art of
consumer vehicle choice modeling.
2. Costs Associated With the Vehicle
Program
In this section, EPA presents our
estimate of the costs associated with the
final vehicle program. The presentation
here summarizes the costs associated
with the new vehicle technology
expected to be added to meet the new
GHG standards, including hardware
costs to comply with the 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 RIA, and Chapter 3 of the Joint
TSD. For more detail on the outputs of
the OMEGA model and the overall
vehicle program costs summarized here,
the reader is directed to Chapters 4 and
7 of the RIA.
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. Some comments
were received that addressed the
technology costs that served as inputs to
the OMEGA model as was mentioned in
Section II.E. While those comments did
not result in changes to the technology
cost inputs, the technology cost
estimates for a select group of
technologies have changed since the
NPRM thus changing the vehicle
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25513
program costs presented here. These
changes, as summarized in Section II.E
and in Chapter 3 of the Joint TSD, were
made in response to updated cost
estimates, from the FEV teardown study,
available to the agencies shortly after
publication of the NPRM, not in
response to comments. Those cost
changes are summarized in Section II.E
and in Chapter 3 of the Joint TSD. EPA
believes that we have been conservative
in estimating the vehicle hardware costs
associated with this rule.
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 new 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 early credit
generation and advanced vehicle
technology credits.
a. Vehicle Compliance Costs Associated
With the 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.452 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
rule relative to what the future vehicle
fleet would be expected to look like
absent this 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
of the program—2012 through 2016.
EPA has also estimated compliance
costs for the years following
implementation so that we can shed
452 ‘‘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.
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light on the long term (2022 and later)
cost impacts of the program.453 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
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.454 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 will be
incurred. Once the program has been
fully implemented, some of the indirect
costs will no longer be attributable to
these 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.455 Note that the shortterm ICMs are used in the 2012 through
2016 years of implementation and
continue through 2021. EPA does this
since the 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 shortterm. Note that, in general the
comments received were supportive of
our use of ICMs as opposed to the more
traditional Retail Price Equivalent
(RPE).456 However, we did receive some
comment that we applied inappropriate
ICM factors to some technologies. We
have not changed our approach in
response to those comments as
explained in greater detail in our
Response to Comments document.
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
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 Chapter 3 of
the Joint TSD.
The technology cost estimates
discussed in Section III.D and detailed
in Chapter 3 of the Joint TSD are used
to build up technology package cost
estimates which are then used as inputs
to the OMEGA model. EPA discusses
our technology packages and package
costs in Chapter 1 of the RIA. 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, TLAAS, 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 rule. 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 longterm ICM is applied because some
indirect costs decrease or are no longer
considered attributable to the program
(e.g., warranty costs go down). 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 Chapter 6 of the RIA.
TABLE III.H.2–1—INDUSTRY AVERAGE VEHICLE COMPLIANCE COSTS ASSOCIATED WITH THE TAILPIPE CO2 STANDARDS
[$/vehicle in 2007 dollars]
Calendar year
$/car
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2012 .........................................................................................................................................................
453 Note that the assumption made here is that the
standards 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 rule in the years prior to 2022
would be eliminated in 2022 and later.
454 Need to add the recent reference for this study
by RTI. Alex Rogozhin et al., Automobile Industry
Regail Price Equivalent and Indirect Cost
Multipliers. Prepared for EPA by RTI International
and Transportation Research Institute, University of
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Michigan. EPA–420–R–09–003, February 2009
(Docket EPA–HQ–OAR–2009–0472).
455 Gloria Helfand and Todd Sherwood,
‘‘Documentation of the Development of Indirect
Cost Multipliers for Three Automotive
Technologies,’’ Office of Transportation and Air
Quality, U.S. EPA, August 2009 (Docket EPA–HQ–
OAR–2009–0472).
456 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
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$342
$/truck
$314
$/vehicle
(car & truck
combined)
$331
focuses more narrowly on the changes that are
required in direct response to regulation-induced
vehicle design changes which may not directly
influence all of the indirect costs that are incurred
in the normal course of business. For example, an
RPE markup captures all indirect costs including
costs such as the retirement benefits of retired
employees. However, the retirement benefits for
retired employees are not expected to change as a
result of a new GHG regulation and, therefore, those
indirect costs should not increase in relation to
newly added hardware in response to a regulation.
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TABLE III.H.2–1—INDUSTRY AVERAGE VEHICLE COMPLIANCE COSTS ASSOCIATED WITH THE TAILPIPE CO2 STANDARDS—
Continued
[$/vehicle in 2007 dollars]
Calendar year
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2030
2040
2050
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
b. Annual Costs of the Vehicle Program
The costs presented here represent the
incremental costs for newly added
technology to comply with the final
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.
TABLE III.H.2–2—QUANTIFIED ANNUAL
COSTS ASSOCIATED WITH THE VEHICLE PROGRAM
[$Millions of 2007 dollars]
Quantified
annual costs
Year
2012
2013
2014
2015
2016
2020
$/car
......................................
......................................
......................................
......................................
......................................
......................................
$4,900
8,000
10,300
12,700
15,600
15,600
$/vehicle
(car & truck
combined)
$/truck
507
631
749
869
869
869
869
869
869
817
817
817
817
496
652
820
1,098
1,098
1,098
1,098
1,098
1,098
1,032
1,032
1,032
1,032
503
639
774
948
947
945
943
940
939
882
878
875
875
TABLE III.H.2–2—QUANTIFIED ANNUAL reduced. EPA has also calculated the
COSTS ASSOCIATED WITH THE VEHI- cost per metric ton of GHG emission
reductions including the savings
CLE PROGRAM—Continued
associated with reduced fuel
consumption (presented below in
Section III.H.4). This latter calculation
Quantified
Year
does not include the other benefits
annual costs
associated with this rule such as those
2030 ......................................
15,800 associated with criteria pollutant
2040 ......................................
17,400 reductions or energy security benefits as
2050 ......................................
19,000
NPV, 3% ...............................
345,900 discussed later in sections III.H.4
NPV, 7% ...............................
191,900 through III.H.9. By including the fuel
savings in the cost estimates, the cost
per ton is less than $0, since the
3. Cost per Ton of Emissions Reduced
estimated value of fuel savings
EPA has calculated the cost per ton of
outweighs the vehicle program costs.
GHG (CO2-equivalent, or CO2e)
With regard to the CH4 and N2O
reductions associated with this rule
standards, since these standards will be
using the above costs and the emissions
emissions caps designed to ensure that
reductions described in Section III.F.
manufacturers do not backslide from
More detail on the costs, emission
current levels, EPA has not estimated
reductions, and the cost per ton can be
costs associated with the standards
found in the RIA and Joint TSD. EPA
has calculated the cost per metric ton of (since the standards will not require any
change from current practices nor does
GHG emissions reductions in the years
EPA estimate they will result in
2020, 2030, 2040, and 2050 using the
emissions reductions).
annual vehicle compliance costs and
emission reductions for each of those
The results for CO2e costs per ton
years. The value in 2050 represents the
under the rule are shown in Table
long-term cost per ton of the emissions
III.H.3–1.
[$Millions of 2007 dollars]
TABLE III.H.3–1—ANNUAL COST PER METRIC TON OF CO2e REDUCED, IN $2007 DOLLARS
Vehicle program cost a
($millions)
mstockstill on DSKB9S0YB1PROD with RULES2
Year
2020
2030
2040
2050
.....................................................................................
.....................................................................................
.....................................................................................
.....................................................................................
Fuel savings b
($millions)
CO2e reduced
(million metric
tons)
Cost per ton of
the vehicle
program only a
Cost per ton of
the vehicle
program with
fuel savings b
¥$35,700
¥79,800
¥119,300
¥171,200
160
310
400
510
$100
50
40
40
¥$130
¥210
¥250
¥300
$15,600
15,800
17,400
19,000
a Costs
b Fuel
here include vehicle compliance costs and do not include any fuel savings.
savings calculated using pre-tax fuel prices.
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Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
4. Reduction in Fuel Consumption and
Its Impacts
a. What are the projected changes in fuel
consumption?
The new CO2 standards will result in
significant improvements in the fuel
efficiency of affected vehicles. Drivers of
those vehicles will see corresponding
savings associated with reduced fuel
expenditures. EPA has estimated the
impacts on fuel consumption for both
the tailpipe CO2 standards and the A/C
credit program. To do this, fuel
consumption is calculated using both
current CO2 emission levels and the
new CO2 standards. The difference
between these estimates represents the
net savings from the 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. EPA also notes that
consumers who drive more than our
average estimates for vehicle miles
traveled (VMT) will experience more
fuel savings; consumers who drive less
than our average VMT estimates will
experience less fuel savings.
The expected impacts on fuel
consumption are shown in Table
III.H.4–1. The gallons shown in the
tables reflect impacts from the new CO2
standards, including the A/C credit
program, and include increased
consumption resulting from the rebound
effect.
TABLE III.H.4–1—FUEL CONSUMPTION
IMPACTS OF THE VEHICLE STANDARDS AND A/C CREDIT PROGRAMS
[Million gallons]
Year
2012
2013
2014
2015
2016
2020
2030
2040
2050
Total
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
550
1,320
2,330
3,750
5,670
12,590
24,730
32,620
41,520
b. What are the monetized fuel savings?
Using the fuel consumption estimates
presented in Section III.H.4.a, EPA can
calculate the monetized fuel savings
associated with the 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 2010 Early
Release.457 AEO is the government
consensus estimate used by NHTSA and
many other government agencies to
estimate the projected price of fuel. EPA
has done this calculation using both the
pre-tax and post-tax fuel prices. Since
the post-tax fuel prices are what
consumers pay, the fuel savings
calculated using these prices represent
the savings consumers will see. The pretax fuel savings are those savings that
society will see. These results are shown
in Table III.H.4–2. Note that in Section
III.H.10, EPA presents the benefit-cost of
the rule and, for that reason, presents
only the pre-tax fuel savings.
TABLE III.H.4–2—ESTIMATED MONETIZED FUEL SAVINGS
[Millions of 2007 dollars]
Fuel savings
(pre-tax)
Calendar year
2012
2013
2014
2015
2016
2020
2030
2040
2050
NPV,
NPV,
.........................................................................................................................................................................
.........................................................................................................................................................................
.........................................................................................................................................................................
.........................................................................................................................................................................
.........................................................................................................................................................................
.........................................................................................................................................................................
.........................................................................................................................................................................
.........................................................................................................................................................................
.........................................................................................................................................................................
3% ..................................................................................................................................................................
7% ..................................................................................................................................................................
mstockstill on DSKB9S0YB1PROD with RULES2
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 rule. As
discussed further in Section III.H.1, it is
a conundrum from an economic
perspective that these large fuel savings
have not been provided by automakers
and purchased by consumers. A number
of behavioral and market phenomena
may lead to this disparity between the
fuel economy that makes financial sense
to consumers and the fuel economy they
purchase. Regardless how consumers
make their decisions on how much fuel
economy to purchase, EPA expects that,
in the aggregate, they will gain these
fuel savings, which will provide actual
money in consumers’ pockets. We
received considerable comment on this
issue, as discussed in Section III.H.1,
and the issue is discussed further in
Chapter 8 of the RIA.
20:30 May 06, 2010
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$1,400
3,800
6,900
11,300
17,400
41,100
89,100
131,700
186,300
1,723,900
755,700
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
457 Energy Information Administration. Annual
Energy Outlook 2010 Early Release. Supplemental
Transportation Tables. December 2009. https://
www.eia.doe.gov/oiaf/aeo/supplement/sup_tran.xls.
VerDate Mar<15>2010
$1,137
2,923
5,708
9,612
14,816
35,739
79,838
119,324
171,248
1,545,638
672,629
Fuel savings
(post-tax)
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vehicle, and vehicle owners respond to
this reduction in operating costs by
driving slightly more.
For this rule, 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,458 and falls within
the range of the larger body of historical
work on the rebound effect.459 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.460 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.461 The rebound effect is also
further discussed in Chapter 4 of the
Joint TSD which reviews the relevant
literature and discusses in more depth
the reasoning for the rebound values
used here.
We received several comments on the
proposed value of the rebound effect.
The California Air Resources Board
(CARB) and the New Jersey Department
of Environmental Protection supported
the use of a 10% rebound effect,
although CARB encouraged EPA to
consider lowering the value to 5%.
Other commenters, such as the Missouri
Department of Natural Resources, the
International Council on Clean
Transportation (ICCT), the Center for
Biological Diversity, and the Consumer
Federation of America, recommended
using a lower rebound effect. ICCT
specifically recommended that the
dynamic rebound effect methodology
utilized by Small & Van Dender was the
most appropriate methodology, which
would support a rebound effect of 5%
or lower. In contrast, the National
Association of Dealerships asserted that
the rebound effect should be higher
(e.g., in the lower range of the 15–30%
458 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–
0018).
459 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–
0472–0012).
460 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–2009–0472–0002).
461 Revised Report by David Greene of Oak Ridge
National Laboratory to EPA, ‘‘Rebound 2007:
Analysis of National Light-Duty Vehicle Travel
Statistics,’’ February 9, 2010 (Docket EPA–HQ–
OAR–2009–0472–0220). This paper has been
accepted for an upcoming special issue of Energy
Policy, although the publication date has not yet
been determined.
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historical range), but did not submit any
data to support this claim.
While we appreciate the input
provided by commenters, we did not
receive any new data or analysis to
justify revising our initial estimates of
the rebound effect at this time. Based on
the positive comments we received, we
will continue using the dynamic
rebound effect to help inform our
estimate of the rebound effect in future
rulemakings. However, given the
relatively new nature of this analytical
approach, we believe the larger body of
historical studies should also be
considered when determining the value
of the rebound effect. As we described
in the Technical Support Document, the
more recent literature suggests that the
rebound effect is 10% or lower, whereas
the larger body of historical studies
suggests a higher rebound effect.
Therefore, we will continue to use the
10% rebound effect for this rulemaking.
However, we plan to update our
estimate of the rebound effect in future
rulemakings as new data becomes
available.
We also invited comments on whether
we should also explore other
alternatives for estimating the rebound
effect, such as whether it would be
appropriate to use the price elasticity of
demand for gasoline to guide the choice
of a value for the rebound effect. We
received only one comment on this
issue from ICCT. In their comments,
ICCT stated that the short run elasticity
can provide a useful point of
comparison for rebound effect estimates,
but it should not be used to guide the
choice of a value for the rebound effect.
Therefore, we have not incorporated
this metric into our analysis.
5. Impacts on U.S. Vehicle Sales and
Payback Period
a. Vehicle Sales Impacts
This analysis compares two effects.
On the one hand, the vehicles will
become more expensive, which would,
by itself, discourage sales. On the other
hand, the vehicles will have improved
fuel economy and thus lower operating
costs. If consumers do not accurately
compare the value of fuel savings with
the increased cost of fuel economy
technology in their vehicle purchase
decisions, as discussed in Preamble
III.H.1, they will continue to behave in
this way after this rule. If auto makers
have accurately gauged how consumers
consider fuel economy when purchasing
vehicles and have provided the amount
that consumers want in vehicles, then
consumers should not be expected to
want the more fuel-efficient vehicles.
After all, auto makers would have
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25517
provided as much fuel economy as
consumers want. If, on the other hand,
auto makers underestimated consumer
demand for fuel economy, as suggested
by some commenters and discussed in
Preamble Section III.H.1 and RIA
Section 8.1.2, then this rule may lead to
production of more desirable vehicles,
and vehicle sales may increase. This
assumption implies that auto makers
have missed some profit-making
opportunities.
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 ¥1.0.462 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
GHG standards and assumes 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.463 EPA also notes
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 light462 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–2009–0472–0015);
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–2009–0472–0016);
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–2009–0472–0017).
463 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–
2009–0472–0007).
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Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
duty vehicle loan.464 The one
commenter on this analysis stated that
use of the five-year payback period was
reasonable. 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
received no comments on these
adjustments. The only change to these
adjustments between the NPRM and this
discussion is an updating of the interest
rate on auto loans. EPA estimates that,
with corrections for these factors, the
effect on consumer expenditures of the
cost of the new technology should be
0.914 times the cost of the technology at
a 3% discount rate, and 0.876 times the
cost of the technology at a 7% discount
rate. The details of this calculation are
in the RIA, Chapter 8.1.
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. The values have
changed slightly from the NPRM, due to
changes in fuel prices and fuel savings,
technology costs, and baseline vehicle
sales projections, in addition to the
adjustment in financing costs.
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 fuel savings associated with
this rule are expected to exceed the
technology costs, the effective prices of
vehicles (the adjusted increase in
technology cost less the fuel savings
over five years) to consumers will fall,
and consumers will buy more new
vehicles. As a result, the lower net cost
of the vehicles is projected to lead to an
increase in sales for both cars and
trucks.
As discussed above, this result
depends on the assumption that more
fuel efficient vehicles that yield net
consumer benefits over five years would
not otherwise be offered on the vehicle
market due to market failures on the
part of vehicle manufacturers. If
vehicles that achieve the fuel economy
standards prescribed by today’s
rulemaking would already be available,
but consumers chose not to purchase
them, then this rulemaking would not
result in an increase in vehicle sales,
because it does not alter how consumers
make decisions about which vehicles to
purchase. In addition, this analysis has
not accounted for a number of factors
that might affect consumer vehicle
purchases, such as changing market
conditions, changes in vehicle
characteristics that might accompany
improvements in fuel economy, or
consumers considering a different
‘‘payback period’’ for their fuel economy
purchases. If consumers use a shorter
payback period, the sales impacts will
be less positive, possibly negative; if
consumers use a higher payback period,
the impacts will be more positive. Also,
this is an aggregate analysis; some
individual consumers (those who drive
less than estimated here) will face lower
net benefits, while others (who drive
more than estimated here) will have
even greater savings. These
complications add considerable
uncertainty to our vehicle sales impact
analysis.
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 over five years are
always higher than the technology costs.
Although both cars and trucks show
% Change
67,500
76,000
114,000
222,200
360,500
very small 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
Change in
truck sales
0.7
0.8
1.1
2.1
3.3
% Change
62,100
190,200
254,900
352,800
488,000
1.1
3.2
4.3
6.1
8.6
larger 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
mstockstill on DSKB9S0YB1PROD with RULES2
Change in
car sales
2012 .............................................................................................................................
2013 .............................................................................................................................
2014 .............................................................................................................................
464 As discussed further in Section III.H.1, 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, and possibly due to sensitivity of
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62,800
70,500
106,100
results to modeling and data used. A survey by
Greene (Greene, David L. ‘‘How Consumers Value
Fuel Economy: A Literature Review.’’ EPA Report
EPA–420–R–10–008, March 2010 (Docket EPA–
HQ–OAR–2009–0472–11575)) finds that estimates
in the literature of the value that consumers place
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% Change
0.7
0.7
1
Change in
truck sales
58,300
92,300
127,700
% Change
1
1.5
2.1
on fuel economy when buying a vehicle range from
negative—consumers would pay to reduce fuel
economy—to more than 1000 times the value of fuel
savings.
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25519
TABLE III.H.5–2—NEW VEHICLE SALES IMPACTS USING A 7% DISCOUNT RATE—Continued
Change in
car sales
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 (i.e., 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
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
208,400
339,400
retired from service. This effect will
slow the replacement of used vehicles
by new models, and thus partly offset
the anticipated effects of this rule on
fuel use and emissions.
Because the agencies are uncertain
about how the value of projected fuel
savings from this rule 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.
A detailed discussion of the vehicle
sales impacts methodology is provided
in the Chapter 8 of EPA’s RIA.
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 new
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
$948 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.H.10)
for details on fuel savings). But how
many months or years would pass
Change in
truck sales
% Change
2
3.1
194,200
280,000
% Change
3.3
4.9
before the fuel savings exceed the
upfront cost of $948?
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
presented in Chapter 4 of the 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). Not included here
are the likely A/C-related maintenance
savings as discussed in Chapter 2 of
EPA’s 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 think about most while in
the showroom considering a new car
purchase. Car/truck fleet weighting is
handled as described in Chapter 1 of the
Joint TSD. As can be seen in the table,
it will take under 3 years (2 years and
7 months at a 3% discount rate, 2 years
and 9 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 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
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1
2
3
4
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
Annual fuel
savings b
$1,018
........................
........................
........................
Cumulative
discounted
fuel savings at
3%
Cumulative
discounted
fuel savings at
7%
$418
$820
$1,204
$1,567
$410
$790
$1,139
$1,457
$424
$420
$414
$402
a Increased vehicle cost due to the rule is $948; 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 RIA.
b Calculated using AEO 2010 Early Release 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.
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As of February 9, 2010, the national
average interest rate for a 5 year new car
loan was 6.54 percent. If the increased
vehicle cost is spread out over 5 years
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at 6.54 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
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increased payments on the car loan,
amounting to $177 in discounted net
savings (3% discount rate) 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 $15 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
$245
$245
$245
$245
$245
$0
$424
$420
$414
$402
$391
$374
Annual discounted net
savings at
3%
Annual discounted net
savings at
7%
$177
$167
$157
$142
$127
$318
$173
$158
$142
$124
$107
$258
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 6.54 percent.
using AEO 2010 Early Release reference case fuel price including taxes.
b Calculated
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
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
case, the present value of the lifetime
net savings is greater than $3,100 at a
3% discount rate, or $2,300 at a 7%
discount rate.
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 .........................................................................................................................................
$1,018
1,140
$4,306
4,306
$3,303
3,166
1,018
1,040
3,381
3,381
2,396
2,340
7% discount rate
Cash .............................................................................................................................................
Credit a .........................................................................................................................................
a Assumes
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b Fuel
a 5 year loan at 6.54 percent.
savings here were calculated using AEO 2010 Early Release 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.
6. Benefits of Reducing GHG Emissions
a. Social Cost of Carbon
In today’s final rule, EPA and NHTSA
assigned a dollar value to reductions in
CO2 emissions using the marginal dollar
value of climate-related damages
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resulting from carbon emissions, also
referred to as ‘‘social cost of carbon’’
(SCC). The SCC estimates used in
today’s rule were recently developed by
an interagency process, in which EPA
and NHTSA participated. As part of the
interagency group, EPA and NHTSA
have critically evaluated the new SCC
estimates and endorse them for use in
these regulatory analyses, for the
reasons presented below. The SCC TSD,
Social Cost of Carbon for Regulatory
Impact Analysis Under Executive Order
12866, presents a more detailed
description of the methodology used to
generate the new estimates, the
underlying assumptions, and the
limitations of the new SCC estimates.
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Under Executive Order 12866,
agencies are required, to the extent
permitted by law, ‘‘to assess both the
costs and the benefits of the intended
regulation and, recognizing that some
costs and benefits are difficult to
quantify, propose or adopt a regulation
only upon a reasoned determination
that the benefits of the intended
regulation justify its costs.’’ The purpose
of the SCC estimates presented here is
to incorporate the social benefits of
reducing carbon dioxide (CO2)
emissions from light-duty vehicles into
a cost-benefit analysis of this final rule,
which has a small, or ‘‘marginal,’’ impact
on cumulative global emissions. The
estimates are presented with an
acknowledgement of the many
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uncertainties involved and with a clear
understanding that they should be
updated over time to reflect increasing
knowledge of the science and
economics of climate impacts.
The interagency process that
developed these SCC estimates involved
a group of technical experts from
numerous agencies, which met on a
regular basis to consider public
comments, explore the technical
literature in relevant fields, and discuss
key model inputs and assumptions. The
main objective of this process was to
develop a range of SCC values using a
defensible set of input assumptions
grounded in the existing scientific and
economic literatures. In this way, key
uncertainties and model differences
transparently and consistently inform
the range of SCC estimates used in this
rulemaking process.
The interagency group selected four
SCC values for use in regulatory
analyses, which EPA and NHTSA have
applied to this final rule. Three values
are based on the average SCC from three
integrated assessment models, at
discount rates of 2.5, 3, and 5 percent.
The fourth value, which represents the
95th percentile SCC estimate across all
three models at a 3 percent discount
rate, is included to represent higherthan-expected impacts from temperature
change further out in the tails of the
SCC distribution.
TABLE III.H.6–1—SOCIAL COST OF CO2, 2010—2050a
[in 2007 dollars]
Discount Rate
Year
5% Avg
2010
2015
2020
2025
2030
2035
2040
2045
2050
.................................................................................................................................................
.................................................................................................................................................
.................................................................................................................................................
.................................................................................................................................................
.................................................................................................................................................
.................................................................................................................................................
.................................................................................................................................................
.................................................................................................................................................
.................................................................................................................................................
3% Avg
5
6
7
8
10
11
13
14
16
21
24
26
30
33
36
39
42
45
2.5% Avg
35
38
42
46
50
54
58
62
65
3% 95th
65
73
81
90
100
110
119
128
136
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a The SCC estimates presented above have been rounded to nearest dollar for consistency with the benefits analysis. The SCC TSD presents
estimates rounded to the nearest tenth of a cent.
i. Monetizing Carbon Dioxide Emissions
The ‘‘social cost of carbon’’ (SCC) is an
estimate of the monetized damages
associated with an incremental increase
in carbon emissions in a given year. It
is intended to include (but is not limited
to) changes in net agricultural
productivity, human health, property
damages from increased flood risk, and
the value of ecosystem services. We
report estimates of the social cost of
carbon in dollars per metric ton of
carbon dioxide throughout this
document.
When attempting to assess the
incremental economic impacts of carbon
dioxide emissions, the analyst faces a
number of serious challenges. A 2009
report from the National Academies of
Science points out that any assessment
will suffer from uncertainty,
speculation, and lack of information
about (1) future emissions of greenhouse
gases, (2) the effects of past and future
emissions on the climate system, (3) the
impact of changes in climate on the
physical and biological environment,
and (4) the translation of these
environmental impacts into economic
damages.465 As a result, any effort to
quantify and monetize the harms
associated with climate change will
raise serious questions of science,
465 National Research Council (2009). Hidden
Costs of Energy: Unpriced Consequences of Energy
Production and Use. National Academies Press.
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economics, and ethics and should be
viewed as provisional.
Despite the serious limits of both
quantification and monetization, SCC
estimates can be useful in estimating the
social benefits of reducing carbon
dioxide emissions. Under Executive
Order 12866, agencies are required, to
the extent permitted by law, ‘‘to assess
both the costs and the benefits of the
intended regulation and, recognizing
that some costs and benefits are difficult
to quantify, propose or adopt a
regulation only upon a reasoned
determination that the benefits of the
intended regulation justify its costs.’’
EPA and NHTSA have used the SCC
estimates to incorporate social benefits
from reducing carbon dioxide emissions
from light-duty vehicles into a costbenefit analysis of this final rule, which
has a small, or ‘‘marginal,’’ impact on
cumulative global emissions. Most
Federal regulatory actions can be
expected to have marginal impacts on
global emissions.
For policies that have marginal
impacts on global emissions, the
benefits from reduced (or costs from
increased) emissions in any future year
can be estimated by multiplying the
change in emissions in that year by the
SCC value appropriate for that year. The
net present value of the benefits can
then be calculated by multiplying each
of these future benefits by an
appropriate discount factor and
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Fmt 4701
Sfmt 4700
summing across all affected years. This
approach assumes that the marginal
damages from increased emissions are
constant for small departures from the
baseline emissions path, an
approximation that is reasonable for
policies that have effects on emissions
that are small relative to cumulative
global carbon dioxide emissions. For
policies that have a large (non-marginal)
impact on global cumulative emissions,
there is a separate question of whether
the SCC is an appropriate tool for
calculating the benefits of reduced
emissions; we do not attempt to answer
that question here.
As noted above, the interagency group
convened on a regular basis to consider
public comments, explore the technical
literature in relevant fields, and discuss
key inputs and assumptions in order to
generate SCC estimates. In addition to
EPA and NHTSA, agencies that actively
participated in the interagency process
included the Departments of
Agriculture, Commerce, Energy, and
Treasury. This process was convened by
the Council of Economic Advisers and
the Office of Management and Budget,
with active participation and regular
input from the Council on
Environmental Quality, National
Economic Council, Office of Energy and
Climate Change, and Office of Science
and Technology Policy. The main
objective of this process was to develop
a range of SCC values using a defensible
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set of input assumptions that are
grounded in the existing literature. In
this way, key uncertainties and model
differences can more transparently and
consistently inform the range of SCC
estimates used in the rulemaking
process.
The interagency group selected four
global SCC estimates for use in
regulatory analyses. For 2010, these
estimates are $5, $21, $35, and $65 (in
2007 dollars). The first three estimates
are based on the average SCC across
models and socio-economic and
emissions scenarios at the 5, 3, and 2.5
percent discount rates, respectively. The
fourth value is included to represent the
higher-than-expected impacts from
temperature change further out in the
tails of the SCC distribution. For this
purpose, we use the SCC value for the
95th percentile at a 3 percent discount
rate. The central value is the average
SCC across models at the 3 percent
discount rate. For purposes of capturing
the uncertainties involved in regulatory
impact analysis, we emphasize the
importance and value of considering the
full range. These SCC estimates also
grow over time. For instance, the central
value increases to $24 per ton of CO2 in
2015 and $26 per ton of CO2 in 2020.
See the SCC TSD for the full range of
annual SCC estimates from 2010 to
2050.
These new SCC estimates represent
global measures and the center of our
current attention because of the
distinctive nature of the climate change
problem. The climate change problem is
highly unusual in at least two respects.
First, it involves a global externality:
Emissions of most greenhouse gases
contribute to damages around the world
even when they are emitted in the
United States. Consequently, to address
the global nature of the problem, the
SCC must incorporate the full (global)
damages caused by GHG emissions.
Second, climate change presents a
problem that the United States alone
cannot solve. Even if the United States
were to reduce its greenhouse gas
emissions to zero, that step would be far
from enough to avoid substantial
climate change. Other countries would
also need to take action to reduce
emissions if significant changes in the
global climate are to be avoided.
It is important to emphasize that the
interagency process is committed to
updating these estimates as the science
and economic understanding of climate
change and its impacts on society
improves over time. Specifically, the
interagency group has set a preliminary
goal of revisiting the SCC values within
two years or at such time as
substantially updated models become
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available, and to continue to support
research in this area. In the meantime,
the interagency group will continue to
explore the issues raised in the SCC
TSD and consider public comments as
part of the ongoing interagency process.
ii. Social Cost of Carbon Values Used in
Past Regulatory Analyses
To date, economic analyses for
Federal regulations have used a wide
range of values to estimate the benefits
associated with reducing carbon dioxide
emissions. In the final model year 2011
CAFE rule, the Department of
Transportation (DOT) used both a
‘‘domestic’’ SCC value of $2 per ton of
CO2 and a ‘‘global’’ SCC value of $33 per
ton of CO2 for 2007 emission reductions
(in 2007 dollars), increasing both values
at 2.4 percent per year. It also included
a sensitivity analysis at $80 per ton of
CO2. A domestic SCC value is meant to
reflect the value of damages in the
United States resulting from a unit
change in carbon dioxide emissions,
while a global SCC value is meant to
reflect the value of damages worldwide.
A 2008 regulation proposed by DOT
assumed a domestic SCC value of $7 per
ton CO2 (in 2006 dollars) for 2011
emission reductions (with a range of $0$14 for sensitivity analysis), also
increasing at 2.4 percent per year. A
regulation finalized by DOE in October
of 2008 used a domestic SCC range of
$0 to $20 per ton CO2 for 2007 emission
reductions (in 2007 dollars). In addition,
EPA’s 2008 Advance Notice of Proposed
Rulemaking for Greenhouse Gases
identified what it described as ‘‘very
preliminary’’ SCC estimates subject to
revision. EPA’s global mean values were
$68 and $40 per ton CO2 for discount
rates of approximately 2 percent and 3
percent, respectively (in 2006 dollars for
2007 emissions).
In 2009, an interagency process was
initiated to offer a preliminary
assessment of how best to quantify the
benefits from reducing carbon dioxide
emissions. To ensure consistency in
how benefits are evaluated across
agencies, the Administration sought to
develop a transparent and defensible
method, specifically designed for the
rulemaking process, to quantify avoided
climate change damages from reduced
CO2 emissions. The interagency group
did not undertake any original analysis.
Instead, it combined SCC estimates from
the existing literature to use as interim
values until a more comprehensive
analysis could be conducted.
The outcome of the preliminary
assessment by the interagency group
was a set of five interim values: Global
SCC estimates for 2007 (in 2006 dollars)
of $55, $33, $19, $10, and $5 per ton of
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Sfmt 4700
CO2. The $33 and $5 values represented
model-weighted means of the published
estimates produced from the most
recently available versions of three
integrated assessment models (DICE,
PAGE, and FUND) at approximately 3
and 5 percent discount rates.466 The $55
and $10 values were derived by
adjusting the published estimates for
uncertainty in the discount rate (using
factors developed by Newell and Pizer
(2003)) at 3 and 5 percent discount
rates, respectively.467 The $19 value was
chosen as a central value between the $5
and $33 per ton estimates. All of these
values were assumed to increase at 3
percent annually to represent growth in
incremental damages over time as the
magnitude of climate change increases.
These interim values represent the
first sustained interagency effort within
the U.S. Government to develop an SCC
for use in regulatory analysis. The
results of this preliminary effort were
presented in several proposed and final
rules and were offered for public
comment in connection with proposed
rules. In particular, EPA and NHTSA
used the interim SCC estimates in the
joint proposal leading to this final rule.
iii. Approach and Key Assumptions
Since the release of the interim
values, interagency group has
reconvened on a regular basis to
generate improved SCC estimates,
which EPA and NHTSA used in this
final rule. Specifically, the group has
considered public comments and
further explored the technical literature
in relevant fields. The general approach
to estimating SCC values was to run the
three integrated assessment models
(FUND, DICE, and PAGE) using the
following inputs agreed upon by the
interagency group:
• A Roe and Baker distribution for the
climate sensitivity parameter bounded
between 0 and 10 with a median of 3 °C
and a cumulative probability between 2
and 4.5 °C of two-thirds.468
466 The DICE (Dynamic Integrated Climate and
Economy) model by William Nordhaus evolved
from a series of energy models and was first
presented in 1990 (Nordhaus and Boyer 2000,
Nordhaus 2008). The PAGE (Policy Analysis of the
Greenhouse Effect) model was developed by Chris
Hope in 1991 for use by European decision-makers
in assessing the marginal impact of carbon
emissions (Hope 2006, Hope 2008). The FUND
(Climate Framework for Uncertainty, Negotiation,
and Distribution) model, developed by Richard Tol
in the early 1990s, originally to study international
capital transfers in climate policy, is now widely
used to study climate impacts (e.g., Tol 2002a, Tol
2002b, Anthoff et al. 2009, Tol 2009).
467 Newell, R., and W. Pizer. 2003. Discounting
the distant future: How much do uncertain rates
increase valuations? Journal of Environmental
Economics and Management 46: 52–71.
468 Roe, G., and M. Baker. 2007. ‘‘Why is climate
sensitivity so unpredictable?’’ Science 318:629–632.
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• Five sets of GDP, population and
carbon emissions trajectories based on
the recent Stanford Energy Modeling
Forum, EMF–22.
• Constant annual discount rates of
2.5, 3, and 5 percent.
The SCC TSD presents a summary of the
results and details, the modeling
exercise and the choices and
assumptions that underlie the resulting
estimates of the SCC. The complete
model results are available in the docket
for this final rule [EPA–HQ–OAR–2009–
0472].
It is important to recognize that a
number of key uncertainties remain, and
that current SCC estimates should be
treated as provisional and revisable
since they will evolve with improved
scientific and economic understanding.
The interagency group also recognizes
that the existing models are imperfect
and incomplete. The National Academy
of Science (2009) points out that there
is tension between the goal of producing
quantified estimates of the economic
damages from an incremental ton of
carbon and the limits of existing efforts
to model these effects. The SCC TSD
highlights a number of concerns and
problems that should be addressed by
the research community, including
research programs housed in many of
the agencies participating in the
interagency process to estimate the SCC.
The U.S. Government will
periodically review and reconsider
estimates of the SCC used for costbenefit analyses to reflect increasing
knowledge of the science and
economics of climate impacts, as well as
improvements in modeling. In this
context, statements recognizing the
25523
limitations of the analysis and calling
for further research take on exceptional
significance. The interagency group
offers the new SCC values with all due
humility about the uncertainties
embedded in them and with a sincere
promise to continue work to improve
them.
iv. Use of New SCC Estimates To
Calculate GHG Benefits for This Final
Rule
The table below summarizes the total
GHG benefits for the lifetime of the rule,
which are calculated by using the four
new SCC values. Specifically, EPA
calculated the total monetized benefits
in each year by multiplying the
marginal benefits estimates per metric
ton of CO2 (the SCC) by the reductions
in CO2 for that year.
TABLE III.H.6–2—MONETIZED CO2 BENEFITS OF VEHICLE PROGRAM, CO2 EMISSIONS a b
[Million 2007$]
CO2 emissions
reduction
(Million metric
tons)
Year
2020
2030
2040
2050
.....................................................................................
.....................................................................................
.....................................................................................
.....................................................................................
Benefits
Avg SCC at
5%
($5–$16) c
139
273
360
459
$900
2,700
4,600
7,200
Avg SCC at
3%
($21–$45) c
$3,700
8,900
14,000
21,000
Avg SCC at
2.5%
($35–$65) c
$5,800
14,000
21,000
30,000
95th percentile
SCC at 3%
($65–$136) c
$11,000
27,000
43,000
62,000
a Monetized GHG benefits exclude the value of reductions in non-CO GHG emissions (HFC, CH and N O) expected under this final rule. Al2
4
2
though EPA has not monetized the benefits of reductions in these non-CO2 emissions, the value of these reductions should not be interpreted as
zero. Rather, the reductions in non-CO2 GHGs will contribute to this rule’s climate benefits, as explained in Section III.F.2. The SCC TSD notes
the difference between the social cost of non-CO2 emissions and CO2 emissions, and specifies a goal to develop methods to value non-CO2
emissions in future analyses.
b Numbers may not compute exactly from Tables III.H.6–1 and III.H.6–2 due to rounding.
c As noted above, SCC increases over time; tables lists ranges for years 2010 through 2050. See Table III.H.6–1 for the SCC estimates corresponding to the years in this table.
b. Summary of the Response to
Comments
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EPA and NHTSA received extensive
public comments about the scientific,
economic, and ethical issues involved
in estimating the SCC, including the
proposed rule’s estimates of the value of
emissions reductions from new cars and
trucks.469 In particular, the comments
addressed the methodology used to
derive the interim SCC estimates,
limitations of integrated assessment
models, discount rate selection,
treatment of uncertainty and
catastrophic impacts, use of global and
domestic SCC, and the presentation and
469 EPA estimated GHG benefits in the proposed
rule using a set of interim SCC values developed by
an interagency group, in which EPA and NHTSA
participated. As discussed in the SCC TSD, the
interagency group selected the interim estimates
from the existing literature and agreed to use those
interim estimates in regulatory analyses until it
could develop a more comprehensive
characterization of the SCC.
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use of SCC estimates. The rest of this
preamble section briefly summarizes
EPA’s response to the comments; the
Response to Comments document
provides the complete responses to all
comments received.
EPA received extensive comments
about the methodology and discount
rates used to derive the interim SCC
estimates. While one commenter from
the auto industry noted that the interim
methodology was acceptable given
available data, many commenters
(representing academic and
environmental organizations) expressed
concerns that the filters were too
narrow, stated that model-weighting
averaging was inappropriate, and
recommended that EPA use lower
discount rates. These commenters also
discussed alternative approaches to
select discount rates and generally
recommended that EPA use lower rates
to give more weight to climate damages
experienced by future generations.
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For the final rule, EPA conducted new
analyses of SCC. EPA did not continue
with its interim approach to derive
estimates from the existing literature
and instead conducted new model runs
that produced a vast amount of SCC
data at three separate certaintyequivalent discount rates (2.5, 3, and 5
percent). As discussed further in the
SCC TSD, this modeling exercise
resulted in a fuller distribution of SCC
estimates and better accounted for
uncertainty through a Monte Carlo
analysis. Comments on specific issues
are addressed in the Response to
Comments document.
EPA received comments on the
limitations of the integrated assessment
models concluding that the selection of
models and reliance on the model
authors’ datasets contributed to the
downward bias of the interim SCC
estimates. In this final rule, EPA relied
on the default values in each model for
the remaining parameter; research gaps
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and practical constraints required EPA
to limit its modification of the models
to socioeconomic and emissions
scenarios, climate sensitivity, and
discount rate. While EPA recognizes
that the models’ translations of physical
impacts to economic values are
incomplete, approximate, and highly
uncertain, it regards them as the best
currently available representations. EPA
also considered, for each model, the
treatment of uncertainty, catastrophic
impacts, and omitted impacts, and as
discussed in the SCC TSD and the
Response to Comments document, used
best available information and
techniques to quantify such impacts as
feasible and supplemented the SCC with
qualitative assessments. Comments on
specific issues are addressed in the
Response to Comments document.
Six commenters, representing
academia and environmental
organizations, supported the proposed
rule’s preference for global SCC
estimates while several industry groups
stated that under the Clean Air Act, EPA
is prohibited from using global
estimates. EPA agrees that a global
measure of GHG mitigation benefits is
both appropriate and lawful for EPA to
consider in evaluating the benefits of
GHG emissions standards adopted
under section 202(a). Global climate
change represents a problem that the
United States cannot solve alone
without global action, and for a variety
of reasons there is a value to the U.S.
from domestic emissions reductions that
reduce the harm occurring globally.
This is not exercise of regulatory
authority over conduct occurring
overseas, but instead is a reasonable
exercise of discretion in how to place a
monetary value on a reduction in
domestic emissions. See the Response to
Comments document for a complete
discussion of this issue.
Finally, EPA received various
comments regarding the presentation of
the SCC methodology and resulting
estimates. EPA has responded to these
concerns by presenting a detailed
discussion about the methodology,
including key model assumptions, as
well as uncertainties and research gaps
associated with the SCC estimates and
the implications for the SCC estimates.
Among these key assumptions and
uncertainties are issues involving
discount rates, climate sensitivity and
socioeconomic scenario assumptions,
incomplete treatment of potential
catastrophic impacts, incomplete
treatment of non-catastrophic impacts,
uncertainty in extrapolation of damages
to high temperatures, incomplete
treatment of adaptation and
technological change, and assumptions
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about risk aversion to high-impact
outcomes (see SCC TSD).
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 lightduty 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 standards are also significant
sources of mobile source air pollution
such as direct PM, NOX, VOCs and air
toxics. The standards will affect exhaust
emissions of these pollutants from
vehicles. They will also affect emissions
from upstream sources related to
changes in fuel consumption. Changes
in ambient ozone, PM2.5, and air toxics
that will result from the 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.
As many commenters noted, it is
important to quantify the health and
environmental impacts associated with
the final rule because a failure to
adequately consider these ancillary copollutant impacts could lead to an
incorrect assessment of their net costs
and benefits. Moreover, co-pollutant
impacts tend to accrue in the near term,
while any effects from reduced climate
change mostly accrue over a timeframe
of several decades or longer.
This section is split into two subsections: The first presents the PM- and
ozone-related health and environmental
impacts associated with the final rule in
calendar year (CY) 2030; the second
presents the PM-related benefits-per-ton
values used to monetize the PM-related
co-benefits associated with the model
year (MY) analysis of the final rule.470
a. Quantified and Monetized Non-GHG
Human Health Benefits of the 2030
Calendar Year (CY) Analysis
This analysis reflects the impact of
the final light-duty GHG rule in 2030
compared to a future-year reference
470 EPA typically analyzes rule impacts
(emissions, air quality, costs and benefits) in the
year in which they occur; for this analysis, we
selected 2030 as a representative future year. We
refer to this analysis as the ‘‘Calendar Year’’ (CY)
analysis. EPA also conducted a separate analysis of
the impacts over the model year lifetimes of the
2012 through 2016 model year vehicles. We refer
to this analysis as the ‘‘Model Year’’ (MY) analysis.
In contrast to the CY analysis, the MY lifetime
analysis shows the lifetime impacts of the program
on each of these MY fleets over the course of its
lifetime.
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scenario without the rule in place.
Overall, we estimate that the final rule
will lead to a net decrease in PM2.5related health impacts (see Section
III.G.5 of this preamble for more
information about the air quality
modeling results). While the PM-related
air quality impacts are relatively small,
the decrease in population-weighted
national average PM2.5 exposure results
in a net decrease in adverse PM-related
human health impacts (the decrease in
national population-weighted annual
average PM2.5 is 0.0036 μg/m3).
The air quality modeling (discussed
in Section III.G.5) projects very small
increases in ozone concentrations in
many areas, but these are driven by the
ethanol production volumes mandated
by the recently finalized RFS2 rule and
are not due to the standards finalized in
this rule. While the ozone-related
impacts are very small, the increase in
population-weighted national average
ozone exposure results in a small
increase in ozone-related health impacts
(population-weighted maximum 8-hour
average ozone increases by 0.0104 ppb).
We base our analysis of the final
rule’s impact on human health in 2030
on peer-reviewed studies of air quality
and human health effects.471 472 These
methods are described in more detail in
the RIA that accompanies this action.
Our benefits methods are also consistent
with recent rulemaking analyses such as
the proposed Portland Cement National
Emissions Standards for Hazardous Air
Pollutants (NESHAP) RIA,473 the final
NO2 NAAQS,474 and the final Category
3 Marine Engine rule.475 To model the
471 U.S. Environmental Protection Agency. (2006).
Final Regulatory Impact Analysis (RIA) for the
National Ambient Air Quality Standards for
Particulate Matter. Prepared by: Office of Air and
Radiation. Retrieved March 26, 2009 at https://www.
epa.gov/ttn/ecas/ria.html. EPA–HQ–OAR–2009–
0472–0240.
472 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. Retrieved
March 26, 2009 at https://www.epa.gov/ttn/ecas/ria.
html. EPA–HQ–OAR–2009–0472–0238.
473 U.S. Environmental Protection Agency (U.S.
EPA). 2009. 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. Accessed
March 15, 2010. EPA–HQ–OAR–2009–0472–0241.
474 U.S. Environmental Protection Agency (U.S.
EPA). 2010. Final 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/FinalNO2RIAfulldocument.pdf.
Accessed March 15, 2010. EPA–HQ–OAR–2009–
0472–0237.
475 U.S. Environmental Protection Agency. 2009.
Regulatory Impact Analysis: Control of Emissions of
Air Pollution from Category 3 Marine Diesel
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ozone and PM air quality impacts of the
final rule, we used the Community
Multiscale Air Quality (CMAQ) model
(see Section III.G.5). The modeled
ambient air quality data serves as an
input to the Environmental Benefits
Mapping and Analysis Program
(BenMAP).476 BenMAP is a computer
program developed by the U.S. EPA that
integrates a number of the modeling
elements used in previous analyses (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.
The range of total monetized ozoneand PM-related health impacts is
presented in Table III.H.7–1. We present
total benefits based on the PM- and
ozone-related premature mortality
function used. The benefits ranges
therefore reflect the addition of each
estimate of ozone-related premature
mortality (each with its own row in
Table III.H.7–1) to estimates of PMrelated premature mortality. These
estimates represent EPA’s preferred
approach to characterizing a best
estimate of benefits. As is the nature of
Regulatory Impact Analyses (RIAs), the
assumptions and methods used to
estimate air quality benefits evolve to
reflect the Agency’s most current
interpretation of the scientific and
economic literature.
TABLE III.H.7–1—ESTIMATED 2030 MONETIZED PM- AND OZONE-RELATED HEALTH BENEFITS a
2030 Total Ozone and PM Benefits—PM Mortality Derived from American Cancer Society Analysis and Six-Cities Analysis a
Premature Ozone Mortality Function
Reference
Total Benefits (Millions, 2007$,
3% Discount Rate) b c d
Multi-city analyses ..........................
Bell et al., 2004 ............................
Huang et al., 2005 ........................
Schwartz, 2005 .............................
Meta-analyses ................................
Bell et al., 2005 ............................
Ito et al., 2005 ..............................
Levy et al., 2005 ...........................
Total Benefits
(Millions, 2007$,
Rate) b c d
Total: $510–$1,300 .......................
PM: $550–$1,300 .........................
Ozone: ¥$40 ...............................
Total: $490–$1,300 .......................
PM: $550–$1,300 .........................
Ozone: ¥$64 ...............................
Total: $490–$1,300 .......................
PM: $550–$1,300 .........................
Ozone: ¥$60 ...............................
Total: $430–$1,200 .......................
PM: $550–$1,300 .........................
Ozone: ¥$120 .............................
Total: $380–$1,200 .......................
PM: $550–$1,300 .........................
Ozone: ¥$170 .............................
Total: $380–$1,200 .......................
PM: $550–$1,300 .........................
Ozone: ¥$170 .............................
Total: $460–$1,200
PM: $500–$1,200
Ozone: ¥$40
Total: $440–$1,200
PM: $500–$1,200
Ozone: ¥$64
Total: $440–$1,200
PM: $500–$1,200
Ozone: ¥$60
Total: $380–$1,100
PM: $500–$1,200
Ozone: ¥$120
Total: $330–$1,000
PM: $500–$1,200
Ozone: ¥$170
Total: $330–$1,000
PM: $500–$1,200
Ozone: ¥$170
7%
Discount
Notes:
a Total includes premature mortality-related and morbidity-related ozone and PM
2.5 benefits. Range was developed by adding the estimate
from the ozone premature mortality function to the estimate of PM2.5-related premature mortality derived from either the ACS study (Pope et al.,
477 or the Six-Cities study (Laden et al., 2006).478
2002)
b Note that total benefits presented here do not include a number of unquantified benefits categories. A detailed listing of unquantified health
and welfare effects is provided in Table III.H.7–2.
c Results reflect the use of both a 3 and 7 percent discount rate, as recommended by EPA’s Guidelines for Preparing Economic Analyses and
OMB Circular A–4. Results are rounded to two significant digits for ease of presentation and computation.
d Negatives indicate a disbenefit, or an increase in health effect incidence.
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The benefits in Table III.H.7–1
include all of the human health impacts
we are able to quantify and monetize at
this time. However, the full complement
of human health and welfare effects
associated with PM and ozone remain
unquantified because of current
limitations in methods or available data.
We have not quantified a number of
known or suspected health effects
linked with ozone and PM for which
appropriate health impact functions are
not available or which do not provide
easily interpretable outcomes (e.g.,
changes in heart rate variability).
Additionally, we are unable to quantify
a number of known welfare effects,
including reduced acid and particulate
deposition damage to cultural
monuments and other materials, and
environmental benefits due to
reductions of impacts of eutrophication
in coastal areas. These are listed in
Table III.H.7–2. As a result, the health
benefits quantified in this section are
likely underestimates of the total
benefits attributable to the final rule.
Engines. EPA–420–R–09–019, December 2009.
Prepared by Office of Air and Radiation. https://
www.epa.gov/otaq/regs/nonroad/marine/ci/
420r09019.pdf. Accessed February 9, 2010. EPA–
HQ–OAR–2009–0472–0283.
476 Information on BenMAP, including
downloads of the software, can be found at
https://www.epa.gov/ttn/ecas/benmodels.html.
477 Pope, C.A., III, R.T. Burnett, M.J. Thun, E.E.
Calle, D. Krewski, K. Ito, and G.D. Thurston (2002).
‘‘Lung Cancer, Cardiopulmonary Mortality, and
Long-term Exposure to Fine Particulate Air
Pollution.’’ Journal of the American Medical
Association 287:1132–1141. EPA–HQ–OAR–2009–
0472–0263.
478 Laden, F., J. Schwartz, F.E. Speizer, and D.W.
Dockery (2006). Reduction in Fine Particulate Air
Pollution and Mortality. American Journal of
Respiratory and Critical Care Medicine. 173:667–
672. EPA–HQ–OAR–2009–0472–1661.
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Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
TABLE III.H.7–2—UNQUANTIFIED AND NON-MONETIZED POTENTIAL EFFECTS
Pollutant/effects
Effects not included in analysis—changes in:
Ozone Health a ....................................................
Ozone Welfare ....................................................
PM Health c .........................................................
PM Welfare .........................................................
Nitrogen and Sulfate Deposition Welfare ...........
CO Health ...........................................................
HC/Toxics Health f ..............................................
HC/Toxics Welfare ..............................................
Chronic respiratory damage b.
Premature aging of the lungs b.
Non-asthma respiratory emergency room visits.
Exposure to UVb (+/¥) e.
Yields for
—commercial forests.
—some fruits and vegetables.
—non-commercial crops.
Damage to urban ornamental plants.
Impacts on recreational demand from damaged forest aesthetics.
Ecosystem functions.
Exposure to UVb (+/¥) e.
Premature mortality—short term exposures d.
Low birth weight.
Pulmonary function.
Chronic respiratory diseases other than chronic bronchitis.
Non-asthma respiratory emergency room visits.
Exposure to UVb (+/¥) e.
Residential and recreational visibility in non-Class I areas.
Soiling and materials damage.
Damage to ecosystem functions.
Exposure to UVb (+/¥) e.
Commercial forests due to acidic sulfate and nitrate deposition.
Commercial freshwater fishing due to acidic deposition.
Recreation in terrestrial ecosystems due to acidic deposition.
Existence values for currently healthy ecosystems.
Commercial fishing, agriculture, and forests due to nitrogen deposition.
Recreation in estuarine ecosystems due to nitrogen deposition.
Ecosystem functions.
Passive fertilization.
Behavioral effects.
Cancer (benzene, 1,3-butadiene, formaldehyde, acetaldehyde).
Anemia (benzene).
Disruption of production of blood components (benzene).
Reduction in the number of blood platelets (benzene).
Excessive bone marrow formation (benzene).
Depression of lymphocyte counts (benzene).
Reproductive and developmental effects (1,3-butadiene).
Irritation of eyes and mucus membranes (formaldehyde).
Respiratory irritation (formaldehyde).
Asthma attacks in asthmatics (formaldehyde).
Asthma-like symptoms in non-asthmatics (formaldehyde).
Irritation of the eyes, skin, and respiratory tract (acetaldehyde).
Upper respiratory tract irritation and congestion (acrolein).
Direct toxic effects to animals.
Bioaccumulation in the food chain.
Damage to ecosystem function.
Odor.
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Notes:
a The public health impact of biological responses such as increased airway responsiveness to stimuli, inflammation in the lung, acute inflammation and respiratory cell damage, and increased susceptibility to respiratory infection are likely partially represented by our quantified
endpoints.
b The public health impact of effects such as chronic respiratory damage and premature aging of the lungs may be partially represented by
quantified endpoints such as hospital admissions or premature mortality, but a number of other related health impacts, such as doctor visits and
decreased athletic performance, remain unquantified.
c In addition to primary economic endpoints, there are a number of biological responses that have been associated with PM health effects including morphological changes and altered host defense mechanisms. The public health impact of these biological responses may be partly represented by our quantified endpoints.
d While some of the effects of short-term exposures are likely to be captured in the estimates, there may be premature mortality due to shortterm exposure to PM not captured in the cohort studies used in this analysis. However, the PM mortality results derived from the expert
elicitation do take into account premature mortality effects of short term exposures.
e May result in benefits or disbenefits.
f Many of the key hydrocarbons related to this rule are also hazardous air pollutants listed in the CAA.
While there will be impacts
associated with air toxic pollutant
emission changes that result from the
final rule, we do not attempt to
monetize those impacts. This is
primarily because currently available
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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
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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
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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.479 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,
we did not have the methods and tools
available for national-scale application
in time for the analysis of the final
rule.480
EPA is also unaware of specific
information identifying any effects on
listed endangered species from the
small fluctuations in pollutant
concentrations associated with this rule
(see Section III.G.5). Furthermore, our
current modeling tools are not designed
to trace fluctuations in ambient
concentration levels to potential
impacts on particular endangered
species.
i. Quantified Human Health Impacts
Tables III.H.7–3 and III.H.7–4 present
the annual PM2.5 and ozone health
impacts in the 48 contiguous U.S. states
associated with the final rule for 2030.
For each endpoint presented in Tables
III.H.7–3 and III.H.7–4, we provide both
the mean estimate and the 90%
confidence interval.
Using EPA’s preferred estimates,
based on the American Cancer Society
(ACS) and Six-Cities studies and no
25527
threshold assumption in the model of
mortality, we estimate that the final rule
will result in between 60 and 150 cases
of avoided PM2.5-related premature
deaths annually in 2030. As a sensitivity
analysis, when the range of expert
opinion is used, we estimate between 22
and 200 fewer premature mortalities in
2030 (see Table 7.7 in the RIA that
accompanies this rule). For ozonerelated premature mortality in 2030, we
estimate a range of between 4 to 18
additional premature mortalities related
to the ethanol production volumes
mandated by the recently finalized
RFS2 rule 481 (and reflected in the air
quality modeling for this rule), but are
not due to the final standards
themselves.
TABLE III.H.7–3—ESTIMATED PM2.5-RELATED HEALTH IMPACTS a
2030 Annual reduction in
incidence
(5th%–95th%ile)
Health effect
Premature Mortality—Derived from epidemiology literature: b
Adult, age 30+, ACS Cohort Study (Pope et al., 2002) ..........................................................
Adult, age 25+, Six-Cities Study (Laden et al., 2006) .............................................................
Infant, age <1 year (Woodruff et al., 1997) .............................................................................
Chronic bronchitis (adult, age 26 and over) ...................................................................................
Non-fatal myocardial infarction (adult, age 18 and over) ...............................................................
Hospital admissions—respiratory (all ages) c ..................................................................................
Hospital admissions—cardiovascular (adults, age >18) d ...............................................................
Emergency room visits for asthma (age 18 years and younger) ...................................................
Acute bronchitis (children, age 8–12) .............................................................................................
Lower respiratory symptoms (children, age 7–14) .........................................................................
Upper respiratory symptoms (asthmatic children, age 9–18) .........................................................
Asthma exacerbation (asthmatic children, age 6–18) ....................................................................
Work loss days ................................................................................................................................
Minor restricted activity days (adults age 18–65) ...........................................................................
60 (23–96)
150 (83–220)
0 (0–1)
42 (8–77)
100 (38–170)
13 (7–20)
32 (23–38)
42 (25–59)
95 (0–190)
1,100 (540–1,700)
850 (270–1,400)
1,000 (120–2,900)
7,600 (6,600–8,500)
45,000 (38,000–52,000)
Notes:
a Incidence is rounded to two significant digits. Estimates represent incidence within the 48 contiguous United States.
b PM-related adult mortality based upon the American Cancer Society (ACS) Cohort Study (Pope et al., 2002) and the Six-Cities Study (Laden
et al., 2006). Note that these are two alternative estimates of adult mortality and should not be summed. PM-related infant mortality based upon
a study by Woodruff, Grillo, and Schoendorf (1997).482
c Respiratory hospital admissions for PM include admissions for chronic obstructive pulmonary disease (COPD), pneumonia and asthma.
d Cardiovascular hospital admissions for PM include total cardiovascular and subcategories for ischemic heart disease, dysrhythmias, and
heart failure.
TABLE III.H.7–4—ESTIMATED OZONE-RELATED HEALTH IMPACTS a
2030 Annual reduction in
incidence
(5th%–95th%ile)
Health effect
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Premature Mortality, All ages b
Multi-City Analyses:
Bell et al. (2004)—Non-accidental ...........................................................................................
Huang et al. (2005)—Cardiopulmonary ...................................................................................
479 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. EPA–HQ–
OAR–2009–0472–0244.
480 In April 2009, EPA hosted a workshop on
estimating the benefits or 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
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generated thoughtful discussion on approaches to
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.
481 EPA 2010, Renewable Fuel Standard Program
(RFS2) Regulatory Impact Analysis. EPA–420–R–
10–006. February 2010. Docket EPA–HQ–OAR–
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¥4 (¥8–0)
¥7 (¥14–1)
2009–0472–11332. EPA–HQ–OAR–2009–0472–
11332. See also 75 FR 14670, March 26, 2010.
482 Woodruff, T.J., J. Grillo, and K.C. Schoendorf.
1997. ‘‘The Relationship Between Selected Causes
of Postneonatal Infant Mortality and Particulate Air
Pollution in the United States.’’ Environmental
Health Perspectives 105(6):608–612. EPA–HQ–
OAR–2009–0472–0382.
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TABLE III.H.7–4—ESTIMATED OZONE-RELATED HEALTH IMPACTS a—Continued
2030 Annual reduction in
incidence
(5th%–95th%ile)
Health effect
Schwartz (2005)—Non-accidental ...........................................................................................
Meta-analyses:
Bell et al. (2005)—All cause ....................................................................................................
Ito et al. (2005)—Non-accidental .............................................................................................
Levy et al. (2005)—All cause ...................................................................................................
Hospital admissions—respiratory causes (adult, 65 and older) c ...................................................
Hospital admissions—respiratory causes (children, under 2) ........................................................
Emergency room visit for asthma (all ages) ...................................................................................
Minor restricted activity days (adults, age 18–65) ..........................................................................
School absence days ......................................................................................................................
¥6 (¥13–1)
¥13 (¥24–¥2)
¥18 (¥30–¥6)
¥18 (¥28–¥9)
¥38 (¥86–¥6)
¥6 (¥13–1)
¥16 (¥51–8)
¥18,000 (¥40,000–3,700)
¥7,700 (¥16,000–1,200)
Notes:
a Negatives indicate a disbenefit, or an increase in health effect incidence. Incidence is rounded to two significant digits. Estimates represent
incidence within the 48 contiguous U.S.
b Estimates of ozone-related premature mortality are based upon incidence estimates derived from several alternative studies: Bell et al.
(2004); Huang et al. (2005); Schwartz (2005); Bell et al. (2005); Ito et al. (2005); Levy et al. (2005). The estimates of ozone-related premature
mortality should therefore not be summed.
c Respiratory hospital admissions for ozone include admissions for all respiratory causes and subcategories for COPD and pneumonia.
ii. Monetized Benefits
Table III.H.7–5 presents the estimated
monetary value of changes in the
incidence of ozone and PM2.5-related
health effects. All monetized estimates
are stated in 2007$. These estimates
account for growth in real gross
domestic product (GDP) per capita
between the present and 2030. Our
estimate of total monetized benefits in
2030 for the final rule, using the ACS
and Six-Cities PM mortality studies and
the range of ozone mortality
assumptions, is between $380 and
$1,300 million, assuming a 3 percent
discount rate, or between $330 and
$1,200 million, assuming a 7 percent
discount rate. As the results indicate,
total benefits are driven primarily by the
reduction in PM2.5-related premature
fatalities each year.
TABLE III.H.7–5—ESTIMATED MONETARY VALUE OF CHANGES IN INCIDENCE OF HEALTH AND WELFARE EFFECTS
[In Millions of 2007$] a b
PM2.5-related health effect
Premature Mortality—Derived from Epidemiology Studies c d.
2030
(5th and 95th%ile)
Adult, age 30+ —ACS study (Pope et al., 2002)
3% discount rate .............................................................
7% discount rate .............................................................
Adult, age 25+ —Six-Cities study (Laden et al., 2006)
3% discount rate .............................................................
7% discount rate .............................................................
Infant Mortality, <1 year—(Woodruff et al. 1997) ...........
Chronic bronchitis (adults, 26 and over) ........................................................................................................................
Non-fatal acute myocardial infarctions
3% discount rate ......................................................................................................................................................
7% discount rate ......................................................................................................................................................
Hospital admissions for respiratory causes ....................................................................................................................
Hospital admissions for cardiovascular causes .............................................................................................................
Emergency room visits for asthma .................................................................................................................................
Acute bronchitis (children, age 8–12) .............................................................................................................................
Lower respiratory symptoms (children, 7–14) ................................................................................................................
Upper respiratory symptoms (asthma, 9–11) .................................................................................................................
Asthma exacerbations ....................................................................................................................................................
Work loss days ...............................................................................................................................................................
Minor restricted-activity days (MRADs) ..........................................................................................................................
$510 ($70–$1,300)
$460 ($63–$1,200)
$1,300 ($190–$3,300)
$1,200 ($180–$3,000)
$1.8 ($0–$7.0)
$22 ($1.9–$77)
$14 ($3.9–$35)
$14 ($3.6–$35)
$0.20 ($0.01–$0.29)
$0.91 ($0.58–$1.3)
$0.016 ($0.009–$0.024)
$0.007 ($0–$0.018)
$0.022 ($0.009–$0.043)
$0.027 ($0.008–$0.061)
$0.058 ($0.006–$0.17)
$1.2 ($1.0–$1.3)
$2.9 ($1.7–$4.2)
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Ozone-related Health Effect
Bell et al., 2004 ...............................................................
¥$38 (¥$110–$4.2)
Huang et al., 2005 ..........................................................
Schwartz, 2005 ...............................................................
Bell et al., 2005 ...............................................................
¥$62 (¥$180–$4.7)
¥$58 (¥$170–$8.8)
¥$120 (¥$330–¥$7.9)
Ito et al., 2005 .................................................................
Levy et al., 2005 .............................................................
¥$170 (¥$430–¥$19)
¥$170 (¥$410–¥$21)
Hospital admissions—respiratory causes (adult, 65 and older) .....................................................................................
¥$0.92 (¥$2.1–$0.27)
Premature Mortality, All ages—Derived from Multi-city
analyses.
Premature Mortality, All ages—Derived from Meta-analyses.
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25529
TABLE III.H.7–5—ESTIMATED MONETARY VALUE OF CHANGES IN INCIDENCE OF HEALTH AND WELFARE EFFECTS—
Continued
[In Millions of 2007$] a b
PM2.5-related health effect
2030
(5th and 95th%ile)
Hospital admissions—respiratory causes (children, under 2) ........................................................................................
Emergency room visit for asthma (all ages) ..................................................................................................................
Minor restricted activity days (adults, age 18–65) .........................................................................................................
School absence days .....................................................................................................................................................
¥$.21 (¥$.45–$0.031)
¥$0.006 (¥$0.018–
$0.003)
¥$1.2 (¥$2.7–$0.25)
¥$0.71 (¥$1.4–$0.11)
Notes:
a Negatives indicate a disbenefit, or an increase in health effect incidence. Monetary benefits are rounded to two significant digits for ease of
presentation and computation. PM and ozone benefits are nationwide.
b Monetary benefits adjusted to account for growth in real GDP per capita between 1990 and the analysis year (2030).
c Valuation assumes discounting over the SAB recommended 20 year segmented lag structure. Results reflect the use of 3 percent and 7 percent discount rates consistent with EPA and OMB guidelines for preparing economic analyses.
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iii. What are the limitations of the
benefits analysis?
Every benefit-cost analysis examining
the potential effects of a change in
environmental protection requirements
is limited to some extent by data gaps,
limitations in model capabilities (such
as geographic coverage), and
uncertainties in the underlying
scientific and economic studies used to
configure the benefit and cost models.
Limitations of the scientific literature
often result in the inability to estimate
quantitative changes in health and
environmental effects, such as potential
increases in premature mortality
associated with increased exposure to
carbon monoxide. Deficiencies in the
economics literature often result in the
inability to assign economic values even
to those health and environmental
outcomes which can be quantified.
These general uncertainties in the
underlying scientific and economics
literature, which can lead to valuations
that are higher or lower, are discussed
in detail in the RIA and its supporting
references. Key uncertainties that have a
bearing on the results of the benefit-cost
analysis of the final rule include the
following:
• The exclusion of potentially
significant and unquantified benefit
categories (such as health, odor, and
ecological impacts of air toxics, ozone,
and PM);
• Errors in measurement and
projection for variables such as
population growth;
• Uncertainties in the estimation of
future year emissions inventories and
air quality;
• Uncertainty in the estimated
relationships of health and welfare
effects to changes in pollutant
concentrations including the shape of
the C–R function, the size of the effect
estimates, and the relative toxicity of the
many components of the PM mixture;
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• Uncertainties in exposure
estimation; and
• Uncertainties associated with the
effect of potential future actions to limit
emissions.
As Table III.H.7–5 indicates, total
benefits are driven primarily by the
reduction in PM2.5-related premature
mortalities each year. Some key
assumptions underlying the premature
mortality estimates include the
following, which may also contribute to
uncertainty:
• Inhalation of fine particles is
causally associated with premature
death at concentrations near those
experienced by most Americans on a
daily basis. Although biological
mechanisms for this effect have not yet
been completely established, the weight
of the available epidemiological,
toxicological, and experimental
evidence supports an assumption of
causality. The impacts of including a
probabilistic representation of causality
were explored in the expert elicitationbased results of the PM NAAQS RIA.
• All fine particles, regardless of their
chemical composition, are equally
potent in causing premature mortality.
This is an important assumption,
because PM produced via transported
precursors emitted from engines may
differ significantly from PM precursors
released from electric generating units
and other industrial sources. However,
no clear scientific grounds exist for
supporting differential effects estimates
by particle type.
• The C–R function for fine particles
is approximately 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 PM, including both
regions that may be in attainment with
PM2.5 standards and those that are at
risk of not meeting the standards.
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• There is uncertainty in the
magnitude of the association between
ozone and premature mortality. The
range of ozone impacts associated with
the final rule is estimated based on the
risk of several sources of ozone-related
mortality effect estimates. In a recent
report on the estimation of ozonerelated premature mortality published
by the National Research Council, 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.483 EPA has
requested advice from the National
Academy of Sciences on how best to
quantify uncertainty in the relationship
between ozone exposure and premature
mortality in the context of quantifying
benefits.
Acknowledging omissions and
uncertainties, we present a best estimate
of the total benefits based on our
interpretation of the best available
scientific literature and methods
supported by EPA’s technical peer
review panel, the Science Advisory
Board’s Health Effects Subcommittee
(SAB–HES). The National Academies of
Science (NRC, 2002) has also reviewed
EPA’s methodology for analyzing the
health benefits of measures taken to
reduce air pollution. EPA addressed
many of these comments in the analysis
of the final PM NAAQS.484 485 This
483 National Research Council (NRC), 2008.
Estimating Mortality Risk Reduction and Economic
Benefits from Controlling Ozone Air Pollution. The
National Academies Press: Washington, DC. EPA–
HQ–OAR–2009–0472–0322.
484 National Research Council (NRC). 2002.
Estimating the Public Health Benefits of Proposed
Air Pollution Regulations. The National Academies
Press: Washington, DC.
485 U.S. Environmental Protection Agency.
October 2006. Final Regulatory Impact Analysis
(RIA) for the National Ambient Air Quality
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07MYR2
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Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
analysis incorporates this most recent
work to the extent possible.
b. PM-Related Monetized Benefits of the
Model Year (MY) Analysis
As described in Section III.G, the final
standards will reduce emissions of
several criteria and toxic pollutants and
precursors. In the MY 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 related to other
criteria pollutants (such as ozone, NO2
the human health benefits associated
with the MY analysis 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 the final rule.
The dollar-per-ton estimates used in
this analysis are provided in Table
III.H.7–6. 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 rule.
or SO2) or toxics pollutants, nor does it
monetize all of the potential health and
welfare effects associated with PM2.5.
The MY analysis uses a ‘‘benefit-perton’’ method to estimate a selected suite
of PM2.5-related health benefits
described below. These PM2.5 benefitper-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,
TABLE III.H.7–6—BENEFITS-PER-TON VALUES (2007$) DERIVED USING THE ACS COHORT STUDY FOR PM-RELATED
PREMATURE MORTALITY (POPE ET AL., 2002) a
All sources d
Stationary (non-EGU)
sources
Year c
SOX
VOC
NOX
Direct PM2.5
Mobile sources
NOX
Direct PM2.5
Estimated Using a 3 Percent Discount Rate b
2015
2020
2030
2040
.................................................................................
.................................................................................
.................................................................................
.................................................................................
$28,000
31,000
36,000
43,000
$1,200
1,300
1,500
1,800
$4,700
5,100
6,100
7,200
$220,000
240,000
280,000
330,000
$4,900
5,300
6,400
7,600
$270,000
290,000
350,000
420,000
200,000
220,000
250,000
300,000
4,400
4,800
5,800
6,900
240,000
270,000
320,000
380,000
Estimated Using a 7 Percent Discount Rate b
2015
2020
2030
2040
.................................................................................
.................................................................................
.................................................................................
.................................................................................
26,000
28,000
33,000
39,000
1,100
1,200
1,400
1,600
4,200
4,600
5,500
6,600
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 either a 3 percent or 7 percent discount rate in the valuation of premature mortality to account for a twenty-year segmented cessation lag.
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.
The benefit per-ton technique has
been used in previous analyses,
including EPA’s recent Ozone National
Ambient Air Quality Standards
(NAAQS) RIA,486 the proposed Portland
Cement National Emissions Standards
for Hazardous Air Pollutants (NESHAP)
RIA,487 and the final NO2 NAAQS (U.S.
EPA, 2009b).488 Table III.H.7–7 shows
the quantified and unquantified PM2.5related co-benefits captured in those
benefit-per-ton estimates.
TABLE III.H.7–7—HUMAN HEALTH AND WELFARE EFFECTS OF PM2.5
Quantified and monetized
in primary estimates
Pollutant/effect
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PM2.5 ..................
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
Standards for Particulate Matter. Prepared by:
Office of Air and Radiation. Available at https://
www.epa.gov/ttn/ecas/ria.html. EPA–HQ–OAR–
2009–0472–0240.
486 U.S. Environmental Protection Agency (U.S.
EPA). 2008. 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/
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changes in
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Subchronic bronchitis cases.
Low birth weight.
Pulmonary function.
Chronic respiratory diseases other than chronic bronchitis.
Non-asthma respiratory emergency room visits.
Visibility.
ttn/ecas/regdata/RIAs/6-ozoneriachapter6.pdf.
Accessed March 15, 2010. EPA–HQ–OAR–2009–
0472–0108.
487 U.S. Environmental Protection Agency (U.S.
EPA). 2009. 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/
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RIAs/portlandcementria_4–20–09.pdf. Accessed
March 15, 2010. EPA–HQ–OAR–2009–0472–0241.
488 U.S. Environmental Protection Agency (U.S.
EPA). 2010. Final 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/FinalNO2RIAfulldocument.pdf.
Accessed March 15, 2010. EPA–HQ–OAR–2009–
0472–0237.
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25531
TABLE III.H.7–7—HUMAN HEALTH AND WELFARE EFFECTS OF PM2.5—Continued
Quantified and monetized
in primary estimates
Pollutant/effect
Unquantified effects
changes in
Minor restricted-activity days
Work loss days
Asthma exacerbations (asthmatic population)
Infant mortality
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Consistent with the NO2 NAAQS,489
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) 490
accompanying the recent final ozone
NAAQS RIA. Readers can also refer to
Fann et al. (2009) 491 for a detailed
description of the benefit-per-ton
methodology.492 A more detailed
description of the benefit-per-ton
489 Although we summarize the main issues in
this chapter, we encourage interested readers to see
the benefits chapter of the final NO2 NAAQS for a
more detailed description of recent changes to the
PM benefits presentation and preference for the nothreshold model.
490 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. EPA–
HQ–OAR–2009–0472–0228.
491 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. EPA–HQ–OAR–2009–0472–
0229.
492 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
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. EPA–HQ–OAR–2009–0472–0227.
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Household soiling.
estimates is also provided in the 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.
• Dollar-per-ton estimates 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. In Section III.G, we
describe the full-scale air quality
modeling conducted for the 2030
calendar year analysis in an effort to
capture this variability.
• There are several health benefits
categories that EPA was unable to
quantify in the MY analysis due to
limitations associated with using
benefits-per-ton estimates, several of
which could be substantial. Because
NOX and VOC emissions are also
precursors to ozone, changes in NOX
and VOC would also impact ozone
formation and the health effects
associated with ozone exposure.
Benefits-per-ton estimates do not exist
for ozone, however, 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 of the RIA that
accompanies this rule for a description
of the quantification and monetization
of health impacts for the CY analysis
and a description of the unquantified
co-pollutant benefits associated with
this rulemaking.
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• 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 SixCities 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 this
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. Timing and
resource constraints precluded EPA
from conducting full-scale
photochemical air quality modeling for
the MY analysis. We have, however,
conducted national-scale air quality
modeling for the CY analysis to analyze
the impacts of the standards on PM2.5,
ozone, and selected air toxics.
8. Energy Security Impacts
This rule 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 caused by potential sudden
disruptions in the supply of imported
petroleum to the U.S. This reduction in
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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 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 percent of
total U.S. imports of all goods and
services.493 In 2008, the U.S. imported
66 percent of the petroleum it
consumed, and the transportation sector
accounted for 70 percent of total U.S.
petroleum consumption. This compares
to approximately 37 percent of
petroleum from imports and 55 percent
of consumption from petroleum in the
transportation sector in 1975.494 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.
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b. Energy Security Implications
In order to understand the energy
security implications of reducing U.S.
petroleum imports, EPA 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 provided
below are based upon a methodology
developed in a peer-reviewed study
entitled ‘‘The Energy Security Benefits of
Reduced Oil Use, 2006–2015,’’
completed in March 2008. This study is
included as part of the docket for this
rulemaking.495 496
When conducting this analysis, ORNL
considered the economic cost of
493 Source: U.S. Bureau of Economic Analysis,
U.S. International Transactions Accounts Data, as
shown on June 24, 2009.
494 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.
495 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).
496 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).
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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 hard
to quantify.
One commenter on this rule felt that
the magnitude of the economic
disruption portion of the energy security
benefit may be too high. This
commenter cites a recent paper written
by Stephen P.A. Brown and Hillard G.
Huntington, entitled ‘‘Estimating U.S.
Oil Security Premiums’’ (September
2009) as the basis for their comment.
The Agency reviewed this paper and
found that it conducted a somewhat
different analysis than the one
conducted by ORNL in support of this
rule. The Brown and Huntington paper
focuses on policies and the energy
security implications of increasing U.S.
demand for oil (or at least holding U.S.
oil consumption constant), while the
ORNL analysis examines the energy
security implications of decreasing U.S.
oil consumption and oil imports. These
asymmetrical analyses would be
expected to yield somewhat different
energy security results.
However, even given the different
scenarios considered, the Brown and
Huntington estimates are roughly
similar to the ORNL estimates. For
example, for an increase in U.S.
consumption that leads to an increase in
U.S. imports of oil, Brown and
Huntington estimate a 2015 disruption
premium of $4.87 per barrel, with an
uncertainty range from $1.03 to $14.10
per barrel. The corresponding 2015
estimate for ORNL as the result of a
reduction in U.S. oil imports is $6.70
per barrel, with an uncertainty range of
$3.11 to $10.67 per barrel. Given that
the two studies analyze different
scenarios, since the Brown and
Huntington disruption premiums are
well within the uncertainty range of the
ORNL study, and given that the ORNL
scenario matches the specific oil market
impacts anticipated from the rule while
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the Brown and Huntington paper does
not, the Agency has concluded that the
ORNL disruption security premium
estimates are more applicable for
analyzing this final rule.
In the energy security literature, the
macroeconomic disruption component
of the energy security premium
traditionally has included both (1)
increased payments for petroleum
imports associated with a rapid increase
in world oil prices, and (2) the GDP
losses and adjustment costs that result
from projected future oil price shocks.
One commenter suggested that the
increased payments associated with
rapid increases in petroleum prices (i.e.,
price increases in a disrupted market)
represent transfers from U.S. oil
consumers to petroleum suppliers rather
than real economic costs, and therefore,
should not be counted as a benefit.
This approach would represent a
significant departure from how the
macroeconomic disruption costs
associated with oil price shocks have
been quantified in the broader energy
security literature, and the Agencies
believe it should be analyzed in more
detail before being applied in a
regulatory context. In addition, the
Agencies also believe that there are
compelling reasons to treat higher oil
import costs during oil supply
disruptions differently than simple
wealth transfers that reflect the exercise
of market power by petroleum sellers or
consumers. According to the OMB
definition of a transfer: ‘‘Benefit and cost
estimates should reflect real resource
use. Transfer payments are monetary
payments from one group to another
that do not affect total resources
available to society. * * * The net
reduction in the total surplus (consumer
plus producer) is a real cost to society,
but the transfer from buyers to sellers
resulting from a higher price is not a
real cost since the net reduction
automatically accounts for the transfer
from buyers to sellers.’’ 497 In other
words, pure transfers do not lead to
changes in the allocation or
consumption of economic resources,
whereas changes in the resource
allocation or use produce real economic
costs or benefits.
While price increases during oil price
disruptions can result in large transfers
of wealth, they also result in a
combination of real resource shortages,
costly short-run shifts in energy supply,
behavioral and demand adjustments by
energy users, and other response costs.
Unlike pure transfers, the root cause of
497 OMB Circular A–4, September 17, 2003. See
https://www.whitehouse.gov/omb/assets/omb/
circulars/a004/a-4.pdf.
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the disruption price increase is a real
resource supply reduction due, for
example, to disaster or war. Regions
where supplies are disrupted (i.e., the
U.S.) suffer very high costs. Businesses’
and households’ emergency responses
to supply disruptions and rapid price
increases are likely to consume some
real economic resources, in addition to
causing financial losses to the U.S.
economy that are matched by offsetting
gains elsewhere in the global economy.
While households and businesses can
reduce their petroleum consumption,
invest in fuel switching technologies, or
use futures markets to insulate
themselves in advance against the
potential costs of rapid increases in oil
prices, when deciding how extensively
to do so, they are unlikely to account for
the effect of their petroleum
consumption on the magnitude of costs
that supply interruptions and
accompanying price shocks impose on
others. As a consequence, the U.S.
economy as a whole will not make
sufficient use of these mechanisms to
insulate itself from the real costs of
rapid increases in energy prices and
outlays that usually accompany oil
supply interruptions.498 Therefore, the
ORNL estimate of macroeconomic
disruption and adjustment costs that the
Agencies use to value energy security
benefits includes the increased oil
import costs stemming from oil price
shocks that are unanticipated and not
internalized by advance actions of U.S.
consumers of petroleum products. The
Agencies believe that, as the ORNL
analysis argues, the uninternalized oil
import costs that occur during oil
supply interruptions represents a real
cost associated with U.S. petroleum
consumption and imports, and that
reducing its value by lowering domestic
petroleum consumption and imports
thus represents a real economic benefit
from lower fuel consumption.
For this rule, ORNL estimated the
energy security premium by
incorporating the oil price forecast of
the Energy Information Administration’s
2009 Annual Energy Outlook (AEO) to
its model. The Agency considered, but
rejected the option, of further updating
this analysis using the oil price
estimates provided by the AEO 2010.
Given the broad uncertainty bands
around oil price forecasts and the
relatively modest change in oil price
forecasts between the AEO 2009 and
AEO 2010, the Agency felt that updating
to AEO 2010 oil prices would not
significantly change the results of this
energy security analysis. Finally, the
EPA used its OMEGA model in
conjunction with ORNL’s energy
security premium estimates to develop
the total energy security benefits for a
number of different years; please refer to
Table III.H.8–1 for this information for
years 2015, 2020, 2030 and 2040,499 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
Joint TSD Chapter 4.
Because the price of oil is determined
globally, supply and demand shocks
anywhere in the world will have an
adverse impact on the United States
(and on all other oil consuming
countries). The total economic costs of
those shocks to the U.S. will depend on
25533
both U.S. petroleum consumption and
imports of petroleum and refined
products. The analysis relied upon to
estimate energy security benefits from
reducing U.S. petroleum consumption
estimates the value of energy security
using the estimated oil import premium,
and is thus consistent with how much
of the energy security literature reports
energy security impacts. Since this rule
is expected to have little impact on the
U.S. supply of crude petroleum, a
reduction in U.S. fuel consumption is
expected to be reflected predominantly
in reduced imports of petroleum and
refined fuel. The estimated energy
security premium associated with a
reduction in U.S. petroleum
consumption that leads to a reduction in
imports would likely be somewhat
larger, due to diminished sensitivity of
the U.S. economy to oil supply shocks
that would accompany the reduction in
oil consumption.
In addition, while the estimates of
energy security externalities used in this
analysis depend on a combination of
U.S. petroleum consumption and
imports, they have been expressed as
per barrel of petroleum imported into
the U.S. The Agencies’ analyses apply
these estimates to the reduction in U.S.
imports of crude petroleum and refined
products that is projected to result from
the rule in order to determine the
benefits that are likely to result from
fuel savings and the consequent
reduction in imports. Thus, the
estimates of energy security externalities
have been used in this analysis in a way
that is completely consistent with how
they are defined and measured in the
ORNL analysis.
TABLE III.H.8–1—ENERGY SECURITY PREMIUM IN 2015, 2020, 2030 AND 2040 (2007$/BARREL)
Year
(range)
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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
$19.94
$18.69
$18.69
($9.80–$28.08)
($10.58–$30.47)
($10.52–$27.89)
($10.52–$27.89)
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 rule, such as the
benefits of reducing greenhouse gas
emissions, are calculated using a global
value? 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-
498 For a more complete discussion of the reasons
why the oil import cost component of the
macroeconomic disruption and adjustment costs
includes some real costs and does not represent a
pure transfer, see Paul N. Leiby, Estimating the
Energy Security Benefits of Reduced U.S. Oil
Imports: Final Report, ORNL–TM–2007–028, Oak
Ridge National Laboratory, March 14, 2008, pp. 21–
25.
499 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.
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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. OMB’s Circular A–4 gives
guidance in this regard. Domestic
pecuniary benefits (or transfers between
buyers and sellers) generally should not
be included because they do not
represent real resource costs, though A–
4 notes that transfers to the U.S. from
other countries may be counted as
benefits as long as the analysis is
conducted from a U.S. perspective.
Energy security is broadly defined as
protecting the U.S. economy against
circumstances that threaten significant
short- and long-term increases in energy
costs. Energy security is inherently a
domestic benefit. Accordingly, it is
possible to argue that the use of the
domestic monopsony benefit may not
necessarily be in conflict with the use
of the global SCC, because the global
SCC represents the benefits against
which the costs of our (i.e., the U.S.’s)
domestic mitigation efforts should be
judged. In the final analysis, the Agency
has determined that using only the
macroeconomic disruption component
of the energy security benefit is the
appropriate metric for this rule.
At proposal, the Agency took the
position that since a global perspective
was being taken with the use of the
global SCC, that the monopsony benefits
‘‘net out’’ and were a transfer. Two
commenters felt that the monopsony
effect should be excluded from net
benefits calculations for the rule since it
is a ‘‘pecuniary’’ externality or does not
represent an efficiency gain. One of the
commenters suggested that EPA instead
conduct a distributional analysis of the
monopsony impacts of the final rule.
The Agency disagrees that all pecuniary
externalities should necessarily be
excluded from net benefits calculations
as a general rule. In this case considered
here, the oil market is non-competitive,
and if the social decision-making unit of
interest is the U.S., there is an argument
for accounting for the monopsony
premium to assess the excess transfer of
wealth caused by the exercise of cartel
power outside of the U.S.
However, for the final rule, the
Agency continues to take a global
perspective with respect to climate
change by using the global SCC.
Therefore, the Agency did not count
monopsony benefits since they ‘‘net out’’
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with losses to other countries outside
the U.S. Since a global perspective has
been taken, a distributional analysis was
not undertaken for this final rule, since
the losses to the losers (oil producers
that export oil to the U.S.) would equal
the gains to the winners (U.S.
consumers of imported oil). As a result,
the Agency has included only the
macroeconomic disruption portion of
the energy security benefits to monetize
the total energy security benefits of this
rule. Hence, the 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.8–2.500 The
reduced oil estimates were derived from
the OMEGA model, as explained in
Section III.F 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 rule, which assumed that
each gallon of fuel saved reduces total
U.S. imports of crude oil or refined
products by 0.95 gallons.501
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
......................................
......................................
......................................
......................................
$0.57
$2.17
$4.55
$6.00
500 Estimated reductions in U.S. imports of
finished petroleum products and crude oil are 95%
of 89 million barrels (MMB) in 2015, 300 MMB in
2020, 590 MMB in 2030, and 778 MMB in 2040.
501 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.
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9. Other Impacts
There are other impacts associated
with the CO2 emissions standards and
associated reduced fuel 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 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 Joint TSD
that accompanies this rule for more
information about these impacts and
how EPA and NHTSA use them in their
analyses.
Note that for the estimated value of
less frequent refueling events, EPA’s
estimate is subject to a number of
uncertainties which we discuss in detail
in Chapter 4.1.11 of the Joint TSD, and
the actual value could be higher or
lower than the value presented here.
Specifically, the analysis makes three
assumptions: (a) That manufacturers
will not adjust fuel tank capacities
downward (from the current average of
19.3 gallons) when they improve the
fuel economy of their vehicle models.
(b) that the average fuel purchase (55
percent of fuel tank capacity) is the
typical fuel purchase. (c) that 100
percent of all refueling is demandbased; i.e., that every gallon of fuel
which is saved would reduce the need
to return to the refueling station. A new
research project is being planned by
DOT which will include a detailed
study of refueling events, and which is
expected to improve upon these
assumptions. These assumptions and
the new DOT research project are
discussed in detail in Joint TSD Chapter
4.2.10.
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25535
TABLE III.H.9–1—OTHER IMPACTS ASSOCIATED WITH THE LIGHT-DUTY VEHICLE GHG PROGRAM
[Millions of 2007 dollars]
2020
Value of Less Frequent Refueling ...................................
Value of Increased Driving a ............................................
Accidents, Noise, Congestion ..........................................
a Calculated
2030
$2,400
4,200
¥2,300
2040
$4,800
8,800
¥4,600
2050
$6,300
13,000
¥6,100
$8,000
18,400
¥7,800
NPV, 3%
$87,900
171,500
¥84,800
NPV, 7%
$40,100
75,500
¥38,600
using post-tax fuel prices.
10. Summary of Costs and Benefits
In this section, EPA presents a
summary of costs, benefits, and net
benefits of the rule. 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 7 percent
discount rate. In this table, fuel savings
are calculated using pre-tax fuel prices.
Consumers are expected to receive the
fuel savings presented here. The cost
estimates for the fuel-saving technology
are based on designs that will hold all
vehicle attributes constant except fuel
economy and technology cost. This
analysis also assumes that consumers
will not change the vehicles that they
purchase. Automakers may redesign
vehicles as part of their compliance
strategies. The redesigns should be
expected to make the vehicles more
attractive to consumers, because the
ability to hold all other attributes
constant means that the only reason to
change them is to make them more
marketable to consumers. In addition,
consumers may choose to purchase
different vehicles than they would in
the absence of this rule. These changes
may affect the net benefits that
consumers receive from their vehicles. If
consumers can buy the same vehicle as
before, except with increased price and
fuel economy, then the increase in
vehicle price is the maximum loss in
welfare to the consumer, because
compensating the increase in price
would leave her able to buy her
previous vehicle with no change. If she
decides to purchase a different vehicle,
or not to purchase a vehicle, she would
do so only if she were better off than
buying her original choice. Because of
the unsettled state of the modeling of
consumer choices (discussed in Section
III.H.1 and in RIA Section 8.1.2), this
analysis does not measure these effects.
If the technology costs are not sufficient
to maintain other vehicle attributes,
then it is possible that automakers
would be required to make less
marketable vehicles in order to comply
with the rule; as a result, there may be
an additional loss in consumer welfare
due to the rule. While EPA received
comments expressing concern over the
possibility of these losses, there were no
specific losses identified.
TABLE III.H.10–1—ESTIMATED SOCIETAL COSTS OF THE LIGHT-DUTY VEHICLE GHG PROGRAM
[Millions of 2007 dollars]
Social costs
2020
$15,600
¥35,700
¥20,100
Vehicle Compliance Costs ...............................................
Fuel Savings a ..................................................................
Quantified Annual Costs ..................................................
a Calculated
2030
2040
$15,800
¥79,800
¥64,000
2050
$17,400
¥119,300
¥101,900
$19,000
¥171,200
¥152,200
NPV, 3%
$345,900
¥1,545,600
¥1,199,700
NPV, 7%
$191,900
¥672,600
¥480,700
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 CO2 emissions—
and consequently the annual quantified
benefits (i.e., total benefits)—for each of
four SCC values considered by EPA. As
discussed in the RIA Section 7.5, the
IPCC Fourth Assessment Report (2007)
concluded that that the benefit estimates
from CO2 reductions are ‘‘very likely’’
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, these monetized GHG
benefits exclude the value of reductions
in non-CO2 GHG emissions (HFC, CH4,
N2O) expected under this final rule.
Although EPA has not monetized the
benefits of reductions in non-CO2 GHGs,
the value of these reductions should not
be interpreted as zero. Rather, the
reductions in non-CO2 GHGs will
contribute to this rule’s climate benefits,
as explained in Section III.F. The SCC
TSD notes the difference between the
social cost of non-CO2 emissions and
SCC and specifies a goal to develop
methods to value non-CO2 emissions in
future analyses.
TABLE III.H.10–2—ESTIMATED SOCIETAL BENEFITS ASSOCIATED WITH THE LIGHT-DUTY VEHICLE GHG PROGRAM
[Millions of 2007 dollars]
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Benefits category
2020
Reduced CO2 Emissions at each assumed SCC
value b c
Avg SCC at 5% ............................................
Avg SCC at 3% ............................................
Avg SCC at 2.5% .........................................
95th percentile SCC at 3% ...........................
Criteria Pollutant Benefits d e f g ............................
Energy Security Impacts (price shock) ................
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2030
$900
3,700
5,800
11,000
B
2,200
Frm 00213
2040
2050
$2,700
8,900
14,000
27,000
1,200–1,300
4,500
$4,600
14,000
21,000
43,000
1,200–1,300
6,000
$7,200
21,000
30,000
62,000
1,200–1,300
7,600
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NPV, 3% a
$34,500
176,700
299,600
538,500
21,000
81,900
NPV, 7% a
$34,500
176,700
299,600
538,500
14,000
36,900
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TABLE III.H.10–2—ESTIMATED SOCIETAL BENEFITS ASSOCIATED WITH THE LIGHT-DUTY VEHICLE GHG PROGRAM—
Continued
[Millions of 2007 dollars]
Benefits category
2020
Reduced Refueling ..............................................
Value of Increased Driving h ................................
Accidents, Noise, Congestion ..............................
Quantified Annual Benefits at each assumed
SCC value b c
Avg SCC at 5% ............................................
Avg SCC at 3% ............................................
Avg SCC at 2.5% .........................................
95th percentile SCC at 3% ...........................
2030
2040
2050
NPV, 3% a
NPV, 7% a
2,400
4,200
¥2,300
4,800
8,800
¥4,600
6,300
13,000
¥6,100
8,000
18,400
¥7,800
87,900
171,500
¥84,800
40,100
75,500
¥38,600
7,400
10,200
12,300
17,500
17,500
23,700
28,800
41,800
25,100
34,500
41,500
63,500
34,700
48,500
57,500
89,500
312,000
454,200
577,100
816,000
162,400
304,600
427,500
666,400
a Note that net present value of reduced GHG emissions is calculated differently than other benefits. The same discount rate used to discount
the value of damages from future emissions (SCC at 5, 3, 2.5 percent) is used to calculate net present value of SCC for internal consistency.
Refer to the SCC TSD for more detail.
b Monetized GHG benefits exclude the value of reductions in non-CO GHG emissions (HFC, CH and N O) expected under this final rule. Al2
4
2
though EPA has not monetized the benefits of reductions in these non-CO2 emissions, the value of these reductions should not be interpreted as
zero. Rather, the reductions in non-CO2 GHGs will contribute to this rule’s climate benefits, as explained in Section III.F.2. The SCC TSD notes
the difference between the social cost of non-CO2 emissions and CO2 emissions, and specifies a goal to develop methods to value non-CO2
emissions in future analyses.
c Section III.H.6 notes that SCC increases over time. Corresponding to the years in this table, the SCC estimates range as follows: for Average
SCC at 5%: $5–$16; for Average SCC at 3%: $21–$45; for Average SCC at 2.5%: $36–$65; and for 95th percentile SCC at 3%: $65–$136. Section III.H.6 also presents these SCC estimates.
d Note that ‘‘B’’ indicates unquantified criteria pollutant benefits in the year 2020. For the final rule, we only modeled the rule’s PM
2.5- and
ozone-related impacts in the calendar year 2030. For the purposes of estimating a stream of future-year criteria pollutant benefits, we assume
that the benefits out to 2050 are equal to, and no less than, those modeled in 2030 as reflected by the stream of estimated future emission reductions. The NPV of criteria pollutant-related benefits should therefore be considered a conservative estimate of the potential benefits associated with the final rule.
e The benefits presented in this table include an estimate of PM-related premature mortality derived from Laden et al., 2006, and the ozone-related premature mortality estimate derived from Bell et al., 2004. If the benefit estimates were based on the ACS study of PM-related premature
mortality (Pope et al., 2002) and the Levy et al., 2005 study of ozone-related premature mortality, the values would be as much as 70% smaller.
f The calendar year benefits presented in this table assume either a 3% discount rate in the valuation of PM-related premature mortality
($1,300 million) or a 7% discount rate ($1,200 million) to account for a twenty-year segmented cessation lag. Note that the benefits estimated
using a 3% discount rate were used to calculate the NPV using a 3% discount rate and the benefits estimated using a 7% discount rate were
used to calculate the NPV using a 7% discount rate. For benefits totals presented at each calendar year, we used the mid-point of the criteria
pollutant benefits range ($1,250).
g Note that the co-pollutant impacts presented here do not include the full complement of endpoints that, if quantified and monetized, would
change the total monetized estimate of impacts. The full complement of human health and welfare effects associated with PM and ozone remain
unquantified because of current limitations in methods or available data. We have not quantified a number of known or suspected health effects
linked with ozone and PM for which appropriate health impact functions are not available or which do not provide easily interpretable outcomes
(e.g., changes in heart rate variability). Additionally, we are unable to quantify a number of known welfare effects, including reduced acid and
particulate deposition damage to cultural monuments and other materials, and environmental benefits due to reductions of impacts of eutrophication in coastal areas.
h 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 CO2 emissions (and
consequently the annual net benefits)
for each of four SCC values considered
by EPA. As noted above, the benefit
estimates from CO2 reductions are ‘‘very
likely,’’ according to the IPCC Fourth
Assessment Report, 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 LIGHT-DUTY VEHICLE GHG PROGRAM a
[Millions of 2007 dollars]
2020
Quantified Annual Costs ......................................
2030
¥$20,100
¥$64,000
2040
¥$101,900
2050
¥$152,200
NPV, 3% b
NPV, 7% b
¥$1,199,700
¥$480,700
34,700
48,500
57,500
89,500
312,000
454,200
577,100
816,000
162,400
304,600
427,500
666,400
186,900
200,700
209,700
1,511,700
1,653,900
1,776,800
643,100
785,300
908,200
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Quantified Annual Benefits at each assumed SCC value c d
Avg SCC at 5% ....................................................
Avg SCC at 3% ....................................................
Avg SCC at 2.5% .................................................
95th percentile SCC at 3% ..................................
7,400
10,200
12,300
17,500
17,500
23,700
28,800
41,800
25,100
34,500
41,500
63,500
Quantified Net Benefits at each assumed SCC value c d
Avg SCC at 5% ....................................................
Avg SCC at 3% ....................................................
Avg SCC at 2.5% .................................................
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30,300
32,400
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87,700
92,800
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136,400
143,400
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TABLE III.H.10–3—QUANTIFIED NET BENEFITS ASSOCIATED WITH THE LIGHT-DUTY VEHICLE GHG PROGRAM a—
Continued
[Millions of 2007 dollars]
2020
95th percentile SCC at 3% ..................................
2030
37,600
105,800
2040
2050
165,400
241,700
NPV, 3% b
2,015,700
NPV, 7% b
1,147,100
a Fuel
impacts were calculated using pre-tax fuel prices.
that net present value of reduced GHG emissions is calculated differently than other benefits. The same discount rate used to discount
the value of damages from future emissions (SCC at 5, 3, 2.5 percent) is used to calculate net present value of SCC for internal consistency.
Refer to the SCC TSD for more detail.
c Monetized GHG benefits exclude the value of reductions in non-CO GHG emissions (HFC, CH and N O) expected under this final rule. Al2
4
2
though EPA has not monetized the benefits of reductions in these non-CO2 emissions, the value of these reductions should not be interpreted as
zero. Rather, the reductions in non-CO2 GHGs will contribute to this rule’s climate benefits, as explained in Section III.F.2. The SCC TSD notes
the difference between the social cost of non-CO2 emissions and CO2 emissions, and specifies a goal to develop methods to value non-CO2
emissions in future analyses.
d Section III.H.6 notes that SCC increases over time. Corresponding to the years in this table, the SCC estimates range as follows: For Average SCC at 5%: $5–$16; for Average SCC at 3%: $21–$45; for Average SCC at 2.5%: $36–$65; and for 95th percentile SCC at 3%: $65–$136.
Section III.H.6 also presents these SCC estimates.
b Note
shown in Tables III.H.10–4 and III.H.10–
5 at both a 3 percent and a 7 percent
discount rate, respectively. The net
benefits are shown in Tables III.H.10–6
and III.H.10–7 for both a 3 percent and
a 7 percent discount rate. Note that the
quantified annual benefits shown in
Table III.H.10–4 and Table III.H.10–5
include fuel savings as a positive
benefit. As such, the quantified annual
costs as shown in Table III.H.10–6 and
Table III.H.10–7 do not include fuel
savings since those are included as
benefits. Also note that each of the
EPA also conducted a separate
analysis of the total benefits over the
model year lifetimes of the 2012 through
2016 model year vehicles. In contrast to
the calendar year analysis presented in
Table III.H.10–1 through Table III.H.10–
3, the model year lifetime analysis
shows the lifetime impacts of the
program on each of these MY fleets over
the course of its lifetime. Full details of
the inputs to this analysis can be found
in RIA Chapter 5. The societal benefits
of the full life of each of the five model
years from 2012 through 2016 are
Tables III.H.10–4 through Table
III.H.10–7 include the benefits of
reduced CO2 emissions—and
consequently the total benefits—for
each of four SCC values considered by
EPA. As noted above, the benefit
estimates from CO2 reductions are ‘‘very
likely,’’ according to the IPCC Fourth
Assessment Report, underestimates
because, in part, models used to
calculate SCC values do not include
information about impacts that have not
been quantified.
TABLE III.H.10–4—ESTIMATED SOCIETAL BENEFITS ASSOCIATED WITH THE LIFETIMES OF 2012–2016 MODEL YEAR
VEHICLES
[Millions of 2007 dollars; 3% discount rate]
Monetized values (millions)
2012MY
Cost of Noise, Accident, Congestion ($) .............
Pretax Fuel Savings ($) .......................................
Energy Security (price shock) ($) a ......................
Value of Reduced Refueling time ($) ..................
Value of Additional Driving ($) .............................
Value of PM2.5-related Health Impacts ($) b c d ....
2013MY
¥$1,100
16,100
900
1,100
2,400
700
¥$1,600
23,900
1,400
1,600
3,400
900
2014MY
2015MY
¥$2,100
32,200
1,800
2,100
4,400
1,300
2016MY
Sum
¥$2,900
46,000
2,500
3,000
6,000
1,800
¥$3,900
63,500
3,500
4,000
7,900
2,400
¥$11,600
181,800
10,100
11,900
24,000
7,000
1,000
4,400
7,200
13,000
1,300
5,900
9,700
18,000
3,800
17,000
29,000
53,000
57,400
60,800
63,600
69,400
78,700
83,300
87,100
95,400
227,000
240,200
252,200
276,200
Reduced CO2 Emissions at each assumed SCC value e f g
Avg SCC at 5% ....................................................
Avg SCC at 3% ....................................................
Avg SCC at 2.5% .................................................
95th percentile SCC at 3% ..................................
400
1,700
2,700
5,100
500
2,400
3,900
7,300
700
3,100
5,200
9,600
Total Benefits at each assumed SCC value e f g
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Avg SCC at 5% ....................................................
Avg SCC at 3% ....................................................
Avg SCC at 2.5% .................................................
95th percentile SCC at 3% ..................................
20,500
21,800
22,800
25,200
30,100
32,000
33,500
36,900
40,400
42,800
44,900
49,300
a Note that, due to a calculation error in the proposal, the energy security impacts for the model year analysis were roughly half what they
should have been.
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 associated with the vehicle model year lifetimes for the final rule.
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.
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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 Note that net present value of reduced GHG emissions is calculated differently than other benefits. The same discount rate used to discount
the value of damages from future emissions (SCC at 5, 3, 2.5 percent) is used to calculate net present value of SCC for internal consistency.
Refer to the SCC TSD for more detail.
f Monetized GHG benefits exclude the value of reductions in non-CO GHG emissions (HFC, CH and N O) expected under this final rule. Al2
4
2
though EPA has not monetized the benefits of reductions in these non-CO2 emissions, the value of these reductions should not be interpreted as
zero. Rather, the reductions in non-CO2 GHGs will contribute to this rule’s climate benefits, as explained in Section III.F.2. The SCC TSD notes
the difference between the social cost of non-CO2 emissions and CO2 emissions, and specifies a goal to develop methods to value non-CO2
emissions in future analyses.
g Section III.H.6 notes that SCC increases over time. Corresponding to the years in this table, the SCC estimates range as follows: For Average SCC at 5%: $5–$16; for Average SCC at 3%: $21–$45; for Average SCC at 2.5%: $36–$65; and for 95th percentile SCC at 3%: $65–$136.
Section III.H.6 also presents these SCC estimates.
TABLE III.H.10–5—ESTIMATED SOCIETAL BENEFITS ASSOCIATED WITH THE LIFETIMES OF 2012–2016 MODEL YEAR
VEHICLES
[Millions of 2007 dollars; 7% discount rate]
Monetized values (millions)
2012MY
2013MY
¥$900
12,500
800
900
1,900
500
Cost of Noise, Accident, Congestion ($) .............
Pretax Fuel Savings ($) .......................................
Energy Security (price shock) ($) a ......................
Value of Reduced Refueling time ($) ..................
Value of Additional Driving ($) .............................
Value of PM2.5-related Health Impacts ($) b c d ....
¥$1,200
18,600
1,100
1,300
2,700
800
2014MY
2015MY
¥$1,600
25,100
1,400
1,700
3,500
1,000
2016MY
Sum
¥$2,300
36,000
2,000
2,400
4,700
1,400
¥$3,100
49,600
2,700
3,200
6,200
1,900
¥$9,200
141,900
8,000
9,400
19,000
5,600
1,000
4,400
7,200
13,000
1,300
5,900
9,700
18,000
3,800
17,000
29,000
53,000
45,200
48,600
51,400
57,200
61,800
66,400
70,200
78,500
178,500
191,700
203,700
227,700
Reduced CO2 Emissions at each assumed SCC value e f g
Avg SCC at 5% ....................................................
Avg SCC at 3% ....................................................
Avg SCC at 2.5% .................................................
95th percentile SCC at 3% ..................................
400
1,700
2,700
5,100
500
2,400
3,900
7,300
700
3,100
5,200
9,600
Total Benefits at each assumed SCC value e f g
Avg SCC at 5% ....................................................
Avg SCC at 3% ....................................................
Avg SCC at 2.5% .................................................
95th percentile SCC at 3% ..................................
16,100
17,400
18,400
20,800
23,800
25,700
27,200
30,600
31,800
34,200
36,300
40,700
a Note that, due to a calculation error in the proposal, the energy security impacts for the model year analysis were roughly half what they
should have been.
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 associated with the vehicle model year lifetimes for the final rule.
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 Note that net present value of reduced GHG emissions is calculated differently than other benefits. The same discount rate used to discount
the value of damages from future emissions (SCC at 5, 3, 2.5 percent) is used to calculate net present value of SCC for internal consistency.
Refer to the SCC TSD for more detail.
f Monetized GHG benefits exclude the value of reductions in non-CO GHG emissions (HFC, CH and N O) expected under this final rule. Al2
4
2
though EPA has not monetized the benefits of reductions in these non-CO2 emissions, the value of these reductions should not be interpreted as
zero. Rather, the reductions in non-CO2 GHGs will contribute to this rule’s climate benefits, as explained in Section III.F.2. The SCC TSD notes
the difference between the social cost of non-CO2 emissions and CO2 emissions, and specifies a goal to develop methods to value non-CO2
emissions in future analyses.
g Section III.H.6 notes that SCC increases over time. Corresponding to the years in this table, the SCC estimates range as follows: For Average SCC at 5%: $5–$16; for Average SCC at 3%: $21–$45; for Average SCC at 2.5%: $36–$65; and for 95th percentile SCC at 3%: $65–$136.
Section III.H.6 also presents these SCC estimates.
TABLE III.H.10–6—QUANTIFIED NET BENEFITS ASSOCIATED WITH THE LIFETIMES OF 2012–2016 MODEL YEAR VEHICLES
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[Millions of 2007 dollars; 3% discount rate]
Monetized Values (millions)
2012MY
Quantified Annual Costs (excluding fuel savings) a ................................................................
2013MY
$4,900
$8,000
2014MY
2015MY
$10,300
2016MY
Sum
$12,700
$15,600
$51,500
57,400
60,800
78,700
83,300
227,000
240,200
Quantified Annual Benefits at each assumed SCC value b c d
Avg SCC at 5% ....................................................
Avg SCC at 3% ....................................................
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21,800
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32,000
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40,400
42,800
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25539
TABLE III.H.10–6—QUANTIFIED NET BENEFITS ASSOCIATED WITH THE LIFETIMES OF 2012–2016 MODEL YEAR
VEHICLES—Continued
[Millions of 2007 dollars; 3% discount rate]
Monetized Values (millions)
2012MY
Avg SCC at 2.5% .................................................
95th percentile SCC at 3% ..................................
2013MY
22,800
25,200
33,500
36,900
2014MY
2015MY
44,900
49,300
2016MY
Sum
63,600
69,400
87,100
95,400
252,200
276,200
44,700
48,100
50,900
56,700
63,100
67,700
71,500
79,800
175,500
188,700
200,700
224,700
Quantified Net Benefits at each assumed SCC value b c d
Avg SCC at 5% ....................................................
Avg SCC at 3% ....................................................
Avg SCC at 2.5% .................................................
95th percentile SCC at 3% ..................................
15,600
16,900
17,900
20,300
22,100
24,000
25,500
28,900
30,100
32,500
34,600
39,000
a 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.
b Note that net present value of reduced GHG emissions is calculated differently than other benefits. The same discount rate used to discount
the value of damages from future emissions (SCC at 5, 3, 2.5 percent) is used to calculate net present value of SCC for internal consistency.
Refer to the SCC TSD for more detail.
c Monetized GHG benefits exclude the value of reductions in non-CO GHG emissions (HFC, CH and N O) expected under this final rule. Al2
4
2
though EPA has not monetized the benefits of reductions in these non-CO2 emissions, the value of these reductions should not be interpreted as
zero. Rather, the reductions in non-CO2 GHGs will contribute to this rule’s climate benefits, as explained in Section III.F.2. The SCC TSD notes
the difference between the social cost of non-CO2 emissions and CO2 emissions, and specifies a goal to develop methods to value non-CO2
emissions in future analyses.
d Section III.H.6 notes that SCC increases over time. Corresponding to the years in this table, the SCC estimates range as follows: For Average SCC at 5%: $5–$16; for Average SCC at 3%: $21–$45; for Average SCC at 2.5%: $36–$65; and for 95th percentile SCC at 3%: $65–$136.
Section III.H.6 also presents these SCC estimates.
TABLE III.H.10–7—QUANTIFIED NET BENEFITS ASSOCIATED WITH THE LIFETIMES OF 2012–2016 MODEL YEAR VEHICLES
[Millions of 2007 dollars; 7% discount rate]
Monetized values (millions)
2012MY
Quantified Annual Costs (excluding fuel savings) a ................................................................
2013MY
$4,900
$8,000
2014MY
2015MY
$10,300
2016MY
Sum
$12,700
$15,600
$51,500
45,200
48,600
51,400
57,200
61,800
66,400
70,200
78,500
178,500
191,700
203,700
227,700
32,500
35,900
38,700
44,500
46,200
50,800
54,600
62,900
127,000
140,200
152,200
176,200
Quantified Annual Benefits at each assumed SCC value b c d
Avg SCC at 5% ....................................................
Avg SCC at 3% ....................................................
Avg SCC at 2.5% .................................................
95th percentile SCC at 3% ..................................
16,100
17,400
18,400
20,800
23,800
25,700
27,200
30,600
31,800
34,200
36,300
40,700
Quantified Net Benefits at each assumed SCC value b c d
Avg SCC at 5% ....................................................
Avg SCC at 3% ....................................................
Avg SCC at 2.5% .................................................
95th percentile SCC at 3% ..................................
11,200
12,500
13,500
15,900
15,800
17,700
19,200
22,600
21,500
23,900
26,000
30,400
a 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.
b Note that net present value of reduced GHG emissions is calculated differently than other benefits. The same discount rate used to discount
the value of damages from future emissions (SCC at 5, 3, 2.5 percent) is used to calculate net present value of SCC for internal consistency.
Refer to the SCC TSD for more detail.
c Monetized GHG benefits exclude the value of reductions in non-CO GHG emissions (HFC, CH and N O) expected under this final rule. Al2
4
2
though EPA has not monetized the benefits of reductions in these non-CO2 emissions, the value of these reductions should not be interpreted as
zero. Rather, the reductions in non-CO2 GHGs will contribute to this rule’s climate benefits, as explained in Section III.F.2. The SCC TSD notes
the difference between the social cost of non-CO2 emissions and CO2 emissions, and specifies a goal to develop methods to value non-CO2
emissions in future analyses.
d Section III.H.6 notes that SCC increases over time. Corresponding to the years in this table, the SCC estimates range as follows: For Average SCC at 5%: $5–$16; for Average SCC at 3%: $21–$45; for Average SCC at 2.5%: $36–$65; and for 95th percentile SCC at 3%: $65–$136.
Section III.H.6 also presents these SCC estimates.
mstockstill on DSKB9S0YB1PROD with RULES2
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
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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
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associated with this action. This
analysis is contained in the Final
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 final rule have been
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submitted for approval to the Office of
Management and Budget (OMB) under
the Paperwork Reduction Act, 44 U.S.C.
3501 et seq., and has been assigned
OMB control number 0783.57. The
information collection requirements are
not enforceable until OMB approves
them.
The Agency is finalizing requirements
for manufacturers to submit 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.I.2–1, the total
annual burden associated with this rule
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 new
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.I.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. In
addition, EPA is amending the table in
40 CFR part 9 of currently approved
OMB control numbers for various
regulations to list the regulatory
citations for the information
requirements contained in this final
rule.
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
economic impact on a substantial
number of small entities directly subject
to the rule. Small entities include small
businesses, small organizations, and
small governmental jurisdictions.
For purposes of assessing the impacts
of this rule on small entities, small
Annual costs
39,940
$5,001,000
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.I.3–1 provides an overview
of the primary SBA small business
categories included in the light-duty
vehicle sector:
TABLE III.I.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).
—Independent commercial importers ........................
1,000 employees ..............................................................
336111
$7 million annual sales ....................................................
$23 million annual sales ..................................................
100 employees .................................................................
50 employees ...................................................................
750 employees .................................................................
1,000 employees ..............................................................
$7 million annual sales.
811111,
441120
423110,
336312,
335312
454312,
—Alternative fuel vehicle converters ..........................
NAICS codes b
811112, 811198
424990
336322, 336399
485310, 811198
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Notes:
a Light-duty vehicle entities that qualify as small businesses would not be subject to this rule. We are exempting small vehicle entities, and we
intend to address these entities in a future rule.
b North American Industrial Classification System.
b. Summary of Potentially Affected
Small Entities
EPA has not conducted a Regulatory
Flexibility Analysis or a SBREFA SBAR
Panel for the rule because we are
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certifying that the rule would not have
a significant economic impact on a
substantial number of small entities
directly subject to the rule. As proposed,
EPA is exempting manufacturers
meeting SBA’s business size criteria for
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small business as provided in 13 CFR
121.201, due to the short lead time to
develop this rule, the extremely small
emissions contribution of these entities,
and the potential need to develop a
program that would be structured
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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 U.S.
and foreign 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. EPA
has identified a total of about 47 vehicle
businesses; about 13 entities (or 28
percent) fit the Small Business
Administration (SBA) criteria 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., and
therefore the exemption will have a
negligible impact on the GHG emissions
reductions from the standards.
To ensure that EPA is aware of which
companies would be exempt, EPA
proposed to require 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. EPA has reconsidered the need
for this additional submission under the
regulations and is deleting it as not
necessary. We already have information
on the limited number of small entities
that we expect would receive the
benefits of the exemption, and do not
need the proposed regulatory
requirement to be able to effectively
implement this exemption for those
parties who in fact meet its terms. 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. Based on this, EPA is
certifying that the rule would not have
a significant economic impact on a
substantial number of small entities.
c. Conclusions
I therefore certify that this rule will
not have a significant economic impact
on a substantial 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 (74 FR 55292, Oct. 27,
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2009), EPA used 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 that might
occur as EPA considers regulations of
GHGs. Concerns about the potential
impacts of statutorily imposed PSD
requirements on small entities were the
subject of deliberations in that
consultation and outreach. EPA has
compiled a summary of that
consultation and outreach, which is
available in the docket for the Tailoring
Rule (EPA–HQ–OAR–2009–0517).
4. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates
Reform Act of 1995 (UMRA), 2 U.S.C.
1531–1538, requires Federal agencies,
unless otherwise prohibited by law, 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, and
tribal governments, in the aggregate, or
to the private sector, of $100 million or
more in any one year.
This rule is not subject to the
requirements of section 203 of UMRA
because it contains no regulatory
requirements that might significantly or
uniquely affect small governments. This
rule 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 rule 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 action represents
the least costly, most cost-effective
approach to achieve the statutory
requirements of the rule. The costs and
benefits associated with the rule are
discussed above and in the Final
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
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levels of government, as specified in
Executive Order 13132. This rulemaking
applies to manufacturers of motor
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 solicited comment on the
proposed action from State and local
officials. Many State and local
governments submitted public
comments on the rule, the majority of
which were supportive of the EPA’s
greenhouse gas program. However, these
entities did not provide comments
indicating there would be a substantial
direct effect on State or local
governments resulting from this rule.
6. Executive Order 13175 (Consultation
and Coordination With Indian Tribal
Governments)
This action 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 will
be affected only to the extent they
purchase and use regulated vehicles.
Thus, Executive Order 13175 does not
apply to this action.
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 rule.502 A summary of the
analysis is presented below.
With respect to GHG emissions, the
effects of climate change observed to
502 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. Docket EPA–HQ–OAR–2009–0472–11292.
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date and projected to occur in the future
include the increased likelihood of more
frequent and intense heat waves.
Specifically, EPA’s analysis of the
scientific assessment literature has
determined that severe heat waves are
projected to intensify in magnitude,
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 finalized
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
extreme 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.
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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 finalized 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
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standards in its regulatory activities
unless to do so would be inconsistent
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.
The rulemaking involves technical
standards. Therefore, the Agency
conducted a search to identify
potentially applicable voluntary
consensus standards. For CO2, N2O, and
CH4 emissions, we identified no such
standards, and none were brought to our
attention in comments. Therefore, EPA
is collecting data over the same test
cycles that are used for the CAFE
program following standardized test
methods and sampling procedures. This
will minimize the amount of testing
done by manufacturers, since
manufacturers are already required to
run these tests. For A/C system leakage
improvement credits, EPA identified a
Society of Automotive Engineers (SAE)
methodology and EPA’s approach is
based closely on this SAE methodology.
For the A/C system efficiency
improvement credits, including the new
idle test, EPA generally uses
standardized test methods and sampling
procedures. However, EPA knows of no
consensus standard available for an A/
C idle test to measure system efficiency
improvements.
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 final 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
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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 standards will affect
climate change projections, and EPA has
estimated reductions in projected global
mean surface temperatures (Section
III.F.3). Within communities
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 one or a few resources.503
In addition, the U.S. Climate Change
Science Program 504 stated as one of its
conclusions: ‘‘The United States is
certainly capable of adapting to the
collective impacts of climate change.
However, there will still be certain
individuals and locations where the
adaptive capacity is less and these
individuals and their communities will
be disproportionally impacted by
climate change.’’ Therefore, these
specific sub-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 final rule.
11. Congressional Review Act
The Congressional Review Act, 5
U.S.C. 801 et seq., as added by the Small
Business Regulatory Enforcement
Fairness Act of 1996, generally provides
that before a rule may take effect, the
agency promulgating the rule must
submit a rule report, which includes a
copy of the rule, to each House of the
Congress and to the Comptroller General
of the United States. EPA will submit a
report containing this rule and other
required information to the U.S. Senate,
the U.S. House of Representatives, and
the Comptroller General of the United
States prior to publication of the rule in
the Federal Register. A Major rule
cannot take effect until 60 days after it
503 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. Docket EPA–HQ–OAR–2009–0472–11292.
504 CCSP (2008) 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.
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is published in the Federal Register.
This action is a ‘‘major rule’’ as defined
by 5 U.S.C. 804(2). This rule will be
effective July 6, 2010, sixty days after
date of publication in the Federal
Register.
J. Statutory Provisions and Legal
Authority
Statutory authority for the vehicle
controls finalized 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 Final Rule and Record of
Decision for Passenger Car and Light
Truck CAFE Standards for MYs 2012–
2016
A. Executive Overview of NHTSA Final
Rule
1. Introduction
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The National Highway Traffic Safety
Administration (NHTSA) is establishing
Corporate Average Fuel Economy
(CAFE) 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.505 NHTSA’s CAFE
505 Among the reports and studies noting this
point are the following:
John Podesta, Todd Stern and Kim Batten,
‘‘Capturing the Energy Opportunity; Creating a LowCarbon 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 March 1,
2010).
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 March 1, 2010).
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 March 1,
2010).
John DeCicco and Freda Fung, ‘‘Global Warming
on the Road; The Climate Impact of America’s
Automobiles,’’ Environmental Defense (2006) pp. ivvii; available at: https://www.edf.org/documents/
5301_Globalwarmingontheroad.pdf (last accessed
March 1, 2010).
‘‘Why is Fuel Economy Important?,’’ a Web page
maintained by the Department of Energy and
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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 27.6
mpg combined fuel economy level in
MY 2011. NHTSA’s final rule projects
total fuel savings of approximately 61
billion gallons over the lifetimes of the
vehicles sold in model years 2012–2016,
with corresponding net societal benefits
of over $180 billion using a 3 percent
discount rate.506
The significance accorded to
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.507 Using vehicle technology
to improve fuel economy, thereby
reducing tailpipe emissions of CO2, is
one of the three main measures of
reducing those tailpipe emissions of
CO2.508 The two other measures for
reducing the tailpipe emissions of CO2
are switching to vehicle fuels with
Environmental Protection Agency, available at
https://www.fueleconomy.gov/feg/why.shtml (last
accessed March 1, 2010); 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/mae/people/faculty/
socolow/ENVIRONMENTDec2004issue.pdf (last
accessed March 1, 2010).
506 This value is based on what NHTSA refers to
as ‘‘Reference Case’’ inputs, which are based on the
assumptions that NHTSA has employed for its main
analysis (as opposed to sensitivity analyses to
examine the effect of variations in the assumptions
on costs and benefits). The Reference Case inputs
include fuel prices based on the AEO 2010
Reference Case, a 3 percent discount rate, a 10
percent rebound effect, a value for the social cost
of carbon (SCC) of $21/metric ton CO2 (in 2010,
rising to $45/metric ton in 2050, at a 3 percent
discount rate), etc. For a full listing of the Reference
Case input assumptions, see Section IV.C.3 below.
507 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 March 1, 2010).
508 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 March 1, 2010).
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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 final rule by NHTSA with another
agency, the Environmental Protection
Agency. As discussed in Section I,
NHTSA’s final MYs 2012–2016 CAFE
standards are part of a joint National
Program. 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 final CAFE standards
are consistent with the President’s
National Fuel Efficiency Policy
announcement of May 19, 2009, which
called 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 final 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.
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.509 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
distress can, in some cases, have
macroeconomic consequences for the
509 Energy Information Administration, Petroleum
Basic Statistics, updated July 2009. Available at
https://www.eia.doe.gov/basics/quickoil.html (last
accessed March 1, 2010).
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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. Since petroleum
imports account for about 2 percent of
GDP, increase in oil imports can create
a discernable fiscal drag. As a
consequence, measures that reduce
petroleum consumption, such as fuel
economy standards, will directly benefit
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
final rules that have the effect of
addressing the urgent and closely
intertwined challenges of energy
independence and security and global
warming. These final 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
final 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 in the rulemaking
timeframe. The agencies’ final rules will
also provide regulatory certainty and
consistency for the automobile industry
by setting harmonized national
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standards. They were developed and are
designed in ways that recognize and
accommodate the relatively short
amount of lead time for the model years
covered by the rulemaking and the
serious current economic situation faced
by this industry.
These joint standards are 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 lightduty trucks sold in the United States,510
and with the Notice of Upcoming Joint
Rulemaking signed by DOT and EPA on
that date.511 This joint final rule 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 below.
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.512 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
510 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-FuelEfficiency-Policy/ (last accessed March 15, 2010).
511 74 FR 24007 (May 22, 2009).
512 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.
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process, it necessarily reduces tailpipe
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 measuring the amount of
CO2 emitted from the tailpipe, rather
than 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
fuel 513 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-pergallon 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
currently requires EPA to use the 1975
passenger car test procedures under
which vehicle air conditioners are not
turned on during fuel economy
testing.514 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 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 to market factors, have
resulted in saving billions of barrels of
oil and avoiding billions of metric tons
513 This is the method that EPA uses to determine
compliance with NHTSA’s CAFE standards.
514 See 49 U.S.C. 32904(c).
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Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
of CO2 emissions. In December 2007,
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,515 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.516 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.517 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 issued a
final rule finding that emissions of
GHGs from new motor vehicles and
motor vehicle engines cause or
contribute to air pollution that endanger
public health and welfare.518
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
515 127
S.Ct. 1438 (2007).
FR 52922 (Sept. 8, 2003).
517 549 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.
518 74 FR 66496 (Dec. 15, 2009).
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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 levels for
passenger cars and some light trucks of
323 g/mil in 2009, decreasing to 205 g/
mi in 2016, and 439 g/mi for light trucks
in 2009, decreasing 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.519
EPA withdrew the prior denial and
granted California’s request for a waiver
on June 30, 2009.520 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
519 74 FR 66495 (Dec. 15, 2009). The
endangerment finding was challenged by industry
in a filing submitted December 23, 2009; a hearing
date does not appear to have been set.
520 74 FR 32744 (July 8, 2009).
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Protection Agency issued on May 19,
2009, 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. 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 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. 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, 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 FR 24352. In midOctober, 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.521 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.
521 Record of OIRA’s action can be found at
https://www.reginfo.gov/public/do/
eoHistReviewSearch (last accessed March 1, 2010).
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.’’
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Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
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
Administrator 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.
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
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remarks on January 26, 2009 for new
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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.522
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 of air
conditioning systems, thereby reducing
522 Under
49 U.S.C. 32912(c), roughly, NHTSA
may raise the penalty amount if the agency decides
that doing so will increase energy conservation
substantially without having a substantial
deleterious impact on the economy, employment, or
competition among automobile manufacturers.
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both fuel consumption and tailpipe
emissions of CO2.523
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
apply nationally under the National
Program.
As requested in the President’s
memorandum, NHTSA 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 more
information on how the proposed CAFE
standards were developed with those
comments in mind, see the NPRM and
the supporting documents.
5. Summary of the Final MY 2012–2016
CAFE Standards
NHTSA is issuing 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.524
Under the final CAFE standards, each
light vehicle model produced for sale in
the United States has a fuel economy
target. The CAFE levels that must be
met by the fleet of each manufacturer
will 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:
BILLING CODE 6560–50–P
523 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.
524 See 49 CFR 523.2 for the exact definition of
‘‘footprint.’’
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ER07MY10.021</GPH>
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25548
Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
BILLING CODE 6560–50–C
Under these final 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,
jointly, are the source of the benefits
and costs of the National Program.
Based on the forecast developed for
this final rule of the MYs 2012–2016
vehicle fleet, NHTSA estimates that the
targets shown above will result in the
following estimated average required
CAFE levels:
TABLE IV.A.5–1—ESTIMATED AVERAGE REQUIRED FUEL ECONOMY (MPG) UNDER FINAL STANDARDS
2012
2013
2014
2015
2016
33.3
25.4
34.2
26.0
34.9
26.6
36.2
27.5
37.8
28.8
Combined Cars & Trucks .................................................................
29.7
30.5
31.3
32.6
34.1
For the reader’s reference, these miles
per gallon values would be equivalent to
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the following gallons per 100 miles
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values for passenger cars and light
trucks:
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Passenger Cars .......................................................................................
Light Trucks .............................................................................................
25549
Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
2012
2013
2014
2015
2016
Passenger Cars .......................................................................................
Light Trucks .............................................................................................
3.00
3.94
2.93
3.85
2.86
3.76
2.76
3.63
2.65
3.48
Combined Cars & Trucks .................................................................
3.36
3.28
3.19
3.07
2.93
NHTSA estimates that average
achieved fuel economy levels will
correspondingly increase through MY
2016, but that manufacturers will, on
average, undercomply 525 in some model
years and overcomply 526 in others,
reaching a combined average fuel
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
assumed.
economy of 33.7 mpg in MY 2016.527
Table IV.A.5–1 is the estimated required
fuel economy for the final CAFE
standards while Table IV.A.5–2
includes the effects of some
manufacturers’ payment of CAFE fines
and use of FFV credits. In addition,
TABLE IV.A.5–2—ESTIMATED AVERAGE ACHIEVED FUEL ECONOMY (MPG) UNDER FINAL STANDARDS
2012
2013
2014
2015
2016
Passenger Cars .......................................................................................
Light Trucks .............................................................................................
32.8
25.1
34.4
26.0
35.3
27.0
36.3
27.6
37.2
28.5
Combined Cars & Trucks .................................................................
29.3
30.6
31.7
32.6
33.7
For the reader’s reference, these miles
per gallon values would be equivalent to
the following gallons per 100 miles
values for passenger cars and light
trucks:
2012
2013
2014
2015
2016
Passenger Cars .......................................................................................
Light Trucks .............................................................................................
3.05
3.99
2.91
3.84
2.83
3.71
2.76
3.62
2.69
3.50
Combined Cars & Trucks .................................................................
3.42
3.27
3.15
3.06
2.97
NHTSA estimates that these fuel
economy increases will lead to fuel
savings totaling 61 billion gallons
during the lifetimes of vehicles sold in
MYs 2012–2016 (all following tables
assume Reference Case economic
inputs):
TABLE IV.A.5–3—FUEL SAVED (BILLION GALLONS) UNDER FINAL STANDARDS
2012
2013
2014
2015
2016
Total
Passenger Cars ...............................................................
Light Trucks .....................................................................
2.4
1.8
5.2
3.7
7.2
5.3
9.4
6.5
11.4
8.1
35.7
25.4
Combined ..................................................................
4.2
8.9
12.5
16.0
19.5
61.0
The agency also estimates that these
new CAFE standards will lead to
corresponding reductions of CO2
emissions totaling 655 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 FINAL STANDARDS
2012
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Passenger Cars ...............................................................
Light Trucks .....................................................................
525 In 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
payment, the estimated achieved CAFE levels
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2013
25
19
2014
54
40
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.
526 In NHTSA’s analysis, ‘‘overcompliance’’ occurs
through multi-year planning: manufacturers apply
some ‘‘extra’’ technology in early model years (e.g.,
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2015
77
57
2016
101
71
Total
123
88
380
275
MY 2014) in order to carry that technology forward
and thereby facilitate compliance in later model
years (e.g., MY 2016).
527 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.
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TABLE IV.A.5–4—AVOIDED CARBON DIOXIDE EMISSIONS (MMT) UNDER FINAL STANDARDS—Continued
2012
Combined ..................................................................
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., increased traffic congestion)
caused by drivers’ tendency to increase
2013
2014
44
94
2015
134
2016
172
Total
210
655
significant benefits to society. NHTSA
estimates that, in present value terms,
these benefits would total over $180
billion over the useful lives of vehicles
sold during MYs 2012–2016:
travel when the cost of driving declines
(as it does when fuel economy
increases). The agency has estimated the
total monetary value to society of these
benefits and disbenefits, and estimates
that the final standards will produce
TABLE IV.A.5–5—PRESENT VALUE OF BENEFITS ($BILLION) UNDER FINAL CAFE STANDARDS
2012
2013
2014
2015
2016
Total
Passenger Cars ...............................................................
Light Trucks .....................................................................
6.8
5.1
15.2
10.7
21.6
15.5
28.7
19.4
35.2
24.3
107.5
75.0
Combined ..................................................................
11.9
25.8
37.1
48
59.5
182.5
NHTSA attributes most of these
benefits—about $143 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) 2010.
The Final Regulatory Impact Analysis
(FRIA) accompanying today’s final rule
presents a detailed analysis of specific
benefits of the final rule.
Monetized value (discounted)
Amount
3% Discount rate
Fuel savings ...........................................
CO2 emissions reductions 528 .................
61.0 billion gallons .................................
655 mmt .................................................
NHTSA estimates that the necessary
increases in technology application will
involve considerable monetary outlays,
7% Discount rate
$143.0 billion .........................................
$14.5 billion ...........................................
totaling $52 billion in incremental
outlays (i.e., beyond those attributable
to the MY 2011 standards) by new
$112.0 billion.
$14.5 billion.
vehicle purchasers during MYs 2012–
2016:
TABLE IV.A.5–6—INCREMENTAL TECHNOLOGY OUTLAYS ($B) UNDER FINAL CAFE STANDARDS
2012
2013
2014
2015
2016
Total
Passenger Cars ...............................................................
Light Trucks .....................................................................
4.1
1.8
5.4
2.5
6.9
3.7
8.2
4.3
9.5
5.4
34.2
17.6
Combined ..................................................................
5.9
7.9
10.5
12.5
14.9
51.7
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 final standards would lead to
increases in average new vehicle prices,
ranging from $322 per vehicle in MY
2012 to $961 per vehicle in MY 2016:
TABLE IV.A.5–7—INCREMENTAL INCREASES IN AVERAGE NEW VEHICLE PRICES ($) UNDER FINAL CAFE STANDARDS
2012
2013
2014
2015
2016
505
322
573
416
690
621
799
752
907
961
Combined ..........................................................................................
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Passenger Cars .......................................................................................
Light Trucks .............................................................................................
434
513
665
782
926
528 We note that the net present value of reduced
CO2 emissions is calculated differently than other
benefits. The same discount rate used to discount
the value of damages from future emissions (SCC
at 5 percent, 3 percent, and 2.5 percent) is used to
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calculate the net present value of the SCC for
internal consistency. Additionally, we note that the
SCC increases over time. See Social Cost of Carbon
for Regulatory Impact Analysis Under Executive
Order 12866, Interagency Working Group on Social
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Cost of Carbon, United States Government,
February 2010 (available in Docket No. NHTSA–
2009–0059 for more information.
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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, again assuming Reference
Case inputs (except for the variation in
25551
discount rate). Numbers in parentheses
represent negative values.
TABLE IV.A.5–8—ITEMIZED COST AND BENEFIT ESTIMATES FOR THE COMBINED VEHICLE FLEET, 3% DISCOUNT RATE
MY 2012
Costs:
Technology Costs .............................
Benefits:
Savings in Lifetime Fuel Expenditures ..............................................
Consumer Surplus from Additional
Driving ...........................................
Value of Savings in Refueling Time
Reduction in Petroleum Market
Externalities ...................................
Reduction in Climate-Related Damages from Lower CO2 Emissions 529 .........................................
MY 2013
MY 2014
MY 2015
MY 2016
Total
5,903
7,890
10,512
12,539
14,904
51,748
9,265
20,178
29,083
37,700
46,823
143,048
696
706
1,504
1,383
2,150
1,939
2,754
2,464
3,387
2,950
10,491
9,443
545
1,154
1,630
2,080
2,543
7,952
921
2,025
2,940
3,840
4,804
14,528
0
125
146
776
598
0
149
166
946
731
0
494
612
2,974
2,288
Reduction in Health Damage Costs From Lower Emissions of Criteria Air Pollutants
CO ............................................................
VOC .........................................................
NOX ..........................................................
PM ............................................................
SOX ..........................................................
0
42
70
205
158
0
76
104
434
332
0
102
126
612
469
Dis-Benefits From Increased Driving
Congestion Costs .....................................
Noise Costs ..............................................
Crash Costs .............................................
(447)
(9)
(217)
(902)
(18)
(430)
(1,282)
(25)
(614)
(1,633)
(32)
(778)
(2,000)
(39)
(950)
(6,264)
(122)
(2,989)
Total Benefits ....................................
11,936
25,840
37,132
48,040
59,509
182,457
Net Benefits ...............................
6,033
17,950
26,619
35,501
44,606
130,709
TABLE IV.A.5–9—ITEMIZED COST AND BENEFIT ESTIMATES FOR THE COMBINED VEHICLE FLEET, 7% DISCOUNT RATE
MY 2012
Costs:
Technology Costs .............................
Benefits:
Savings in Lifetime Fuel Expenditures ..............................................
Consumer Surplus from Additional
Driving ...........................................
Value of Savings in Refueling Time
Reduction in Petroleum Market
Externalities ...................................
Reduction in Climate-Related Damages From Lower CO2 Emissions 530 .........................................
MY 2013
MY 2014
MY 2015
MY 2016
Total
5,903
7,890
10,512
12,539
14,904
51,748
7,197
15,781
22,757
29,542
36,727
112,004
542
567
1,179
1,114
1,686
1,562
2,163
1,986
2,663
2,379
8,233
7,608
432
917
1,296
1,654
2,023
6,322
921
2,025
2,940
3,840
4,804
14,530
0
99
114
611
475
0
119
131
748
581
0
390
476
2,329
1,819
(1,302)
(26)
(619)
(1,595)
(31)
(756)
(4,992)
(98)
(2,378)
Reduction in Health Damage Costs From Lower Emissions of Criteria Air Pollutants
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CO ............................................................
VOC .........................................................
NOx ..........................................................
PM ............................................................
SOx ...........................................................
0
32
53
154
125
0
60
80
336
265
0
80
98
480
373
Dis-Benefits From Increased Driving
Congestion Costs .....................................
Noise Costs ..............................................
Crash Costs .............................................
529 See
(355)
(7)
(173)
(719)
(14)
(342)
(1,021)
(20)
(488)
supra note 528.
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TABLE IV.A.5–9—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
Total Benefits ....................................
9,488
20,682
29,743
38,537
47,793
146,243
Net Benefits ...............................
3,586
12,792
19,231
25,998
32,890
94,497
Neither EPCA nor EISA requires that
NHTSA conduct a cost-benefitanalysis
in determining average fuel economy
standards, but too, neither precludes its
use.531 EPCA does require that NHTSA
consider economic practicability among
other factors, and NHTSA has
concluded, as discussed elsewhere
herein, that the standards it promulgates
today are economically practicable.
Further validating and supporting its
conclusion that the standards it
promulgates 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 final
standards would be more than three
times the magnitude of the
corresponding costs, such that the final
standards would produce net benefits of
over $130 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,’’ 532 a
530 See
supra note 529.
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 sdirect 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.’’)
532 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
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531 Center
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majority of the committee of the
National Academy of Sciences (NAS)
(‘‘2002 NAS Report’’) 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 attributebased 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.533 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 trade-offs that must be
made if CAFE standards were increased
by any significant amount.534
In response to these conclusions,
NHTSA considered various attributes
and ultimately issued footprint-based
CAFE standards for light trucks and
sought legislative authority to issue
attribute-based CAFE standards for
passenger cars before undertaking to
raise the car standards. Congress went a
step further in enacting EISA, not only
authorizing the issuance of attributebased standards, but also mandating
them.
ii. Climate Change and Other
Externalities Justify Increasing the CAFE
Standards
The NAS committee said that there
are two compelling concerns that justify
increasing the fuel economy standards,
both relating to externalities. The first
March 1, 2010). 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.
533 NHTSA formerly used this approach for CAFE
standards. EISA prohibits its use after MY 2010.
534 NAS, p. 9. As discussed at length in prior
CAFE rules, two members of the NAS Committee
dissented from the majority opinion that there
would be safety impacts to downweighting under
a flat-standard system.
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and most important concern, it argued,
is the accumulation in the atmosphere
of greenhouse gases, principally carbon
dioxide.535
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 of such increases 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.
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 it was then
structured. While raising CAFE
standards under the then-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.536
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.’’ 537 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
535 NAS,
pp. 2, 13, and 83.
pp. 4–5 (Finding 10).
537 NAS, p. 5 (Finding 12).
536 NAS,
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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.538
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b. 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.539 Reforming
the CAFE program enabled it to achieve
larger fuel savings, while enhancing
safety and preventing adverse economic
consequences.
As noted above, fuel economy
standards were restructured so that they
were 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 non-attribute-based
CAFE, attribute-based CAFE enhances
overall fuel savings while providing
vehicle manufacturers with the
flexibility they need to respond to
changing market conditions. Attributebased CAFE also provides a more
equitable regulatory framework by
creating a level playing field for
manufacturers, regardless of whether
they are full-line or limited-line
manufacturers. We were particularly
encouraged that attribute-based CAFE
will confer no compliance advantage if
vehicle makers choose to downsize
some of their fleet as a CAFE
compliance strategy, thereby reducing
p. 87.
539 71 FR 17566 (Apr. 6, 2006).
the adverse safety risks associated with
the non-attribute-based CAFE program.
c. 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,540 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. Although the Court found
that NHTSA had been arbitrary and
capricious in several respects, the Court
did not vacate the standards, but instead
said it would remand the rule to
NHTSA to promulgate new standards
consistent with its opinion ‘‘as
expeditiously as possible and for the
earliest model year practicable.’’ 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.
d. 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).
e. NHTSA Proposes CAFE Standards for
MYs 2011–2015 (April 2008)
The agency could not 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 could, 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
538 NAS,
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met its obligations under the proposed
‘‘optimized’’ standards for each model
year.
Passenger
cars mpg
MY
MY
MY
MY
MY
2011
2012
2013
2014
2015
...........
...........
...........
...........
...........
31.2
32.8
34.0
34.8
35.7
Light trucks
mpg
25.0
26.4
27.8
28.2
28.6
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 proposed
‘‘optimized’’ standards for each model
year, would have been as follows:
Combined
mpg
MY
MY
MY
MY
MY
2011
2012
2013
2014
2015
...................................
...................................
...................................
...................................
...................................
27.8
29.2
30.5
31.0
31.6
The annual average increase during
this five year period would have been
approximately 4.5 percent. Due to the
uneven distribution of new model
introductions during this period and to
the fact that significant technological
changes could be most readily made in
conjunction with those introductions,
the annual percentage increases were
greater in the early years in this period.
f. Ninth Circuit Revises Its Decision re
Final Rule for MY 2008–2011 Light
Trucks (August 2008)
In response to the Government
petition for rehearing, the Ninth Circuit
modified its decision by replacing its
direction to prepare an EIS with a
direction to prepare either a new EA or,
if necessary, an EIS.541
g. NHTSA Releases Final Environmental
Impact Statement (October 2008)
On October 17, 2008, EPA published
a notice announcing the availability of
NHTSA’s final environmental impact
statement (FEIS) for the MYs 2011–2015
rulemaking.542 Throughout the FEIS,
NHTSA relied extensively on findings
of the United Nations Intergovernmental
Panel on Climate Change (IPCC) and the
U.S. Climate Change Science Program
(USCCSP). In particular, the agency
relied heavily on the most recent,
thoroughly peer-reviewed, and credible
assessments of global climate change
and its impact on the United States: The
541 See CBD v. NHTSA, 538 F.3d 1172 (9th Cir.
2008).
542 73 FR 61859 (Oct. 18, 2008).
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IPCC Fourth Assessment Report
Working Group I4 and II5 Reports, and
reports by the USCCSP that include
Scientific Assessments of the Effects of
Global Climate Change on the United
States and Synthesis and Assessment
Products.
In the FEIS, NHTSA compared the
environmental impacts of its preferred
alternative and those of reasonable
alternatives. It considered direct,
indirect, and cumulative impacts and
describes these impacts to inform the
decision maker and the public of the
environmental impacts of the various
alternatives.
Among other potential impacts,
NHTSA analyzed the direct and indirect
impacts related to fuel and energy use,
emissions, including carbon dioxide
and its effects on temperature and
climate change, air quality, natural
resources, and the human environment.
Specifically, the FEIS used a climate
model to estimate and report on four
direct and indirect effects of climate
change, driven by alternative scenarios
of GHG emissions, including:
1. Changes in CO2 concentrations;
2. Changes in global mean surface
temperature;
3. Changes in regional temperature
and precipitation; and
4. Changes in sea level.
NHTSA also considered the
cumulative impacts of the proposed
standards for MY 2011–2015 passenger
cars and light trucks, together with
estimated impacts of NHTSA’s
implementation of the CAFE program
through MY 2010 and NHTSA’s future
CAFE rulemaking for MYs 2016–2020.
h. Department of Transportation
Decides Not To Issue MY 2011–2015
Final Rule (January 2009)
On January 7, 2009, the Department of
Transportation announced that the Bush
Administration would not issue the
final rule, notwithstanding the Office of
Information and Regulatory Affairs’
completion of review of the rule under
Executive Order 12866, Regulatory
Planning and Review, on November 14,
2008.543
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i. The President Requests NHTSA To
Issue Final Rule for MY 2011 Only
(January 2009)
As explained above, in his
memorandum of January 26, 2009, the
President requested the agency to issue
a final rule adopting CAFE standards for
MY 2011 only. Further, the President
requested NHTSA to establish standards
543 The
statement can be found at https://
www.dot.gov/affairs/dot0109.htm (last accessed
March 1, 2010).
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for MY 2012 and later after considering
the appropriate legal factors, the
comments filed in response to the May
2008 proposal, the relevant
technological and scientific
considerations, and, to the extent
feasible, a forthcoming report by the
National Academy of Sciences assessing
automotive technologies that can
practicably be used to improve fuel
economy.
j. NHTSA Issues Final Rule for MY 2011
(March 2009)
standards, for the reasons discussed
extensively in that final rule.
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
i. Standards
The final rule established footprintbased fuel economy standards for MY
2011 passenger cars and light trucks.
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 2011.544 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
544 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.
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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 545 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
ii. 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.546 Since its
enactment, EPCA has permitted
manufacturers to earn credits for
exceeding the standards and to apply
those credits to compliance obligations
545 Those numbers set out several paragraphs
above.
546 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.
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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.
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2. Energy Policy and Conservation Act,
as Amended by the Energy
Independence and Security Act
NHTSA establishes CAFE standards
for passenger cars and light trucks for
each model year under EPCA, as
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
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weighting based on the circumstances in
each CAFE standard rulemaking.547
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.’’ 548 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 their fleets
that employ a particular type of fuelsaving technology, and cost to
consumers. Consumer acceptability is
also an element of economic
practicability, one which is particularly
difficult to gauge during times of
547 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.’’)
548 67 FR 77015, 77021 (Dec. 16, 2002).
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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.
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.’’ 549 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.
(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,550
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 551 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
549 CEI–I,
793 F.2d 1322, 1352 (DC Cir. 1986).
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.
551 42 FR 63184, 63188 (Dec. 15, 1977). See also
42 FR 33534, 33537 (Jun. 30, 1977).
550 In
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fuel economy capability and thus
decrease the level of average fuel
economy that the agency can determine
to be feasible.
NHTSA also recognizes that in some
cases the effect of other motor vehicle
standards of the Government on fuel
economy may be neutral or positive. For
example, to the extent the GHG
standards set by EPA and California
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 lower-GHGproducing air conditioners. The agency
considered EPA’s standards and the
harmonization benefits of the National
Program in developing its own
standards.
(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.’’ 552 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.
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(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
552 42
FR 63184, 63188 (1977).
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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
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 553
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,554 NHTSA defined the
553 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.
554 Center for Auto Safety v. NHTSA, 793 F.2d
1322, 1325 n. 12 (DC Cir. 1986); Public Citizen v.
NHTSA, 848 F.2d 256, 262–3 n. 27 (DC Cir. 1988)
(noting that ‘‘NHTSA itself has interpreted the
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‘‘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.’’ 555 Pursuant to
that view, NHTSA declined in the past
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.556 In 1988,
NHTSA included climate change
concepts in its CAFE notices and
prepared its first environmental
assessment addressing that subject.557 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.558 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.559 Under the universal or
‘‘flat’’ CAFE standards that NHTSA was
previously authorized to establish,
manufacturers were encouraged to
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
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).
555 42 FR 63184, 63188 (Dec. 15, 1977) (emphasis
added).
556 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).
557 53 FR 33080, 33096 (Aug. 29, 1988).
558 53 FR 39275, 39302 (Oct. 6, 1988).
559 See, e.g., Center for Auto Safety v. NHTSA
(CAS), 793 F. 2d 1322 (DC 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 (DC Cir. 1990).
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buy, which resulted in a higher mass
differential between the smallest and
the largest vehicles, with a
correspondingly greater risk to safety.
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, and because all vehicles are
required to continue improving their
fuel economy.
In addition, the agency considers
consumer demand in establishing new
standards and in assessing whether
already established standards remained
feasible. In the 1980s, 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.
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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.560 As noted 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.
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
560 49
U.S.C. 32902(h).
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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 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 (DC 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.
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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
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 many 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.
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. NHTSA sought
comment in the NPRM 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, but decided against
finalizing either option for purposes of
this final rule, choosing to defer the
matter for now. 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
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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
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.561 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 provisions 562 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,
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.
C. Development and Feasibility of the
Final Standards
1. How was the baseline and reference
vehicle fleet developed?
a. Why do the agencies establish a
baseline and reference vehicle fleet?
As also discussed in Section II.B
above, 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
established a baseline vehicle fleet
representing those vehicles, based on
the best available transparent
information. Each agency then
developed a separate reference fleet,
accounting (via their respective
analytical models) for the effect that the
MY 2011 CAFE standards have on the
baseline fleet. This reference fleet is
then used for comparisons of
technologies’ incremental cost and
effectiveness, as well as for other
relevant comparisons in the rule.
Because NHTSA and EPA have
different established practices, the
agencies’ rulemaking documents (the
Federal Register notice, Joint Technical
Support Document, agency-specific
Regulatory Impact Analyses, and
NHTSA Environmental Impact
Analysis) have some differences in
terminology. In connection with its firstever GHG emissions rule under the
CAA, EPA has used the term ‘‘baseline
fleet’’ to refer to the MY 2008 fleet (i.e.,
from EPA certification and fuel
economy data for MY 2008) prior to
adjustment to reflect projected shifts in
market composition. NHTSA, as in
recent CAFE rulemakings, refers to the
resultant market forecast, as specified in
CAFE model input files (and
corresponding input files for EPA’s
OMEGA model), as the ‘‘baseline’’ fleet.
EPA refers to this fleet as the ‘‘reference
fleet.’’ NHTSA refers to the ‘‘no action’’
standards identified in the EIS (that is,
the MY 2011 standards carried forward
through MY 2016) as defining the
‘‘baseline’’ scenario, and refers to the
fleet to which technologies have been
added in response to these standards as
the ‘‘adjusted baseline’’ fleet.563 EPA
refers to this as the ‘‘final reference
fleet.’’ These differences in terminology
are summarized in the following table:
EPA terminology
MY 2008 Fleet with MY 2008 Production Volumes ................................
MY 2008 Fleet Adjusted to Reflect Projected Market Shifts ..................
MY 2008 Fleet Adjusted to Reflected Projected Market Shifts and Response to MY 2011 CAFE Standards.
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Fleet description
NHTSA terminology
Baseline .........................................
Reference Fleet .............................
[Final] Reference Fleet ..................
MY 2008 Fleet
Baseline [Market Forecast]
Adjusted Baseline
The agencies have retained this mixed
terminology in order to facilitate
comparison to past rulemakings. In
general, EPA’s RIA and the Joint TSD
apply EPA’s nomenclature, NHTSA’s
RIA and EIS apply NHTSA’s
nomenclature, and the joint Federal
Register notice uses EPA’s
nomenclature when focusing on GHG
emissions standards, and NHTSA’s
nomenclature when focusing on CAFE
standards.
b. What data did the agencies use to
construct the baseline, and how did
they do so?
561 EPCA does not provide authority for seeking
to enjoin violations of the CAFE standards.
562 49 U.S.C. 30120, Remedies for defects and
noncompliance.
563 Some manufacturers’ baseline fleets (as
reflected in the agencies’ market forecast) do not,
without applying additional technology and/or
CAFE credits, show compliance with the baseline
standards.
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As explained in the Technical
Support Document (TSD) prepared
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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 model year
for which final data is currently
available from manufacturers. These
data were used as the source for MY
2008 production volumes and some
vehicle engineering characteristics, such
as 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 the 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).564
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
564 Available at https://www.eia.doe.gov/oiaf/aeo/
index.html (last accessed March 15, 2010).
Specifically, while the total volume of both cars and
trucks was obtained from AEO 2010, the car-truck
split was obtained from AEO 2009. The agencies
have also used fuel price forecasts from AEO 2010.
Both agencies regard AEO a credible source not
only of such forecasts, but also of many underlying
forecasts, including forecasts of the size of the
future light vehicle market.
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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
2011–2015.565 This provided the yearby-year percentages of cars and trucks
sold by each manufacturer as well as the
percentages of each vehicle segment.
The changes between company market
share and industry market segments
were most significant from 2011–2014,
while for 2014–2015 the changes were
relatively small. Noting this, and lacking
a credible forecast of company and
segment shares after 2015, the agencies
assumed 2016 market share and market
segments to be the same as for 2015.
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 Joint Technical Support
Document accompanying today’s final
rule.
c. How is this different from NHTSA’s
historical approach and why is this
approach preferable?
As discussed above in Section II.B.4,
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-duty 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
advantages and disadvantages of using a
market forecast derived from public and
commercial sources rather than from
manufacturers’ product plans, and
565 EPA also considered other sources of similar
information, such as J.D. Powers, and concluded
that CSM was more appropriate for purposes of this
rulemaking analysis.
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conclude that the advantages outweigh
the disadvantages.
Although manufacturers did not
comment on the agency’s proposal to
rely on public and commercial
information rather than manufacturers’
confidential product plans when
developing a market forecast, those
organizations that did comment on this
issue supported this change. The
California Air Resources Board (CARB)
and Center for Biological Diversity
(CBD) both commended the resultant
increase in transparency. CARB further
indicated that the use of public and
commercial information should produce
a better forecast. On the other hand, as
discussed above in Section I, CBD and
the Northeast States for Coordinated Air
Use Management (NESCAUM) both
raised concerns regarding the resultant
omission of some new vehicle models,
and the inclusion of some vehicles to be
discontinued, while CARB suggested
that the impact of these inaccuracies
should be minor.
As discussed above in Section II.B.4,
while a baseline developed using
publicly and commercially available
sources has both advantages and
disadvantages relative to a baseline
developed using manufacturers’ product
plans, NHTSA has concluded for
today’s rule that the advantages
outweigh the disadvantages. Today’s
approach is much more transparent than
the agency’s past approach of relying on
product plans, and as discussed in
Section II.B.4, any inaccuracies related
to new or discontinued vehicle models
should have only a minor impact on the
agency’s analysis.
For subsequent rulemakings, NHTSA
remains hopeful that manufacturers will
agree to make public their plans for
model years that are very near, so that
this information could be incorporated
into analysis available for public review
and comment. In any event, because
NHTSA is releasing market inputs used
in the agency’s analysis of this final
rule, all interested parties can review
these inputs fully, as intended in
adopting the transparent approach.
More information on the advantages and
disadvantages of the current approach
and the agencies’ decision to follow it
is available in Section II.B.4.
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
MYs 2011–2016, while the baseline that
NHTSA used for the MY 2011 CAFE
rule was developed from confidential
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2011–2015 is 77 million, or about 15.4
million vehicles annually.566 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 41
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.
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.
566 Please see Section II.B above and Chapter 1 of
the Joint TSD for more discussion on the agencies’
use of AEO 2010 to determine the sales forecasts
for light vehicles during the model years covered
by the rulemaking, as well as the memo available
at Docket No. NHTSA–2009–059–0222.
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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.
This comparison provides a basis for
understanding general characteristics
and measures of the difference, in this
case, between using publicly (and
commercially) available sources and
using manufacturers’ confidential
product plans. The current baseline,
while developed using the same
methods as the baseline used for MYs
2012–2016 NPRM, reflects updates to
the underlying commercially-available
forecast of manufacturer and market
segment shares of the future light
vehicle market. These changes are
discussed above in Section II.B.
Estimated vehicle sales:
The sales forecasts, based on the
Energy Information Administration’s
(EIA’s) Annual Energy Outlook 2010
(AEO 2010), used in the current baseline
indicate that the total number of light
vehicles expected to be sold during MYs
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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,
given that the agency is relying on
different sources of material for these
assumptions as discussed in Section II.B
above and Chapter 1 of the Joint TSD.
25563
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.567
TABLE IV.C.1–1—SALES FORECASTS
[Production for U.S. sale in MY 2011, thousand units]
Current baseline
MY 2011 Final rule
Manufacturer
Nonpassenger
Passenger
Nonpassenger
Chrysler ............................................................................................................
Ford ..................................................................................................................
General Motors ................................................................................................
Honda ..............................................................................................................
Hyundai ............................................................................................................
Kia ....................................................................................................................
Nissan ..............................................................................................................
Toyota ..............................................................................................................
Other Asian ......................................................................................................
European .........................................................................................................
326
1,344
1,249
851
382
306
612
1,356
664
833
737
792
1,347
585
46
88
331
888
246
396
707
1,615
1,700
1,250
655
........................
789
1,405
441
724
1,216
1,144
1,844
470
221
........................
479
1,094
191
190
Total ..........................................................................................................
7,923
5,458
9,286
6,849
567 As explained below, although NHTSA
normalized each manufacturer’s overall market
share to produce a realistically-sized fleet, the
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product mix for each manufacturer that submitted
product plans was preserved. The agency has
reviewed manufacturers’ product plans in detail,
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and understands that manufacturers do not sell the
same mix of vehicles in every model year.
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Dual-fueled vehicles:
Manufacturers have also, during and
since MY 2008, indicated to the agency
that they intend to sell more dual-fueled
or flexible-fuel vehicles (FFVs) in MY
2011 than indicated in the current
baseline of adjusted MY 2008
compliance data. FFVs create a potential
market for alternatives to petroleumbased 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.568 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.’’ 569 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 7 percent
for the current baseline, versus 17
percent for the MY 2011 final rule.
NHTSA notes that in MY 2008 (the
model year providing the vehicle
models upon which today’s market
forecast is based), the three U.S.-based
OEMs produced most of the FFVs
offered for sale in the U.S., yet these
OEMs account are projected to account
for a smaller share of the future market
in the forecast the agency has used to
develop and analyze today’s rule than in
the forecast the agency used to develop
and analyze the MY 2011 standards.
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 lower in MY 2011 than
shown in the MY 2011 final rule and the
MYs 2012–2016 NPRM. Under the
current baseline, average fuel economy
for MY 2011 is 26.4 mpg, versus 26.5
mpg under the baseline in the MY 2011
final rule, and 26.7 mpg under the
baseline in the MYs 2012–2016 NPRM.
The 0.3 mpg change relative to the MYs
2012–2016 baseline is the result of
changes in manufacturer and market
segment shares of the MY 2011 market.
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
Volkswagen is essentially the same
under both, Toyota and Nissan show
increased combined CAFE levels under
the current baseline (by 1.9 and 0.7 mpg
respectively), while Chrysler, Ford, and
GM show decreased combined CAFE
levels under the current baseline (by
1.4, 1.1, and 0.8 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
Passenger
Nonpassenger
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BMW ................................................................................................................................
Chrysler ............................................................................................................................
Ford ..................................................................................................................................
Subaru .............................................................................................................................
General Motors ................................................................................................................
Honda ..............................................................................................................................
Hyundai ............................................................................................................................
Tata ..................................................................................................................................
Kia 570 ...............................................................................................................................
Mazda 571 .........................................................................................................................
Daimler .............................................................................................................................
Mitsubishi .........................................................................................................................
Nissan ..............................................................................................................................
Porsche ............................................................................................................................
Ferrari 572 .........................................................................................................................
Maserati 573 ......................................................................................................................
Suzuki ..............................................................................................................................
Toyota ..............................................................................................................................
Volkswagen ......................................................................................................................
27.2
27.8
28.0
29.2
28.2
33.5
32.5
24.6
31.7
30.6
26.4
29.4
31.7
26.2
23.0
21.8
21.0
26.1
21.2
25.0
24.3
19.6
23.7
26.0
21.0
23.6
21.7
20.0
30.9
35.1
29.1
Total/Average ...........................................................................................................
30.3
568 See
49 U.S.C. 32905 and 32906.
U.S.C. 32902(h).
570 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).
569 49
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571 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.
572 EPA did not include Ferrari in the current
baseline based on the conclusion that including
them would not impact the results, and therefore
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Passenger
Nonpassenger
27.0
28.2
29.3
28.6
30.3
32.3
31.7
24.7
23.0
23.1
22.5
28.6
21.4
25.2
26.0
23.9
20.6
26.7
21.4
20.0
23.3
23.7
20.2
25.2
29.3
31.3
27.2
16.2
18.2
28.7
33.2
28.5
22.2
30.4
22.6
24.0
22.7
20.1
Ferrari is not listed in the table for the current
baseline.
573 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.
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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 ..........
Nissan ...............
MY 2011
Final Rule
baseline
25.0
23.3
24.9
27.9
24.1
29.5
31.3
21.4
29.5
29.8
24.4
27.4
27.3
26.0
24.7
26.0
28.6
24.9
30.0
30.0
24.4
23.6
29.1
26.6
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
largest manufacturers represented in the
MY 2011
Current
product plan data used in that
Manufacturer
Final Rule
baseline
baseline
rulemaking, and for the overall industry.
The tables containing product plan data
Porsche .............
23.7
22.0
Ferrari ...............
16.2 do not identify manufacturers by name,
Maserati ............
18.2 and do not present them in the same
Suzuki ...............
29.7
27.8 sequence.
Toyota ...............
29.5
27.6
Tables IV.C.1–4a and 1–4b show that
Volkswagen ......
27.0
27.1
the current baseline reflects a slight
decrease in overall average passenger
Total/Average .........
26.4
26.5 vehicle size relative to the
manufacturers’ plans. This is a
Tables IV.C.1–4 through 1–6
reflection of the market segment shifts
summarize other differences between
underlying the sales forecasts of the
the current baseline and manufacturers’ current baseline.
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 ....................................................................................................................................................
Daimler .....................................................................................................................................................
Ford ..........................................................................................................................................................
General Motors ........................................................................................................................................
Honda ......................................................................................................................................................
Hyundai ....................................................................................................................................................
Kia ............................................................................................................................................................
Mazda ......................................................................................................................................................
Mitsubishi .................................................................................................................................................
Nissan ......................................................................................................................................................
Porsche ....................................................................................................................................................
Subaru .....................................................................................................................................................
Suzuki ......................................................................................................................................................
Tata ..........................................................................................................................................................
Toyota ......................................................................................................................................................
Volkswagen ..............................................................................................................................................
45.4
46.8
47.1
46.3
46.4
44.3
44.4
45.2
44.4
43.8
45.3
38.6
43.1
40.8
50.3
44.0
43.5
49.9
52.8
53.3
56.1
58.2
49.1
48.7
51.0
47.3
46.5
53.9
51.0
46.2
47.2
47.8
53.0
52.6
47.5
50.9
49.0
49.9
52.5
46.3
44.8
46.5
44.9
44.6
48.3
42.8
44.3
41.6
48.8
47.6
45.1
Industry Average ..............................................................................................................................
45.2
53.5
48.6
TABLE IV.C.1–4b—MY 2011 FINAL RULE AVERAGE PLANNED MY 2011 VEHICLE FOOTPRINT
[Square feet]
PC
1
2
3
4
5
6
7
Avg.
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
46.7
46.0
44.9
45.4
45.2
48.5
45.1
58.5
50.4
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 ..............................................................................................................................
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Manufacturer
Manufacturer
Manufacturer
Manufacturer
Manufacturer
Manufacturer
Manufacturer
LT
45.6
55.1
49.7
Tables IV.C.1–5a and 1–5b show that
the current baseline reflects a decrease
in overall average vehicle weight
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relative to the manufacturers’ plans. As
above, this is most likely a reflection of
the market segment shifts underlying
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baseline.
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TABLE IV.C.1–5a—CURRENT BASELINE AVERAGE MY 2011 VEHICLE CURB WEIGHT
[Pounds]
Manufacturer
PC
LT
Avg.
BMW ........................................................................................................................................................
Chrysler ....................................................................................................................................................
Daimler .....................................................................................................................................................
Ford ..........................................................................................................................................................
General Motors ........................................................................................................................................
Honda ......................................................................................................................................................
Hyundai ....................................................................................................................................................
Kia ............................................................................................................................................................
Mazda ......................................................................................................................................................
Mitsubishi .................................................................................................................................................
Nissan ......................................................................................................................................................
Porsche ....................................................................................................................................................
Subaru .....................................................................................................................................................
Suzuki ......................................................................................................................................................
Tata ..........................................................................................................................................................
Toyota ......................................................................................................................................................
Volkswagen ..............................................................................................................................................
3,535
3,572
3,583
3,526
3,528
3,040
3,014
3,035
3,258
3,298
3,251
3,159
3,176
2,842
3,906
3,109
3,445
4,648
4,469
5,127
4,472
4,978
4,054
4,078
4,007
3,803
3,860
4,499
4,906
3,470
3,843
5,171
4,321
5,672
4,055
4,194
4,063
3,877
4,281
3,453
3,129
3,252
3,348
3,468
3,689
3,760
3,391
2,965
4,627
3,589
3,839
Industry Average ..............................................................................................................................
3,313
4,499
3,797
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]
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Manufacturer
PC
LT
Avg.
BMW ........................................................................................................................................................
Chrysler ....................................................................................................................................................
Daimler .....................................................................................................................................................
Ford ..........................................................................................................................................................
General Motors ........................................................................................................................................
Honda ......................................................................................................................................................
Hyundai ....................................................................................................................................................
Kia ............................................................................................................................................................
Mazda ......................................................................................................................................................
Mitsubishi .................................................................................................................................................
Nissan ......................................................................................................................................................
Porsche ....................................................................................................................................................
Subaru .....................................................................................................................................................
Suzuki ......................................................................................................................................................
Tata ..........................................................................................................................................................
Toyota ......................................................................................................................................................
Volkswagen ..............................................................................................................................................
0.072
0.055
0.068
0.058
0.057
0.056
0.052
0.050
0.052
0.053
0.059
0.105
0.060
0.049
0.077
0.053
0.057
0.061
0.052
0.056
0.054
0.056
0.054
0.055
0.056
0.055
0.056
0.057
0.073
0.056
0.062
0.057
0.062
0.052
0.067
0.053
0.064
0.056
0.056
0.056
0.052
0.051
0.052
0.054
0.058
0.094
0.058
0.051
0.065
0.056
0.056
Industry Average ..............................................................................................................................
0.057
0.056
0.056
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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
PC
(percent)
Manufacturer
LT
(percent)
Avg.
(percent)
32
0
0
12
17
29
26
38
0
0
5
0
0
4
28
5
16
37
13
0
8
3
26
0
83
0
59
25
100
42
21
100
15
0
34
9
0
11
9
28
23
48
0
18
12
34
16
6
69
9
13
Industry Average ..............................................................................................................................
mstockstill on DSKB9S0YB1PROD with RULES2
BMW ........................................................................................................................................................
Chrysler ....................................................................................................................................................
Daimler .....................................................................................................................................................
Ford ..........................................................................................................................................................
General Motors ........................................................................................................................................
Honda ......................................................................................................................................................
Hyundai ....................................................................................................................................................
Kia ............................................................................................................................................................
Mazda ......................................................................................................................................................
Mitsubishi .................................................................................................................................................
Nissan ......................................................................................................................................................
Porsche ....................................................................................................................................................
Subaru .....................................................................................................................................................
Suzuki ......................................................................................................................................................
Tata ..........................................................................................................................................................
Toyota ......................................................................................................................................................
Volkswagen ..............................................................................................................................................
13
15
14
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Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
TABLE IV.C.1–8—MY 2011 FINAL RULE, SHARE OF FLEET REDESIGNED IN MY 2011
PC
(percent)
Manufacturer
Manufacturer
Manufacturer
Manufacturer
Manufacturer
Manufacturer
Manufacturer
1
2
3
4
5
6
7
LT
(percent)
Avg.
(percent)
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
.........................................................................................................................................
19
34
5
7
19
34
27
0
27
0
0
0
28
28
11
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
IV.C.1–8 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 IV.C.1–8 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.
mstockstill on DSKB9S0YB1PROD with RULES2
e. How does manufacturer product plan
data factor into the baseline used in this
rule?
purposes of this final rule, a transparent
baseline is preferable.
For the NPRM, NHTSA conducted a
separate analysis that did make use of
these product plans. NHTSA performed
this separate analysis for purposes of
comparison only. For today’s final rule
NHTSA used the publicly available
baseline for all analysis related to the
development and evaluation of the new
CAFE standards. As discussed above in
Section II.B.4, while a baseline
developed using publicly and
commercially available sources has both
advantages and disadvantages relative to
a baseline developed using
manufacturers’ product plans, NHTSA
has concluded for today’s rule that the
advantages outweigh the disadvantages.
NHTSA plans to consider these
advantages and disadvantages further in
connection with future rulemakings,
taking into account changes in the
market, changes in the scope and
quality of publicly and commercially
available data, and any changes in
manufacturers’ willingness to make
some product planning information
publicly available.
2. How were the technology inputs
developed?
As discussed in Section II.B.5 above,
while the agencies received updated
product plans in Spring and Fall 2009
in response to NHTSA’s requests, the
baseline data used in this final rule is
not informed by these product plans,
except with respect to specific
engineering characteristics (e.g., GVWR)
of some MY 2008 vehicle models,
because these product plans contain
confidential business information that
the agencies are legally required to
protect from disclosure, and because the
agencies have concluded that, for
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, as well as the
comments received to the NPRM for this
rule. In addition, the agencies
supplemented their review with
574 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
in Docket No. NHTSA–2009–0059–0156 and on
NHTSA’s Web site.
575 A date of 2011 means the technology can be
applied in all model years, while a date of 2014
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updated information from the FEV teardown studies contracted by EPA, 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 final rule above in
Section II.E, in Chapter 3 of the Joint
TSD, and in Section V of NHTSA’s
FRIA.
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,574 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.575
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 FRIA.
means the technology can only be applied in model
years 2014 through 2016.
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25569
TABLE IV.C.2–1—LIST OF TECHNOLOGIES IN NHTSA’S ANALYSIS
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 ...................................................................................
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 DSKB9S0YB1PROD with RULES2
Technology
LUB ...........................................................
EFR ...........................................................
CCPS ........................................................
DVVLS ......................................................
DEACS ......................................................
ICP ............................................................
DCP ..........................................................
DVVLD ......................................................
CVVL .........................................................
DEACD .....................................................
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 final rule 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. 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 final
standards. However, some refinements
were made as discussed in the
NPRM.576 Additionally, the following
refinements were made for purposes of
the final rule.
Specific to its modeling, NHTSA has
revised two technologies used in the
final rule analysis from those
considered in the NPRM. These
revisions were based on comments
received in response to the NPRM and
the identification of area to improve
accuracy. In the NPRM, a diesel engine
option (DSLT or DSLC) was not
available for small vehicles because it
576 74
FR at 49655–56 (Sept. 28, 2009).
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did not appear to be a cost-effective
option. However, based on comments
received in response to the NPRM, the
agency added a diesel engine option for
small vehicles. Additionally, in the
NPRM, the mass reduction/material
substitution technology, MS1, assumed
engine downsizing. However, for
purposes of the final rule, engine
downsizing is no longer assumed for
MS1, thus slightly lowering the
effectiveness estimate to better reflect
how manufacturers might implement
small amounts of mass reduction/
material substitution. Chapter 3 of the
Joint TSD and Section V of NHTSA’s
FRIA provide a more detailed
explanation of these revisions.
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
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Year available
2011
2011
2011
2011
2011
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
EPA’s 2008 Staff Technical Report,577
the agencies took a fresh look at
technology cost and effectiveness values
and incorporated additional FEV teardown study results for purposes of this
final rule. This joint work is reflected in
Chapter 3 of the Joint TSD and in
Section II of this preamble, as
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 FRIA. NHTSA
and EPA are confident that the thorough
review conducted for purposes of this
final rule led to the best available
conclusions regarding technology costs
and effectiveness estimates for the
current rulemaking and resulted in
excellent consistency between the
agencies’ respective analyses for
577 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.
Available at Docket No. NHTSA–2009–0059–0027.
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developing the CAFE and CO2
standards.
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 for purposes of the NRPM:
mild and strong hybrids, diesels, SGDI,
and Valve Train Lift Technologies. In
addition, based on FEV tear-down
studies, the costs for turbocharging/
downsizing, 6-, 7-, 8-speed automatic
transmissions, and dual clutch
transmissions were revised for this final
rule. These revisions are discussed at
length in the Joint TSD and in NHTSA’s
FRIA.
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 the
agencies apply technologies to vehicles
in their respective models, we report the
ranges for the effectiveness values used
in each model. For purposes of the final
rule analysis, NHTSA made only a
couple of changes to the effectiveness
estimates. Specifically, in reviewing the
NPRM effectiveness estimates for this
final rule NHTSA discovered that the
DCTAM effectiveness value for
Subcompact and Compact subclasses
was incorrect; the (lower) wet clutch
effectiveness estimate had been used
instead of the intended (higher) dry
clutch estimate for these vehicle
classes.578 Thus, NHTSA corrected
these effectiveness estimates.
Additionally, as discussed above, the
effectiveness estimate for MS1 was
revised (lowered) to better represent the
impact of reducing mass at a refresh. 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
FRIA.
As a general matter, NHTSA received
relatively few comments related to
technology cost and effectiveness
estimates as compared to the number
received on these issues in previous
CAFE rulemakings. The California Air
Resources Board (CARB) generally
agreed with cost estimates used in the
NPRM analysis. NHTSA also received
comments from the Aluminum
Association, General Motors,
Honeywell, International Council on
Clean Transportation (ICCT),
Manufacturers of Emission Controls
Association (MECA), Motor and
Equipment Manufacturers Association
(MEMA) and the New Jersey
Department of Environmental Protection
related to cost and effectiveness
estimates for specific technologies,
including but not limited to hybrids,
diesels, turbocharging and downsizing,
and mass reduction/material
substitution. A detailed description of
these comments and NHTSA’s
responses can be found in Section V of
NHTSA’s FRIA.
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 non-
performance passenger cars. NHTSA
sought comment on the extent to which
commenters believed that the agencies
have been successful in holding
constant these elements of vehicle
performance and utility in developing
the technology cost and effectiveness
estimates, but received relatively little
in response. NHTSA thus concludes
that commenters had no significant
issues with its approach for purposes of
this rulemaking, but the agency will
continue to analyze this issue going
forward.
Additionally, NHTSA notes that the
technology costs included in this final
rule take into account only those
associated with the initial build of the
vehicle. The agencies sought comment
on the 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, but received
no responses. The agency will continue
to examine this issue closely for
subsequent rulemakings, particularly as
manufacturers turn increasingly to even
more advanced technologies in the
future that may have more significant
lifetime costs.
The tables below provide examples of
the incremental cost and effectiveness
estimates employed by the agency in
developing this final rule, according to
the decision trees used in the Volpe
modeling analysis. Thus, the
effectiveness and cost estimates are not
absolute to a single reference vehicle,
but are incremental to the technology or
technologies that precede it.
TABLE IV.C.2–2—TECHNOLOGY EFFECTIVENESS ESTIMATES EMPLOYED IN THE VOLPE MODEL FOR CERTAIN
TECHNOLOGIES
Subcomp.
car
Compact
car
Midsize
car
Large car
Perform.
subcomp.
car
Perform.
compact
car
Perform.
midsize
car
Perform.
large car
Minivan
LT
Small LT
Midsize
LT
Large LT
mstockstill on DSKB9S0YB1PROD with RULES2
VEHICLE TECHNOLOGY INCREMENTAL FUEL CONSUMPTION REDUCTION (Ø%)
Low Friction Lubricants ..........
VVT—Dual Cam
Phasing (DCP)
Discrete Variable
Valve Lift
(DVVL) on
DOHC ............
Cylinder Deactivation on OHV
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
2.0–3.0
2.0–3.0
2.0–3.0
2.0–3.0
2.0–3.0
2.0–3.0
2.0–3.0
2.0–3.0
2.0–3.0
2.0–3.0
2.0–3.0
2.0–3.0
1.0–3.0
1.0–3.0
1.0–3.0
1.0–3.0
1.0–3.0
1.0–3.0
1.0–3.0
1.0–3.0
1.0–3.0
1.0–3.0
1.0–3.0
1.0–3.0
n.a.
n.a.
n.a.
3.9–5.5
n.a.
3.9–5.5
3.9–5.5
3.9–5.5
3.9–5.5
n.a.
3.9–5.5
3.9–5.5
578 ‘‘Dry clutch’’ DCTAMs and ‘‘wet clutch’’
DCTAMs have different characteristics and different
uses. A dry clutch DCTAM is more efficient and
less expensive than a wet clutch DCTAM, which
requires a wet-clutch-type hydraulic system to cool
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the clutches. However, without a cooling system, a
dry clutch DCTAM has a lower torque capacity. Dry
clutch DCTAMs are thus ideal for smaller vehicles
with lower torque ratings, like those in the
Subcompact and Compact classes, while wet clutch
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DCTAMs would be more appropriate for, e.g., larger
trucks. Thus, it is appropriate to distinguish
accordingly in DCTAM effectiveness between
subclasses.
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TABLE IV.C.2–2—TECHNOLOGY EFFECTIVENESS ESTIMATES EMPLOYED IN THE VOLPE MODEL FOR CERTAIN
TECHNOLOGIES—Continued
Large car
Perform.
subcomp.
car
Perform.
compact
car
Perform.
midsize
car
Perform.
large car
2.0–3.0
2.0–3.0
2.0–3.0
2.0–3.0
2.0–3.0
2.0–3.0
2.0–3.0
2.0–3.0
2.0–3.0
2.0–3.0
4.2–4.8
4.2–4.8
1.8–1.9
4.2–4.8
1.8–1.9
1.8–1.9
1.8–1.9
1.8–1.9
4.2–4.8
1.8–1.9
1.8–1.9
1.4–3.4
1.4–3.4
1.4–3.4
1.4–3.4
1.4–3.4
1.4–3.4
1.4–3.4
1.4–3.4
1.4–3.4
1.4–3.4
1.4–3.4
1.4–3.4
1.0–2.0
1.0–2.0
1.0–2.0
1.0–2.0
1.0–2.0
1.0–2.0
1.0–2.0
1.0–2.0
1.0–2.0
1.0–2.0
1.0–2.0
1.0–2.0
2.0–3.0
2.0–3.0
2.0–3.0
2.5–3.5
2.0–3.0
2.5–3.5
2.5–3.5
3.0–4.0
2.5–3.5
2.0–3.0
2.5–3.5
n.a.
8.6–8.9
8.6–8.9
8.6–8.9
8.7–8.9
8.6–8.9
8.7–8.9
8.7–8.9
8.7–8.9
8.7–8.9
8.6–8.9
8.7–8.9
14.1–16.3
6.3–12.4
6.3–12.4
6.3–12.4
6.3–12.4
6.3–12.4
6.3–12.4
6.3–12.4
6.3–12.4
6.3–12.4
6.3–12.4
6.3–12.4
n.a.
2.0–3.0
2.0–3.0
2.0–3.0
2.0–3.0
2.0–3.0
2.0–3.0
2.0–3.0
2.0–3.0
2.0–3.0
2.0–3.0
2.0–3.0
2.0–3.0
Subcomp.
car
Stoichiometric
Gasoline Direct Injection
(GDI) ..............
Turbocharging
and
Downsizing ....
6/7/8–Speed
Auto. Trans
with Improved
Internals .........
Electric Power
Steering .........
12V Micro-Hybrid .................
Crank mounted
Integrated
Starter Generator ................
Power Split Hybrid .................
Aero Drag Reduction ...........
Compact
car
2.0–3.0
2.0–3.0
4.2–4.8
Midsize
car
Minivan
LT
Small LT
Midsize
LT
Large LT
TABLE IV.C.2–3—TECHNOLOGY COST ESTIMATES EMPLOYED IN THE VOLPE MODEL FOR CERTAIN TECHNOLOGIES
Subcomp.
car
Compact
car
Midsize
car
Large car
Perform.
subcomp.
car
Perform.
compact
car
Perform.
midsize
car
Perform.
large car
Minivan
LT
Small LT
Midsize
LT
Large LT
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VEHICLE TECHNOLOGY ICM COSTS PER VEHICLE ($)
Nominal baseline
engine (for
cost purpose)
Low Friction Lubricants ..........
VVT—Dual Cam
Phasing (DCP)
Discrete Variable
Valve Lift
(DVVL) on
DOHC ............
Cylinder Deactivation on OHV
Stoichiometric
Gasoline Direct Injection
(GDI) ..............
Turbocharging
and
Downsizing ....
6/7/8-Speed
Auto. Trans
with Improved
Internals .........
Electric Power
Steering .........
12V Micro-Hybrid .................
Crank mounted
Integrated
Starter Generator ................
Power Split Hybrid .................
Aero Drag Reduction ...........
(*)
(*)
(*)
V6
(*)
V6
V6
V8
V6
(*)
V6
V8
3
3
3
3
3
3
3
3
3
3
3
3
38
38
38
82
38
82
82
82
82
38
82
82
142
142
142
206
142
206
206
294
206
142
206
294
n.a.
n.a.
n.a.
168
n.a.
168
168
192
168
n.a.
168
192
236
236
236
342
236
342
342
392
342
236
342
392
445
445
445
325
445
325
325
919
325
445
325
919
112
112
112
112
112–214
112–214
112–214
112–214
112–214
112
112–214
112–214
106
106
106
106
106
106
106
106
106
106
106
106
288
311
342
367
314
337
372
410
337
325
376
n.a.
2,791
3,107
3,319
3,547
2,839
3,149
3,335
3,571
3,149
3,141
3,611
5,124
1,600
2,133
2,742
3,261
3,661
4,018
5,287
6,723
4,018
2,337
3,462
n.a.
48
48
48
48
48
48
48
48
48
48
48
48
* Inline 4.
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c. How does NHTSA use these
assumptions in its modeling analysis?
NHTSA relies on several inputs and
data files to conduct the compliance
analysis using the Volpe model, as
discussed further below and in Section
V of the FRIA. For the purposes of
applying technologies, the Volpe model
primarily uses two data files, one that
contains data on the vehicles expected
to be manufactured in the model years
covered by the rulemaking and
identifies the appropriate stage within
the vehicle’s life-cycle for the
technology to be applied, and one that
contains data/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 final standards. The
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 standards, which
cover MYs 2012–2016, the light-duty
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—previous analyses
would count a vehicle as ‘‘new’’ in any
year when significant technology
differences are made, such as at a
redesign.579 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 lightduty vehicle fuel economy.580
579 The market file for the MY 2011 final rule,
which included data for MYs 2011–2015, had 5500
vehicles, about 5 times what we are using in this
analysis of the MY 2008 certification data.
580 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 the fleets that
manufacturers can be expected to produce in the
future. Furthermore, because required CAFE levels
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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 estimated 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
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 likely be applied
to vehicles equipped with manual
transmissions during the rulemaking
timeframe, due primarily to the cylinder
deactivation system not being able to
anticipate gear shifts. 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
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.
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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.
In response to the NPRM, NHTSA
received comments from GM that
included a description of technical
considerations, concerns, limitations
and risks that need to be considered
when implementing turbocharging and
downsizing technologies on full size
trucks. These include concerns related
to engine knock, drivability, control of
boost pressure, packaging complexity,
enhanced cooling for vehicles that are
designed for towing or hauling, and
noise, vibration and harshness. NHTSA
judges that the expressed technical
considerations, concerns, limitations
and risks are well recognized within the
industry and it is standard industry
practice to address each during the
design and development phases of
applying turbocharging and downsizing
technologies. Cost and effectiveness
estimates used in the final rule are
based on analysis that assumes each of
these factors is addressed prior to
production implementation of the
technologies. In comments related to
full size trucks, GM commented that
potential to address knock limit
concerns through various alternatives,
which include use of higher octane
premium fuel and/or the addition of a
supplemental ethanol injection system.
For this rulemaking, NHTSA has not
assumed that either of these approaches
is implemented to address knock limit
concerns, and these technologies are not
included in assessment of turbocharging
and downsizing feasibility, cost or
effectiveness.581 In addition, NHTSA
has received confidential business
information from a manufacturer that
supports that turbocharging and
downsizing is feasible on a full size
truck product during the rulemaking
period.
581 Note that for one of the teardown analysis cost
studies of turbocharging and downsizing conducted
by FEV, in which a 2.4L I4 DOHC naturally
aspirated engine was replaced by a 1.6L I4 DOHC
SGDI turbocharged engine, the particular 1.6L
turbocharged engine chosen for the study was a
premium octane fuel engine. For this rulemaking,
NHTSA intends that a turbocharged and downsized
engine achieve comparable performance to a
baseline engine without requiring premium octane
fuel. For the FEV study of the 1.6L turbocharged
engine, this could be achieved through the
specification of an engine with a displacement of
slightly greater than 1.6L. NHTSA judges that a
slightly larger engine would have small effect on
the overall cost analysis used in this rulemaking.
For all other teardown studies conducted by FEV,
both the naturally aspirated engine and the
replacement turbocharged and downsized engine
were specified to use regular octane fuel.
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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
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.582
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
582 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 a vehicle’s
braking characteristics or how it performs in crash
avoidance tests.
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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
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 FRIA
and in Chapter 3 of the TSD.
NHTSA received comments from the
Center for Biological Diversity (CBD)
and Ferrari regarding redesign cycles.
CBD stated that manufacturers do not
necessarily adhere to the agencies’
assumed five-year redesign cycle, and
may add significant technologies by
redesigning vehicles at more frequent
intervals, albeit at higher costs. CBD
argued that NHTSA should analyze the
costs and benefits of manufacturers
choosing to redesign vehicles more
frequently than a 5-year average.
Conversely, Ferrari agreed with the
agencies that major technology changes
are introduced at vehicle redesigns,
rather than at vehicle freshenings,
stating further that as compared to fullline manufacturers, small-volume
manufacturers in fact may have 7 to 8year redesign cycles. In response,
NHTSA recognizes that not all
manufacturers follow a precise five-year
redesign cycle for every vehicle they
produce,583 but continues to believe that
the five-year redesign cycle assumption
is a reasonable estimate of how often
manufacturers can make major
technological changes for purposes of its
583 In prior NHTSA rulemakings, the agency was
able to account for shorter redesign cycles on some
models (e.g., some sedans), and longer redesign
cycles on others (e.g., cargo vans), but has
standardized the redesign cycle in this analysis
using the transparent baseline.
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modeling analysis.584 NHTSA has
considered attempting to quantify the
increased cost impacts of setting
standards that rise in stringency so
rapidly that manufacturers are forced to
apply ‘‘usual redesign’’ technologies at
non-redesign intervals, but such an
analysis would be exceedingly complex
and is beyond the scope of this
rulemaking given the timeframe and the
current condition of the industry.
NHTSA emphatically disagrees that the
redesign cycle is a barrier to increasing
penetration of technologies as CBD
suggests, but we also believe that
standards so stringent that they would
require manufacturers to abandon
redesign cycles entirely would be
beyond the realm of economic
practicability and technological
feasibility, particularly in this
rulemaking timeframe given lead time
and capital constraints. Manufacturers
can and will accomplish much
improvement in fuel economy and GHG
reductions while applying technology
consistent with their redesign
schedules.
Once the model indicates 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
584 In the MY 2011 final rule, NHTSA noted that
the CAR report submitted by the Alliance, prepared
by the Center for Automotive Research and EDF,
stated that ‘‘For a given vehicle line, the time from
conception to first production may span two and
one-half to five years,’’ but that ‘‘The time from first
production (‘‘Job#1’’) to the last vehicle off the line
(‘‘Balance Out’’) may span from four to five years to
eight to ten years or more, depending on the
dynamics of the market segment,’’ The CAR report
then stated that ‘‘At the point of final production
of the current vehicle line, a new model with the
same badge and similar characteristics may be
ready to take its place, continuing the cycle, or the
old model may be dropped in favor of a different
product.’’ See NHTSA–2008–0089–0170.1,
Attachment 16, at 8 (393 of pdf). NHTSA explained
that this description, which states that a vehicle
model will be redesigned or dropped after 4–10
years, was consistent with other characterizations of
the redesign and freshening process, and supported
the 5-year redesign and 2–3 year refresh cycle
assumptions used in the MY 2011 final rule. See id.,
at 9 (394 of pdf). Given that the situation faced by
the auto industry today is not so wholly different
from that in March 2009, when the MY 2011 final
rule was published, and given that the commenters
did not present information to suggest that these
assumptions are unreasonable (but rather simply
that different manufacturers may redesign their
vehicles more or less frequently, as the range of
cycles above indicates), NHTSA believes that the
assumptions remain reasonable for purposes of this
final rule analysis. See also ‘‘Car Wars 2009–2012,
The U.S. automotive product pipeline,’’ John
Murphy, Research Analyst, Merrill Lynch research
paper, May 14, 2008 and ‘‘Car Wars 2010–2013, The
U.S. automotive product pipeline,’’ John Murphy,
Research Analyst, Bank of America/Merrill Lynch
research paper, July 15, 2009. Available at https://
www.autonews.com/assets/PDF/CA66116716.PDF
(last accessed March 15, 2010).
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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 car classes
and 6 truck classes),585 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 ‘‘like’’ 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 SUV/Pickup/
Van, Large SUV/Pickup/Van, and
Minivan.
For this final rule as for the NPRM,
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 fuelsaving 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 final rule for MYs 2012–2016. No
comments were received on the vehicle
subclasses employed in the agency’s
NPRM analysis, and NHTSA has
retained the subclasses and the
methodology for dividing vehicles
among them for the final rule analysis.
Vehicle subclasses are discussed in
more detail in Section V of the FRIA
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
Subcompact ........................................................
Subcompact Performance ...................................
Compact ..............................................................
Compact Performance ........................................
Midsize ................................................................
Midsize Performance ...........................................
Large ...................................................................
Large Performance ..............................................
Chevy Aveo, Hyundai Accent.
Mazda MX–5, BMW Z4.
Chevy Cobalt, Nissan Sentra and Altima.
Audi S4, Mazda RX–8.
Chevy Impala, 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
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Minivans ..............................................................
Small SUV/Pickup/Van ........................................
Midsize SUV/Pickup/Van .....................................
Large SUV/Pickup/Van ........................................
Dodge Caravan, Toyota Sienna.
Ford Escape & Ranger, Nissan Rogue.
Chevy Colorado, Jeep Wrangler, Toyota Tacoma.
Chevy Silverado, Ford E-Series, Toyota Sequoia.
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
585 The NAS classes included subcompact cars,
compact cars, midsize cars, large cars, small SUVs,
midsize SUVs, large SUVs, small pickups, large
pickups, and minivans.
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Report, and evaluates the application of
individual technologies and their
incremental costs and effectiveness.
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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
add 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
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
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accurate application of technologies to
vehicles. For purposes of the final rule,
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 and in the MY 2012–2016
NPRM.
In general, and as described in great
detail in the MY 2011 final rule and in
Section V of the current FRIA, 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
the Volpe model to apply technologies
in a cost-effective, logical order that also
considers ease of implementation. For
example, software or control logic
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25575
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 FRIA.
Expanded decision trees are available in
the docket for this final rule.
BILLING CODE 6560–50–P
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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 FRIA).
Each technology’s incremental estimate
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
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 this and the previous
CAFE 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 that have been offered for the
agencies’ consideration 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 final rule.586 To the extent that the
decision trees have changed for
purposes of the NPRM and this final
rule, 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 did not receive any
comments related to the use or ordering
of the decision trees, and the agency
586 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.
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continued to use the decision trees as
they were proposed in the NPRM.
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 (albeit in
varying degrees) in the model years
covered by this rule. 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.
CBD commented that because many of
the technologies considered in the
NPRM are currently available,
manufacturers should be able to attain
mpg levels equivalent to the MY 2016
standards in MY 2009. In response, as
discussed above, technology
‘‘availability’’ is not determined based
simply on whether the technology
exists, but depends also on whether the
technology has achieved a level of
technical viability that makes it
appropriate for widespread application.
This depends in turn on component
supplier constraints, capital investment
and engineering constraints, and
manufacturer product cycles, among
other things. Moreover, even if a
technology is available for application,
it may not be available for every vehicle.
Some technologies may have
considerable fuel economy benefits, but
cannot be applied to some vehicles due
to technological constraints—for
example, cylinder deactivation cannot
be applied to vehicles with current 4cylinder engines (because not enough
cylinders are present to deactivate some
and continue moving the vehicle) or on
vehicles with manual transmissions
within the rulemaking timeframe. The
agencies have provided for increases
over time to reach the mpg level of the
MY 2016 standards precisely because of
these types of constraints, because they
have a real effect on how quickly
manufacturers can apply technology to
vehicles in their fleets.
Has the technology reached the phasein cap for this model year?
Besides the refresh/redesign cycles
used in the Volpe model, which
constrain the rate of technology
application at the vehicle level so as to
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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.587 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 for purposes of
the agency’s modeling analysis over the
course of the last several CAFE
rulemakings, as discussed in greater
detail in the MY 2011 final rule,588 and
in Section V of the FRIA and Chapter 3
of the Joint TSD. The MY 2011 final rule
employed non-linear 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
settings for all years beyond 2011 in a
future rulemaking analysis.589
587 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.
588 74 FR 14268–14271 (Mar. 30, 2009).
589 See 74 FR at 14269 (Mar. 20, 2009).
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For purposes of this final rule 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.590 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 this final rule, 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 this
final rule 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 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
analysis underlying this final rule.
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
final rule 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.
NHTSA received comments from the
Alliance and ICCT relating to phase-in
caps. The Alliance commented that the
higher phase-in caps in the NPRM
analysis (as compared to the MY 2011
final rule) ‘‘ignore OEM engine
architecture differences/limitations,’’
590 See 74 FR at 14270 (Mar. 30, 2009) for further
discussion and examples.
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arguing that the agency must consider
manufacturing investment and lead time
implications when defining phase-in
caps. ICCT did not raise the issue of
phase-in caps directly, but commented
that the agencies had not provided
information in the proposal documents
explaining when each manufacturer can
implement the different technologies
and how long it will take the
technologies to spread across the fleet.
ICCT argued that this information was
crucial to considering how quickly the
stringency of the standards could be
increased, and at what cost.
In response to the Alliance comments,
the phase-in cap constraint is, in fact,
exactly intended to account for
manufacturing investment and lead time
implications, as discussed above: phasein caps are intended to reflect a
manufacturer’s overall resource capacity
available for implementing new
technologies (such as engineering and
development personnel and financial
resources), to help ensure that resource
capacity is accounted for in the
modeling process. Although the phasein caps for the analysis supporting these
standards are higher than the phase-in
caps employed in the MY 2011 final
rule, as stated in the NPRM, the
agencies considered the fact that
manufacturers, as part of the agreements
supporting the National Program,
appear to be anticipating higher
technology application rates during the
rulemaking timeframe—indicating that
the values selected for the phase-in caps
are more likely within the range of
practicability. Additionally, the
agencies did not receive any comments
from manufacturers indicating a direct
concern with the proposed application
rates, which they were able to review in
the detailed manufacturer level model
outputs. The agencies believe that as
manufacturers focus their resources (i.e.,
engineering, capital investment, etc.) on
fuel economy-improving technologies,
many of which have been in production
for many years, the application rates
being modeled are appropriate for the
timeframe being analyzed.
In response to ICCT’s comments, the
combination of phase-in caps, refresh/
redesign cycles, engineering constraints,
etc., are intended to simulate
manufacturers’ technology application
decisions, and ultimately define the
technology application/implementation
rates for each manufacturer. NHTSA has
used the best public data available to
define refresh and redesign schedules to
define technology implementation,
which allows us to apply technologies
at the specific times each manufacturer
is planning. There was full notice of not
just the phase-in caps themselves, but
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their specific application as well.
NHTSA notes that the PRIA and the
FRIA do contain manufacturer-specific
application/implementation rates for
prominent technologies, and that
manufacturer-specific technology
application as employed in the agency’s
analysis is available in full in the Volpe
model outputs available on NHTSA’s
Web site. The model outputs present the
resultant application of technologies at
the industry, manufacturer, and vehicle
levels.
Theoretically, significantly higher
phase-in caps, such as those used in the
current proposal and final rule as
compared to those used in the MY 2011
final rule, should 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 final
standards.591 NHTSA believes that this
is due to the interaction of the various
changes in methodology for this final
rule—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 the
modeling analysis for this final rule as
compared to prior rulemakings. Other
revisions that could impact modeled
application rates include the use of
transparent CAFE certification data in
baseline fleet formulation and the use of
other data for projecting it forward,592 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 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 the analysis underlying these final
591 The modeling output for the analysis
underlying these final standards is available on
NHTSA’s Web site.
592 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 projected net
application of technology.
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standards, achieving a suitable level of
stringency without requiring unrealistic
or unachievable penetration rates.
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 rule, 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 industrywide 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
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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 the proposed standards,
NHTSA and EPA reviewed both types of
learning factors, and the thresholds
(300,000) and reduction rates (20
percent for volume, 3 percent for timebased) 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 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
was applied to the higher complexity
hybrid technologies, while no learning
was 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.
ICCT and Ferrari commented on
learning curves. ICCT stated the
agencies could improve the accuracy of
the learning curve assumptions if they
used a more dynamic or continuous
learning curve that is more technologyspecific, rather than using step
decreases as the current time- and
volume-based learning curves appear to
do. ICCT also commented on the
appropriate application of volumeversus time-based learning, and stated
further that worldwide production
volumes should be taken into account
when developing learning curves.
Ferrari commented that is more difficult
for small-volume manufacturers to
negotiate cost decreases from things like
cost learning effects with their
suppliers, implying that learning effects
may not be applicable equally for all
manufacturers.
NHTSA agrees that a continuous
curve, if implemented correctly, could
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potentially improve the accuracy of
modeling cost-learning effects, although
the agency cannot estimate at this time
how significant the improvement would
be. To implement a continuous curve,
however, NHTSA would need to
develop a learning curve cost model to
be integrated into the agency’s existing
model for CAFE analysis. Due to time
constraints the agencies were not able to
investigate fully the use of a continuous
cost-learning effects curve for each
technology, but we will investigate the
applicability of this approach for future
rulemakings. For purposes of the final
rule analysis, however, NHTSA believes
that while more detailed cost learning
approaches may eventually be possible,
the approach taken for this final rule is
valid.
Additionally, while the agencies agree
that worldwide production volumes can
impact learning curves, the agencies do
not forecast worldwide vehicle
production volumes in addition to the
already complex task of forecasting the
U.S. market. That said, the agencies do
consider current and projected
worldwide technology proliferation
when determining the maturity of a
particular technology used to determine
the appropriateness of applying time- or
volume-based learning, which helps to
account for the effect of globalized
production.
With regard to ICCT’s comments on
the appropriate application of volumeversus time-based learning, however, it
seems as though ICCT is referencing a
study that defines volume- and timebased learning in a different manner
than the current definitions used by the
agencies, and so is not directly relevant.
The agencies use ‘‘volume-based’’
learning for non-mature technologies
that have the potential for significant
cost reductions through learning, while
‘‘time-based’’ learning is used for mature
technologies that have already had
significant cost reductions and only
have the potential for smaller cost
reductions. For ‘‘time-based’’ learning,
the agencies chose to emulate the small
year-over-year cost reductions
manufacturers realize through defined
cost reductions, approximately 3
percent per year, negotiated into
contracts with suppliers. A more
detailed description of how the agencies
define volume- and time-based learning
can be found in NHTSA’s PRIA.
And finally, in response to Ferrari’s
comment, NHTSA recognizes that cost
negotiations can be different for
different manufacturers, but believes
that on balance, cost learning at the
supplier level will generally impact
costs to all purchasers. Thus, if cost
reductions are realized for a particular
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technology, all entities that purchase the
technology will benefit from these cost
reductions.
Is the technology more or less effective
due to synergistic effects?
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When two or more technologies are
added to a particular vehicle model to
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.593 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
593 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 percent (i.e., 0.1)
and 20 percent (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
percent rather than the 30 percent obtained by
adding 10 percent to 20 percent. The ‘‘synergy
factors’’ discussed in this section further adjust
these multiplicatively combined effectiveness
values.
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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.594 The lumped parameter tool is
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 that 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 FRIA.
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).595 Inputs to
the Volpe model incorporate NEMSidentified pairs, as well as additional
594 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.
Available at Docket No. NHTSA–2009–0059–0027.
595 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 March 15,
2010).
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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
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 FRIA) 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 received only one comment
regarding synergies, from MEMA, who
commented that NHTSA’s Volpe model
adequately addressed synergistic effects.
Having received no information to the
contrary, NHTSA finalized the synergy
approach and values for the final rule.
d. Where can readers find more detailed
information about NHTSA’s technology
analysis?
Much more detailed information is
provided in Section V of the FRIA, and
a discussion of how NHTSA and EPA
jointly reviewed and updated
technology assumptions for purposes of
this final rule 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 final rule, Docket No.
NHTSA–2009–0059, and on NHTSA’s
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Web site. And finally, because much of
NHTSA’s technology analysis for
purposes of this final rule 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
growing experience with this type of
analysis.596
3. How did NHTSA develop its
economic assumptions?
NHTSA’s analysis of alternative CAFE
standards for the model years covered
by this rulemaking relies on a range of
forecast variables, economic
assumptions, and parameter values.
This section describes the sources of
these forecasts, the rationale underlying
each assumption, and the agency’s
choices of specific parameter values.
These 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 final rule, NHTSA
reconsidered previous comments it had
received and comments received to the
NPRM, as well as reviewed newly
available literature. As a consequence,
the agency elected to revise some of its
economic assumptions and parameter
estimates from previous rulemakings at
the NPRM stage, 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
FRIA, 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 comments the agency received and
its responses are discussed in detail
below, as well as in the TSD and FRIA.
For the reader’s reference, Table IV.C.3–
1 below summarizes the values used to
calculate the economic benefits from
each alternative.
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) ..............................................................................................................................
Average percentage of tank refilled per refueling ............................................................................................................................
Percent of drivers refueling in response to low fuel level ................................................................................................................
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%
$24.64
55%
100%
1.15%
Total Economic Costs ($/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
$3.66
$3.29
$0.00
$0.17
$0.00
$0
$1,300
$5,300
$5,100
$290,000
$240,000
$31,000
$21 597
Varies by year.
$0.054
$0.023
$0.001
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Total External Costs ...........................................................................................................................................................
External Costs from Additional Light Truck Use ($/vehicle-mile)
Congestion .................................................................................................................................................................................
Accidents ...................................................................................................................................................................................
Noise ..........................................................................................................................................................................................
$0.078
Total External Costs ...........................................................................................................................................................
Discount Rate Applied to Future Benefits
$0.075
3%, 7%
596 74
FR 14233–308 (Mar. 30, 2009).
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597 The $21 value is for CO emissions in 2010,
2
which rises to $45/ton in 2050, at an average
discount rate of 3 percent.
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$0.026
$0.001
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a. Costs of Fuel Economy-Improving
Technologies
NHTSA and EPA previously
developed detailed estimates of the
costs of applying fuel economyimproving technologies to vehicle
models for use in analyzing the impacts
of alternative standards considered in
the proposed rulemaking, including
varying cost estimates for applying
certain fuel economy technologies to
vehicles of different sizes and body
styles. These estimates were modified
for purposes of this analysis as a result
of extensive consultations among
engineers from NHTSA, EPA, and the
Volpe Center. Building on NHTSA’s
estimates developed for the MY 2011
CAFE final rule and EPA’s Advanced
Notice of Proposed Rulemaking, which
relied on EPA’s 2008 Staff Technical
Report, the two agencies took a fresh
look at technology cost and
effectiveness values and incorporated
FEV tear-down study results for
purposes of this joint final rule under
the National Program.
While NHTSA generally found that
much of the cost information used in
the 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
the component costs of several major
technologies including: turbocharging/
downsizing, mild and strong hybrids,
diesels, SGDI, and Valve Train Lift
Technologies for purposes of the NPRM.
In addition, based on FEV tear-down
studies, the costs for turbocharging/
downsizing, 6-, 7-, 8-speed automatic
transmissions, and dual clutch
transmissions were revised for this final
rule.
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 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
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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.598 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 and EPA received far fewer
specific comments on technology cost
estimates than in previous CAFE
rulemakings, which suggests that most,
although not all, stakeholders generally
agreed with the agencies’ assumptions.
Several commenters supported the
agencies’ use of tear-down studies for
developing some of the technology
costs, largely citing the agencies’ own
reasons in support of that methodology.
Some specific comments were received
with regard to hybrid and other
technology costs, to which the agencies
are responding directly in Chapter 3 of
the Joint TSD and in the agencies’
respective FRIAs. Generally speaking,
however, to the extent that commenters
disagreed with the agencies’ cost
estimates, often the disagreement
stemmed from assumptions about the
technology’s maturity, which the
agencies have tried to account for in the
analysis. These issues are discussed
further in Chapter 3 of the TSD.
Additionally, we note that technology
costs will also be addressed in the
upcoming revised NAS report.
With regard to the indirect cost
multiplier approach, commenters also
generally supported the higher level of
598 NHTSA notes that in addition to the
technology cost analysis employing this ‘‘ICM’’
approach, the FRIA contains a sensitivity analysis
using a technology cost multiplier of 1.5.
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specificity provided by the ICM
approach compared to the RPE
approach, although some commenters
suggested specific refinements to the
measurement of ICMs. For example,
while the automotive dealer
organization NADA argued that all
dealer costs of sales should be included
in ‘‘dealer profit,’’ another commenter
noted expressly that the ICM does not
include profits. Comments from ICCT
also argued in favor of revising the
‘‘technology complexity’’ component of
the ICM to account for the complexity
of integrating a new technology into a
vehicle, rather than for only the
complexity of producing the technology
itself. These comments and others on
the ICM are addressed in Chapter 3 of
the Joint TSD and in the agencies’
respective FRIAs. NHTSA notes that
profits were not included in the indirect
cost estimates of this rule, and also that
NHTSA’s sensitivity analysis, presented
in Chapter X of the FRIA, indicates that
using the 1.5 RPE multiplier would
result in higher costs compared to
today’s final rule costs incorporating the
ICM multiplier, although even with
those higher costs the 1.5 RPE analysis
still resulted in significant net benefits
for the rulemaking as a whole. NHTSA
continues to study this issue and may
employ a different approach in future
rulemakings.
b. Potential Opportunity Costs of
Improved Fuel Economy
An important concern is whether
achieving the fuel economy
improvements required by alternative
CAFE standards might result in
manufacturers compromising 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. (This
possibility is addressed in detail in
Section IV.G.6.) Although 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 varying combinations of these
characteristics clearly demonstrate that
changes in these attributes affect the
utility and economic value that vehicles
offer to potential buyers.599
599 See, e.g., 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–2009–0472–0015);
Berry, Steven, James Levinsohn, and Ariel Pakes,
1995. ‘‘Automobile Prices in Market Equilibrium,’’
Econometrica 63(4): 841–940 (Docket NHTSA–
2009–0059–0031); McCarthy, Patrick S., 1996.
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Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
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 cost
estimates for fuel economy-improving
technologies include adequate provision
for accompanying outlays that are
necessary to prevent any significant
degradation in other attributes that
vehicle owners value, 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 omitting these
will cause the agency’s estimated
technology costs to underestimate the
true economic costs of improving fuel
economy.
Recognizing this possibility, it would
be desirable 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 net change in buyer’s
welfare that results from the
‘‘Market Price and Income Elasticities of New
Vehicle Demands.’’ Review of Economics and
Statistics 78: 543–547 (Docket NHTSA–2009–0059–
0039); and 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–2009–0472–0017).
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combination of these changes would
provide a more accurate estimate of the
true economic costs for improving fuel
economy. Although the agency has been
unable to develop a procedure for doing
so as part of this rulemaking, Section
IV.G.6. below includes a detailed
analysis and discussion of how omitting
possible changes in vehicle attributes
other than their prices and fuel
economy might affect its estimates of
benefits and costs resulting from the
standards this rule establishes.
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.600
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
savings resulting from alternative CAFE
standards evaluated in the MY 2011
final rule.
For purposes of this final rule,
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 rated 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 vehicle fleet would have
achieved from 2000 through 2006 if cars
and light trucks of each model year
achieved the same fuel economy levels
600 71
PO 00000
in actual on-road driving as they did
under test conditions when new.
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.601 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.
NHTSA received no comments on this
issue in response to the NPRM.
Accordingly, it has not revised its
estimate of the on-road fuel economy
gap from the 20 percent figure used
previously.
d. Fuel Prices and the Value of Saving
Fuel
Projected future fuel prices are a
critical input into the 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 2010
Early Release (December 2009)
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.602 This forecast is
601 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 March 1, 2010).
602 Energy Information Administration, Annual
Energy Outlook 2010 Early Release, Reference Case
(December 2009), Table A12. Available at https://
www.eia.doe.gov/oiaf/aeo/pdf/appa.pdf, p. 25 (last
accessed March 1, 2010). These forecasts reflect 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 lead to a decline in its future price, there is
some concern about whether the AEO 2010 forecast
of fuel prices 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 agency
FR 77871 (Dec. 27, 2006).
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somewhat lower than the AEO 2009
Reference Case forecast the agency
relied upon in the analysis it conducted
for the NPRM. Over the period from
2010 to 2030, the AEO 2010 Early
Release Reference Case forecast of retail
gasoline prices used in this analysis
averages $3.18 per gallon (in 2007
dollars), in contrast to the $3.38 per
gallon average price for that same period
forecast in the earlier AEO 2009
Reference Case and used in the NPRM
analysis.
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. We also anticipated that
the Reference Case forecasts would be
significantly higher in subsequent
editions of AEO, and that in future
rulemaking analyses the agency would
be likely to rely on the Reference Case
rather than High Price Case forecasts. In
fact, both EIA’s AEO 2009 Reference
Case and its subsequent AEO 2010 Early
Release Reference Case forecasts project
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 2010 Early
Release Reference Case is an appropriate
forecast for projected future fuel prices.
NHTSA and EPA received relatively
few comments on the fuel prices used
in the NPRM analysis, compared to
previous CAFE rulemakings. Two
commenters, CARB and NADA,
supported the use of AEO’s Reference
Case for use in the agencies’ analysis,
although they disagreed on the agencies’
use of the High and Low Price Cases for
sensitivities. Both commenters
emphasized the sensitivity of the market
and the agencies’ analysis to higher and
lower gas prices, and on that basis,
CARB supported the use of the High and
Low Price Cases in sensitivity analysis
but urged the agencies to caveat the
‘‘Reference Case’’ results more explicitly.
In contrast, NADA argued that the
agencies should not use the High and
Low Price Cases, because EIA does not
notes 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 then recently-passed EISA legislation.
The fuel price forecasts reported in EIA’s Revised
Release of AEO 2008 differed by less than one cent
per gallon throughout the entire forecast period
(2008–2030) from those previously issued as part of
its initial release of AEO 2008. Thus, the agencies
are reasonably confident that the fuel price forecasts
presented in AEO 2010 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.
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assign specific probabilities to either of
them. Only one commenter, James
Adcock, argued that the agencies should
use forecasts of future fuel prices other
than those reported in AEO; Adcock
stated that future fuel prices should be
assumed to be higher than current pump
prices.
Measured in constant 2007 dollars,
the AEO 2010 Early Release Reference
Case forecast of retail gasoline prices
during calendar year 2010 is $2.44 per
gallon, and rises gradually to $3.83 by
the year 2035 (these values include
Federal, State and local taxes). However,
the agency’s analysis of the value of fuel
savings over the lifetimes of MY 2012–
2016 cars and light trucks requires
forecasts extending through calendar
year 2050, approximately the last year
during which a significant number of
MY 2016 vehicles will remain in
service. To obtain fuel price forecasts for
the years 2036 through 2050, the agency
assumes that retail fuel prices will
continue to increase after 2035 at the
average annual rates projected for 2025
through 2035 in the AEO 2010 Early
Release Reference Case.603 This
assumption results in a projected retail
price of gasoline that reaches $4.49 in
2007 dollars during 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. The agency has
updated the estimates of gasoline taxes
it employed in the NPRM using the
recent data on State fuel tax rates;
expressed in 2007 dollars, Federal
gasoline taxes are currently $0.178,
while State and local gasoline taxes
together average $0.231 per gallon, for a
total tax burden of $0.401 per gallon.
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,
NHTSA deducts their value from retail
fuel prices to determine the true value
of fuel savings resulting from more
stringent CAFE standards to the U.S.
economy.
NHTSA follows the assumptions used
by EIA in AEO 2010 Early Release that
State and local gasoline taxes will keep
pace with inflation in nominal terms,
and thus remain constant when
603 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.
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expressed in constant 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 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 rather than an ad
valorem 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 to determine
the economic value of each gallon of
fuel saved during that year as a result of
improved fuel economy. Subtracting
fuel taxes from the retail prices forecast
in AEO 2010 Early Release results in a
projected value for saving gasoline of
$2.04 per gallon during 2010, rising to
$3.48 per gallon by the year 2035,and
averaging $2.91 over this 25-year period.
Although the Early Release of AEO
2010 contains only the Reference Case
forecast, EIA includes ‘‘High Price Case’’
and ‘‘Low Price Case’’ forecasts in each
year’s complete AEO, which reflect
uncertainties regarding future levels of
oil production and demand. For this
final rule, NHTSA has continued to use
the most recent ‘‘High Price Case’’ and
‘‘Low Price Case’’ forecasts available,
which are those from AEO 2009. While
NHTSA recognizes that these forecasts
are not probabilistic, as NADA
commented, we continue to believe that
using them for sensitivity analyses
provides valuable information for
agency decision-makers, because it
illustrates the sensitivity of the rule’s
primary economic benefit resulting from
uncertainty about future growth in
world demand for petroleum energy and
the strategic behavior of oil suppliers.
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 (all figures
in 2007 dollars). In conjunction with
our assumption that fuel taxes will
remain constant in real or inflationadjusted 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 $1.66 to
$5.09 per gallon in 2030 (again, all
figures are in constant 2007 dollars). In
conducting the 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. Detailed
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results and discussion of this sensitivity
analysis can be found in the FRIA.
Generally, however, this analysis
confirmed that as several commenters
suggested, the primary economic benefit
resulting from the rule—the value of
fuel savings—is quite sensitive to
forecast fuel prices.
e. Consumer Valuation of Fuel Economy
and Payback Period
In estimating the impacts on vehicle
sales that would result from alternative
CAFE standards to potential vehicle
buyers, NHTSA assumes, as in the MY
2011 final rule, that potential vehicle
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
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.
One commenter, NADA, supported
the agency’s assumption of a five-year
period for buyers’ valuation of fuel
economy, on the basis that the
considerable majority of consumers seek
to recoup costs quickly. However,
NADA also encouraged the agencies to
ensure that purchaser finance costs,
opportunity costs of vehicle ownership,
and increased maintenance costs were
accounted for. Another commenter,
James Adcock, argued that the
assumption of a five-year period was
irrational, because it did not account for
the fact that first purchasers will be able
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to sell a higher-mpg vehicle for more
money than a lower-mpg vehicle.
In response to these comments, the
agency notes that it 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 the shorter 5-year
‘‘payback period’’ we assume that
manufacturers employ to represent the
preferences of vehicle buyers. The 5year payback period is only utilized to
identify the likely sequence of
improvements in fuel economy that
manufacturers are likely to make to their
different vehicle models. The procedure
the agency uses for calculating lifetime
fuel savings is discussed in detail in the
following section, while alternative
assumptions about the time horizon
over which potential buyers consider
fuel savings in their vehicle purchasing
decisions are analyzed and discussed in
detail in Section IV.G.6 below.
Valuing fuel savings over vehicles’
entire lifetimes in effect recognizes the
gains that future vehicle owners will
receive, even if initial purchasers of
higher-mpg models are not able to
recover the entire remaining value of
fuel savings when they re-sell those
vehicles. The agency acknowledges,
however, that it has not accounted for
any effects of increased financing costs
for purchasing vehicles with higher fuel
economy or increased expenses for
maintaining them on benefits to vehicle
owners, over either the short-run
payback period or the full lifetimes of
vehicles.
f. Vehicle Survival and Use
Assumptions
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.604
This is calculated by multiplying the
604 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 March 1, 2010).
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number of vehicles originally produced
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.’’
As discussed in more detail in Section
II.B.3 above and in Chapter 1 of the
TSD, 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
and NHTSA used projected car and
truck volumes for this period from
Energy Information Administration’s
(EIA’s) Annual Energy Outlook (AEO)
2009 in the NPRM analysis.605 For the
analysis supporting this final rule,
NHTSA substituted the revised forecasts
of total volume reported in EIA’s
Annual Energy Outlook 2010 Early
Release. However, Annual Energy
Outlook forecasts only total car and
light truck sales, rather than sales at the
manufacturer and model-specific level,
which the agencies require in order to
estimate the effects new standards will
have on individual manufacturers.606
To estimate sales of individual car
and light truck models produced by
each manufacturer, EPA purchased data
from CSM Worldwide and used its
projections of the number of vehicles of
each type (car or truck) that will be
produced and sold by manufacturers in
model years 2011 through 2015.607 This
provided year-by-year estimates of the
percentage of cars and trucks sold by
each manufacturer, as well as the sales
percentages accounted for by each
vehicle market segment. (The
distributions of car and truck sales by
manufacturer and by market segment for
the 2016 model year and beyond were
assumed to be the same as CSM’s
forecast for the 2015 calendar year.)
Normalizing these percentages to the
605 Available at https://www.eia.doe.gov/oiaf/aeo/
index.html (last accessed March 15, 2010). 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.
606 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.
607 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.
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total car and light truck sales volumes
projected for 2012 through 2016 in AEO
2009 provided manufacturer-specific
market share and model-specific sales
estimates for those model years. The
volumes were then scaled to AEO 2010
total volume for each year.
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
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.608
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).609 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 FRIA and Chapter 4 of the 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
608 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 March 1,
2010). These updated survival rates suggest that the
expected lifetimes of recent-model passenger cars
and light trucks are 13.8 and 14.5 years.
609 For a description of the Survey, See https://
nhts.ornl.gov/quickStart.shtml (last accessed March
1, 2010).
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the rate forecast in the AEO 2010 Early
Release Reference Case.610 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 1.15
percent per year 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.611
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.612
610 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.
611 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.
612 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
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NHTSA and EPA received no
comments on their respective NPRMs
indicating that these assumptions
should be updated or reconsidered.
Thus the agencies have continued to
employ them in the analysis supporting
this final rule.
g. Accounting for the Fuel Economy
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 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
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.613 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 the
NPRM.614 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
53.9 billion gallons (= 1,395 billion miles divided
by 25.9 miles per gallon).
613 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.
614 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.
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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 light-duty vehicle travel over
the period from 1950 through 2006 to
estimate various econometric models of
the relationship between vehicle milestraveled 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 other factors.615 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 used a
10 percent rebound effect in its analysis
of fuel savings and other benefits from
higher CAFE standards for the NPRM.
The agency also sought comment on
other alternatives for estimating the
rebound effect, such as 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.
615 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.
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NHTSA and EPA received far fewer
comments on the rebound effect than
were previously received to CAFE
rulemakings. Only one commenter, NJ
DEP, expressly supported the agencies’
assumption of 10 percent for the
rebound effect; other commenters
(CARB, CBD, ICCT) argued that 10
percent should be the absolute
maximum value and that the rebound
effect assumed by the agencies should
be lower, and would also be expected to
decline over time. ICCT added that the
price elasticity of gasoline demand
could be a useful comparison for the
rebound effect, but should not be used
to derive it. Other commenters argued
that a rebound effect either was unlikely
to occur (James Hyde), or was unlikely
to produce a uniform increase in use of
all vehicles with improved fuel
economy (Missouri DNR). NADA
argued, in contrast, that the agencies
had not provided sufficient justification
for lowering the rebound effect to 10
percent from the ‘‘historically justified’’
range of 15 to 30 percent.
The agency’s interpretation of
historical and recent evidence on the
magnitude of the rebound effect is that
a significant fuel economy rebound
effect exists, and commenters did not
provide any additional data or analysis
to justify revising our initial estimates of
the rebound effect. Therefore, the data
available at this time do not justify
using a rebound effect below the 10
percent figure employed in its NPRM
analysis. NHTSA believes that
projections of a continued decline in the
magnitude of the rebound effect are
unrealistic because they assume the rate
at which it declines in response to
increasing incomes remain constant,
and in some cases imply that the
rebound effect will become negative in
the near future. In addition, the
continued increases in fuel prices used
in this analysis will tend to increase the
magnitude of the rebound effect, thus
offsetting part of the effect of rising
incomes. As the preceding discussion
indicates, there is a wide range of
estimates for both the historical
magnitude of the rebound effect and its
projected future value, and there is
some evidence that the magnitude of the
rebound effect appears to be declining
over time. Nevertheless, NHTSA
requires a single point estimate for the
rebound effect as an input to its
analysis, although a range of estimates
can be used to test the sensitivity to
uncertainty about its exact magnitude.
For the final rule, NHTSA chose to use
10 percent as its primary estimate of the
rebound effect, with a range of 5–15
percent for use in sensitivity testing.
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The 10 percent figure is well below
those reported in almost all previous
research, and it is also below most
estimates of the historical and current
magnitude of the rebound effect
developed by NHTSA. However, other
recent research—particularly that
conducted by Small and Van Dender
and by Greene—reports persuasive
evidence that the magnitude of the
rebound effect is likely to be declining
over time, and the forecasts developed
by NHTSA also suggest that this is
likely to be the case. As a consequence,
NHTSA concluded that a value below
the historical estimates reported here is
likely to provide a more reliable
estimate of its magnitude during the
future period spanned by NHTSA’s
analysis of the impacts of this rule. The
10 percent estimate meets this
condition, since it lies below the 15–30
percent range of estimates for the
historical rebound effect reported in
most previous research, and at the
upper end of the 5–10 percent range of
estimates for the future rebound effect
reported in the recent studies by Small
and Van Dender and by Greene. It also
lies within the 3–16 percent range of
forecasts of the future magnitude of the
rebound effect developed by NHTSA in
its recent research. In summary, the 10
percent value was not derived from a
single point estimate from a particular
study, but instead represents a
reasonable compromise between the
historical estimates and the projected
future estimates. NHTSA will continue
to review this estimate of the rebound
effect in future rulemakings, but the
agency has continued to use the 10
percent rebound effect over the entire
future period spanned by the analysis it
conducted for this final rule.
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
costs drivers incur plus the consumer
surplus they receive from the additional
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accessibility it provides.616 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. Because
no comments addressed this issue of
benefits from increased vehicle use or
the procedure used to estimate them,
the agencies have finalized their
proposed assumptions for purposes of
the final rule analysis.
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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.617 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.618
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
616 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.
617 If manufacturers respond to improved fuel
economy by reducing the size of fuel tanks to
maintain a constant driving range, the resulting cost
saving will presumably be reflected in lower
vehicle sales prices.
618 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 March 1,
2010); update available at https://ostpxweb.dot.gov/
policy/Data/VOTrevision1_2-11-03.pdf (last
accessed March 1, 2010).
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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
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).619Assuming
that locating a station and filling up
requires a total of 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.
Although the agencies received no
public comments on the procedures
they used to estimate the benefits from
less frequent refueling or the magnitude
of those benefits, we note also that the
estimated value of less frequent
refueling events is subject to a number
of uncertainties which we discuss in
detail in Chapter 4.1.11 of the Joint TSD,
and the actual value could be higher or
lower than the value presented here.
Specifically, the analysis makes three
assumptions: (a) That manufacturers
will not adjust fuel tank capacities
downward (from the current average of
19.3 gallons) when they improve the
fuel economy of their vehicle models.
(b) that the average fuel purchase (55
percent of fuel tank capacity) is the
typical fuel purchase. (c) that 100
percent of all refueling is demandbased; i.e., that every gallon of fuel
which is saved would reduce the need
619 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.
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to return to the refueling station.
NHTSA has planned a new research
project which will include a detailed
study of refueling events, and which is
expected to improve upon these
assumptions. These assumptions and
the upcoming research project are
discussed in detail in Joint TSD Chapter
4.2.10, as well as in Chapter VIII of
NHTSA’s FRIA.
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.620
NHTSA employed these estimates
previously in its analysis accompanying
the MY 2011 final rule, and after
reviewing the procedures used by
FHWA to develop them and considering
other available estimates of these values,
continues to find them appropriate for
use in this final rule. The agency
multiplies FHWA’s estimates of permile 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.
One commenter, Inrix, Inc., stated
that ‘‘deeply connected vehicles,’’ i.e.,
those with built-in computer systems to
help drivers identify alternative routes
to avoid congestion, are better able to
avoid congestion than conventional
vehicles. The commenter argued that
increased use of these models may be
less likely to contribute to increased
congestion, and urged the agencies to
consider the impact of this on their
estimates of fuel use and GHG
emissions. NHTSA notes that the
number of such vehicles is extremely
small at present, and is likely to remain
modest for the model years affected by
this rule, and has thus continued to
employ the estimates of congestion costs
from additional rebound-effect vehicle
use that it utilized in the NPRM
analysis. The agency recognizes that
these vehicles may become sufficiently
common in the future that their effect
on the fuel economy drivers actually
experience could become significant,
but notes that to the extent this occurs,
620 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 March 1, 2010).
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it would be reflected in the gap between
test and on-road fuel economy. NHTSA
will continue to monitor the production
of such vehicles and their
representation in the vehicle fleet in its
future rulemakings.
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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.621
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 final 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 of reduced
economic externalities from petroleum
consumption and imports.622 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.623 The updated ORNL study was
subjected to a detailed peer review
comissioned by EPA, and ORNL’s
estimates of the value of oil import
externalities were subsequently revised
to reflect their comments and
recommendations of the peer
reviewers.624 Finally, 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, as
well as 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 increase in
payments from U.S. oil purchasers to
foreign oil suppliers beyond the
increased purchase price of petroleum
itself that results when increased U.S.
import demand raises the world price of
petroleum.625 However, the monopsony
premium represents a financial transfer
from consumers of petroleum products
to oil producers, which does not entail
the consumption of real economic
resources. Thus reducing the magnitude
of the monopsony premium produces
no savings in real economic resources
globally or domestically, although it
does reduce the value of the financial
transfer from U.S. consumers of
petroleum products to foreign suppliers
of petroleum. Accordingly, NHTSA’s
analysis of the benefits from adopting
proposed CAFE standards for MY 2012–
2016 cars and light trucks excluded the
reduced value of monopsony payments
by U.S. oil consumers that might result
from lower fuel consumption by these
vehicles. The agency sought comment
on whether it would be reasonable to
include the reduction in monopsony
payments by U.S. consumers of
petroleum products in their estimates of
621 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 (Docket NHTSA–2009–0062–24); and Toman,
M.A. (1993). ‘‘The Economics of Energy Security:
Theory, Evidence, Policy,’’ in A.V. Kneese and J.L.
Sweeney, eds. (1993) (Docket NHTSA–2009–0062–
23). Handbook of Natural Resource and Energy
Economics, Vol. III. Amsterdam: North-Holland, pp.
1167–1218.
622 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 March 1, 2010).
623 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 March
1, 2010).
624 Peer Review Report Summary: Estimating the
Energy Security Benefits of Reduced U.S. Oil
Imports, ICF, Inc., September 2007. Available at
Docket No. NHTSA–2009–0059–0160.
625 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.
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total economic benefits from reducing
U.S. fuel consumption.
Commenters from NYU School of Law
argued that monopsony payments
should be treated as a distributional
effect, not a standard efficiency benefit.
An individual commenter, A.G. Fraas,
also supported the agencies’ exclusion
of the monopsony benefit, arguing that
it represents a pecuniary externality that
should not be considered in benefit-cost
analyses of governmental actions—
again, in essence, that it represents a
distributional effect. These comments
support the agency’s decision to exclude
any reduction in monopsony premium
payments that results from lower U.S.
petroleum imports from its accounting
of benefits from reduced fuel
consumption. Thus the agency
continues to exclude any reduction in
monopsony premium payments from its
estimates of benefits for the stricter
CAFE standards this final rule
establishes.
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
to the U.S. economy by $0.169 per
gallon (in 2007$). In contrast to reduced
monopsony premium payments, 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 analysis of the
economic benefits from adopting higher
CAFE standards for MY 2012–2016 cars
and light trucks.
A.G. Fraas commented on this
proposed rule and felt that that
magnitude of the economic disruption
portion of the energy security benefit
may be too high. He cites a recent paper
written by Stephen P.A. Brown and
Hillard G. Huntington, entitled
‘‘Estimating U.S. Oil Security
Premiums’’ (September 2009). He
commented that the Brown and
Huntington premium associated with
replacing oil imports by increased
domestic oil production while keeping
U.S. oil consumption unchanged (i.e.,
‘‘the cost of displacing a barrel of
domestic oil with a barrel of imported
oil’’) ranges from $2.17 per barrel in
2015 to $2.37 per barrel in 2030 (2007$),
or $0.052 to $0.056 per gallon.
In contrast, this rule is not a domestic
oil supply initiative, but is one intended
to reduce domestic oil consumption and
thereby also to a significant extent
reduce U.S. oil imports. When NHTSA
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used the ORNL Energy Security
Premium Analysis to calculate the
energy security premium for this rule, it
based the energy security premium on
decreased demand for oil and oil
products. The agency estimated that
most of the decreased demand for oil
and oil products would come from
decreased imports of oil, given the
inelasticity of U.S. supply and the
modest estimated change in world oil
price. The Brown and Huntington
estimates for this change, considering
the disruption component alone, are
much in line with the ORNL estimates.
For a reduction in U.S. consumption
that largely leads to a reduction in
imports, Brown and Huntington
estimate a midpoint premium of $4.98
per barrel in 2015 rising to $6.82 per
barrel by 2030 (2007$). The 2015
disruption premium estimate has an
uncertainty range of $1.10 to $14.35
(2007$). The corresponding 2030
estimate from ORNL is only about 19
percent higher ($8.12/bbl), with an
uncertainty range—$3.90 to $13.04—
completely enclosed by that of Brown
and Huntington. Thus, we conclude that
the ORNL disruption security premium
estimates for this rule is roughly
consistent with the Brown and
Huntington results.
Commenters from the NYU School of
Law agreed that reduced disruption
costs should be counted as a benefit, but
stated that the agencies should
disaggregate and exclude any reduction
in wealth transfers that occur during oil
shocks from their calculation of this
benefit. NHTSA acknowledges that for
consistency with its exclusion of
reductions in monopsony premium
payments from the benefits of reduced
fuel consumption and petroleum
imports, it may be necessary to exclude
reductions in the wealth transfer
component of macroeconomic
disruption costs from the benefits of
reducing U.S. petroleum imports. In
future rulemakings, the agency will
assess the arguments for excluding the
wealth transfer component of disruption
costs from its accounting of benefits
from reducing domestic fuel
consumption and U.S. petroleum
imports, and explore whether it is
practical to estimate its value separately
and exclude it from the benefits
calculations.
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.626 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.
Commenters from the NYU School of
Law stated that the agencies were
justified in not including a value for
military security, as long as the agencies
incorporate the increased protection
value of the SPR into their calculation
of disruption effects. CBD and James
Adcock disagreed, and stated that the
agencies should, in fact, include a value
for military security—CBD cited several
studies, and Mr. Adcock presented his
own value of $0.275 per gallon. CARB
stated simply that the agencies should
include a sensitivity analysis for
military security at $0.15 per gallon, in
addition to the $0.05 per gallon already
evaluated. EDF also cited studies
claiming a benefit for increased national
security.
In response to the comments from
CBD and Mr. Adcock, NHTSA’s
examination of the historical record
indicates that while costs for U.S.
military security may vary over time in
response to long-term changes in the
level of oil imports into the U.S., these
costs are unlikely to decline in response
to the small reductions in U.S. oil
imports (relative to total oil imports)
that are typically projected to result
from raising CAFE standards for lightduty vehicles. U.S. military activities in
regions that represent vital sources of oil
imports also serve a broader range of
security and foreign policy objectives
than simply protecting oil supplies, and
as a consequence are unlikely to vary
significantly in response to the modest
changes in the level of oil imports likely
to be prompted by higher CAFE
standards.
The agency does not find evidence in
the historical record that Congress or the
Executive Branch has ever attempted to
calibrate U.S. military expenditures,
overall force levels, or specific
deployments to any measure of global
oil market activity or U.S. reliance on
petroleum imports, or to any calculation
of the projected economic consequences
626 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.
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of hostilities arising in the Persian Gulf.
Instead, changes in U.S. force levels,
deployments, and thus military
spending in that region have been
largely governed by political events,
emerging threats, and other military and
political considerations, rather than by
shifts in U.S. oil consumption or
imports. NHTSA thus concludes that
the levels of U.S. military activity and
expenditures are likely to remain
unaffected by even relatively large
changes in light duty vehicle fuel
consumption, and has continued to
exclude any reduction in these outlays
from its estimates of the economic
benefits resulting from lower U.S. fuel
consumption and petroleum imports.
In response to the comments from the
NYU School of Law, NHTSA will
explore how it might estimate the
contribution of the SPR to reducing
potential macroeconomic costs from oil
supply disruptions, although the agency
notes that to some extent the existence
of the SPR may already be reflected in
the magnitude of price elasticities of the
supplies of foreign oil available for
import to the U.S. However, the agency
notes that the size of the SPR has not
appeared to change significantly in
response to historical variation in U.S.
petroleum consumption or imports,
suggesting that its effect on the
magnitude of potential macroeconomic
costs from disruptions in petroleum
imports may be limited.
Finally, in response to the comment
from EDF, the agency notes that the
value of $0.05 per gallon for the
reduction in military security outlays
that is used for sensitivity analysis
assumes that the entire reduction in U.S.
petroleum imports resulting from higher
CAFE standards would reflect lower
imports from Persian Gulf suppliers,
that the estimate of annual U.S. military
costs for securing Persian Gulf oil
supplies reported by Delucchi and
Murphy is correct, and that Congress
would reduce half of these outlays in
proportion to any decline in U.S. oil
imports from the region. The $0.15 per
gallon estimate recommended by CARB
would thus require that U.S. military
outlays to protect Persian Gulf oil
supplies are three times as large as
Delucchi and Murphy estimate, or that
Congress would reduce military
spending in that region more than in
proportion to any reduction in U.S.
petroleum imports originating there.
Because it views these possibilities as
unrealistic, NHTSA has continued to
use the $0.05 figure in its sensitivity
analysis, rather than the higher figure
suggested.
Based on a detailed analysis of
differences in fuel consumption,
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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
estimated 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
reduce domestic fuel refining.627 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.628 Thus on balance,
each 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.629
NHTSA employed this estimate in the
analysis presented in the NPRM, and
received no comments on the
assumptions or data used to develop it.
Hence the agency has continued to
assume that each 100 gallons of fuel
saved as a consequence of the CAFE
standards established by this final rule
will reduce total U.S. imports of crude
petroleum or refined fuel by 95 gallons.
NHTSA has applied the estimates of
economic benefits from lower U.S.
petroleum imports to the resulting
estimate of reductions in imports of
crude petroleum and refined fuel.
l. Air Pollutant Emissions
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i. Changes in 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
627 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.
628 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
average 85 percent over the forecast period spanned
by AEO 2009.
629 This figure is calculated as 50 gallons + 50
gallons*90% = 50 gallons + 45 gallons = 95 gallons.
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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 (MOVES 2010).630
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 SO2.631 Total SO2
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.632 The GREET model
630 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.
631 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
grams of SO2 per gallon of gasoline and 0.10 grams
per gallon of diesel.
632 Argonne National Laboratories, The
Greenhouse Gas and Regulated Emissions from
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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.633 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
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.634
Transportation (GREET) Model, Version 1.8, June
2007, available at https://www.transportation.anl.
gov/modeling_simulation/GREET/ (last
accessed March 15, 2010).
633 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.
634 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. We note that while
assuming that all changes in upstream emissions
result from a decrease in petroleum production and
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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.635 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
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.636 NHTSA applies these
transport, our analysis of downstream criteria
pollutant impacts assumes no change in the
composition of the gasoline fuel supply.
635 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.
636 These reflect differences in the typical
geographic distributions of emissions of each
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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.
NHTSA and EPA received no
comments on the procedures they
employed to estimate the reductions in
emissions of criteria air pollutants
reported in their respective NPRMs, or
on the unit economic values the
agencies applied to those reductions to
calculate their total value. Thus the
agencies have continued to employ
these procedures and values in the
analysis reported in this final rule.
However, the agencies have made some
minor changes in the emission factors
used to calculate changes in emissions
resulting from increased vehicle use;
these revisions are detailed in Chapter
4 of the Final Technical Support
Document accompanying this rule.
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
pollutant, their contributions to ambient PM2.5
concentrations, pollution levels (predominantly
those of PM2.5), and resulting changes in population
exposure.
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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 alternative CAFE standards
and in assessing the economic benefits
of each alternative that was considered.
Since direct estimates of the economic
benefits from reducing CO2 or other
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. Thus the
benefits from reducing CO2 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
increased carbon dioxide (CO2)
emissions, including losses in
agricultural productivity, the economic
damages caused by adverse effects on
human health, property losses and
damages resulting from sea level rise,
and changes in the value of ecosystem
services. The SCC is usually expressed
in dollars per additional metric ton of
CO2 emissions occurring during a
specified year, and is higher for more
distant future years because the
damages caused by an additional ton of
emissions increase with larger existing
concentrations of CO2 in the earth’s
atmosphere. Marginal reductions in CO2
emissions that are projected to result
from lower fuel consumption, refining,
and distribution during each future year
are multiplied by the estimated SCC
appropriate for that year, which is used
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to represent the value of eliminating
each ton of CO2 emissions, to determine
the total economic benefit from reduced
emissions during that year. These
benefits are then discounted to their
present value as usual, using a discount
rate that is consistent with that used to
develop the estimate of the SCC itself.
The agency’s NPRM incorporated the
Federal interagency working group’s
interim guidance on appropriate SCC
values for estimating economic benefits
from reductions in CO2 emissions.
NHTSA specifically asked for comment
on the procedures employed by the
group to develop its recommended
values, as well as on the reasonableness
and correct interpretation of those
values. Comments the agency received
address several different issues,
including (1) the interagency group’s
procedures for selecting SCC estimates
to incorporate in its recommended
values; (2) the appropriateness of the
procedures the agency used to combine
and summarize these estimates; (3) the
parameter values and input assumptions
used by different researchers to develop
their estimates of the SCC; (4) the choice
between global and domestic estimates
of the SCC for use in Federal regulatory
analysis, (5) the discount rates used to
derive estimates of the SCC; and (6) the
overall level of the agency’s SCC
estimates.
NHTSA’s Procedures for Selecting SCC
Estimates
Many of the comments NHTSA
received concerned the group’s
procedures for selecting published
estimates and aggregating them to arrive
at its range of recommended values.
CARB asked for a clearer explanation of
why mean SCC estimates from only two
of the three major climate models were
included in the average values reported
in the interim guidance, and whether
the arithmetic mean of reported values
is the appropriate measure of their
central tendency. Students from the
University of California at Santa Barbara
(UCSB) noted that the interagency group
often selected only a single SCC
estimate from studies reporting multiple
estimates or a range of values to include
in developing its summary values, and
objected that this procedure caused the
group to understate the degree of
uncertainty surrounding its
recommended values.
Steven Rose also noted that the
interagency group’s ‘‘filtering’’ of
published estimates of the SCC on the
basis of their vintage and input
assumptions tended to restrict the
included estimates to a relatively
narrow band that excluded most
potentially catastrophic climate
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changes, and thus was not
representative of the wide uncertainty
surrounding the ‘‘true’’ SCC. If the
purpose of incorporating the SCC into
regulatory analysis was effectively to
price CO2 emissions so that emitters
would account for climate damages
caused by their actions, he reasoned,
then the estimate to be used should
incorporate the wide range of
uncertainty surrounding the magnitude
of potential damages.
Rose also noted that many of the more
recent studies reporting estimates of the
SCC were designed to explore the
influence of different factors on the
extent and timing of climate damages,
rather than to estimate the SCC
specifically, and thus that these more
recent estimates were not necessarily
more informative than SCC estimates
reported in some older studies. Rose
argued that because there has been little
change in major climate models since
about 2001, all estimates published after
that date should be considered in order
to expand the size of the sample
represented by average values, rather
than limiting it by including only the
most recently-reported estimates.
James Adcock objected to the
interagency group’s reliance on Tol’s
survey of published estimates of the
SCC, since many of the estimates it
included were developed by Tol
himself. In contrast, Steven Rose argued
that the Tol survey offered a useful way
to summarize and represent variation
among published estimates of the SCC,
and thus to indicate the uncertainty
surrounding its true value.
Procedures for Summarizing Published
SCC Estimates
Steven Rose argued that combining
SCC estimates generated using different
discount rates was inappropriate, and
urged the interagency group instead to
select one or more discount rates and
then to average only SCC estimates
developed using the same discount rate.
Rose also noted that the interagency
group’s explanation of how it applied
the procedure developed by Newell and
Pizer to incorporate uncertainty in the
discount rate was inadequately detailed,
and in any case it may not be
appropriate for use in combining SCC
estimates that were based on different
discount rates. UCS also questioned
NHTSA’s use of averaging to combine
estimates of the SCC relying on different
discount rates, as well as the agency’s
equal weighting of upper- and lowerbound SCC estimates reported in
published studies.
NESCAUM commented that the
interagency group’s basis for deriving
the $20 SCC estimate from its summary
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25593
of published values was not adequately
clear, and that the group’s guidance
should clarify the origin of this value.
NESCAUM also urged the interagency
group to identify a representative range
of alternative SCC estimates for use in
assessing benefits from reduced
emissions, rather than a single value.
Ford commented that the interagency
group’s methodology for developing an
estimate of the SCC was acceptable, but
argued that NHTSA agency should rely
on the costs of reducing CO2 emissions
in other sectors of the U.S. economy to
evaluate economic benefits from
reducing motor vehicle emission. Ford
asserted that this represented a more
reliable estimate of the benefits from
reducing emissions than the potential
climate damages avoided by reducing
vehicle emissions, since lowering
vehicle emissions reduces the need to
control emissions from other economic
sectors.
Parameter Values and Input
Assumptions Underlying SCC Estimates
CARB also noted that some of the
wide variation in published SCC
estimates relied upon by the interagency
group could be attributed to authors’
differing assumptions about future GHG
emissions scenarios and choices of
discount rates. Steven Rose noted that
SCC estimates derived using future
emissions scenarios that assumed
significant reductions in emissions were
probably inappropriate for use in
Federal regulatory analysis, since
Federal regulations must be adopted
individually and are each likely to lead
to only marginal reductions in
emissions, so it is unreasonable to
assume that their collective effect on
future emissions will be large.
CARB also emphasized that SCC
estimates were not available over the
same range of discount rates for all
major climate models, thus making
averages of available results less reliable
as indicators of any central tendency in
estimates of the SCC. To remedy this
shortcoming, the Pew Center on Climate
Change urged the interagency group to
analyze the sensitivity of SCC estimates
to systematic variation in uncertain
model parameters and input scenarios
as a means of identifying the range of
uncertainty in the SCC itself, as well as
to include a risk premium in its SCC
estimates as a means of compensating
for climate models’ omission of
potential economic damages from
catastrophic climate changes.
CBD commented that the interim
nature of the interagency group’s
guidance made it impossible for
decision-makers to determine whether
the agency’s proposed CAFE standards
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were sufficiently stringent. CBD also
argued that economic models’ exclusion
of some potential climate impacts
caused them to underestimate the ‘‘true’’
SCC, and that the interagency group’s
procedure of averaging published
estimates failed to convey important
information about variation in estimates
of the SCC to decision makers. In a
related comment, the Pew Center on
Climate Change cautioned against use of
the interagency group’s interim SCC
estimates for analyzing benefits from
NHTSA’s final rule, on the grounds that
some older estimates of the SCC
surveyed for the interim guidance
implausibly suggested that there could
be positive net benefits from climate
change, while more recent research
suggests uniformly negative economic
impacts.
James Adcock presented his own
estimate of the value of reducing CO2
emissions, which he derived by
assuming that climate change would
completely eliminate the economic
value of all services provided by the
local natural environment within a 50year time frame. In addition, Adcock
urged that Federal agencies use a
consistent estimate of the SCC in their
regulatory analyses, and that this
estimate be updated regularly to reflect
new knowledge; he also asserted that
the SCC should be above the per-ton
price of CO2 emissions permits under a
cap-and-trade system.
Global vs. Domestic SCC Values
NADA argued that NHTSA should
employ an estimate of the domestic
value of reducing CO2 emissions for
purposes of estimating their aggregate
economic benefits, since the agency
includes only the domestic value of
benefits stemming from reductions in
other environmental and energy security
externalities. In contrast, both the Pew
Center on Climate Change and students
from the University of California at
Santa Barbara (UCSB) asserted that a
global value of the SCC was appropriate
for use even in analyzing benefits from
U.S. domestic environmental
regulations such as CAFE, and Steven
Rose added that it was difficult to
identify any proper role for a domestic
estimate of the SCC. James Adcock
commented that the agency’s derivation
of the fraction of the global SCC it
employed (6 percent) to obtain a
domestic value was not clearly
explained.
Discount Rates Used To Derive SCC
Estimates
NRDC also cited the effect of positive
discount rates on damages occurring in
the distant future, which reduce the
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present value of those damages to
misleadingly low levels. Similarly,
Steven Rose argued that the interagency
group should have used discount rates
below the 3 percent lower bound the
group selected, and that the discount
rate should also have been allowed to
vary over time to account for
uncertainty in its true value. The Pew
Center also urged NHTSA to account
explicitly for uncertainty surrounding
the correct discount rate, but did not
indicate how the agency should do so.
CARB echoed the recommendation for
including SCC values reflecting
discount rates below 3 percent, since
EPA had previously used lower rates in
previously proposed rules to discount
benefits that were not expected to occur
until the distant future, and thus to be
experienced mainly by future
generations. The New Jersey Department
of Environmental Protection noted that
giving nearly equal weight to future
generations would imply a discount rate
of less than 3 percent—probably in the
neighborhood of 2 percent—and
endorsed the interagency group’s use of
the procedure developed by Newell and
Pizer to account for uncertainty
surrounding the correct discount rate.
The Pew Center urged the agency to
ignore SCC estimates derived using
discount rates above 5 percent, and
instead to use the lowest possible rates,
even including the possibility of
negative values. Similarly, NRDC
asserted that both the 3 percent and 5
percent discount rates selected by the
interagency group are inappropriately
high, but did not recommend a specific
alternative rate. Students from UCSB
observed that the interagency group’s
equal weighting of the 3 percent and 5
percent rates appeared to be
inconsistent with the more frequent use
of 3 percent in published estimates of
the SCC, as well as with OMB’s
guidance that the 3 percent rate was
appropriate for discounting future
impacts on consumption. The group
urged NHTSA to consider a wider range
of discount rates in its revised estimates
of the SCC, including some below 3
percent. CBD argued that the discount
rate should increase over the future to
reflect the potential for catastrophic
climate impacts.
CBD asserted that because the
potential consequences of climate
change are so extreme, that future
economic impacts of climate change
should not be discounted (i.e., a 0
percent discount rate should be used).
James Adcock echoed this view.
Overall Level of SCC Estimates
NRDC argued that the SCC estimate
recommended by the interagency group
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was likely to be too low, because of
most models’ omission of some
important climate impacts, particularly
including potential catastrophic impacts
resulting from non-incremental changes
in climate conditions. CARB argued that
it seemed prudent to include SCC
values as high as $200 per ton, to reflect
the possibility of low-probability but
catastrophic changes in the global
climate and the resulting economic
damages.
The New Jersey Department of
Environmental Protection pointed out
that SCC estimates reviewed by the
IPCC ranged as high as $95/ton, and that
the Stern Report’s estimate was $85/ton,
suggesting the possibility that the
interagency group may have
inappropriately filtered out the highest
estimates of the SCC. Other commenters
including NACAA, NESCAUM, NRDC,
and UCS urged NHTSA to employ
higher SCC values than it used in the
NPRM analysis, but did not recommend
specific values. CARB urged the agency
to use higher values of the SCC than it
employed in its NPRM analysis, and
recommended a value of $25/ton,
growing at 2.4 percent annually, or
alternatively, a fixed value of $50/ton.
Steven Rose cautioned against
applying a uniform 3 percent annual
growth rate to all of the provisional SCC
estimates recommended by the
interagency group, and noted that the
base year where such growth is assumed
to begin should be determined carefully
for each estimate.
Finally, the Institute for Energy
Research commented that NHTSA had
probably overstated the reductions in
CO2 emissions that would result from
the proposed standards—and thus their
economic value—because of the
potential for compensating increases in
emissions, such as those cause by
increased retention and use of older,
less fuel-efficient vehicles in the fleet.
After carefully considering comments
received to the NPRM, for purposes of
this final rule, NHTSA has relied on
estimates of the SCC developed by the
Federal interagency working group
convened for the specific purpose of
developing new estimates to be used by
U.S. Federal agencies in regulatory
evaluations. Under Executive Order
12866, Federal agencies are required, to
the extent permitted by law, ‘‘to assess
both the costs and the benefits of the
intended regulation and, recognizing
that some costs and benefits are difficult
to quantify, propose or adopt a
regulation only upon a reasoned
determination that the benefits of the
intended regulation justify its costs.’’
The group’s purpose in developing new
estimates of the SCC was to allow
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Federal agencies to incorporate the
social benefits of reducing carbon
dioxide (CO2) emissions into costbenefit analyses of regulatory actions
that have small, or ‘‘marginal,’’ impacts
on cumulative global emissions, as most
Federal regulatory actions can be
expected to have.
The interagency group convened on a
regular basis to consider public
comments, explore the technical
literature in relevant fields, and discuss
key inputs and assumptions in order to
generate SCC estimates. Agencies that
actively participated in the interagency
process included the Environmental
Protection Agency and the Departments
of Agriculture, Commerce, Energy,
Transportation, and Treasury. This
process was convened by the Council of
Economic Advisers and the Office of
Management and Budget, with active
participation and regular input from the
Council on Environmental Quality,
National Economic Council, Office of
Energy and Climate Change, and Office
of Science and Technology Policy. The
main objective of this process was to
develop a range of SCC values using a
defensible set of input assumptions that
are grounded in the existing literature.
In this way, key uncertainties and
model differences can more
transparently and consistently inform
the range of SCC estimates used in the
rulemaking process.
The interagency group developed its
estimates of the SCC estimates while
clearly acknowledging the many
uncertainties involved, and with a clear
understanding that they should be
updated over time to reflect increasing
knowledge of the science and
economics of climate impacts.
Technical experts from numerous
agencies met on a regular basis to
consider public comments, explore the
technical literature in relevant fields,
and discuss key model inputs and
assumptions. The main objective of this
process was to develop a range of SCC
values using a defensible set of input
assumptions grounded in the existing
scientific and economic literature. In
this way, key uncertainties and model
differences transparently and
25595
consistently can inform the range of
SCC estimates used in the rulemaking
process.
The group ultimately selected four
SCC values for use in regulatory
analyses. Three values are based on the
average SCC from three integrated
assessment models, using discount rates
of 2.5, 3, and 5 percent. The fourth
value, which represents the 95th
percentile SCC estimate across all three
models at a 3 percent discount rate, is
included to represent the possibility of
higher-than-expected impacts from
temperature change that lie further out
in the tails of the distribution of SCC
estimates. Table IV.C.3–2 summarizes
the interagency group’s estimates of the
SCC during various future years. The
SCC estimates reported in the table
assume that the marginal damages from
increased emissions are constant for
small departures from the baseline
emissions path, an approximation that
is reasonable for policies that have
effects on emissions that are small
relative to cumulative global carbon
dioxide emissions.
TABLE IV.C.3–2—SOCIAL COST OF CO2 EMISSIONS, 2010–2050
[2007 dollars]
Discount rate
5%
3%
Source
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2010
2015
2020
2025
2030
2035
2040
2045
2050
As Table IV.C.3–2 shows, the four
SCC estimates selected by the
interagency group for use in regulatory
analyses are $5, $21, $35, and $65 (in
2007 dollars) for emissions occurring in
the year 2010. The first three estimates
are based on the average SCC across
models and socio-economic and
emissions scenarios at the 5, 3, and 2.5
percent discount rates, respectively. The
fourth value is included to represent the
higher-than-expected impacts from
temperature change further out in the
tails of the SCC distribution. For this
purpose, the group elected to use the
SCC value for the 95th percentile at a 3
percent discount rate.
The central value identified by the
interagency group is the average SCC
across models at the 3 percent discount
rate, or $21 per metric ton in 2010. To
20:30 May 06, 2010
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3%
Average of estimates
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2.5%
4.7
5.7
6.8
8.2
9.7
11.2
12.7
14.2
15.7
21.4
23.8
26.3
29.6
32.8
36.0
39.2
42.1
44.9
capture the uncertainties involved in
regulatory impact analysis, however, the
group emphasized the importance of
considering the full range of estimated
SCC values. As the table also shows, the
SCC estimates also rise over time; for
example, the central value increases to
$24 per ton of CO2 in 2015 and $26 per
ton of CO2 in 2020.
The interagency group is committed
to updating these estimates as the
science and economic understanding of
climate change and its impacts on
society improves over time. Specifically,
the group has set a preliminary goal of
revisiting the SCC values within two
years or at such time as substantially
updated models become available, and
to continue to support research in this
area. U.S. Federal agencies will
periodically review and reconsider
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95th Percentile
estimate
35.1
38.4
41.7
45.9
50.0
54.2
58.4
61.7
65.0
64.9
72.8
80.7
90.4
100.0
109.7
119.3
127.8
136.2
estimates of the SCC used for costbenefit analyses to reflect increasing
knowledge of the science and
economics of climate impacts, as well as
improvements in modeling.
Details of the process used by the
interagency group to develop its SCC
estimates, complete results including
year-by-year estimates of each of the
four values, and a thorough discussion
of their intended use and limitations is
provided in the document Social Cost of
Carbon for Regulatory Impact Analysis
Under Executive Order 12866,
Interagency Working Group on Social
Cost of Carbon, United States
Government, February 2010.637
637 This document is available in the docket for
this rulemaking (NHTSA–2009–0059).
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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
proposed increases in CAFE standards
for MY 2012–2016 passenger cars and
light trucks, NHTSA employed a
discount rate of 3 percent per year, but
also presents these benefit and cost
estimates at a 7 percent discount rate.
While both discount rates are
presented, NHTSA believes that 3
percent is the most appropriate rate for
discounting future benefits from
increased CAFE standards because most
or all of vehicle manufacturers’ costs for
complying with higher CAFE standards
will ultimately be reflected in higher
sales prices for their new vehicle
models. By increasing sales prices for
new cars and light trucks, CAFE
regulations 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 consumers’ rate
of time preference.638
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 consumers’ rate
of time preference, NHTSA believes that
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 is
more appropriate than 7 percent, but
presents both.639 One commenter,
NRDC, supported the agencies’ use of a
3 percent discount rate as consistent
with DOE practice in energy efficiencyrelated rulemakings and OMB guidance.
OMB guidance actually requires that
638 Id.
639 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).
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benefits and costs be presented at both
a 3 and a 7 percent discount rate.
Because there is some remaining
uncertainty about whether vehicle
manufacturers will completely recover
their costs for complying with higher
CAFE standards by increasing vehicle
sales prices, however, NHTSA also
presents these benefit and cost estimates
using a higher 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 OMB
estimates that this rate currently
averages about 7 percent.640 Thus the
agency has also examined its benefit
and cost estimates for alternative MY
2012–2016 CAFE standards using a 7
percent real discount rate.
In its proposed rule, NHTSA sought
comment on whether it should evaluate
CAFE standards using a discount rate of
3 percent, 7 percent, or an alternative
value. NRDC not only opposed the
agency’s use of a 7 percent discount
rate, but also opposed conducting even
sensitivity analyses with discount rates
higher than 3 percent. In contrast, two
other commenters, NADA and the
Institute for Energy Research, advised
that the agencies should use discount
rates of 7 percent or higher. NADA
argued that the most appropriate
discount rate would be one closer to
historical financing rates on motor
vehicle loans (which currently average
about 6.5 percent), while the Institute
for Energy Research argued that
consumers may have much higher
discount rates than the agencies
assumed, perhaps even as high as 25
percent.
After carefully considering these
comments, NHTSA has elected to use
discount rates of both 3 and 7 percent
in the analysis supporting this final
rule. As indicated above, the agency
believes that vehicle manufacturers will
recover most or all of their added costs
for complying with the CAFE standards
this rule establishes by raising sales
prices for some or all vehicle models. As
a consequence, this regulation will thus
primarily affect vehicle purchases and
related consumption decisions, which
suggests that its future benefits and
costs should be discounted at the rate of
time preference vehicle buyers reveal in
their consumption and savings
behavior. OMB’s 3 percent figure
appears to be a conservative (i.e., low)
estimate of this rate, because it assumes
in effect that vehicle buyers face little
640 Id.
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risk about the value of future fuel
savings and other benefits from the rule;
nevertheless, in the current economic
environment it appears to represent a
reasonable estimate of consumers’ rate
of time preference. Thus NHTSA has
mainly relied upon 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
One important exception to the 3
percent discount rate is the rates used
to discount benefits from reducing CO2
emissions from the years in which
reduced emissions occur, which span
the lifetimes of MY 2012–2016 cars and
light trucks, to their present values. In
order to ensure consistency in the
derivation and use of the interagency
group’s estimates of the unit values of
reducing CO2 emissions, the benefits
from reducing those emissions during
each future year are discounted using
the same ‘‘intergenerational’’ discount
rates that were used to derive each of
the alternative unit values of reducing
CO2 emissions. As indicate in Table
IV.C.3–2 above, these rates are 2.5
percent, 3 percent, and 5 percent
depending on which estimate of the
SCC is being considered.641
n. Accounting for Uncertainty in
Benefits and Costs
In analyzing the uncertainty
surrounding its estimates of benefits and
costs from alternative CAFE standards,
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,
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
641 The fact that the 3 percent discount rate used
by the interagency group to derive its central
estimate of the SCC is identical to the 3 percent
short-term or ‘‘intra-generational’’ discount rate used
by NHTSA to discount future benefits other than
reductions in CO2 emissions is coincidental, and
should not be interpreted as a required condition
that must be satisfied in future rulemakings.
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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.
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o. Where can readers find more
information about the economic
assumptions?
Much more detailed information is
provided in Chapter VIII of the FRIA,
and a discussion of how NHTSA and
EPA jointly reviewed and updated
economic assumptions for purposes of
this final rule is available in Chapter 4
of the Joint 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 final rule, NHTSA–2009–
0059, and on NHTSA’s Web site.642
Finally, because much of NHTSA’s
economic analysis for purposes of this
final rule 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
growing experience with this type of
analysis.643
4. How does NHTSA use the
assumptions in its modeling analysis?
In developing today’s final 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,
642 See https://www.nhtsa.dot.gov (click on ‘‘Fuel
Economy Standards (CAFE),’’ click on ‘‘Related
Links: CAFE Compliance and Effects Modeling
System: The Volpe Model’’).
643 74 FR 14308–14358 (Mar. 30, 2009).
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(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 final rule, as
are inputs for and outputs from analysis
of today’s final CAFE standards.
a. How does the model operate?
As discussed above, the agency uses
the Volpe model to estimate how
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 and reference market forecast
discussed above in Section IV.C.1 and
Chapter 1 of the TSD, (b) technologyrelated estimates discussed above in
Section IV.C.2 and Chapter 3 of the
TSD, (c) economic inputs discussed
above in Section IV.C.3 and Chapter 4
of the TSD, and (d) inputs defining
baseline and 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 costminimizing strategy in order to identify
a set of technologies the manufacturer
could apply in response to new CAFE
standards.644 The model applies
technologies to each of the projected
individual vehicles in a manufacturer’s
fleet, until one of three things occurs:
644 NHTSA does its best to remain scrupulously
neutral in the application of technologies through
the modeling analysis, to avoid picking technology
‘‘winners.’’ The technology application methodology
has been reviewed by the agency over the course
of several rulemakings, and commenters have been
generally supportive of the agency’s approach. See,
e.g., 74 FR 14238–14246 (Mar. 30, 2009).
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(1) The manufacturer’s fleet achieves
compliance with the applicable
standard;
(2) The manufacturer ‘‘exhausts’’ 645
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.646
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. This is
designed to simulate a manufacturer’s
decision to plan for CAFE obligations
several years in advance, which NHTSA
believes better replicates manufacturers’
actual behavior as compared to the yearby-year evaluation which EPCA would
otherwise require.
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
stringency and then set the standard at
645 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.
646 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. NHTSA thus includes the possibility of
manufacturers choosing to pay fines in its modeling
analysis in order to achieve what the agency
believes is a more realistic simulation of
manufacturer decision-making. Unlike flex-fuel and
other credits, NHTSA is not barred by statute from
considering fine-payment in determining maximum
feasible standards under EPCA/EISA. 49 U.S.C.
32902(h).
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that level, while ensuring ratable
increases in average fuel economy.647
The multi-year planning capability
mentioned above increases the model’s
ability to simulate manufacturers’ realworld behavior, accounting for the fact
that manufacturers will seek out
compliance paths for several model
years at a time, while accommodating
the year-by-year requirement.
The model also calculates the costs,
effects, and benefits of technologies that
it estimates could be added in response
to a given CAFE standard.648 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
647 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.
648 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
February 21, 2010).
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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
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 today’s final standards, the
agency did not use the Volpe model’s
curve fitting routines; rather, as
discussed above in Section II, the
agency fitted curves outside the model
(as for the NPRM) but elected to retain
the curve shapes defining the proposed
standards. 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.649 Also,
although some observers have criticized
analyses the agency has conducted
using the Volpe model, those criticisms
have largely concerned inputs to the
model (such as fuel prices and the
estimated economic cost of CO2
emissions), not the model itself. In
comments on the NPRM preceding
today’s final rule, one of these
observers, the Center for Biological
Diversity (CBD), suggested that the
revisions to such inputs have produced
an unbiased cost-benefit analysis.
One commenter, the International
Council on Clean Transportation (ICCT)
suggested that the Volpe model is
649 74
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excessively complex and insufficiently
transparent. However, in NHTSA’s
view, the complexity of the Volpe
model has evolved in response to the
complex analytical demands
surrounding very significant regulations
impacting a large and important sector
of the economy, and ICCT’s own
comments illustrate some of the
potential pitfalls of model
simplification. Furthermore, ICCT’s
assertions regarding model transparency
relate to the use of confidential business
information, not to the Volpe model
itself; as discussed elsewhere in this
final rule, NHTSA and the Volpe Center
have taken pains to make the Volpe
model transparent by releasing the
model and supporting documentation,
along with the underlying source code
and accompanying model inputs and
outputs. Therefore, the agency disagrees
with these ICCT comments.
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 that would be ‘‘maximum feasible’’
for that year.650 Doing so requires the
ability to analyze each model year and,
when developing regulations covering
multiple model years, to account for the
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. 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
650 49
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(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 to
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
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 final CAFE
standards for passenger cars, the CAFE
model estimated that manufacturers
could apply turbocharged SGDI engines
mated with dual-clutch AMTs to 2.4
million passenger cars in MY 2016,
about 22 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.
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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 final
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
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
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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?
As discussed in the NPRM preceding
today’s final rule, the Volpe model has
been 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.651 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
capability prior to the statutory deadline
for the MY 2011 final standards.
The model now includes this
capability, and NHTSA has applied it in
conducting analysis to support the
NPRM and in analyzing the standards
finalized today. Consequently, this new
capability 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.
651 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.
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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
FRIA. 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.
In the NPRM preceding today’s final
rule, NHTSA sought comment on ways
to improve on this earlier work and
develop this capability effectively. Some
comments implied that the agency
should continue work to do so, without
providing specific recommendations.
The Alliance of Automobile
Manufacturers identified consumer
choice as one of several factors outside
the industry’s control yet influential
with respect to the agencies’ analysis.
Also, the University of Pennsylvania
Environmental Law Project suggested
that the rule would change consumers’
vehicle purchasing decisions, and the
California Air Resources Board
expressed support for continued
consideration of consumer choice
modeling. On the other hand, citing
concerns regarding model calibration,
handling of advanced technologies, and
applicability to the future light vehicle
market, ACEEE, ICCT, UCS, and NRDC
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all expressed opposition to the
possibility of using consumer choice
models in estimating the costs and
benefits of new standards.
Notwithstanding comments on this
issue, NHTSA has been unable to
further develop this capability in time to
include it in the analysis supporting
decisions regarding final CAFE
standards. The agency will, however,
continue efforts to develop and make
use of this capability in future
rulemakings, taking into account
comments received in connection with
today’s final rule.
d. Does the model set the standards?
Since NHTSA began using the Volpe
model in CAFE analysis, some
commenters have interpreted the
agency’s use of the model as the way by
which the agency chooses the maximum
feasible fuel economy standards. This is
incorrect. 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, it
was not the model’s decision to seek
that level of stringency, it was the
agency’s, as it is always the agency’s
decision what level of CAFE stringency
is appropriate. Ultimately, NHTSA’s
selection of appropriate CAFE standards
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
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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.
This is why the agency considered
eight regulatory alternatives, only one of
which reflects the agency’s final
standards, based on the agency’s
determinations and assumptions. Others
assess alternative standards, some of
which exceed the final standards and/or
the point at which net benefits are
maximized.652 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) 653 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 or 2007 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 final
rule are available in the public docket.
With the model and these input files,
anyone is capable of independently
652 See Section IV.F below for a discussion of the
regulatory alternatives considered in this
rulemaking.
653 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.
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running the model to repeat, evaluate,
and/or modify the agency’s analysis.
NHTSA is aware of two attempts by
commenters to install and use the Volpe
model in connection with the NPRM.
James Adcock, an individual reviewer,
reported difficulties installing the model
on a computer with Microsoft® Office
2003 installed. Also, students from the
University of California at Santa
Barbara, though successful in installing
and running the model, reported being
unable to reproduce NHTSA’s results
underlying the development of the
shapes of the passenger car and light
truck curves.
Regarding the difficulties Mr. Adcock
reported encountering, NHTSA staff is
aware of no attempts to contact the
agency for assistance locating
supporting material related to the MYs
2012–2016 CAFE rulemaking. Further,
the model documentation provides
specific minimum hardware
requirements and also indicates
operating environment requirements,
both of which have remained materially
unchanged for more than a year. Volpe
Center staff members routinely install
and run the model successfully on new
laptops, desktops, and servers as part of
normal equipment refreshes and
interagency support activities. We
believe, therefore, that if the minimum
hardware and operating environment
requirements are met, installing and
running the model should be
straightforward and successful. The
model documentation notes that some
of the development and operating
environment used by the Volpe model
(e.g., the software environment rather
than the hardware on which that
software environment operates),
particularly the version of Microsoft®
Excel used by the model, is Microsoft®
Office 2003. We recognize that some
users may have more recent versions of
Microsoft® Office. However, as in the
case of other large organizations,
software licensing decisions, including
the version of Microsoft® Office, is
centralized in the Office of the Chief
Information Officer. Nonetheless, the
Volpe Model is proven on both
Microsoft® Office version 2003 and the
newer 2007 version.
As discussed in Section II.C,
considering comments by the UC Santa
Barbara students regarding difficulties
reproducing NHTSA’s analysis, NHTSA
reexamined its analysis, and discovered
some erroneous entries in model inputs
underlying the analysis used to develop
the curves proposed in the NPRM.
These errors are discussed in the FRIA
and have since been corrected. Updated
inputs and outputs have been posted to
NHTSA’s Web site, and should enable
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outside replication of the analysis
documented in today’s notice.
5. How did NHTSA develop the shape
of the target curves for the final
standards?
In developing the shape of the target
curves for today’s final standards,
NHTSA took a new approach, primarily
in response to comments received in the
MY 2011 rulemaking. NHTSA’s
authority under EISA allows
consideration of any ‘‘attribute related to
fuel economy’’ and any ‘‘mathematical
function.’’ While the attribute, footprint,
is the same for these final 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.
Given comments received in response to
the NPRM preceding this final rule, it
appears that the constrained linear
function developed here significantly
mitigates prior steepness concerns, and
appropriately balances, for purposes of
this rulemaking, the objectives of (1)
discouraging vehicle downsizing that
could compromise highway safety and
(2) avoiding an overly strong incentive
to increase vehicle sizes in ways that
could compromise energy and
environmental benefits.
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.654
Like the MY 2011 standards, the MY
2012–2016 passenger car and light truck
standards are attribute-based and
defined by a mathematical function.655
654 49
U.S.C. 32902(a)(3)(A).
discussed in Chapter 2 of the TSD, EPA is
also setting 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.
655 As
PO 00000
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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.
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
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ways harmful to safety.656 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
simply cause its compliance obligation
to increase.
Third, attribute-based standards
provide a more equitable regulatory
framework for different vehicle
manufacturers.657 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 universal
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
finalized 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. Section II
discusses the reasons that the agency
does not believe that fuel savings and
emissions reductions will be
significantly lower than anticipated
such as to warrant additional backstop
measures beyond the one mandated by
EISA, but the agency will monitor the
situation and consider further
rulemaking solutions if necessary and as
lead time permits. See also Section
IV.E.3 below for further discussion of
NHTSA’s backstop authority.
b. What attribute does NHTSA use, and
why?
Consistent with the MY 2011 CAFE
standards, NHTSA is using footprint as
the attribute for the MY 2012–2016
CAFE standards. There are 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 Section IV.D.1.a.ii
below, 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.
NHTSA’s research indicates that
reductions in vehicle mass tend to
compromise vehicle safety if applied on
an equal basis across the entire light
duty vehicle fleet, however if greater
mass reduction is applied to the higher
mass vehicles (the larger light trucks),
an improvement in aggregate fleet safety
is possible. Footprint-based standards
provide an incentive to use advanced
lightweight materials and structures
that, if carefully designed and validated,
should minimize impacts on safety,
although that will be better proven as
these vehicles become more prevalent in
the future.
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
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TARGET =
656 The 2002 NAS Report described at length and
quantified the potential safety problem with average
fuel economy standards that specify a single
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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
logistic function, which takes the form
of an S-curve, and is defined according
to the following formula:
1
)
1 ⎛ 1 1 ⎞ e(
+⎜ − ⎟
a ⎝ b a ⎠ 1 + e ( FOOTPRINT − c ) d
FOOTPRINT − c d
numerical requirement for the entire industry. See
NAS Report at 5, finding 12.
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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.
As discussed above in Section II.C,
NHTSA and EPA sought comment on
whether the agencies should consider
setting standards for the final rule based
on another attribute or another
combination of attributes. Although
NHTSA specifically requested that the
commenters address the concerns raised
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, commenters raising the issue
largely reiterated comments submitted
in prior CAFE rulemakings, which the
agency answered in the MY 2011 final
rule.658 As a result, and as discussed
further in Section II, the agencies
finalized target curve standards based
on footprint for MYs 2012–2016.
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657 Id.
at 4–5, finding 10.
74 FR at 14358–59 (Mar. 30, 2009).
658 See
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d. What mathematical function is
NHTSA using for the MYs 2012–2016
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
done so for the final CAFE standards.
In revisiting this question, NHTSA
found that the final MY 2011 CAFE
standard for passenger cars, though less
steep than the MY 2011 standard
NHTSA final in 2008, continues to
concentrate the sloped portion of the
curve (from a compliance perspective,
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.
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:
After fitting this mathematical form
(separately) to the passenger car and
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
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 discussed above
in Section II.C, NHTSA and EPA have
considered comments by students from
UC Santa Barbara indicating that the
passenger car and light truck curves
should be flatter. The agencies conclude
that flatter curves would reduce the
incentives intended in shifting from
659 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.
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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 2.718,659 c is the footprint (in square
feet) at which the inverse of the fuel economy
target falls halfway between the inverses of
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‘‘flat’’ CAFE standards to attribute-based
CAFE and GHG standards—those being
the incentive to respond to attributebased standards in ways that minimize
compromises in vehicle safety, and the
incentive for more manufacturers (than
primarily those selling a wider range of
vehicles) across the range of the
attribute to have to increase the
application of fuel-saving technologies.
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 at that time,
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.
Having re-examined a constrained
linear function for purposes of the final
standards, and considered comments
discussed above in Section II, NHTSA,
with EPA, concludes that for both
passenger cars and light trucks, the
constrained linear functions finalized
today remain meaningfully sloped over
a wide footprint range, thereby
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; for
example, MIN(1,2) = 1, MAX(1,2) = 2, and
MIN[MAX(1,2),3)]=2.
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e. How did NHTSA fit the coefficients
that determine the shape of the final
curves?
For purposes of this final rule and the
preceding NPRM, and for EPA’s use in
developing new CO2 emissions
standards, potential curve shapes were
fitted 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 FRIA and
Chapter 3 of the Joint TSD 660 were
applied, by taking the following steps:
(1) Treating all manufacturers as
unwilling to pay civil penalties rather
660 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 final standards. NHTSA and EPA
did include diesel engines and strong hybrid
vehicle technologies in all other portions of their
analyses.
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1
⎡
1 ⎞ 1⎤
⎛
MIN ⎢ MAX ⎜ c × FOOTPRINT + d, ⎟ , ⎥
a ⎠ b⎦
⎝
⎣
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.
However, while this approach
produced curves that the agencies’
judged appropriate for the NPRM, it did
not do so for the final rule. Corrections
to some engineering inputs in NHTSA’s
market forecast, while leading to a light
truck curve nearly identical to that
derived for the NPRM, yielded a
considerably steeper passenger car
curve. As discussed above in Section II,
NHTSA and EPA are concerned about
the incentives that would result from a
significantly steeper curve. Considering
this, and considering that the updated
analysis—in terms of the error measure
applied by the agency—supports the
curve from the NPRM nearly as well as
it supports the steeper curve, NHTSA
and EPA are promulgating final
standards based on the curves proposed
in the NPRM.
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. Section II.C also
discusses comments NHTSA and EPA
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providing a well-distributed
disincentive to downsize vehicles in
ways that could compromise highway
safety. Further, the constrained linear
functions finalized today are not so
steeply sloped that they 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,
today’s final CAFE standards are
defined by constrained linear functions.
The constrained linear function is
defined according to the following
formula:
Frm 00282
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received on this process, and on the
outcomes thereof.
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.661 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 2020.662
Second, as discussed above and at
length in the March 2009 final rule
establishing the MY 2011 CAFE
standards, EPCA requires that the
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, based on a balancing of
661 EISA added the following additional
requirements: (1) Standards must be attribute-based
and expressed in the form of a mathematical
function. 49 U.S.C. 32902(b)(3)(A). (2) Standards for
MYs 2011–2020 must ‘‘increase ratably’’ in each
model year. 49 U.S.C. 32902(b)(2)(C). This
requirement does not have a precise mathematical
meaning, particularly because it must be interpreted
in conjunction 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. Generally speaking, the
requirement for ratable increases means that the
annual increases should not be disproportionately
large or small in relation to each other.
662 49 U.S.C. 32902(b)(2)(A).
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express statutory and other factors.663
The implication of this second
requirement is that it calls for setting a
standard that exceeds 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.
The ultimate determination of what
standards can be considered maximum
feasible involves a weighing and
balancing of these factors. NHTSA
received a number of comments on how
the agency interprets its statutory
requirements, and will respond to them
in this section.
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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.
(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.
Commenters appear to have generally
agreed with the agency’s interpretation
of technological feasibility. NESCAUM
commented that the proposed standards
were technologically feasible and costeffective in the rulemaking timeframe.
CBD and the UCSB students focused
their comments more on the technologyforcing aspects of the definition of
technological feasibility. CBD
commented that the standards must be
below the level of all that is
technologically feasible if all the
663 49
U.S.C. 32902(a).
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technology necessary to meet them is
available today. The UCSB students
similarly commented that the agencies
should not base regulations for MY 2016
solely on technologies available today,
that they should also consider
technologies still in the research phase
for the later years of the rulemaking
timeframe.
While NHTSA agrees that the
technological feasibility factor can
include a degree of technology forcing,
and that this could certainly be
appropriate given EPCA’s overarching
purpose of energy conservation, we note
that determining what levels of
technology to require in the rulemaking
timeframe requires a balancing of all
relevant factors. Technologies that are
still in the research phase now may be
sufficiently advanced to become
available for commercial application in,
for example, MY 2016. However, given
the rate at which the standards already
require average mpg to rise, and given
the current state of the industry, NHTSA
does not believe that it would be
reasonable to set standards mandating
that manufacturers devote substantial
resources to bringing these technologies
to market immediately rather than to
simply improving the fuel economy of
their fleets by applying more of the
technologies on the market today. As
will be discussed further in Section IV.F
below, technological feasibility is one of
four factors that the agency balances in
determining what standards would be
maximum feasible for each model year.
As the balancing may vary depending
on the circumstances at hand for the
model years in which the standards are
set, the extent to which technological
feasibility is simply met or plays a more
dynamic role may also shift.
(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.’’ 664 In an attempt to ensure the
standards’ economic practicability, the
agency considers a variety of factors,
including the annual rate at which
manufacturers can increase the
percentage of the fleet that has a
particular type of fuel saving
technology, and cost to consumers.
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
664 67
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FR 77015, 77021 (Dec. 16, 2002).
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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.’’ 665 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 factor
must be considered in the context of the
competing concerns associated with
different levels of standards. Prior to the
MY 2005–2007 rulemaking, the agency
generally 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 should 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.
Besides the many commenters raising
economic practicability as an issue in
the context of the stringency of the
proposed standards, some commenters
also directly addressed the agency’s
interpretation of economic
practicability. AIAM commented that
NHTSA has wide discretion to consider
economic practicability concerns as
long as EPCA’s overarching purpose of
energy conservation is met, and that it
would be within NHTSA’s statutory
discretion to set standards at levels
665 CEI–I,
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below those at which net benefits are
maximized due to economic
practicability. GM and Mitsubishi both
commented that consideration of
economic practicability should include
more focus on individual
manufacturers: GM stated that NHTSA
must consider sales and employment
impacts on individual manufacturers
and not just industry in the aggregate,
while Mitsubishi emphasized the
difficulties of limited-line
manufacturers in meeting standards that
might be economically practicable for
full-line manufacturers. CBD
commented that a determination of
economic practicability should not be
tied to ‘‘differences between incremental
improvements’’ that ‘‘fail to consider all
relevant costs and benefits and fail to
analyze the overall impact of the
proposed standards.’’ CBD pointed to
the three-to-one benefit-cost ratio of the
proposed standards to argue that much
more stringent standards would still be
economically practicable. ACEEE also
commented that standards set at the
level at which net benefits are
maximized should be considered a
‘‘lower bound’’ for determining
economic practicability.
While NHTSA agrees with AIAM in
general that the agency has wide
discretion to consider economic
practicability concerns, we do not
believe that economic practicability will
always counsel setting standards lower
than the point at which net benefits are
maximized, given that it must be
considered in the context of the overall
balancing and EPCA’s overarching
purpose of energy conservation.
Depending on the conditions of the
industry and the assumptions used in
the agency’s analysis of alternative
stringencies, NHTSA could well find
that standards that maximize net
benefits, or even higher standards, could
be economically practicable. To that
end, however, given the current
conditions faced by the industry, which
is perhaps just now passing the nadir of
the economy-wide downturn and
looking at a challenging road to
recovery, and the relatively limited
amount of lead time for MYs 2012–
2016, we disagree with CBD’s comment
that the benefit-cost ratio of the final
standards indicates that more stringent
standards would be economically
practicable during the rulemaking
timeframe and with ACEEE’s comment
that standards higher than those that
would maximize net benefits would be
economically practicable at this time.
These comments overlook the fact that
nearly all manufacturers are capitalconstrained at this time and may be for
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the next couple of model years; access
to capital in a down market is crucial to
making the investments in technology
that the final standards will require, and
requiring more technology will require
significantly more capital, to which
manufacturers would not likely have
access. Moreover, economic
practicability depends as well on
manufacturers’ ability to sell the
vehicles that the standards require them
to produce. If per-vehicle costs increase
too much too soon, consumers may
defer new vehicle purchases, which
defeats the object of raising CAFE
standards to get vehicles with better
mileage on the road sooner and meet the
need of the Nation to conserve energy.
See Section IV.F below for further
discussion of these issues.
As for GM’s and Mitsubishi’s
comments, while the agency does
consider carefully the impacts on
individual manufacturers in the
agency’s analysis, as shown in the FRIA,
we reiterate that economic practicability
is not keyed to any single manufacturer.
One of the main benefits of attributebased standards is greater regulatory
fairness—for all the manufacturers who
build vehicles of a particular footprint,
the target for that footprint is the same,
yet each manufacturer has their own
individual compliance obligation
depending on the mix of vehicles they
produce for sale. More manufacturers
are required to improve their fuel
economy, yet in a fairer way. And while
some manufacturers may face
difficulties under a given CAFE
standard, others will find opportunities.
The agency’s consideration of economic
practicability recognizes these
difficulties and opportunities in the
context of the industry as a whole, and
in the context of balancing against the
other statutory factors, as discussed
further below.
(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,666
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
666 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.
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said so because, from the CAFE
program’s earliest years 667 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
has said that it 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.’’ 668 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.669 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.
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
667 42 FR 63184, 63188 (Dec. 15, 1977). See also
42 FR 33534, 33537 (Jun. 30, 1977).
668 42 FR 33534, 33537 (Jun. 30, 1977).
669 That provision was deleted as obsolete when
EPCA was codified in 1994.
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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 endangerment finding, its
granting of a waiver to California for its
motor vehicle GHG standards, and its
own GHG standards for light-duty
vehicles, 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.
In the NPRM, NHTSA tentatively
concluded that the effects of the EPA
and California standards are neither
positive nor negative because the
proposed rule resulted in consistent
standards among all components of the
National Program, but sought comment
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. NHTSA
stated that it had already considered
EPA’s proposal and the harmonization
benefits of the National Program in
developing its own proposed maximum
feasible standards.
The Alliance commented that the
extent to which the consideration of
other motor vehicle standards of the
government should affect NHTSA’s
standard-setting process was entirely
within the agency’s discretion. The
Alliance agreed with NHTSA that the
original intent of the factor was to
ensure that NHTSA accounted for other
government standards that might reduce
fuel economy or inhibit fuel economy
improvements, but stated that since
GHG standards set by EPA and
California overlap CAFE standards so
extensively, and are thus functionally
equivalent to CAFE standards (plus air
conditioning), those standards should
be ‘‘basically irrelevant to NHTSA’s
mission to set fuel economy standards,
unless some specific aspect of the GHG
standards actually makes it harder for
mfrs to improve fuel economy.’’ The
Alliance stated further that NHTSA
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must still determine what levels of
CAFE standards would be maximum
feasible regardless of the findings or
standards set by EPA and California.
Thus, the Alliance stated, for purposes
of the MYs 2012–2016 CAFE standards,
EPA’s GHG standards could be
sufficiently considered by NHTSA given
the agency’s decision to harmonize as
part of the National Program,670 while
California’s GHG standards need not be
considered because of the state’s
agreement under the National Program
that compliance with EPA’s standards
would constitute compliance with its
own. Ford concurred individually with
the Alliance comments. NADA, in
contrast, commented that EPA’s GHG
standards should not be considered as
an ‘‘other vehicle standard’’ for purposes
of this statutory factor, and argued that
NHTSA need not and should not
consider California’s GHG standards
due to preemption under EPCA.
Commenters from the state of
California (the Attorney General and the
Air Resources Board), in contrast, stated
that NHTSA must consider the effects of
the California GHG standards on fuel
economy as a baseline for NHTSA’s
analysis, to give credit to the state’s
leadership role in achieving the levels
required by the National Program. CBD
seconded this comment.671 The
California Attorney General further
stated that Congress discussed both
positive and negative impacts of other
standards on fuel economy in the 1975
Conference Reports preceding EPCA’s
enactment.672 CARB and the University
of Pennsylvania Environmental Law
Project both cited the Green Mountain
Chrysler 673 and Central Valley
Chrysler 674 cases as supporting
NHTSA’s consideration of CARB’s GHG
standards pursuant to this factor.
NHTSA believes that these comments
generally support the agency’s
interpretation of this factor as stated in
the NPRM. While the agency may
consider both positive and negative
effects of other motor vehicle standards
of the Government on fuel economy in
determining what level of CAFE
standards would be maximum feasible,
given the fact that the final rule results
in consistent standards among all
components of the National Program,
670 The University of Pennsylvania
Environmental Law Project offered a similar
comment.
671 NHTSA answered similar comments in the
FEIS. See FEIS Section 10.2.4.2 for the agency’s
response.
672 Citing HR Rep 94–340 at 86–87, 89–91 (1975
USCCAN 1762, 1848–49, 1851–53).
673 Green Mountain Chrysler Plymouth Dodge
Jeep v. Crombie, 508 F.Supp.2d 295 (D.Vt. 2007).
674 Central Valley Chrysler Jeep, Inc. v. Goldstene,
529 F.Supp.2d 1151 (E.D. Cal. 2007).
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25607
and given that NHTSA considered the
harmonization benefits of the National
Program in developing its own
standards, the agency’s obligation to
balance this factor with the others may
be considered accounted for.
(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.’’ 675 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.
While a number of commenters cited
the need of the nation to conserve
energy in calling for the agency to set
more stringent CAFE standards, none
disagreed with the agency’s
interpretation of this factor and its
influence on the statutory balancing
required by EPCA. CBD, for example,
commented that ‘‘Increasing mileage
standards for this vehicle fleet is the
single most effective and quickest
available step the U.S. can take to
conserve energy and to reduce the U.S.
dependence on foreign oil, and also has
an immediate and highly significant
effect on total U.S. GHG emissions,’’ and
that accordingly, NHTSA should
consider the need of the nation to
conserve energy as counseling the
agency to raise standards at a faster rate.
NHTSA agrees that this factor tends to
influence stringency upwards, but
reiterates that the need of the nation to
conserve energy is still but one of four
factors that must be balanced, as
discussed below.
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
FR 33534, 33551 (June 30, 1977)). The
courts have consistently upheld
NHTSA’s implementation of EPCA in
this manner. See, e.g., Competitive
675 42
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Enterprise Institute v. NHTSA, 956 F.2d
321, 322 (DC 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 (DC 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, manufacturers
were encouraged to 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, which
resulted in a higher mass differential
between the smallest and the largest
vehicles, with a correspondingly greater
risk to safety. Under the attribute-based
standards being finalized 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, and because all vehicles are
required to continue improving their
fuel economy. In prior rulemakings,
NHTSA limited the application of mass
reduction/material substitution in our
modeling analysis to vehicles over 5,000
lbs GVWR,676 but for purposes of
today’s final standards, NHTSA has
revised its modeling analysis to allow
some application of mass reduction/
material substitution for all vehicles,
although it is concentrated in the largest
and heaviest vehicles, 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 Joint TSD and in
Section V of the FRIA; and the
estimated safety impacts that may be
due to the final 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.677 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
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.’’ 678 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 broad
discretion to decide what weight to give
677 49
U.S.C. 32902(h).
for Auto Safety v. NHTSA, 793 F.2d
1322, 1341 (C.A.D.C. 1986).
678 Center
676 See
74 FR 14396–14407 (Mar. 30, 2009).
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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,679
and as long as that balancing reasonably
accommodates ‘‘conflicting policies that
were committed to the agency’s care by
the statute.’’ 680 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.681
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
balancing process. While NHTSA used
marginal cost-benefit analysis in the
first two rulemakings to establish
attribute-based CAFE standards, as
noted above, 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.
v. Other Standards—Minimum
Domestic Passenger Car Standard
The minimum domestic passenger car
standard was added to the CAFE
679 Center for Biological Diversity v. NHTSA, 538
F.3d 1172, 1195 (9th Cir. 2008).
680 CAS, 1338 (quoting Chevron U.S.A., Inc. v.
Natural Resources Defense Council, Inc., 467 U.S.
837, 845).
681 CBD v. NHTSA, 538 F.3d 1172, 1198 (9th Cir.
2008).
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program through EISA, when Congress
gave NHTSA explicit authority to set
universal standards for domesticallymanufactured passenger cars at the level
of 27.5 mpg or 92 percent of the average
fuel economy of the combined domestic
and import passenger car fleets in that
model year, whichever was greater.682
This minimum standard was intended
to act as a ‘‘backstop,’’ ensuring that
domestically-manufactured passenger
cars reached a given mpg level even if
the market shifted in ways likely to
reduce overall fleet mpg. Congress was
silent as to whether the agency could or
should develop similar backstop
standards for imported passenger cars
and light trucks. NHTSA has struggled
with this question since EISA was
enacted.
In the MY 2011 final rule, facing
comments split fairly evenly between
support and opposition to additional
backstop standards, NHTSA noted
Congress’ silence and ‘‘accept[ed] at
least the possibility that * * * [it] could
be reasonably interpreted as permissive
rather than restrictive,’’ but concluded
based on the record for that rulemaking
as a whole that additional backstop
standards were not necessary for MY
2011, given the lack of leadtime for
manufacturers to change their MY 2011
vehicles, the apparently-growing public
preference for smaller vehicles, and the
anti-backsliding characteristics of the
footprint-based curves.683 NHTSA
stated, however, that it would continue
to monitor manufacturers’ product plans
and compliance, and would revisit the
backstop issue if it became necessary in
future rulemakings.684
Thus, in the MYs 2012–2016 NPRM,
NHTSA again sought comment on the
issue of additional backstop standards,
recognizing the possibility that low fuel
prices during the years that the MYs
2012–2016 vehicles are in service might
lead to less than anticipated fuel
savings.685 NHTSA asked commenters,
in addressing this issue, to consider
reviewing the agency’s discussion in the
MY 2011 final rule, which the agency
described as concluding that its
authority was likely limited by
Congress’ silence to setting only the
backstop that Congress expressly
provided for.686 EPA also sought
comment on whether it should set
backstop standards under the CAA for
MYs 2012–2016.
As discussed above in Section II,
many commenters addressed the
682 49
683 74
U.S.C. 32902(b)(4).
FR at 14412 (Mar. 30, 2009).
684 Id.
685 74
686 Id.
FR at 49685 (Sept. 28, 2009).
at 49637, 49685 (Sept. 28, 2009).
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backstop issue, and again comments
were fairly evenly split between support
and opposition to additional backstop
standards. While commenters opposed
to additional backstops, such as the
Alliance, largely reiterated NHTSA’s
previous statements with regard to its
backstop authority, some commenters in
favor of additional backstops provided
more detailed legal arguments than have
been previously presented for the
agency’s consideration. Section II
provides NHTSA’s and EPA’s general
response to comments on the backstop
issue; this section provides NHTSA’s
specific response to the legal arguments
by Sierra Club et al.687 on the agency’s
authority to set additional backstop
standards.
The Sierra Club et al. commented that
a more permissive reading of Congress’
silence in EISA was appropriate given
the context of the statute, the 9th
Circuit’s revised opinion in CBD v.
NHTSA, and the assumptions employed
in the NPRM analysis. The commenters
stated that given that EISA includes the
35-in-2020 and ratable increase
requirements, and given that CAFE
standards were only just starting to rise
for light trucks at the time of EISA’s
enactment and had remained at the
statutory level of 27.5 mpg for passenger
cars for many years, it appears that
Congress’ intent in EISA was to raise
CAFE standards as rapidly as possible.
Thus, the commenters stated, if the
purpose of EISA was to promote the
maximum feasible increase in fuel
economy with ratable increases, then
there was no reason to think that
backstop standards would be
inconsistent with that purpose—if they
were inconsistent, Congress would not
have included one for domestic
passenger cars. Similarly, Congress
could not have thought that additional
backstops were inconsistent with
attribute-based standards, or it would
not have included one for domestic
passenger cars.688 The commenters also
cited D.C. Circuit case law stating that
congressional silence leaves room for
agency discretion; specifically, that
‘‘[w]hen interpreting statutes that govern
agency action, [the courts] have
consistently recognized that a
congressional mandate in one section
687 NHTSA refers to these commenters by the
shorthand ‘‘Sierra Club et al.,’’ but the group
consists of the Sierra Club, the Safe Climate
Campaign, the Coalition for Clean Air, the Alliance
for Climate Protection, and Environment America.
Their comments may be found at Docket No. EPA–
HQ–OAR–2009–0472–7278.1.
688 The commenters also suggested that NHTSA
could set attribute-based backstop standards if it
was concerned that Congress’ mandate to set
attribute-based standards generally precluded
additional flat backstops.
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and silence in another often ‘suggests
not a prohibition but simply a decision
not to mandate any solution in the
second context, i.e., to leave the
question to agency discretion.’ ’’ 689
The Sierra Club et al. also commented
that it appeared that the 9th Circuit’s
revised opinion in CBD v. NHTSA
supported the agency’s discretion to set
additional backstops, since it was
revised after the passage of EISA and
did not change its earlier holding
(pertaining to the original EPCA
language) that backstop standards were
within the agency’s discretion.690
And finally, the commenters stated
that NHTSA’s rationale for not adopting
additional backstops in the MY 2011
final rule should not be relied on for
MYs 2012–2016, namely, that the
agency’s belief that backstop standards
were unnecessary to ensure the
expected levels of fuel savings given the
short lead time between the
promulgation of the final standards and
the beginning of MY 2011, the apparent
growing consumer preference for
smaller vehicles, and the existing antibacksliding measures in the attributebased curves. As described above in
Section II, these commenters (and many
others) expressed concern about the
agencies’ fleet mix assumptions and
their potential effect on estimated fuel
savings.
In response, and given DC Circuit
precedent as cited above, NHTSA agrees
that whether to adopt additional
minimum standards for imported
passenger cars and light trucks is
squarely within the agency’s discretion,
and that such discretion should be
exercised as necessary to avoid undue
losses in fuel savings due to market
shifts or other forces while still
respecting the statutorily-mandated
manufacturer need for lead time in
establishing CAFE standards. However,
as discussed above in Section II.C,
NHTSA remains confident that the
projections of the future fleet mix are
reliable, and that future changes in the
fleet mix of footprints and sales are not
likely to lead to more than modest
changes in projected emissions
reductions or fuel savings. There are
only a relatively few model years at
issue, and market trends today are
consistent with the agencies’ estimates,
showing shifts from light trucks to
passenger cars and increased emphasis
on fuel economy from all vehicles. The
shapes of the curves also tend to avoid
689 Citing Catawba County, N.C. v. EPA, 571 F.3d
20, 36 (DC Cir. 2009) (quoting Cheney R. Co. v. ICC,
902 F.2d 66, 69 (DC Cir. 1990)).
690 Citing CBD v. NHTSA, 538 F.3d at 1204–06
(9th Cir. 2008).
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or minimize regulatory incentives for
manufacturers to upsize their fleet to
change their compliance burden, and
the risk of vehicle upsizing or changing
vehicle offerings to ‘‘game’’ the
passenger car and light truck definitions
to which commenters refer is not so
great for the model years in question,
because the changes that commenters
suggest manufacturers might make are
neither so simple nor so likely to be
accepted by consumers, as discussed
above.
Thus, NHTSA is confident that the
anticipated increases in average fuel
economy and reductions in average CO2
emission rates can be achieved without
backstops under EISA, as noted above.
Nevertheless, we acknowledge that the
MY 2016 fuel economy goal of 34.1 mpg
is an estimate and not a standard,691 and
that changes in fuel prices, consumer
preferences, and/or vehicle survival and
mileage accumulation rates could result
in either smaller or larger oil savings.
However, as explained above and
elsewhere in the rule, NHTSA believes
that the possibility of not meeting (or,
alternatively, exceeding) fuel economy
goals exists, but is not likely to lead to
more than modest changes in the
currently-projected levels of fuel and
GHG savings. NHTSA plans to conduct
retrospective analysis to monitor
progress, and has the authority to revise
standards if warranted, as long as
sufficient lead time is provided. Given
this, and given the potential
complexities in designing an
appropriate backstop, NHTSA believes
that the balance here points to not
adopting additional backstops at this
time for the MYs 2012–2016 standards
other than NHTSA’s issuing the ones
required by EPCA/EISA for domestic
passenger cars. If, during the timeframe
of this rule, NHTSA observes a
significant shift in the manufacturer’s
product mix resulting in a relaxation of
their estimated targets, NHTSA and EPA
will reconsider options, both for MYs
2012–2016 and future rulemakings.
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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
691 The MYs 2012–2016 passenger car and light
truck curves are the actual standards.
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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
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.’’ 692
The APA also requires that agencies
provide notice and comment to the
public when proposing regulations.693
Two commenters, the American
Chemistry Council and the American
Petroleum Institute, argued that the
agreements by auto manufacturers and
California to support the National
Program indicated that a ‘‘deal’’ had
been struck between the agencies and
these parties, which was not available as
part of the administrative record and
which the public had not been given the
opportunity to comment on. The
commenters argued that this violated
the APA.
In response, under the APA, agencies
‘‘must justify their rulemakings solely on
the basis of the record [they] compile[]
692 Ibid.,
693 5
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and make[] public.’’ 694 Any informal
contacts that occurred prior to the
release of the NPRM may have been
informative for the agencies and other
parties involved in developing the
NPRM, but they did not release the
agencies of their obligation consider and
respond to public comments on the
NPRM and to justify the final standards
based on the public record. The
agencies believe that the record fully
justifies the final standards,
demonstrating analytically that they are
the maximum feasible and reasonable
for the model years covered. Thus, we
disagree that there has been any
violation of the APA.
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 both a draft and a final
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
694 Sierra Club v. Costle, 657 F.2d 298, 401 (DC
Cir. 1981).
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U.S. 332, 350, 109 S.Ct. 1835, 104
L.Ed.2d 351 (1989).
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.
This final rule also constitutes a
Record of Decision for NHTSA under
NEPA. Section IV.K below provides
much more information on the agency’s
NEPA analysis for this rulemaking, and
on how this final rule constitutes a
Record of Decision.
E. What are the final CAFE standards?
1. Form of the Standards
1
⎡
1 ⎞ 1⎤
⎛
MIN ⎢ MAX ⎜ c × FOOTPRINT + d, ⎟ , ⎥
a ⎠ b⎦
⎝
⎣
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.
In the NPRM preceding today’s final
rule (as under the recently-promulgated
CAFErequired =
∑ SALES
i
SALESi
∑ TARGET
i
(40 CFR 600.512–08(c)(8) and (9)). Using
this term would be more definitive than
using terms such as ‘‘footprint of a
vehicle model’’ and would more fully
harmonize the NHTSA and EPA
regulations. Therefore, under the final
CAFE standards promulgated today, a
manufacturer’s ‘‘fleet target standard’’
will be derived from the summation of
the targets for all and every unique
footprint within each model type for all
model types that make up a fleet of
vehicles. Also, to provide greater clarity,
the equation will use the variable name
PRODUCTION rather than SALES to
refer to production of vehicles for sale
in the United States. Otherwise, for
purposes of the final rule the same
equation will apply:
695 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 established today.
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However, comments by Honda and
Toyota indicate that the defined
variables used in the equations could be
interpreted differently by vehicle
manufacturers. The term ‘‘footprint of a
vehicle model’’ could be interpreted to
mean that a manufacturer only has to
use one representative footprint within
a model type or that it is necessary to
use all the unique footprints and
corresponding fuel economy target
standards within a model type when
determining a fleet target standard.
In the same NPRM, EPA proposed
new regulations which also include the
calculation of standards based on the
attribute of footprint. The EPA
regulation text is specific and states that
standards will be derived using the
target values ‘‘for each unique
combination of model type and
footprint value’’ (proposed regulation
text 40 CFR 86.1818–12(c)(2)(ii)(B) for
passenger automobiles and (c)(3)(ii)(B)
for light trucks). Also, in an EPA final
rule issued November 25, 2009, the
manufacturers are required to provide in
their final model year reports to EPA
data for ‘‘each unique footprint within
each model type’’ used to calculate the
new CAFE program fuel economy levels
ER07MY10.031</MATH>
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MY 2011 standards), NHTSA proposed
that the CAFE level required of any
given manufacturer be determined by
calculating the production-weighted
harmonic average of the fuel economy
targets applicable to each vehicle model:
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.
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 salesweighted harmonic average of those
targets.695
As discussed above in Section II.C,
NHTSA has determined fuel economy
targets using a constrained linear
function defined according to the
following formula:
Each of the CAFE standards that
NHTSA is finalizing today for passenger
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
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CAFErequired =
∑ PRODUCTION
∑
i
However, PRODUCTIONi is the
number of units produced for sale in the
United States of each ith unique
footprint within each model type,
produced for sale in the United States,
and TARGETi is the corresponding fuel
economy target (according to the
equation shown in Chapter II and based
on the corresponding footprint), and the
summations in the numerator and
denominator are both performed over all
unique footprint and model type
combinations in the fleet in question.
The equations and terms specified for
calculating the required CAFE fleet
values in Part 531.5(b) and (c) for MYs
2012–2016, and Part 533.5(g), (h) and (i)
i
i
PRODUCTION i
TARGETi
for MYs 2008–2016 will be updated
accordingly. Although the agency is not
changing the equations for the MY 2011
standards, we would expect
manufacturers to follow the same
procedures for calculating their required
levels for that model year. Also, the
Appendices in each of these parts will
also be updated to provide
corresponding examples of calculating
the fleet standards.
Corresponding changes to regulatory
text defining CAFE standards are
discussed below in Section IV.I.
The final 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 proposed
CAFE standards defined by the
following coefficients during MYs
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) .......................................................................
After updating inputs to its analysis,
and revisiting the form and stringency
of both passenger cars and light truck
36.23
28.12
0.0005308
0.005842
2013
2014
37.15
28.67
0.0005308
0.005153
standards, as discussed in Section II,
NHTSA is finalizing passenger car
CAFE standards defined by the
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
following coefficients during MYs
2012–2016:
TABLE IV.E.2–2—COEFFICIENTS DEFINING FINAL MY 2012–2016 FUEL ECONOMY TARGETS FOR PASSENGER CARS
2012
a (mpg) .......................................................................
b (mpg) .......................................................................
c (gpm/sf) ...................................................................
d (gpm) .......................................................................
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These coefficients reflect the agency’s
decision, discussed above in Section II,
to leave the shapes of both the passenger
car and light truck curves unchanged.
They also reflect the agency’s
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35.95
27.95
0.0005308
0.006057
2013
2014
36.80
28.46
0.0005308
0.005410
reevaluation of the ‘‘gap’’ in stringency
between the passenger car and light
truck standard, also discussed in
Section II.
These coefficients result in the
footprint-dependent target curves
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2015
37.75
29.03
0.0005308
0.004725
39.24
29.90
0.0005308
0.003719
2016
41.09
30.96
0.0005308
0.002573
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.
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ER07MY10.033</MATH>
Coefficient
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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 final 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): 696
TABLE IV.E.2–3—ESTIMATED AVERAGE FUEL ECONOMY REQUIRED UNDER FINAL MY 2011 AND FINAL MY 2012–2016
CAFE STANDARDS FOR PASSENGER CARS
MY 2011
BMW ................................................................................
Chrysler ............................................................................
Daimler .............................................................................
Ford ..................................................................................
General Motors ................................................................
Honda ...............................................................................
Hyundai ............................................................................
Kia ....................................................................................
Mazda ..............................................................................
Mitsubishi .........................................................................
Nissan ..............................................................................
696 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
under the MY 2011 passenger car standard. Based
on the agency’s current forecast of the MY 2011
passenger car market, which anticipates greater
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30.2
29.4
29.2
29.7
30.3
30.8
30.9
30.6
30.6
31.0
30.7
MY 2012
MY 2013
33.0
32.6
32.0
32.9
32.7
33.8
33.8
33.4
33.8
34.2
33.3
numbers of passenger cars than the forecast used in
the MY 2011 final rule, NHTSA now estimates that
the average required fuel economy level for
passenger cars will be 30.4 mpg in MY 2011. This
does not mean that the agency is making the
standards more stringent for that model year, or that
any manufacturer will necessarily face a more
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33.7
33.3
32.7
33.7
33.5
34.6
34.3
34.2
34.6
35.0
34.1
MY 2014
34.5
34.1
33.3
34.4
34.2
35.4
35.1
35.0
35.5
35.8
34.9
MY 2015
35.7
35.2
34.4
35.6
35.4
36.7
36.6
36.3
36.8
37.1
36.1
MY 2016
37.3
36.7
35.8
37.1
36.9
38.3
38.2
37.9
38.4
38.7
37.7
difficult CAFE standard, it simply reflects the
change in assumptions about what vehicles will be
produced for sale in that model year. The target
curve remains the same, and each manufacturer’s
compliance obligation will still be determined at
the end of the model year.
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TABLE IV.E.2–3—ESTIMATED AVERAGE FUEL ECONOMY REQUIRED UNDER FINAL MY 2011 AND FINAL MY 2012–2016
CAFE STANDARDS FOR PASSENGER CARS—Continued
Manufacturer
MY 2011
Porsche ............................................................................
Subaru ..............................................................................
Suzuki ..............................................................................
Tata ..................................................................................
Toyota ..............................................................................
Volkswagen ......................................................................
Average ............................................................................
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Because a manufacturer’s required
average fuel economy level for a model
year under the final standards will be
based on its actual production numbers
in that model year, its official required
fuel economy level will not be known
until the end of that model year.
However, because the targets for each
vehicle footprint will 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.
As published in the MY 2011 final
rule, the domestic minimum passenger
car standard for MY 2011 was set at 27.8
mpg, which represented 92 percent of
the final projected passenger car
standards promulgated for that model
year.697 NHTSA stated at the time that
‘‘The final calculated minimum
standards will be updated to reflect any
changes in the projected passenger car
standards.’’ 698 Subsequently, in the
NPRM proposing the MYs 2012–2016
standards, NHTSA noted that given
changes in the projected estimated
required passenger car standard for MY
697 See
74 FR at 14410 (Mar. 30, 3009).
698 Id.
699 Readers should remember, of course, that the
‘‘estimated required standard’’ is not necessarily the
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31.2
31.0
31.2
28.0
30.8
30.8
30.4
MY 2012
MY 2013
35.9
34.6
35.8
30.7
33.9
34.3
33.3
36.8
35.5
36.6
31.4
34.7
35.0
34.2
MY 2014
37.8
36.3
37.5
32.1
35.5
35.9
34.9
MY 2015
39.2
37.7
39.0
33.3
36.8
37.2
36.2
MY 2016
41.1
39.4
40.8
34.7
38.4
38.8
37.8
2011,699 92 percent of that standard
would be 28.0 mpg, not 27.8 mpg, and
proposed to raise the minimum
domestic passenger car standard
accordingly.
The Alliance commented to the
NPRM that the minimum domestic
passenger car standard is subject to the
18-month lead time rule for standards
per 49 U.S.C. per 49 U.S.C. 32902(a),
and that NHTSA therefore cannot revise
it at this time. Toyota individually
offered identical comments.
49 U.S.C. 32902(b)(4)(B) does state
that the minimum domestic passenger
car standard shall be 92 percent of the
projected average fuel economy for the
passenger car fleet, ‘‘which projection
shall be published in the Federal
Register when the standard for that
model year is promulgated in
accordance with this section.’’ In
reviewing the statute, the agency
concurs that the minimum domestic
passenger car standard should be based
on the agency’s fleet assumptions when
the passenger car standard for that year
is promulgated, which would make it
inappropriate to change the minimum
standard for MY 2011 at this time.
However, we note that we do not read
this language to preclude any change in
the minimum standard after it is first
promulgated for a model year. As long
as the 18-month lead-time requirement
of 49 U.S.C. 32902(a) is respected,
NHTSA believes that the language of the
statute suggests that the 92 percent
should be determined anew any time
the passenger car standards are revised.
The Alliance also commented that the
minimum domestic passenger car
standard should be based on the
projected ‘‘actual’’ (NHTSA refers to this
as ‘‘estimated achieved’’) mpg level for
the combined passenger car fleet, rather
than based on the projected ‘‘target’’ mpg
level (NHTSA refers to this as
‘‘estimated required’’) for the combined
fleet. The Alliance argued that the plain
language of the statute states that 92
percent should be taken of the ‘‘average
fuel economy projected * * * for the
combined * * * fleets,’’ which is
different than the average fuel economy
standard projected. The Alliance further
argued that using the ‘‘estimated
achieved’’ value to determine the 92
percent will avoid inadvertently
‘‘considering’’ FFV credits in setting the
minimum standard, since the ‘‘estimated
achieved’’ value is determined by
ignoring FFV credits. Toyota
individually offered identical
comments.
NHTSA disagrees that the minimum
standard should be based on the
estimated achieved levels rather than
the estimated required levels. NHTSA
interprets Congress’ reference in the
second clause of 32902(b)(4)(B) to the
standard promulgated in that model
year as indicating that Congress
intended ‘‘projected average fuel
economy’’ in the first clause to pertain
to the estimated required level, not the
estimated achieved level. The Alliance’s
concern that a minimum standard based
on the estimated required level
‘‘inadvertently considers’’ FFV credits is
misplaced, because NHTSA is
statutorily prohibited from considering
FFV credits in setting maximum feasible
standards. Thus, NHTSA has continued
to determine the minimum domestic
passenger car standard based on the
estimated required mpg levels projected
for the model years covered by the
rulemaking.
Based on NHTSA’s current market
forecast, the agency’s estimates of these
minimum standards under the final MY
2012–2016 CAFE standards (and, for
comparison, the final MY 2011
minimum domestic passenger car
standard) are summarized below in
Table IV.E.3–1.
ultimate mpg level with which manufacturers will
have to comply, because the ultimate mpg level for
each manufacturer is determined at the end of the
model year based on the target curves and the mix
of vehicles that each manufacturer has produced for
sale. The mpg level designated as ‘‘estimated
required’ is exactly that, an estimate.
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TABLE IV.E.3–1—ESTIMATED MINIMUM STANDARD FOR DOMESTICALLY MANUFACTURED PASSENGER CARS UNDER FINAL
MY 2011 AND FINAL MY 2012–2016 CAFE STANDARDS FOR PASSENGER CARS
2011
2012
2013
2014
2015
2016
27.8
30.7
31.4
32.1
33.3
34.7
following coefficients during MYs
2012–2016:
4. Light Truck Standards
For light trucks, NHTSA proposed
CAFE standards defined by the
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) .......................................................................
After updating inputs to its analysis,
and revisiting the form and stringency
of both passenger cars and light truck
29.44
22.06
0.0004546
0.01533
2013
2014
30.32
22.55
0.0004546
0.01434
standards, as discussed in Section II,
NHTSA is finalizing light truck CAFE
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
standards defined by the following
coefficients during MYs 2012–2016:
TABLE IV.E.4–2—COEFFICIENTS DEFINING FINAL MY 2012–2016 FUEL ECONOMY TARGETS FOR LIGHT TRUCKS
Coefficient
2012
a (mpg) .......................................................................
b (mpg) .......................................................................
c (gpm/sf) ...................................................................
d (gpm) .......................................................................
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As for passenger cars, these
coefficients reflect the agency’s
decision, discussed above in Section II,
to leave the shapes of both the passenger
car and light truck curves unchanged.
They also reflect the agency’s
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29.82
22.27
0.0004546
0.014900
2013
2014
30.67
22.74
0.0004546
0.013968
reevaluation of the ‘‘gap’’ in stringency
between the passenger car and light
truck standard, also discussed in
Section II.
These coefficients result in the
footprint-dependent targets shown
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2015
31.38
23.13
0.0004546
0.013225
32.72
23.85
0.0004546
0.011920
2016
34.42
24.74
0.0004546
0.010413
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.
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Again, 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 final 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): 700
TABLE IV.E.4–3—ESTIMATED AVERAGE FUEL ECONOMY REQUIRED UNDER FINAL MY 2011 AND FINAL MY 2012–2016
CAFE STANDARDS FOR LIGHT TRUCKS
MY 2011
BMW ........................................................
Chrysler ....................................................
Daimler .....................................................
Ford ..........................................................
General Motors ........................................
Honda .......................................................
Hyundai ....................................................
Kia ............................................................
Mazda ......................................................
Mitsubishi .................................................
Nissan ......................................................
Porsche ....................................................
Subaru ......................................................
Suzuki ......................................................
Tata ..........................................................
Toyota ......................................................
25.6
24.5
24.7
23.7
23.3
25.7
25.9
25.2
26.2
26.4
24.5
25.5
26.5
26.3
26.2
24.6
700 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
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MY 2012
MY 2013
26.6
25.7
25.6
24.8
24.2
26.9
27.0
26.2
27.6
27.8
25.6
26.3
27.9
27.5
27.4
25.7
27.3
26.2
26.3
25.4
24.8
27.5
27.6
26.7
28.4
28.5
26.2
26.9
28.6
28.2
28.2
26.2
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 24.4 mpg
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MY 2014
27.9
26.8
26.9
26.0
25.2
28.0
28.2
27.3
28.9
29.1
26.8
27.5
29.2
28.8
28.8
26.8
MY 2015
28.9
27.8
27.8
27.0
26.1
29.1
29.3
28.3
30.1
30.2
27.8
28.5
30.4
29.9
29.9
27.8
MY 2016
30.2
29.0
29.1
28.1
27.2
30.4
30.7
29.5
31.5
31.7
29.1
29.8
31.9
31.4
31.3
29.1
in MY 2011. The increase in the estimate reflects
a decrease in the size of the average light truck.
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25617
TABLE IV.E.4–3—ESTIMATED AVERAGE FUEL ECONOMY REQUIRED UNDER FINAL MY 2011 AND FINAL MY 2012–2016
CAFE STANDARDS FOR LIGHT TRUCKS—Continued
Manufacturer
MY 2011
Volkswagen ..............................................
Average ....................................................
25.0
24.4
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As discussed above with respect to
the final passenger cars standards, we
note that a manufacturer’s required fuel
economy level for a model year under
the final standards will be based on its
actual production numbers in that
model year.
F. How do the final standards fulfill
NHTSA’s statutory obligations?
In developing the proposed MY 2012–
16 standards, the agency developed and
considered a wide variety of
alternatives. 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%.701 That same approach has been
carried over to this final rule and to the
accompanying FEIS and FRIA. Thus, 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 clearly communicates the
level of stringency of each alternative
and allows us to identify alternatives
that represent different ways to balance
NHTSA’s statutory requirements under
EPCA/EISA.
In the NPRM, we noted that each of
the listed alternatives represents, in
part, a different way in which NHTSA
could conceivably balance different
policies and considerations in setting
the standards. We were mindful that the
agency needs to weigh and balance
many factors, such as technological
feasibility, economic practicability,
including lead time considerations for
the introduction of technologies and
impacts on the auto industry, the
impacts of the standards on fuel savings
and CO2 emissions, and fuel savings by
consumers, as well as other relevant
factors such as safety. For example, the
7% 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
701 Notice of intent to prepare an EIS, 74 FR
14857, 14859–60, April 1, 2009.
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MY 2012
MY 2013
25.8
25.4
26.4
26.0
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. We
also recognized that some technologies
(e.g., PHEVs and EVs) will not be
available for more than limited
commercial use through MY 2016, and
that even those technologies that could
be more widely commercialized through
MY 2016 cannot all be deployed on
every vehicle model in MY 2012 but
require a realistic schedule for more
widespread commercialization to be
within the realm of economically
practicability.
In addition to the alternatives that
increase evenly at annual rates ranging
from 3% to 7%, NHTSA also included
alternatives developed using benefitcost criteria. The agency emphasized
benefit-cost-related alternatives in its
rulemakings for MY 2008–2011 and,
subsequently, MY 2011 standards. By
including such alternatives in its
current analysis, the agency is providing
a degree of analytical continuity
between the two approaches to defining
alternatives in an effort to illustrate the
similarities and dissimilarities. To that
end, we included and analyzed two
additional alternatives, one that sets
standards at the point where net
benefits are maximized (labeled ‘‘MNB’’
in the table below), and another that sets
standards at the point at which total
costs are most nearly equal to total
benefits (labeled ‘‘TCTB’’ in the table
below).702 With respect to the first of
those alternatives, we note that
Executive Order 12866 focuses attention
702 The stringency indicated by each of these
alternatives depends on the value of inputs to
NHTSA’s analysis. Results presented here for these
two alternatives are based on NHTSA’s reference
case inputs, which underlie the central analysis of
the proposed standards. In the accompanying FRIA,
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.
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MY 2014
27.0
26.6
MY 2015
28.0
27.5
MY 2016
29.2
28.8
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, NHTSA used
the Volpe model extensively to assess
the technologies that the manufacturers
could apply in order to comply with
each of the alternatives. This allowed us
to assess the variety, amount and cost of
the technologies that could be used 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, reduce fuel consumption,
and reduce CO2 emissions.
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 other relevant
goals and priorities. Those priorities and
goals include maximizing energy
conservation and achieving a nationally
harmonized and coordinated program
for regulating fuel economy and GHG
emissions.
Part of that assessment of alternatives
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 a national attribute-based GHG
emissions standard would need to be set
to achieve the same emission reductions
in California as the California GHG
program. This was done by evaluating a
nationwide Clean Air Act standard for
MY 2016 that would apply across the
country and require the levels of
emissions reduction which California
standards would require for the subset
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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 national
new vehicle fleet-wide CO2 performance
standards for model year 2016 which
would result in the new light-duty
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 were met exclusively by fuel
economy improvements—and the
overall result is the model year 2016
goals of the National Program.
However, the level of stringency for
the National Program goal of 250 g/mi
CO2 can be met with both fuel economy
‘‘tailpipe’’ improvements as well as other
GHG-reduction related improvements,
such as A/C refrigerant leakage
reductions. CAFE standards, as
discussed elsewhere in this final rule,
cannot be met by improvements that
cannot be accounted for on the FTP/
HFET tests. Thus, setting CAFE
standards at 35.5 mpg would require
more tailpipe technology (at more
expense to manufacturers) than would
be required under such a CAA standard.
To obtain an equivalent CAFE standard,
we determined how much tailpipe
technology would be necessary in order
to meet an mpg level of 35.5 if
manufacturers also employed what EPA
deemed to be an average amount of
A/C ‘‘credits’’ (leakage and efficiency) to
reach the 250 g/mi equivalent. This
results in a figure of 34.1 mpg as the
appropriate counterpart CAFE standard.
This differential gives manufacturers the
opportunity to reach 35.5 mpg
equivalent 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.
Thus, as part of the process of
considering all of the factors relevant
under EPCA for setting standards, in a
context where achieving a harmonized
National Program is important, for the
proposal 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 alternatives
presented above, represents a unique
balancing of the statutory factors and
other relevant considerations. For the
reader’s reference, the estimated
required levels of stringency for each
alternative in each model year are
presented below:
TABLE IV.F–1—ESTIMATED REQUIRED FUEL ECONOMY LEVEL FOR REGULATORY ALTERNATIVES 703
Alt. 1
Alt. 3
Alt. 4
Alt. 5
Alt. 6
Alt. 7
Alt. 8
Alt. 9
No action
2012:
Passenger Cars ........................
Light Trucks ...............................
Alt. 2
3%/year
increase
4%/year
increase
~4.3%/year
increase
5%/year
increase
~6.0%/year
increase
MNB
6%/year
increase
7%/year
increase
~6.6%/year
increase
TCTB
30.5
24.4
31.7
24.1
32.1
24.4
33.3
25.4
32.4
24.6
33.0
26.3
32.7
24.9
33.0
25.1
33.4
26.3
Combined ...........................
2013:
Passenger Cars ........................
Light Trucks ...............................
27.8
28.3
28.6
29.7
28.8
30.0
29.1
29.4
30.3
30.5
24.4
32.6
24.8
33.3
25.3
34.2
26.0
33.9
25.8
36.1
27.7
34.5
26.3
35.2
26.8
36.7
28.0
Combined ...........................
2014:
Passenger Cars ........................
Light Trucks ...............................
27.8
29.1
29.7
30.5
30.3
32.3
30.8
31.4
32.8
30.5
24.5
33.5
25.5
34.5
26.3
34.9
26.6
35.5
27.0
38.1
29.1
36.5
27.8
37.6
28.6
39.2
29.7
Combined ...........................
2015:
Passenger Cars ........................
Light Trucks ...............................
28.0
30.0
30.9
31.3
31.8
34.2
32.7
33.7
35.0
30.5
24.4
34.4
26.2
35.8
27.2
36.2
27.5
37.1
28.3
39.4
30.3
38.6
29.4
40.1
30.5
40.7
30.7
Combined ...........................
2016:
Passenger Cars ........................
Light Trucks ...............................
28.0
31.0
32.2
32.6
33.4
35.6
34.7
36.0
36.5
30.5
24.4
35.4
27.0
37.2
28.3
37.8
28.8
39.0
29.7
40.9
31.1
40.9
31.1
42.9
32.6
42.3
31.8
Combined ...........................
28.1
32.0
33.6
34.1
35.2
36.9
36.9
38.7
38.0
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The following figure presents this
same information but in a different way,
comparing estimated 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
FRIA.
703 Also, the ‘‘MNB’’ and the ‘‘TCTB’’ alternatives
depend on the inputs to the agencies’ analysis. The
sensitivity analysis presented in the FRIA
documents the response of these alternatives to
changes in key economic inputs. For example, the
combined average required fuel economy under the
‘‘MNB’’ alternative is 36.9 mpg under the reference
case economic inputs presented here, and ranges
from 33.7 mpg to 37.2 mpg under the alternative
economic inputs presented in the FRIA. See Table
X–14 in the FRIA.
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As this figure illustrates, the final
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 final
standards reflects an average annual
increase of 4.3%/y. The final 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.’’
For each alternative, including today’s
final standards, NHTSA has estimated
all corresponding effects for each model
year, including fuel savings, CO2
25619
reductions, and other effects, as well as
the estimated societal benefits of these
effects. The accompanying FRIA
presents a detailed analysis of these
results. Table IV.F–2 presents fuel
savings, CO2 reductions, and total
industry cost outlays for model year
2012—2016 for the eight alternatives.
TABLE IV.F–2—FUEL SAVINGS, CO2 REDUCTIONS, AND TECHNOLOGY COSTS FOR REGULATORY ALTERNATIVES
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3% per Year .................................................................................................................................
4% per Year .................................................................................................................................
Final (4.3% per Year) ..................................................................................................................
5% per Year .................................................................................................................................
6% per Year .................................................................................................................................
Maximum Net Benefit ..................................................................................................................
7% per Year .................................................................................................................................
Total Cost = Total Benefit ............................................................................................................
As noted earlier, NHTSA has used the
Volpe model to analyze each of these
alternatives based on analytical inputs
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determined jointly with EPA. For a
given regulatory alternative, the Volpe
model estimates how each manufacturer
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34
50
61
68
82
90
93
96
CO2
reductions
(mmt)
373
539
655
709
840
925
945
986
Cost
($b)
23
39
52
63
90
103
111
114
could apply technology in response to
the MY 2012 standard (separately for
cars and trucks), carries technologies
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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
decides the manufacturers can achieve
in that model year’’ considering four
statutory factors. Pursuant to EPCA’s
requirement that NHTSA not consider
statutory credits in establishing CAFE
standards, NHTSA did not consider FFV
credits, credits carried forward and
backward, and transferred credits in this
calculation 704, 705 In addition, the
analysis incorporates fines for some
manufacturers that have traditionally
paid fines rather than comply with the
standards. Because it entails year-byyear 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 NHTSA’s FRIA.
704 NHTSA has conducted a separate analysis,
discussed above in Section I, which accounts for
EPCA’s provisions regarding FFVs.
705 For a number of reasons, the results of this
modeling differ from EPA’s for specific
manufacturers, fleets, and model years. These
reasons include representing every model year
explicitly, accounting for estimates of when vehicle
model redesigns will occur, and not considering
those compliance flexibilities where EPCA forbids
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In reviewing the results of the various
alternatives, NHTSA confirmed that
progressive increases in stringency
require progressively greater
deployment of fuel-saving technology
and corresponding increases in
technology outlays and related costs,
fuel savings, and CO2 emission
reductions. To begin, NHTSA estimated
total incremental outlays for additional
technology in each model year. The
following figure shows cumulative
results for MYs 2012–2016 for industry
as a whole and Chrysler, Ford, General
Motors, Honda, Nissan, and Toyota.
This figure focuses on these
manufacturers as they currently (in MY
2010) represent three large U.S.headquartered and three large foreignheadquartered full-line manufacturers.
BILLING CODE 6560–50–P
such consideration in setting CAFE standards. It
should be noted, however, that these flexibilities in
fact provide manufacturers significant latitude to
manage their compliance obligations.
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regulatory alternative. The following
four charts illustrate the results of this
analysis, considering the application of
four technologies by six manufacturers
and by 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
presented because they are among the
technologies that play an important role
in achieving the fuel economy
improvements shown in NHTSA’s
analysis, and diesels and strong HEVs
are presented because they represent
technologies involving significant cost
and related lead time challenges for
widespread use through MY 2016.
These figures focus on Chrysler, Ford,
General Motors, Honda, Nissan, and
Toyota, as above. For each alternative,
the figures show additional application
of technology by MY 2016.706
BILLING CODE 2010–8159–P
706 The FRIA presents results for all model years,
technologies, and manufacturers, and NHTSA has
considered these broader results when considering
the eight regulatory alternatives.
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As part of the incremental technology
outlays, NHTSA also analyzes which
technologies manufacturers could apply
to meet the standards. In NHTSA’s
analysis, manufacturers achieve
compliance with the fuel economy
levels through application of technology
rather than through changes in the mix
of vehicles produced for sale in the U.S.
The accompanying FRIA presents
detailed estimates of additional
technology penetration into the NHTSA
reference fleet associated with each
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The modeling analysis demonstrates
that applying these technologies, of
course, results in fuel savings. Relevant
to EPCA’s requirement that NHTSA
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consider, among other factors, economic
practicability and the need of the nation
to conserve energy, the following figure
compares the incremental technology
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outlays and related cost presented above
for the industry to the corresponding
cumulative fuel savings.
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below. The following five figures show
industry-wide average incremental (i.e.,
relative to the reference fleet) pervehicle costs, for each model year, each
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fleet, and the combined fleet. Estimates
specific to each manufacturer are shown
in NHTSA’s FRIA.
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These incremental technology outlays
(and corresponding fuel savings) also
result in corresponding increases in
incremental cost per vehicle, as shown
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BILLING CODE 6560–50–C
As discussed in the NPRM, 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 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. Additionally,
given that CO2 and fuel savings are very
closely correlated, 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
savings and reduced CO2 emissions,
which would be achievable at
reasonable cost. And finally, neither the
3%/y nor the 4%/y alternatives 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. These
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alternatives would give inadequate
weight to other standards of the
Government, specifically EPA’s and
CARB’s. Thus, the agency concluded
that alternatives less stringent than the
proposed standards would not yield the
emissions reductions required to
produce a harmonized national program
and would not produce corresponding
fuel savings, and therefore would not
place adequate emphasis on the nation’s
need to conserve energy. NHTSA has
therefore concluded that it must reject
the 3%/y and 4%/y alternatives.
NHTSA then considered the
‘‘environmentally-preferable’’
alternative. Based on the information
provided in the FEIS, the
environmentally-preferable alternative
would be that involving stringencies
that increase at 7% annually.707 NHTSA
notes that NEPA does not require that
agencies choose the environmentallypreferable alternative if doing so would
be contrary to the choice that the agency
would otherwise make under its
governing statute. Given the levels of
707 See, e.g., FEIS, figure S–12, p. 18, which
shows that 7%/y alternative yields greatest
cumulative effect on global mean temperature.
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technology and cost required by the
environmentally-preferable alternative
and the lack of lead time to achieve
such levels between now and MY 2016,
as discussed further below, NHTSA
concludes that the environmentallypreferable alternative would not be
economically practicable or
technologically feasible, and thus
concludes that it would result in
standards that would be beyond the
level achievable for MYs 2012–2016.
For the other alternatives, NHTSA
determined that it would be
inappropriate to choose any of the other
more stringent alternatives due to
concerns over lead time and economic
practicability. There are real-world
technological and economic 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. The
alternatives more stringent than the
final standards begin to accrue costs
considerably more rapidly than they
accrue fuel savings and emissions
reductions, and at levels that are
increasingly economically burdensome,
especially considering the need to make
underlying investments (e.g., for
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engineering and tooling) well in
advance of actual production. As shown
in Figures IV–2 to IV–6 above, while the
final standards already require
aggressive application of technologies,
more stringent standards would require
more widespread use (including more
substantial implementation of advanced
technologies such as stoichiometric
gasoline direct injection engines, diesel
engines, and strong hybrids), and would
raise serious issues of adequacy of lead
time, not only to meet the standards but
to coordinate such significant changes
with manufacturers’ redesign cycles.
The agency maintains, as it has
historically, that there is an important
distinction between considerations of
technological feasibility and economic
practicability, both of which enter into
the agency’s determination of the
maximum feasible levels of stringency.
A given level of performance may be
technologically feasible (i.e., setting
aside economic constraints) for a given
vehicle model. However, it would not
be economically practicable to require a
level of fleet average performance that
assumes every vehicle will immediately
(i.e., within 18 months of the rule’s
promulgation) perform at its highest
technologically feasible level, because
manufacturers do not have unlimited
access to the financial resources or the
time required to hire enough engineers,
build enough facilities, and install
enough tooling. The lead time
reasonably needed to make capital
investments and to devote the resources
and time to design and prepare for
commercial production of a more fuel
efficient vehicle is an important element
that NHTSA takes into consideration in
establishing the standards.
In addition, the figures presented
above reveal that increasing stringency
beyond the final standards would entail
significant additional application of
technology. Among the more stringent
alternatives, the one closest in
stringency to the standards being
finalized today is the alternative under
which combined CAFE stringency
increases at 5% annually. As indicated
25631
above, this alternative would yield fuel
savings and CO2 reductions about 11%
and 8% higher, respectively, than the
final standards. However, compared to
the final standards, this alternative
would increase outlays for new
technologies during MY 2012–2016 by
about 22%, or $12b. Average MY 2016
cost increases would, in turn, rise from
$903 under the final standards to $1,152
when stringency increases at 5%
annually. This represents a 28%
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). Additionally,
the 5%/y alternative disproportionally
burdens the light truck fleet requiring a
nearly $400 (42 percent) cost increase in
MY 2016 compared to the final
standards. The following three tables
summarize estimated manufacturerlevel average incremental costs for the
5%/y alternative and the average of the
passenger and light truck fleets:
TABLE IV.F–3—AVERAGE INCREMENTAL COSTS ($/VEHICLE) UNDER THE 5%/Y ALTERNATIVE CAFE STANDARDS FOR
PASSENGER CARS
Manufacturer
MY 2012
MY 2013
MY 2014
MY 2015
MY 2016
BMW ............................................................................
Chrysler ........................................................................
Daimler .........................................................................
Ford ..............................................................................
General Motors ............................................................
Honda ...........................................................................
Hyundai ........................................................................
Kia ................................................................................
Mazda ..........................................................................
Mitsubishi .....................................................................
Nissan ..........................................................................
Porsche ........................................................................
Subaru ..........................................................................
Suzuki ..........................................................................
Tata ..............................................................................
Toyota ..........................................................................
Volkswagen ..................................................................
3
734
........................
743
448
50
747
49
555
534
294
68
292
........................
111
31
145
4
1,303
..........................
1,245
823
109
877
128
718
507
491
(52)
324
959
93
29
428
24
1,462
410
1,261
1,187
271
1,057
197
1,166
2,534
965
(51)
1,372
1,267
183
52
477
184
1,653
801
1,583
1,425
375
1,052
261
1,407
3,213
1,064
(50)
1,723
1,316
306
129
492
585
1,727
1,109
1,923
1,594
606
1,124
369
1,427
3,141
1,125
(49)
1,679
1,540
710
212
783
Average .................................................................
337
540
726
886
1,053
TABLE IV.F–4—AVERAGE INCREMENTAL COSTS ($/VEHICLE) UNDER THE 5%/Y ALTERNATIVE CAFE STANDARDS FOR
LIGHT TRUCKS
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Manufacturer
MY 2012
MY 2013
BMW ............................................................................
Chrysler ........................................................................
Daimler .........................................................................
Ford ..............................................................................
General Motors ............................................................
Honda ...........................................................................
Hyundai ........................................................................
Kia ................................................................................
Mazda ..........................................................................
Mitsubishi .....................................................................
Nissan ..........................................................................
Porsche ........................................................................
Subaru ..........................................................................
Suzuki ..........................................................................
169
360
60
1,207
292
258
711
47
248
........................
613
........................
1,225
........................
160
559
55
1,663
628
234
685
293
408
..........................
723
(0)
1,220
1,998
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MY 2014
MY 2015
201
1,120
51
1,882
866
611
1,923
556
419
1,037
2,142
(1)
1,365
1,895
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453
1,216
52
2,258
968
750
1,909
782
519
1,189
2,148
469
1,374
1,837
MY 2016
868
1,432
51
2,225
1,136
1,047
1,862
1,157
768
1,556
2,315
469
1,330
2,096
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TABLE IV.F–4—AVERAGE INCREMENTAL COSTS ($/VEHICLE) UNDER THE 5%/Y ALTERNATIVE CAFE STANDARDS FOR
LIGHT TRUCKS—Continued
Manufacturer
MY 2012
MY 2013
MY 2014
MY 2015
MY 2016
Tata ..............................................................................
Toyota ..........................................................................
Volkswagen ..................................................................
........................
63
........................
..........................
187
..........................
..........................
594
514
..........................
734
458
503
991
441
Average .................................................................
415
628
1,026
1,173
1,343
TABLE IV.F–5—AVERAGE INCREMENTAL COSTS ($/VEHICLE) UNDER THE 5%/Y ALTERNATIVE CAFE STANDARDS FOR
PASSENGER CARS AND LIGHT TRUCKS COMBINED
MY 2012
BMW ............................................................................
Chrysler ........................................................................
Daimler .........................................................................
Ford ..............................................................................
General Motors ............................................................
Honda ...........................................................................
Hyundai ........................................................................
Kia ................................................................................
Mazda ..........................................................................
Mitsubishi .....................................................................
Nissan ..........................................................................
Porsche ........................................................................
Subaru ..........................................................................
Suzuki ..........................................................................
Tata ..............................................................................
Toyota ..........................................................................
Volkswagen ..................................................................
72
499
20
914
371
135
742
49
500
371
399
52
617
........................
61
43
117
64
870
20
1,407
726
157
838
168
667
352
565
(39)
628
1,134
56
82
333
84
1,272
281
1,498
1,033
396
1,237
273
1,053
1,973
1,344
(35)
1,369
1,381
101
239
486
265
1,414
554
1,838
1,205
518
1,186
355
1,272
2,386
1,387
130
1,597
1,404
182
333
486
666
1,569
773
2,034
1,379
769
1,235
506
1,330
2,506
1,467
124
1,553
1,630
629
466
723
Average .................................................................
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Manufacturer
367
573
836
987
1,152
These cost increases derive from
increased application of advanced
technologies as stringency increases
past the levels in the final standards.
For example, under the final standards,
additional diesel application rates
average 1.6% for the industry and range
from 0% to 3% among Chrysler, Ford,
GM, Honda, Nissan, and Toyota. Under
standards increasing in combined
stringency at 5% annually, these rates
more than triple, averaging 6.2% for the
industry and ranging from 0% to 21%
for the same six manufacturers.
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
final 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 now and
over the next few years, under the final
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MY 2013
MY 2014
standards. NHTSA believes that the
final rule 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 Joint Technical Support
Document and the agency’s Regulatory
Impact Analysis, the average model year
2016 per-vehicle cost increase of more
than $900 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, are
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 reduction 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
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MY 2015
MY 2016
necessary to bring new technology into
production.
The agency concludes that the levels
of technology penetration required by
the final standards are reasonable.
Increasing the standards beyond those
levels would lead to rapidly increasing
dependence on advanced technologies
with higher costs—technology that,
though perhaps technologically feasible
for individual vehicle models, would, at
the scales involved, pose too great an
economic burden given the state of the
industry, particularly in the early years
of the rulemaking time frame.708
Therefore, the agency concluded that
these more stringent alternatives would
give insufficient weight to economic
practicability and related lead time
708 Although the final standards are projected to
be slightly more costly than the 5% alternative in
MY 2012, that alternative standard becomes
progressively more costly than the final standards
in the remaining model years. See Figures IV.F.8
through IV.F.10 above. Moreover, as discussed
above, after MY 2012, the 5% alternative standard
yields less incremental fuel economy benefits at
increased cost (both industry-wide and per vehicle),
directionally the less desirable result. These
increased costs incurred to increase fuel economy
through MY 2016 would impose significantly
increased economic burden on the manufacturers in
the next few calendar years to prepare for these
future model years. In weighing the statutory
factors, NHTSA accordingly rejected this alternative
in favor of the final standard.
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concerns, given the current state of the
industry and the rate of increase in
stringency that would be required.
Overall, the agency concluded that
among the alternatives considered by
the agency, the proposed alternative
contained the maximum feasible CAFE
standards for MYs 2012–2016 as they
were the most appropriate balance of
the various statutory factors.
Some commenters argued that the
agency should select a more stringent
alternative than that proposed in the
NPRM. The Union of Concerned
Scientists (UCS) commented that
NHTSA should set standards to produce
the ‘‘maximum environmental benefit’’
available at ‘‘reasonable’’ cost, and at
least at the stringency maximizing net
benefits. Students from the University of
California at Santa Barbara commented
that the agency should have based
standards not just on technologies
known to be available, but also on
technologies that may be available in
the future—and should do so in order to
force manufacturers to ‘‘reach’’ to greater
levels of performance. Also, the Center
for Biological Diversity (CBD)
commented that, having conducted an
unbiased cost-benefit analysis showing
benefits three times the magnitude of
costs for the proposed alternative, the
agency should select a more stringent
alternative. CBD also argued that the
agency should have evaluated the extent
to which manufacturers could deploy
technology more rapidly than suggested
by a five-year redesign cycle.
Conversely, other commenters argued
that NHTSA should select a less
stringent alternative, either in all model
years or at least in the earlier model
years. Chrysler, VW, and the Alliance of
Automobile Manufacturers commented
that the stringency of NHTSA’s CAFE
standards should be further reduced
relative to that of EPA’s GHG emissions
standards, so that manufacturers would
not be required by CAFE to add any
tailpipe technology beyond what they
thought would be necessary to meet an
mpg level of 35.5 minus the maximum
possible A/C credits that could be
obtained under the EPA program. Also,
Chrysler, Daimler, Toyota, Volkswagen,
and the Alliance argued that the agency
should reduce the rate of increase in
stringency to produce steadier and more
‘‘linear’’ increases between MY 2011 and
MY 2016. In addition, the Heritage
Foundation commented that the
proposed standards would, in effect,
force accelerated progress toward EISA’s
‘‘35 mpg by 2020’’ requirement, causing
financially-stressed manufacturers to
incur undue costs that would be passed
along to consumers.
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However, most commenters
supported the agency’s selection of the
proposed standards. The American
Chemical Society, the New York
Department of Environmental
Conservation, the Washington State
Department of Ecology, and several
individuals all expressed general
support for the levels of stringency
proposed by NHTSA as part of the joint
proposal. General Motors and Nissan
both indicated that the proposed
standards are consistent with the
National Program announced by the
President and supported in letters of
commitment signed by these companies’
executives. Finally, the California Air
Resources Board (CARB) strongly
supported the stringency of the
proposed standards, as well as the
agencies’ underlying technical analysis
and weighing of statutory factors. CARB
further commented that the stringency
increases in the earlier model years are
essential to providing environmental
benefits at least as great as would be
achieved through state-level
enforcement of CARB’s GHG emissions
standards.709
The agency has considered these
comments and all others, and having
considered those comments, believes
the final standards best balance all
relevant factors that the agency
considers when determining maximum
feasible CAFE standards. As discussed
below, having updated inputs to its
analysis and correspondingly updated
its definition and analysis of these
regulatory alternatives, the agency
continues to conclude that
manufacturers can respond to the
proposed standards with technologies
that will be available at reasonable cost.
The agency finds that alternatives less
stringent that the one adopted today
would leave too much technology ‘‘on
the shelf’’ unnecessarily, thereby failing
to deliver the fuel savings that the
nation needs or to yield environmental
benefits necessary to support a
harmonized national program. In
response to some manufacturers’
suggestion that NHTSA’s CAFE
standards should be made even less
stringent compared to EPA’s GHG
emissions standards, NHTSA notes that
the difference, consistent with the
underlying Notice of Intent, is based on
the agencies’ estimate of the average
amount of air conditioning credit
earned, not the maximum theoretically
available, and that NHTSA’s analysis
indicates that most manufacturers can
709 Generally speaking, the cumulative benefits
(in terms of fuel savings and GHG reductions) of
front-loaded standards will be greater than
standards that increase linearly.
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25633
achieve the CAFE standards by MY
2016 using tailpipe technologies. This is
fully consistent with the agency’s
historical position. As NHTSA
explained in the NPRM, the Conference
Report for EPCA, as enacted in 1975,
makes clear, and applicable 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.’’
CEI–I, 793 F.2d 1322, 1352 (DC Cir.
1986). 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. Thus, 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.
While some manufacturers may find
greater A/C improvements to be a more
cost-effective way of meeting the GHG
standards, that does not mean those
manufacturers will be unable to meet
the CAFE standards with tailpipe
technologies. NHTSA’s analysis has
demonstrated a feasible path to
compliance with the CAFE standards for
most manufacturers using those
technologies. ‘‘Economic practicability’’
means just that, practicability, and need
not always mean what is ‘‘cheapest’’ or
‘‘most cost-effective’’ for a specific
manufacturer. Moreover, many of the
A/C improvements on which
manufacturers intend to rely for meeting
the GHG standards will reduce GHG
emissions, specifically HFC emissions,
but they will not lead to greater fuel
savings.710 The core purpose of the
CAFE standards under EPCA is to
reduce fuel consumption. NHTSA
believes that less stringent standards
would allow tailpipe fuel economy
technologies to be left on the table that
can be feasibly and economically
applied, and failing to apply them
would lead to a loss in fuel savings.
This would not place appropriate
emphasis on the core CAFE purpose of
conserving fuel. For this reason, we
decline to reduce the stringency of our
standards as requested by some
manufacturers. Similarly, we decline to
pursue with EPA in this rulemaking the
suggestion by one commenter that that
710 This is not to say that NHTSA means, in any
way, to deter manufacturers from employing A/C
technologies to meet EPA’s standards, but simply to
say that NHTSA’s independent obligation to set
maximum feasible CAFE standards to be met
through application of tailpipe technologies alone
must be fulfilled, while recognizing the flexibilities
offered in another regulatory program.
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agency’s calculation authority under
EPCA be used to provide A/C credits.
With respect to some manufacturers’
concerns regarding the increase in
stringency through MY 2013, the agency
notes that stringency increases in these
model years are especially important in
terms of the accumulation of fuel
savings and emission reductions over
time. In addition, a weakening would
risk failing to produce emission
reductions at least as great as might be
achieved through CARB’s GHG
standards. Therefore, the agency
believes that alternatives less stringent
than the one adopted today would not
give sufficient emphasis to the nation’s
need to conserve energy. The
requirement to set standards that
increase ratably between MYs 2011 and
2020 must also be considered in the
context of what levels of standards
would be maximum feasible. The
agency believes that the rate of increase
of the final standards is reasonable.
On the other hand, the agency
disagrees with comments by UCS, CBD,
and others indicating that more
stringent standards would be
appropriate. As discussed above,
alternatives more stringent than the one
adopted today would entail a rapidly
increasing dependence on the most
expensive technologies and those which
are technically more demanding to
implement, with commensurately rapid
increases in costs. In the agency’s
considered judgment, these alternatives
are not economically practicable, nor do
they provide correspondingly sufficient
lead time. The agency also disagrees
with CBD’s assertion that NHTSA and
EPA have been overly conservative in
assuming an average redesign cycle of 5
years. There are some manufacturers
who apply longer cycles (such as
smaller manufacturers described above),
there are others who have shorter cycles
for some of their products, and there are
some products (e.g., cargo vans) that
tend to be redesigned on longer cycles.
NHTSA believes that there are no full
line manufacturers who can maintain
significant redesigns of vehicles (with
relative large sales) in 1 or 2 years, and
CBD has provided no evidence
indicating this would be practicable. A
complete redesign of the entire U.S.
light-duty fleet by model year 2012 is
clearly infeasible, and NHTSA and EPA
believe that several model years
additional lead time is necessary in
order for the manufacturers to meet the
most stringent standards. The graduated
increase in the stringency of the
standards from MYs 2012 through 2016
accounts for the economic necessity of
timing the application of many major
technologies to coincide with scheduled
model redesigns.
In contrast, through analysis of the
illustrative results shown above, as well
as the more complete and detailed
results presented in the accompanying
FRIA, NHTSA has concluded that the
final standards are technologically
feasible and economically practicable.
The final standards will require
manufacturers to apply considerable
additional technology, starting with
very significant investment in
technology design, development and
capital investment called for in the next
few years. Although NHTSA cannot
predict how manufacturers will respond
to the final 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
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 final
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 costly
technologies, such as diesel engines and
advanced technologies, such as strong
HEVs.
As shown below, NHTSA estimates
that the final standards could lead to
average incremental costs ranging from
$303 per vehicle (for light trucks in MY
2012) to $947 per vehicle (for light
trucks in MY 2016), increasing steadily
from $396 per vehicle for all light
vehicles in MY 2012 to $903 for all light
vehicle in MY 2016. NHTSA estimates
that these costs would vary considerably
among manufacturers, but would rarely
exceed $1,800 per vehicle. The
following three tables summarize
estimated manufacturer-level average
incremental costs for the final standards
and the average of the passenger and
light truck fleets:
TABLE IV.F–6—AVERAGE INCREMENTAL COSTS ($/VEHICLE) UNDER FINAL PASSENGER CAR CAFE STANDARDS
mstockstill on DSKB9S0YB1PROD with RULES2
Manufacturer
MY 2012
MY 2013
BMW ............................................................................
Chrysler ........................................................................
Daimler .........................................................................
Ford ..............................................................................
General Motors ............................................................
Honda ...........................................................................
Hyundai ........................................................................
Kia ................................................................................
Mazda ..........................................................................
Mitsubishi .....................................................................
Nissan ..........................................................................
Porsche ........................................................................
Subaru ..........................................................................
Suzuki ..........................................................................
Tata ..............................................................................
Toyota ..........................................................................
Volkswagen ..................................................................
3
734
........................
1,619
448
33
559
110
555
534
119
68
292
........................
111
31
145
4
1,043
..........................
1,537
896
98
591
144
656
460
323
(52)
324
625
93
29
428
24
1,129
410
1,533
1,127
205
768
177
799
1,588
707
(51)
988
779
183
41
477
184
1,270
801
1,713
1,302
273
744
235
854
1,875
723
(50)
1,385
794
306
121
492
585
1,358
1,109
1,884
1,323
456
838
277
923
1,831
832
(49)
1,361
1,005
710
126
783
Average .................................................................
455
552
670
774
880
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25635
TABLE IV.F–7—AVERAGE INCREMENTAL COSTS ($/VEHICLE) UNDER FINAL 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 ..................................................................
252
360
60
465
292
233
693
400
144
........................
398
........................
1,036
........................
........................
130
........................
239
527
51
633
513
217
630
467
241
..........................
489
(1)
995
1,797
..........................
150
..........................
277
876
51
673
749
370
1,148
582
250
553
970
(1)
1,016
1,744
..........................
384
514
281
931
52
1,074
807
457
1,136
780
354
686
1,026
469
1,060
1,689
..........................
499
458
701
1,170
51
1,174
986
806
1,113
1,137
480
1,371
1,362
469
1,049
1,732
503
713
441
Average .................................................................
303
411
615
741
947
TABLE IV.F–8—AVERAGE INCREMENTAL COSTS ($/VEHICLE) UNDER FINAL CAFE STANDARDS
MY 2012
BMW ............................................................................
Chrysler ........................................................................
Daimler .........................................................................
Ford ..............................................................................
General Motors ............................................................
Honda ...........................................................................
Hyundai ........................................................................
Kia ................................................................................
Mazda ..........................................................................
Mitsubishi .....................................................................
Nissan ..........................................................................
Porsche ........................................................................
Subaru ..........................................................................
Suzuki ..........................................................................
Tata ..............................................................................
Toyota ..........................................................................
Volkswagen ..................................................................
106
499
20
1,195
371
116
577
176
482
371
211
52
551
........................
61
67
117
94
743
18
1,187
705
144
599
221
587
319
376
(39)
552
823
56
70
333
110
989
281
1,205
946
266
847
263
716
1,200
792
(35)
998
954
101
159
486
213
1,084
554
1,472
1,064
343
805
334
778
1,389
813
130
1,267
946
182
248
486
618
1,257
773
1,622
1,165
585
879
426
858
1,647
984
124
1,248
1,123
629
317
723
Average .................................................................
mstockstill on DSKB9S0YB1PROD with RULES2
Manufacturer
396
498
650
762
903
In summary, NHTSA has considered
eight regulatory alternatives, including
the final 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 final
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, and
would forego these benefits even though
there is adequate lead time to
implement reasonable and feasible
technology for the vehicles. Conversely,
the agency has concluded that more
711 See
MY 2013
MY 2014
stringent standards would involve levels
of additional technology and cost that
would be economically impracticable
and, correspondingly, would provide
inadequate lead time, considering the
economic 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 final
standards,711 NHTSA concludes that the
final standards represent a reasonable
balancing of all of these concerns, and
MY 2015
are the maximum feasible average fuel
economy levels that the manufacturers
can achieve in MYs 2012–2016.
G. Impacts of the Final CAFE Standards
1. How will these 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
Section IV.G.7 below.
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economy requirement of 34.1 mpg in
that model year:
TABLE IV.G.1–1—ESTIMATED AVERAGE REQUIRED FUEL ECONOMY (mpg) UNDER FINAL STANDARDS
Model year
2012
2013
2014
2015
2016
Passenger Cars ...........................................................
Light Trucks .................................................................
33.3
25.4
34.2
26.0
34.9
26.6
36.2
27.5
37.8
28.8
Combined ..............................................................
29.7
30.5
31.3
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 712 in some model economy of 33.7 mpg in MY 2016: 714
years and overcomply 713 in others,
TABLE IV.G.1–2—ESTIMATED AVERAGE ACHIEVED FUEL ECONOMY (mpg) UNDER FINAL STANDARDS
Model year
2012
2013
2014
2015
2016
Passenger Cars ...........................................................
Light Trucks .................................................................
32.8
25.1
34.4
26.0
35.3
27.0
36.3
27.6
37.2
28.5
Combined ..............................................................
29.3
30.6
31.7
32.6
33.7
NHTSA estimates that these fuel
economy increases will lead to fuel
savings totaling 61 billion gallons
during the useful lives of vehicles
manufactured in MYs 2012–2016:
TABLE IV.G.1–3—FUEL SAVED (BILLION GALLONS) UNDER FINAL STANDARDS
Model year
2012
2013
2014
2015
2016
Total
Passenger Cars .......................................
Light Trucks .............................................
2.4
1.8
5.2
3.7
7.2
5.3
9.4
6.5
11.4
8.1
35.7
25.4
Combined ..........................................
4.2
8.9
12.5
16.0
19.5
61.0
The agency also estimates that these
new CAFE standards will lead to
corresponding reductions of CO2
emissions totaling 655 million metric
tons (mmt) during the useful lives of
vehicles sold in MYs 2012–2016:
TABLE IV.G.1–4—CARBON DIOXIDE EMISSIONS (mmt) AVOIDED UNDER FINAL STANDARDS
Model year
2012
2013
2014
2015
2016
Total
Passenger Cars .......................................
Light Trucks .............................................
25
19
54
40
77
57
101
71
123
88
380
275
Combined ..........................................
44
94
134
172
210
655
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 new standards on fuel use and
2. How will these standards improve
fleet-wide fuel economy and reduce
GHG emissions beyond MY 2016?
mstockstill on DSKB9S0YB1PROD with RULES2
Under the assumption that CAFE
standards at least as stringent as those
being finalized today for MY 2016
would be established for subsequent
model years, the effects of the final
712 In 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
payment, the estimated achieved CAFE levels
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GHG emissions will continue to grow
through approximately 2050, when
virtually all cars and light trucks in
service will have met standards as
stringent as those established for MY
2016.
As Table IV.G.2–1 shows, NHTSA
estimates that the fuel economy
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.
713 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).
714 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.
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increases resulting from the final
standards will lead to reductions in total
fuel consumption by cars and light
trucks of 10 billion gallons during 2020,
increasing to 32 billion gallons by 2050.
Over the period from 2012, when the
final standards would begin to take
effect, through 2050, cumulative fuel
savings would total 729 billion gallons,
as Table IV.G.2–1 also indicates.
TABLE IV.G.2–1—REDUCTION IN FLEET-WIDE FUEL USE (BILLION GALLONS) UNDER FINAL STANDARDS
Calendar year
2020
2030
2040
Total,
2012–2050
2050
Passenger Cars ...................................................................
Light Trucks .........................................................................
6
4
13
7
17
9
21
11
469
260
Combined ......................................................................
10
20
26
32
729
The energy security analysis
conducted for this rule estimates that
the world price of oil will fall modestly
in response to lower U.S. demand for
refined fuel. One potential result of this
decline in the world price of oil would
be an increase in the consumption of
petroleum products outside the U.S.,
which would in turn lead to a modest
increase in emissions of greenhouse
gases, criteria air pollutants, and
airborne toxics from their refining and
use. While additional information
would be needed to analyze this
‘‘leakage effect’’ in detail, NHTSA
provides a sample estimate of its
potential magnitude in its Final EIS.715
This analysis indicates that the leakage
effect is likely to offset only a modest
fraction of the reductions in emissions
projected to result from the rule.
As a consequence of these reductions
in fleet-wide fuel consumption, the
agency also estimates that the new
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 annual CO2
emissions associated with passenger car
and light truck use in the U.S. use will
decline by 116 million metric tons
(mmt) in 2020 as a consequence of the
new standards, as Table IV.G.2–2
reports. The table also shows that the
this annual reduction is estimated to
grow to nearly 400 million metric tons
by the year 2050, and will total nearly
9 billion metric tons over the period
from 2012, when the final standards
would take effect, through 2050.
TABLE IV.G.2–2—REDUCTION IN FLEET-WIDE CARBON DIOXIDE EMISSIONS (mmt) FROM PASSENGER CAR AND LIGHT
TRUCK USE UNDER FINAL STANDARDS
Calendar year
2020
2030
2040
Total,
2012–2050
2050
Passenger Cars ...................................................................
Light Trucks .........................................................................
69
49
153
89
205
112
255
136
5,607
3,208
Combined ......................................................................
117
242
316
391
8,815
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, based on
analysis documented in the final
Environmental Impact Statement (EIS)
that informed the agency’s decisions
regarding this rule, 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
mstockstill on DSKB9S0YB1PROD with RULES2
Atmospheric CO2 Concentration ..................
Increase in Global Mean Surface Temperature.
Sea Level Rise .............................................
Global Mean Precipitation ............................
715 NHTSA Final Environmental Impact
Statement: Corporate Average Fuel Economy
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standards
Difference
ppm .......................................
°C ..........................................
2100
2100
783.0
3.136
780.3
3.125
¥2.7
¥0.011
cm .........................................
% change from 1980–1999
avg.
2100
2090
38.00
4.59%
37.91
4.57%
¥0.09
¥0.02%
Standards, Passenger Cars and Light Trucks, Model
Years 2012–2016, February 2010, page 3–14.
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3. How will these final 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 new 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 new 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 lower fuel production
and distribution will outweigh the
increase in emissions from vehicle use,
resulting in a net decline in their total
emissions.716
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 final
standards during calendar year 2030. By
that date, the majority of light-duty
vehicles in use will have met the MY
2016 CAFE standards, so these
reductions provide a useful index of the
long-term impact of the final 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
Nitrogen
oxides
(NOX)
Particulate
matter
(PM2.5)
Volatile organic compounds
(VOC)
Vehicle class
Source of emissions
Passenger Cars ................................
Vehicle use .......................................
Fuel production and distribution .......
All sources ........................................
2,718
¥20,970
¥18,252
465
¥2,831
¥2,366
¥2,442
¥12,698
¥15,140
2,523
¥75,342
¥72,820
Light Trucks ......................................
Vehicle use .......................................
Fuel production and distribution .......
All sources ........................................
3,544
¥12,252
¥8,707
176
¥1,655
¥1,479
¥1,420
¥7,424
¥8,845
1,586
¥43,763
¥42,177
Total ...........................................
Vehicle use .......................................
Fuel production and distribution .......
All sources ........................................
6,263
¥33,222
¥26,959
642
¥4,487
¥3,845
¥3,862
¥20,122
¥23,984
4,108
¥119,106
¥114,997
Sulfur oxides
(SOX)
TABLE IV.G.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
1,3-Butadiene
Formaldehyde
Passenger Cars ..............................................
Vehicle use .....................................................
Fuel production and distribution .....................
All sources ......................................................
72
¥161
¥89
18
¥2
16
59
¥58
1
Light Trucks ....................................................
Vehicle use .....................................................
Fuel production and distribution .....................
All sources ......................................................
38
¥94
¥55
10
¥1
9
65
¥34
32
Total .........................................................
Vehicle use .....................................................
Fuel production and distribution .....................
All sources ......................................................
111
¥254
¥144
28
¥3
25
124
¥91
33
mstockstill on DSKB9S0YB1PROD with RULES2
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
716 As stated elsewhere, while the agency’s
analysis assumes that all changes in upstream
emissions result from a decrease in petroleum
production and transport, the analysis of non-GHG
emissions in future calendar years also assumes that
retail gasoline composition is unaffected by this
rule; as a result, the impacts of this rule on
downstream non-GHG emissions (more specifically,
on air toxics) may be underestimated. See also
Section III.G above for more information.
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population exposure to unhealthful
atmospheric concentrations of PM2.5.
The estimates reported in Table IV.G.3–
2, based on analysis documented in the
final Environmental Impact Statement
(EIS) that informed the agency’s
decisions regarding this rule, are
derived from PM2.5-related dollar-perton 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. However, emissions changes and
dollar-per-ton estimates alone are not
necessarily a good indication of local or
regional air quality and health impacts,
as there may be localized impacts
associated with this rulemaking,
because the atmospheric chemistry
related to ambient concentrations of
PM2.5, ozone, and air toxics is very
complex. Full-scale photochemical
modeling provides the necessary 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. Although EPA conducted such
modeling for purposes of the final rule,
it was not available in time to be
included in NHTSA’s FEIS. See Section
III.G above for EPA’s description of the
full-scale air quality modeling it
conducted for the 2030 calendar year in
an effort to capture this variability.
TABLE IV.G.3–2—PROJECTED REDUCTIONS IN HEALTH IMPACTS OF EXPOSURE TO CRITERIA AIR POLLUTANTS FROM
FINAL 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 final standards?
NHTSA estimates that the final
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
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
243 to 623.
160.
222.
28,705.
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.
TABLE IV.G.4–1—ADDITION OF TECHNOLOGIES TO PASSENGER CAR FLEET UNDER FINAL STANDARDS
MY 2012
(percent)
mstockstill on DSKB9S0YB1PROD with RULES2
Technology
Low Friction Lubricants ........................................................
Engine Friction Reduction ....................................................
VVT—Coupled Cam Phasing (CCP) on SOHC ..................
Discrete Variable Valve Lift (DVVL) on SOHC ....................
Cylinder Deactivation on SOHC ..........................................
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 TRBDS ...............................
Conversion to Diesel following CBRST ...............................
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 mounted Integrated Starter Generator .........................
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MY 2013
(percent)
14
15
2
0
0
0
11
9
0
0
0
0
0
0
9
0
8
0
2
0
1
0
0
0
12
9
18
0
4
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MY 2014
(percent)
18
37
3
1
0
0
15
19
0
0
1
1
1
0
18
0
14
8
2
0
1
3
0
0
26
22
25
0
11
E:\FR\FM\07MYR2.SGM
MY 2015
(percent)
19
41
3
1
0
0
16
22
0
0
1
2
1
0
21
1
16
10
2
0
1
4
0
1
34
25
27
0
19
07MYR2
MY 2016
(percent)
21
43
5
4
0
0
17
23
0
1
1
2
2
0
24
4
19
13
2
0
1
1
0
1
47
26
31
0
24
21
52
7
4
0
0
24
29
0
2
1
2
3
0
28
9
21
17
2
0
1
¥3
0
2
54
38
41
0
25
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TABLE IV.G.4–1—ADDITION OF TECHNOLOGIES TO PASSENGER CAR FLEET UNDER FINAL STANDARDS—Continued
MY 2012
(percent)
Technology
Crank mounted Integrated Starter Generator ......................
Power Split Hybrid ...............................................................
2-Mode Hybrid .....................................................................
Plug-in Hybrid ......................................................................
Mass Reduction (1.5) ...........................................................
Mass Reduction (3.5 to 8.5) ................................................
Low Rolling Resistance Tires ..............................................
Low Drag Brakes .................................................................
Secondary Axle Disconnect—Unibody ................................
Secondary Axle Disconnect—Ladder Frame ......................
Aero Drag Reduction ...........................................................
MY 2013
(percent)
3
2
0
0
18
0
4
2
0
1
6
MY 2014
(percent)
3
2
0
0
26
0
16
3
0
2
20
MY 2015
(percent)
3
2
0
0
32
17
23
4
0
2
29
MY 2016
(percent)
3
2
0
0
39
31
32
4
0
2
34
3
2
0
0
46
40
35
6
0
2
38
TABLE IV.G.4–2—ADDITION OF TECHNOLOGIES TO LIGHT TRUCK FLEET UNDER FINAL STANDARDS
MY 2012
(percent)
Technology
Low Friction Lubricants ........................................................
Engine Friction Reduction ....................................................
VVT—Coupled Cam Phasing (CCP) on SOHC ..................
Discrete Variable Valve Lift (DVVL) on SOHC ....................
Cylinder Deactivation on SOHC ..........................................
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 TRBDS ...............................
Conversion to Diesel following CBRST ...............................
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 mounted Integrated Starter Generator .........................
Crank mounted Integrated Starter Generator ......................
Power Split Hybrid ...............................................................
2-Mode Hybrid .....................................................................
Plug-in Hybrid ......................................................................
Mass Reduction (1.5) ...........................................................
Mass Reduction (3.5 to 8.5) ................................................
Low Rolling Resistance Tires ..............................................
Low Drag Brakes .................................................................
Secondary Axle Disconnect—Unibody ................................
Secondary Axle Disconnect—Ladder Frame ......................
Aero Drag Reduction ...........................................................
MY 2013
(percent)
18
14
2
1
6
0
6
9
0
1
0
0
0
0
12
0
3
0
1
0
0
0
0
¥2
10
7
7
0
5
0
1
0
0
4
0
11
14
0
17
13
MY 2014
(percent)
20
34
3
2
6
0
8
12
0
1
1
0
13
0
17
0
6
2
1
0
0
¥11
0
¥2
32
11
9
0
10
0
1
0
0
5
0
12
32
0
19
15
MY 2015
(percent)
22
35
3
2
6
0
13
17
0
1
1
0
14
0
23
3
10
6
1
0
0
¥17
0
¥2
46
11
10
0
19
0
1
0
0
21
19
13
30
0
20
20
MY 2016
(percent)
23
40
2
2
6
1
13
17
0
1
2
0
19
0
24
5
10
6
1
0
0
¥28
0
¥2
58
20
15
0
20
0
1
0
0
35
33
16
31
0
21
22
23
51
2
3
5
1
17
18
0
0
7
13
19
0
31
18
14
9
1
0
0
¥32
0
¥1
65
27
23
0
21
0
1
0
0
48
54
17
40
0
28
25
mstockstill on DSKB9S0YB1PROD with RULES2
TABLE IV.G.4–3—ADDITION OF TECHNOLOGIES TO OVERALL FLEET UNDER FINAL STANDARDS
MY 2012
(percent)
Technology
Low Friction Lubricants ........................................................
Engine Friction Reduction ....................................................
VVT—Coupled Cam Phasing (CCP) on SOHC ..................
Discrete Variable Valve Lift (DVVL) on SOHC ....................
Cylinder Deactivation on SOHC ..........................................
VVT—Intake Cam Phasing (ICP) ........................................
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MY 2013
(percent)
16
15
2
0
2
0
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MY 2014
(percent)
18
36
3
1
3
0
E:\FR\FM\07MYR2.SGM
MY 2015
(percent)
20
39
3
2
2
0
07MYR2
MY 2016
(percent)
22
42
4
3
2
0
22
51
5
3
2
0
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TABLE IV.G.4–3—ADDITION OF TECHNOLOGIES TO OVERALL FLEET UNDER FINAL STANDARDS—Continued
MY 2012
(percent)
Technology
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 TRBDS ...............................
Conversion to Diesel following CBRST ...............................
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 mounted Integrated Starter Generator .........................
Crank mounted Integrated Starter Generator ......................
Power Split Hybrid ...............................................................
2-Mode Hybrid .....................................................................
Plug-in Hybrid ......................................................................
Mass Reduction (1.5) ...........................................................
Mass Reduction (3.5 to 8.5) ................................................
Low Rolling Resistance Tires ..............................................
Low Drag Brakes .................................................................
Secondary Axle Disconnect—Unibody ................................
Secondary Axle Disconnect—Ladder Frame ......................
Aero Drag Reduction ...........................................................
In order to pay for this additional
technology (and, for some
manufacturers, civil penalties), NHTSA
estimates that the cost of an average
passenger car and light truck will,
relative to levels resulting from
MY 2013
(percent)
9
9
0
0
0
0
0
0
10
0
6
0
1
0
0
0
0
¥1
11
8
13
0
5
2
2
0
0
13
0
7
6
0
7
9
MY 2014
(percent)
13
16
0
1
1
1
6
0
17
0
11
6
2
0
0
¥2
0
0
28
18
19
0
11
2
2
0
0
18
0
14
14
0
8
18
compliance with baseline (MY 2011)
standards, increase by $505–$907 and
$322–$961, respectively, during MYs
2011–2016. The following tables
summarize the agency’s estimates of
average cost increases for each
15
20
0
0
1
1
6
0
22
1
14
8
2
0
0
¥4
0
0
38
20
21
0
19
2
2
0
0
28
18
19
14
0
8
26
MY 2015
(percent)
MY 2016
(percent)
16
21
0
1
1
1
8
0
24
4
16
11
2
0
0
¥10
0
0
51
24
25
0
23
2
1
0
0
37
32
26
14
0
8
30
22
25
0
1
3
6
8
0
29
12
19
14
2
0
1
¥13
0
1
58
34
35
0
23
2
1
0
0
47
45
29
18
0
11
34
manufacturer’s passenger car, light
truck, and overall fleets (with
corresponding averages for the
industry):
TABLE IV.G.4–4—AVERAGE PASSENGER CAR INCREMENTAL COST INCREASES ($) UNDER FINAL STANDARDS
mstockstill on DSKB9S0YB1PROD with RULES2
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 ..........................................................................
157
794
160
1,641
552
33
559
110
632
644
119
316
413
242
243
31
293
196
1,043
198
1,537
896
98
591
144
656
620
323
251
472
625
258
29
505
255
1,129
564
1,533
1,127
205
768
177
799
1,588
707
307
988
779
370
41
587
443
1,270
944
1,713
1,302
273
744
235
854
1,875
723
390
1,385
794
532
121
668
855
1,358
1,252
1,884
1,323
456
838
277
923
1,831
832
496
1,361
1,005
924
126
964
Total/Average ................................................................
505
573
690
799
907
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TABLE IV.G.4–5—AVERAGE LIGHT TRUCK INCREMENTAL COST INCREASES ($) UNDER FINAL 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 ..........................................................................
252
409
98
465
336
233
693
406
144
39
398
44
1,036
66
66
130
44
272
527
123
633
513
217
630
467
241
77
489
76
995
1,797
110
150
77
338
876
155
673
749
370
1,148
582
250
553
970
109
1,016
1,744
137
384
552
402
931
189
1,074
807
457
1,136
780
354
686
1,026
568
1,060
1,689
198
499
557
827
1,170
260
1,174
986
806
1,113
1,137
480
1,371
1,362
640
1,049
1,732
690
713
606
Total/Average ................................................................
322
416
621
752
961
TABLE IV.G.4–6—AVERAGE INCREMENTAL COST INCREASES ($) BY MANUFACTURER UNDER FINAL 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 ..........................................................................
196
553
139
1,209
446
116
577
177
545
459
211
250
630
231
164
67
245
225
743
171
1,187
705
144
599
221
587
453
376
207
650
823
199
70
410
283
989
417
1,205
946
266
847
263
716
1,200
792
243
998
954
265
159
579
430
1,084
695
1,472
1,064
343
805
334
778
1,389
813
452
1,267
946
396
248
648
847
1,257
937
1,622
1,165
585
879
426
858
1,647
984
544
1,248
1,123
832
317
901
Total/Average ................................................................
434
513
665
782
926
Based on the agencies’ estimates of
manufacturers’ future sales volumes,
these cost increases will lead to a total
of $51.7 billion in incremental outlays
during MYs 2012–2016 for additional
technology attributable to the final
standards:
TABLE IV.G.4–7—INCREMENTAL TECHNOLOGY OUTLAYS ($b) UNDER FINAL STANDARDS
2012
2013
2014
2015
2016
Total
4.1
1.8
5.4
2.5
6.9
3.7
8.2
4.3
9.5
5.4
34.2
17.6
Combined ..........................................
mstockstill on DSKB9S0YB1PROD with RULES2
Passenger Cars .......................................
Light Trucks .............................................
5.9
7.9
10.5
12.5
14.9
51.7
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 is intended to hold
vehicle performance, capacity, and
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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 final CAFE
standards. Although these costs are
difficult to estimate accurately, they
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nonetheless represent a notable category
of omitted costs if they have not been
adequately accounted for in the cost
estimates. Similarly, the agency’s
estimates of net benefits for meeting
higher CAFE standards does not
estimate the economic value of potential
changes in motor vehicle fatalities and
injuries that could result from
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reductions in the size or weight of
vehicles. While NHTSA reports a range
of estimates of these potential safety
effects below and in the FRIA (ranging
from a net negative monetary impact to
a net positive benefits for society), no
estimate of their economic value is
included in the agency’s estimates of the
net benefits resulting from the final
standards.
Finally, while NHTSA is confident
that the cost estimates are the best
available and appropriate for purposes
of this final rule, 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. 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 final standards.
However, offsetting these costs, the
achieved increases in fuel economy will
also produce significant benefits to
society. NHTSA attributes most of these
benefits to reductions in fuel
consumption, valuing fuel savings at
25643
future pretax prices in EIA’s reference
case forecast from AEO 2010. The total
benefits also include other benefits and
dis-benefits, 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 FRIA accompanying today’s
final rule presents a detailed analysis of
the rule’s specific benefits.
As Table IV.G.4–8 shows, NHTSA
estimates that at the discount rate of 3
percent prescribed in OMB guidance for
regulatory analysis, the present value of
total benefits from the final CAFE
standards over the lifetimes of MY
2012–2016 passenger cars and light
trucks will be $182.5 billion.
TABLE IV.G.4–8—PRESENT VALUE OF BENEFITS ($BILLION) UNDER FINAL STANDARDS USING 3 PERCENT DISCOUNT
RATE 717
2012
2013
2014
2015
2016
Total
Passenger Cars .......................................
Light Trucks .............................................
6.8
5.1
15.2
10.7
21.6
15.5
28.7
19.4
35.2
24.3
107.5
75.0
Combined ..........................................
11.9
25.8
37.1
48.0
59.5
182.5
Table IV.G.4–9 reports that the
present value of total benefits from
requiring cars and light trucks to
achieve the fuel economy levels
specified in the final CAFE standards
for MYs 2012–16 will be $146.2 billion
when discounted at the 7 percent rate
also required by OMB guidance. Thus
the present value of fuel savings and
other benefits over the lifetimes of the
vehicles covered by the final standards
is $36.3 billion—or about 20 percent—
lower when discounted at a 7 percent
annual rate than when discounted using
the 3 percent annual rate.718
TABLE IV.G.4–9—PRESENT VALUE OF BENEFITS ($BILLION) UNDER FINAL STANDARDS USING 7 PERCENT DISCOUNT
RATE
2012
2013
2014
2015
2016
Total
Passenger Cars .......................................
Light Trucks .............................................
5.5
4.0
12.3
8.4
17.5
12.2
23.2
15.3
28.6
19.2
87.0
59.2
Combined ..........................................
9.5
20.7
29.7
38.5
47.8
146.2
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For both the passenger car and light
truck fleets, NHTSA estimates that the
benefits of today’s final standards will
exceed the corresponding costs in every
model year, so that the net social
benefits from requiring higher fuel
economy—the difference between the
total benefits that result from higher fuel
economy and the technology outlays
required to achieve it—will be
substantial. Because the technology
outlays required to achieve the fuel
economy levels required by the final
standards are incurred during the model
years when vehicles are produced and
sold, however, they are not subject to
discounting, so that their present value
does not depend on the discount rate
used.719 Thus the net benefits of the
final standards differ depending on
whether the 3 percent or 7 percent
discount rate is used, but only because
the choice of discount rates affects the
present value of total benefits, and not
that of technology costs.
As Table IV.G.4–10 shows, over the
lifetimes of the affected (MY 2012–2016)
717 Unless otherwise indicated, all tables in
Section IV report benefits calculated using the
Reference Case input assumptions, with future
benefits resulting from reductions in carbon dioxide
emissions discounted at the 3 percent rate
prescribed in the interagency guidance on the social
cost of carbon.
718 For tables that report total or net benefits using
a 7 percent discount rate, future benefits from
reducing carbon dioxide emissions are discounted
at 3 percent, in order to maintain consistency with
the discount rate used to develop the reference case
estimate of the social cost of carbon. All other
future benefits reported in these tables are
discounted using the 7 percent rate.
719 Although technology costs are incurred at the
beginning of each model year’s lifetime and thus are
not subject to discounting, the discount rate does
influence the effective cost of some technologies.
Because NHTSA assumes some manufacturers will
be willing to pay civil penalties when compliance
costs become sufficiently high, It is still possible for
the discount rate to affect the agency’s estimate of
total technology outlays. However, this does not
occur under the alternative NHTSA has adopted for
its final MY 2012–16 CAFE standards.
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vehicles, the agency estimates that when
the benefits of the final standards are
discounted at a 3 percent rate, they will
exceed the costs of the final standards
by $130.7 billion:
TABLE IV.G.4–10—PRESENT VALUE OF NET BENEFITS ($BILLION) UNDER FINAL STANDARDS USING 3 PERCENT
DISCOUNT RATE
2012
2013
2014
2015
2016
Total
Passenger Cars .......................................
Light Trucks .............................................
2.7
3.4
9.7
8.2
14.8
11.8
20.5
15.0
25.7
18.9
73.3
57.4
Combined ..........................................
6.0
18.0
26.6
35.5
44.6
130.7
As indicated previously, when fuel
savings and other future benefits
resulting from the final standards are
discounted at the 7 percent rate
prescribed in OMB guidance, they are
$36.3 billion lower than when the 3
percent discount rate is applied.
Because technology costs are not subject
to discounting, using the higher 7
percent discount rate reduces net
benefits by exactly this same amount.
Nevertheless, Table IV.G.4–11 shows
that the net benefits from requiring
passenger cars and light trucks to
achieve higher fuel economy are still
substantial even when future benefits
are discounted at the higher rate,
totaling $94.5 billion over MYs 2012–
16. Net benefits are thus about 28
percent lower when future benefits are
discounted at a 7 percent annual rate
than at a 3 percent rate.
TABLE IV.G.4–11—PRESENT VALUE OF NET BENEFITS ($BILLION) UNDER FINAL STANDARDS USING 7 PERCENT
DISCOUNT RATE
2012
2013
2014
2015
2016
Total
1.3
2.3
6.8
5.9
10.6
8.6
15.0
11.0
19.0
13.9
52.9
41.6
Combined ..........................................
mstockstill on DSKB9S0YB1PROD with RULES2
Passenger Cars .......................................
Light Trucks .............................................
3.6
12.8
19.2
26.0
32.9
94.5
NHTSA’s estimates of economic
benefits from establishing higher CAFE
standards are 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
MYs 2012–16 passenger cars and light
trucks. Specifically, if the agency has
underestimated the fuel economy levels
that manufacturers would have
achieved under the baseline scenario—
or is too optimistic about the fuel
economy levels that manufacturers will
actually achieve under the final
standards—its estimates of fuel savings
and the resulting economic benefits
attributable to this rule will be too large.
Another major source of potential
overestimation in the agency’s estimates
of benefits from requiring higher fuel
economy stems from its reliance on the
Reference Case fuel price forecasts
reported in AEO 2010. Although
NHTSA believes that these forecasts are
the most reliable that are available, they
are nevertheless significantly higher
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than the fuel price projections reported
in most previous editions of EIA’s
Annual Energy Outlook, and reflect
projections of world oil prices that are
well above forecasts issued by other
firms and government agencies. If the
future fuel prices projected in AEO 2010
prove to be too high, the agency’s
estimates of the value of future fuel
savings—the major component of
benefits from this rule—will also be too
high.
In addition, it is possible that
NHTSA’s estimates of economic benefits
from the effects of saving fuel on U.S.
petroleum consumption and imports are
too high. The estimated ‘‘energy security
premium’’ the agency uses to value
reductions in U.S. petroleum imports
includes both increased payments for
petroleum imports that occur when
world oil prices increase rapidly, and
losses in U.S. GDP losses and
adjustment costs that result from oil
price shocks. One commenter suggested
increased import costs associated with
rapid increases in petroleum prices
represent transfers from U.S. oil
consumers to petroleum suppliers rather
than real economic costs, so any
reduction in their potential magnitude
should be excluded when calculating
benefits from lower U.S. petroleum
imports. If this view is correct, then the
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agency’s estimates of benefits from the
effect of reduced fuel consumption on
U.S. petroleum imports would indeed
be too high.720
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. If the
AEO 2010 forecast of fuel prices proves
to be too low, for example, NHTSA will
have underestimated the value of fuel
savings that will result from adopting
higher CAFE standards for MY 2012–16.
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
720 Doing so, however, would represent a
significant departure from how disruption costs
associated with oil price shocks have been
quantified in research on the value of energy
security, and NHTSA believes this issue should be
analyzed in more detail before these costs are
excluded. Moreover, the agency believes that
increases in import costs during oil supply
disruptions differ from transfers due to the
existence of U.S. monopsony power in the world oil
market, since they reflect real resource shortages
and costly short-run shifts in demand by energy
users, rather than losses to consumers of petroleum
products that that are matched by offsetting gains
to suppliers. Thus the agency believes that reducing
their expected value provides real economic
benefits, and they do not represent pure transfers.
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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
expected to result from adopting higher
CAFE standards.
NHTSA’s benefit estimates could also
be too low because they exclude or
understate the economic value of certain
potentially significant categories of
benefits from reducing fuel
consumption. As one example, EPA’s
estimates 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.
EPA’s estimates exclude these benefits
because no reliable dollar-per-ton
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.
Similarly, 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.721 For example, none of
the three models used to value climaterelated economic damages includes
ocean acidification or loss of species
and wildlife. The models also may not
adequately capture certain other
impacts, such as potentially abrupt
changes in climate associated with
thresholds that govern climate system
responses, inter-sectoral and inter-
25645
regional interactions, including global
security impacts of high-end extreme
warming, or limited near-term
substitutability between damage to
natural systems and increased
consumption. 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 following tables present itemized
costs and benefits for the combined
passenger car and light truck fleets for
each model year affected by the final
standards as well as for all model years
combined, using both discount rates
prescribed by OMB regulatory guidance.
Table IV.G.4–12 reports technology
outlays, each separate component of
benefits (including costs associated with
additional driving due to the rebound
effect, labeled ‘‘dis-benefits’’), the total
value of benefits, and net benefits, using
the 3 percent discount rate. (Numbers in
parentheses represent negative values.)
TABLE IV.G.4–12—ITEMIZED COST AND BENEFIT ESTIMATES FOR THE COMBINED VEHICLE FLEET USING 3 PERCENT
DISCOUNT RATE ($M)
MY 2012
MY 2013
MY 2014
MY 2015
MY 2016
Total
Costs
Technology Costs ........................
5,903
7,890
10,512
12,539
14,904
51,748
Benefits
mstockstill on DSKB9S0YB1PROD with RULES2
Savings in Lifetime Fuel Expenditures ..........................................
Consumer Surplus from Additional Driving .............................
Value of Savings in Refueling
Time ..........................................
Reduction in Petroleum Market
Externalities ..............................
Reduction in Climate-Related
Damages from Lower CO2
Emissions 722 ............................
Reduction in Health Damage
Costs from Lower Emissions of
Criteria Air Pollutants:
CO .........................................
VOC ......................................
NOX .......................................
PM .........................................
SOX .......................................
Dis-Benefits from Increased Driving:
Congestion Costs .................
Noise Costs ..........................
Crash Costs ..........................
Total Benefits .................
9,265
20,178
29,083
37,700
46,823
143,048
696
1,504
2,150
2,754
3,387
10,491
706
1,383
1,939
2,464
2,950
9,443
545
1,154
1,630
2,080
2,543
7,952
921
2,025
2,940
3,840
4,804
14,528
0
42
70
205
158
0
76
104
434
332
0
102
126
612
469
0
125
146
776
598
0
149
166
946
731
0
494
612
2,974
2,288
(447)
(9)
(217)
(902)
(18)
(430)
(1,282)
(25)
(614)
(1,633)
(32)
(778)
(2,000)
(39)
(950)
(6,264)
(122)
(2,989)
11,936
25,840
37,132
48,040
59,509
182,457
721 Social Cost of Carbon for Regulatory Impact
Analysis Under Executive Order 12866, Interagency
Working Group on Social Cost of Carbon, United
States Government, February 2010. Available in
Docket No. NHTSA–2009–0059.
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722 Using the central value of $21 per metric ton
for the SCC, and discounting future benefits from
reduced CO2 emissions at a 3 percent annual rate.
Additionally, we note that the $21 per metric ton
value for the SCC applies to calendar year 2010, and
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increases over time. See the interagency guidance
on SCC for more information.
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TABLE IV.G.4–12—ITEMIZED COST AND BENEFIT ESTIMATES FOR THE COMBINED VEHICLE FLEET USING 3 PERCENT
DISCOUNT RATE ($M)—Continued
MY 2012
Net Benefits ...................
MY 2013
6,033
Similarly, Table IV.G.4–13 below
reports technology outlays, the
individual components of benefits
MY 2014
17,950
MY 2015
26,619
MY 2016
35,501
(including ‘‘dis-benefits’’ resulting from
additional driving) and their total, and
net benefits, using the 7 percent
44,606
Total
130,709
discount rate. (Again, numbers in
parentheses represent negative values.)
TABLE IV.G.4–13—ITEMIZED COST AND BENEFIT ESTIMATES FOR THE COMBINED VEHICLE FLEET USING 7 PERCENT
DISCOUNT RATE ($M)
MY 2012
MY 2013
MY 2014
MY 2015
MY 2016
Total
Costs
Technology Costs ........................
5,903
7,890
10,512
12,539
14,904
51,748
Benefits
Savings in Lifetime Fuel Expenditures ..........................................
Consumer Surplus from Additional Driving .............................
Value of Savings in Refueling
Time ..........................................
Reduction in Petroleum Market
Externalities ..............................
Reduction in Climate-Related
Damages from Lower CO2
Emissions 723 ............................
Reduction in Health Damage
Costs from Lower Emissions of
Criteria Air Pollutants:
CO .........................................
VOC ......................................
NOX .......................................
PM .........................................
SOX .......................................
Dis-Benefits from Increased Driving:
Congestion Costs .................
Noise Costs ..........................
Crash Costs ..........................
15,781
22,757
29,542
36,727
112,004
542
1,179
1,686
2,163
2,663
8,233
567
1,114
1,562
1,986
2,379
7,608
432
917
1,296
1,654
2,023
6,322
921
2,025
2,940
3,840
4,804
14,530
0
32
53
154
125
0
60
80
336
265
0
80
98
480
373
0
99
114
611
475
0
119
131
748
581
0
390
476
2,329
1,819
(355)
(7)
(173)
(719)
(14)
(342)
(1,021)
(20)
(488)
(1,302)
(26)
(619)
(1,595)
(31)
(756)
(4,992)
(98)
(2,378)
Total Benefits .................
9,488
20,682
29,743
38,537
47,793
146,243
Net Benefits ...................
mstockstill on DSKB9S0YB1PROD with RULES2
7,197
3,586
12,792
19,231
25,998
32,890
94,497
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 final standards to a
meaningful extent.
As discussed in the FRIA, 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 multi-year
planning effects are represented, there is
no basis to estimate reliably how
manufacturers might use these
mechanisms. Accounting for the FFV
provisions indicates that achieved fuel
economies would be 0.5–1.3 mpg lower
than when these provisions are not
considered (for comparison see Table
IV.G.1–2 above):
723 Using the central value of $21 per metric ton
for the SCC, and discounting future benefits from
reduced CO2 emissions at a 3 percent annual rate.
Additionally, we note that the $21 per metric ton
value for the SCC applies to calendar year 2010, and
increases over time. See the interagency guidance
on SCC for more information.
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TABLE IV.G.4–14—AVERAGE ACHIEVED FUEL ECONOMY (mpg) UNDER FINAL STANDARDS (WITH FFV CREDITS)
2012
2013
2014
2015
2016
Passenger Cars ...................................................................
Light Trucks .........................................................................
32.3
24.5
33.5
25.1
34.2
25.9
35.0
26.7
36.2
27.5
Combined ......................................................................
28.7
29.7
30.6
31.5
32.7
As a result, NHTSA estimates that,
when FFV credits are taken into
account, fuel savings will total 58.6
billion gallons—about 3.9 percent less
than the 61.0 billion gallons estimated
when these credits are not considered:
TABLE IV.G.4–15—FUEL SAVED (BILLION GALLONS) UNDER FINAL STANDARDS (WITH FFV CREDITS)
2012
2013
2014
2015
2016
Total
Passenger Cars .......................................
Light Trucks .............................................
2.7
2.3
4.7
3.6
6.4
5.0
8.4
6.6
11.0
8.1
33.1
25.5
Combined ..........................................
4.9
8.2
11.3
15.0
19.1
58.6
The agency similarly estimates CO2
emissions reductions will total 636
million metric tons (mmt), about 2.9
percent less than the 655 mmt estimated
when these credits are not
considered: 724
TABLE IV.G.4–16—AVOIDED CARBON DIOXIDE EMISSIONS (mmt) UNDER FINAL STANDARDS (WITH FFV CREDITS)
2012
2013
2014
2015
2016
Total
Passenger Cars .......................................
Light Trucks .............................................
28
25
50
39
69
54
91
72
119
88
357
279
Combined ..........................................
53
89
123
163
208
636
This analysis further indicates that
significant reductions in outlays for
additional technology will result when
FFV provisions are taken into account.
Table IV.G.4–17 below shows that as a
result, total technology costs are
estimated to decline to $37.5 billion, or
about 27 percent less than the $51.7
billion estimated when excluding these
provisions:
TABLE IV.G.4–17—INCREMENTAL TECHNOLOGY OUTLAYS ($B) UNDER FINAL STANDARDS WITH FFV CREDITS
2012
2013
2014
2015
2016
Total
Passenger Cars .......................................
Light Trucks .............................................
2.6
1.1
3.6
1.5
4.8
2.5
6.1
3.4
7.5
4.4
24.6
12.9
Combined ..........................................
3.7
5.1
7.3
9.5
11.9
37.5
Because NHTSA’s analysis indicated
that FFV provisions will not
significantly reduce fuel savings, the
agency’s estimate of the present value of
total benefits will be $175.6 billion
when discounted at a 3 percent annual
rate, as Table IV.G.4–18 following
reports. This estimate of total benefits is
$6.9 billion, or about 3.8 percent, lower
than the $182.5 billion reported
previously for the analysis that
excluded these provisions:
TABLE IV.G.4–18—PRESENT VALUE OF BENEFITS ($BILLION) UNDER FINAL STANDARDS WITH FFV CREDITS USING 3
PERCENT DISCOUNT RATE
2012
2013
2014
2015
2016
Total
mstockstill on DSKB9S0YB1PROD with RULES2
Passenger Cars .......................................
Light Trucks .............................................
7.6
6.4
13.7
10.4
19.1
14.6
25.6
19.8
34.0
24.4
100.0
75.6
Combined ..........................................
14.0
24.1
33.7
45.4
58.4
175.6
724 Differences in the application of diesel engines
lead to differences in the incremental percentage
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changes in fuel consumption and carbon dioxide
emissions.
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Similarly, because the FFV are not
expected to reduce fuel savings
significantly, NHTSA estimates that the
present value of total benefits will
decline only slightly from its previous
estimate when future fuel savings and
other benefits are discounted at the
higher 7 percent rate. Table IV.G.4–19
reports that the present value of benefits
from requiring higher fuel economy for
MY 2012–16 cars and light trucks will
total $140.7 billion when discounted
using a 7 percent rate, about $5.5 billion
(or again, 3.8 percent) below the
previous $146.2 billion estimate of total
benefits when FFV credits were not
permitted:
TABLE IV.G.4–19—PRESENT VALUE OF BENEFITS ($BILLION) UNDER FINAL STANDARDS WITH FFV CREDITS USING 7
PERCENT DISCOUNT RATE
2012
2013
2014
2015
2016
Total
Passenger Cars .......................................
Light Trucks .............................................
6.1
5.0
11.1
8.2
15.5
11.5
20.7
15.6
27.6
19.3
80.9
59.7
Combined ..........................................
11.2
19.3
27.0
36.4
46.9
140.7
Although the discounted present
value of total benefits will be slightly
lower when FFV provisions are taken
into account, the agency estimates that
these provisions will slightly increase
net benefits. This occurs because the
flexibility these provisions provide to
manufacturers will allow them to
reduce technology costs for meeting the
new standards by considerably more
than the reduction in the value of fuel
savings and other benefits. As Table
IV.G.4–20 shows, the agency estimates
that the availability of FFV credits will
increase net benefits from the final
CAFE standards to $138.2 billion from
the previously-reported estimate of
$130.7 billion without those credits, or
by about 5.7 percent.
TABLE IV.G.4–20—PRESENT VALUE OF NET BENEFITS ($BILLION) UNDER FINAL STANDARDS WITH FFV CREDITS USING
3% DISCOUNT RATE
2012
2013
2014
2015
2016
Total
Passenger Cars .......................................
Light Trucks .............................................
5.1
5.3
10.1
8.8
14.3
12.1
19.5
16.4
26.5
20.0
75.4
62.7
Combined ..........................................
10.4
19.0
26.5
35.9
46.5
138.2
Similarly, Table IV.G.4–21
immediately below shows that NHTSA
estimates manufacturers’ use of FFV
credits will raise net benefits from
requiring higher fuel economy for MY
2012–16 cars and light trucks to $103.2
billion if a 7 percent discount rate is
applied to future benefits. This estimate
is $8.7 billion—or about 9.2%—higher
than the previously-reported $94.5
billion estimate of net benefits without
the availability of FFV credits using that
same discount rate.
TABLE IV.G.4–21—PRESENT VALUE OF NET BENEFITS ($BILLION) UNDER FINAL STANDARDS WITH FFV CREDITS USING
7% DISCOUNT RATE
2012
2013
2014
2015
2016
Total
3.6
3.9
7.5
6.6
10.7
9.1
14.6
12.3
20.0
14.9
56.4
46.8
Combined ..........................................
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Passenger Cars .......................................
Light Trucks .............................................
7.5
14.1
19.7
26.9
35.0
103.2
The agency has also performed
several sensitivity analyses to examine
the effects of varying important
assumptions that affect its estimates of
benefits and costs from higher CAFE
standards for MY 2012–16 cars and light
trucks. We examine the sensitivity of
fuel savings, total economic benefits,
and technology costs with respect to the
following five economic parameters:
(1) The price of gasoline: The
Reference Case uses the AEO 2010
reference case estimate for the price of
gasoline. In this sensitivity analysis we
examine the effect of instead using the
AEO 2009 high and low price forecasts.
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(2) 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 instead using a 5 percent or 15
percent rebound effect.
(3) The values of CO2 benefits: The
Reference Case uses $21 per ton (in
2010 in 2007$, rising over time to $45
in 2030) to quantify the benefits of
reducing CO2 emissions and $0.17 per
gallon to quantify the energy security
benefits from reducing fuel
consumption. In the sensitivity analysis,
we examine the effect of using values of
PO 00000
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$5, and $65 per ton instead of the
reference value of $21 per ton to value
CO2 benefits. These values can be
translated into cents per gallon by
multiplying by 0.0089,725 giving the
following values:
($5 per ton CO2) × 0.0089 = $0.045 per
gallon
725 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/1,000kg * kg/
1,000g * 2,433g/gallon = (3.67 * 2,433)/1,000 *
1,000 = $0.0089/gallon.
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($21 per ton CO2) × 0.0089 = $0.187 per
gallon
($35 per ton CO2) × 0.0089 = $0.312 per
gallon
($67 per ton CO2) × 0.0089 = $0.596 per
gallon
(4) 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
instead using a value of 5 cents per
gallon.
Varying each of these four parameters
in isolation results in 9 additional
economic scenarios, in addition to the
Reference case. These are listed in Table
IV.G.4–22 below, together with two
additional scenarios that use
combinations of these parameters that
together produce the lowest and highest
benefits.
TABLE IV.G.4–22—SENSITIVITY ANALYSES EVALUATED IN NHTSA’S FRIA
Name
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Reference ....................................................
High Fuel Price ............................................
Low Fuel Price .............................................
5% Rebound Effect ......................................
15% Rebound Effect ....................................
$67/ton CO2 Value .......................................
$35/ton CO2 Value .......................................
$5/ton CO2 Value .........................................
$5/ton CO2 ...................................................
5¢/gal Military Security Value ......................
Lowest Discounted Benefits ........................
Highest Discounted Benefits .......................
AEO
AEO
AEO
AEO
AEO
AEO
AEO
AEO
AEO
AEO
AEO
AEO
The basic results of the sensitivity
analyses were as follows:
(1) The various economic
assumptions have no effect on the final
passenger car and light truck standards
established by this rule, because these
are determined without reference to
economic benefits.
(2) Varying the economic assumptions
individually has comparatively modest
impacts on fuel savings resulting from
the adopted standards. The range of
variation in fuel savings in response to
changes in individual assumptions
extends from a reduction of nearly 5
percent to an increase of that same
percentage.
(3) The economic parameter with the
greatest impacts on fuel savings is the
magnitude of the rebound effect.
Varying the rebound effect from 5
percent to 15 percent is responsible for
a 4.6 percent increase and 4.6 percent
reduction in fuel savings compared to
the Reference results.
(4) The only other parameter that has
a significant effect on fuel savings is
forecast fuel prices, although its effect is
complex because changes in fuel prices
affect vehicle use and fuel consumption
in both the baseline and under the final
standards.
(5) Variation in forecast fuel prices
and in the value of reducing CO2
emissions have significant effects on the
total economic benefits resulting from
the final standards. Changing the fuel
price forecast to AEO’s High Price
forecast raises estimated economic
benefits by almost 40 percent, while
using AEO’s Low Price forecast reduces
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Discount
rate
(percent)
Fuel price
Jkt 220001
20210 Reference Case ......................
2009 High Price Case ........................
2009 Low Price Case .........................
20210 Reference Case ......................
20210 Reference Case ......................
20210 Reference Case ......................
20210 Reference Case ......................
20210 Reference Case ......................
20210 Reference Case ......................
20210 Reference Case ......................
2009 Low Price Case .........................
2009 High Price Case ........................
total economic benefits by only about 5
percent. Raising the value of eliminating
each ton of CO2 emissions to $67
increases total benefits by 15 percent.
(6) Varying all economic parameters
simultaneously has a significant effect
on total economic benefits. The
combination of parameter values
producing the highest benefits increases
their total by slightly more than 50
percent, while that producing the lowest
benefits reduces their value by almost
55 percent. However, varying these
parameters in combination has less
significant effects on other measures; for
example, the high- and low-benefit
combinations of parameter values raise
or lower fuel savings and technology
costs by only about 5 percent.
For more detailed information regarding
NHTSA’s sensitivity analyses for this
final rule, please see Chapter X of
NHTSA’s FRIA.
5. How would these final standards
impact vehicle sales?
The effect of this rule on sales of new
vehicles depends partly on how
potential buyers evaluate and respond
to its effects on vehicle prices and fuel
economy. The rule will make new cars
and light trucks more expensive, as
manufacturers attempt to recover their
costs for complying with the rule by
raising vehicle prices, which by itself
would discourage sales. At the same
time, the rule will require
manufacturers to improve the fuel
economy of at least some of their
models, which will lower their
operating costs.
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Rebound
effect
(percent)
3
3
3
3
3
3
3
3
3
3
7
3
10
10
10
5
15
10
10
10
10
10
15
5
Military
security
SCC
$21
21
21
21
21
67
35
5
5
21
5
67
0¢/gal.
0¢/gal.
0¢/gal.
0¢/gal.
0¢/gal.
0¢/gal.
0¢/gal.
0¢/gal.
0¢/gal.
5¢/gal.
0¢/gal.
5¢/gal.
However, this rule will not change the
way that potential buyers evaluate
improved fuel economy. If some
consumers find it difficult to estimate
the value of future fuel savings and
correctly compare it with the increased
cost of purchasing higher fuel economy
(possibilities discussed below in Section
IV.G.6)—or if they simply have low
values of saving fuel—this rule will not
change that situation, and they are
unlikely to purchase the more fuelefficient models that manufacturers
offer. To the extent that other consumers
more completely or correctly account
for the value of fuel savings and the
costs of acquiring higher fuel economy
in their purchasing decisions, they will
also continue to do so, and they are
likely to view models with improved
fuel economy as more attractive
purchases than currently available
models. The effect of the rule on sales
of new vehicles will depend on which
form of behavior is more widespread.
In general we would expect that the
net effect of this rule would be to reduce
sales of new vehicles or leave them
unchanged. If consumers are satisfied
with the combinations of fuel economy
levels and prices that current models
offer, we would expect some to decide
that the higher prices of those models
no longer justify purchasing them, even
though they offer higher fuel economy.
Other potential buyers may decide to
purchase the same vehicle they would
have before the rule took effect, or to
adjust their purchases in favor of
models offering other attributes. Thus
sales of new models would decline,
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regardless of whether ‘‘consumer-side’’
failures in the market for fuel economy
currently lead buyers to under-invest in
fuel economy. However, if there is some
market failure on the producer or
supply side that currently inhibits
manufacturers from offering increases in
fuel economy that would increase their
profits—for example, if producers have
underestimated the demand for fuel
economy, or do not compete vigorously
to provide as much as buyers would
prefer—then the new standards would
make vehicles more attractive to many
buyers, and their sales should increase
(potential explanations for such
producer market failures are discussed
in Section IV.G.6 below).
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. The
methodology NHTSA used for
estimating the impact on vehicle sales
in effect assumes that the latter situation
will prevail; although it is relatively
straightforward, it relies on a number of
simplifying assumptions.
There is a broad consensus in the
economic literature that the price
elasticity for demand for automobiles is
approximately ¥1.0.726 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
726 Kleit, A.N. (1990). ‘‘The Effect of Annual
Changes in Automobile Fuel Economy Standards,’’
Journal of Regulatory Economics, vol. 2, pp 151–
172 (Docket EPA–HQ–OAR–2009–0472–0015);
Bordley, R. (1994). ‘‘An Overlapping Choice Set
Model of Automotive Price Elasticities,’’
Transportation Research B, vol 28B, no 6, pp 401–
408 (Docket NHTSA–2009–0059–0153); 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
(Docket NHTSA–2009–0059–0039).
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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
consumers value the fuel economy
improvements.727 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 potentially increase
beyond that estimated here, which
could result in 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.728 The
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 5
year 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.
727 Gron, Ann and Swenson, Deborah, 2000, ‘‘Cost
Pass-Through in the U.S. Automobile Market,’’ The
Review of Economics and Statistics, 82: 316–324.
(Docket EPA–HQ–OAR–2009–0472–0007).
728 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
February 26, 2010).
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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
depend on vehicle value. The Insurance
Information Institute provides the
average value of collision plus
comprehensive insurance in 2006 as
$448.729 This is compared to an average
price for light vehicles of $24,033 for
2006.730 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 five
year 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.731 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
729 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 March 15,
2010).
730 $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.
731 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.
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the vehicle at the time of purchase.732
Discounting the additional 3.2 percent
(16 percent/5 years) per year over the 5
years using a 3 percent mid-year
discount rate 733 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.
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.734 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, results 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, light trucks, and both combined for
the final standards. 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, AND COMBINED
MY 2012
MY 2013
MY 2014
MY 2015
MY 2016
¥65,202
48,561
46,801
106,658
103,422
139,893
168,334
171,920
227,039
213,868
Combined ......................................................................
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Passenger Cars ...................................................................
Light Trucks .........................................................................
¥16,641
153,459
243,315
340,255
440,907
The estimates provided in the tables
above 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 fuel savings
associated with this rule are expected to
exceed the technology costs, the
effective prices of vehicles (the adjusted
increase in technology cost less the fuel
savings over five years) to consumers
will fall, and consumers will buy more
new vehicles. As a result, the lower net
cost of the vehicles is projected to lead
to an increase in sales for both cars and
trucks.
As discussed above, this result
depends on the assumption that more
fuel efficient vehicles yielding net
consumer benefits over their first five
years would not otherwise be offered,
due to market failures on the part of
vehicle manufacturers. However,
vehicle models that achieve the fuel
economy targets prescribed by today’s
rulemaking are already available, and
consumers do not currently purchase a
combination of them that meets the fuel
economy levels this rule requires. This
suggests that the rule may not result in
an increase in vehicle sales, because it
does not alter how consumers currently
make decisions about which models to
purchase. In addition, this analysis has
not accounted for a number of factors
that might affect consumer vehicle
purchases, such as changing market
conditions, changes in vehicle
characteristics that might accompany
improvements in fuel economy, or
consumers considering a different
‘‘payback period’’ for their fuel economy
purchases. If consumers use a shorter
payback period, sales will increase by
less than estimated here, and might
even decline, while if consumers use
longer payback periods, the increase in
sales is likely to be larger than reported.
In addition, because this is an aggregate
analysis some individual consumers
(including those who drive less than
estimated here) will receive lower net
benefits from the increase n fuel
economy this rule requires, while others
(who drive more than estimated here)
will realize even greater savings. These
complications—which have not been
taken into account in our analysis—add
considerable uncertainty to our
estimates of changes in vehicle sales
resulting from this rule.
6. Potential Unquantified Consumer
Welfare Impacts of the Final Standards
The underlying goal of the CAFE and
GHG standards is to increase social
welfare, in the broadest sense, and as
shown in earlier sections, NHTSA
projects that the MY 2012–2016 CAFE
standards will yield large net social
benefits. In its net benefits analysis,
NHTSA made every attempt to include
all of the costs and benefits that could
be identified and quantified.
It is important to highlight several
features of the rulemaking analysis that
NHTSA believes gives high confidence
to its conclusion that there are large net
social benefits from these standards.
First, the agencies adopted footprintbased standards in large part so that the
full range of vehicle choices in the
marketplace could be maintained.
Second, the agencies performed a
rigorous technological feasibility, cost,
and leadtime analysis that showed that
the standards could be met while
maintaining current levels of other
vehicle attributes such as safety, utility,
and performance. Third, widespread
automaker support for the standards, in
conjunction with the future product
plans that have been provided by
automakers to the agencies and recent
industry announcements on new
product offerings, provides further
indication that the standards can be met
while retaining the full spectrum of
vehicle choices.
Notwithstanding these points, and its
high degree of confidence that the
benefits amply justify the costs, NHTSA
recognizes the possibility of consumer
welfare impacts that are not accounted
for in its analysis of benefits and costs
732 Based on https://www.bankrate.com auto loan
calculator for a 5 year loan at 6 percent.
733 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.
734 Consumer Reports, August 2008, ‘‘What That
Car Really Costs to Own.’’ Available at https://www.
consumerreports.org/cro/cars/pricing/what-thatcar-really-costs-to-own-4-08/overview/what-that-car
-really-costs-to-own-ov.htm (last accessed February
26, 2010).
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from higher CAFE standards. The
agencies received public comments
expressing diverging views on this
issue. The majority of commenters
suggested that potential losses in
welfare from requiring higher fuel
economy were unlikely to be a
significant concern, because of the many
imperfections in the market for fuel
economy. In contrast, other comments
suggested that potential unidentified
and unquantified consumer welfare
losses could be large. Acknowledging
the comments, the FRIA provides a
sensitivity analysis showing how
various levels of unidentified consumer
welfare losses would affect the projected
net social benefits from the CAFE
standards established by this final rule.
There are two viewpoints for
evaluating the costs and benefits of the
increase in CAFE standards: The private
perspective of vehicle buyers
themselves on the higher fuel economy
levels that the rule would require, and
the economy-wide or ‘‘social’’
perspective on the costs and benefits of
requiring higher fuel economy. It is
important, in short, to distinguish
between costs and benefits that are
‘‘private’’ and costs and benefits that are
‘‘social.’’ The agency’s analysis of
benefits and costs from requiring higher
fuel efficiency, presented above,
includes several categories of benefits
(‘‘social benefits’’) that are not limited to
automobile purchasers and that extend
throughout the U.S. economy, such as
reductions in the energy security costs
associated with U.S. petroleum imports
and in the economic damages expected
to result from climate change. In
contrast, other categories of benefits—
principally the economic value of future
fuel savings projected to result from
higher fuel economy—will be
experienced exclusively by the initial
purchasers and subsequent owners of
vehicle models whose fuel economy
manufacturers elect to improve as part
of their strategies for complying with
higher CAFE standards (‘‘private
benefits’’).
Although the economy-wide or
‘‘social’’ benefits from requiring higher
fuel economy represent an important
share of the total economic benefits
from raising CAFE standards, NHTSA
estimates that benefits to vehicle buyers
themselves will significantly exceed the
costs of complying with the stricter fuel
economy standards this rule establishes,
as shown above. Since the agency also
assumes that the costs of new
technologies manufacturers will employ
to improve fuel economy will ultimately
be shifted to vehicle buyers in the form
of higher purchase prices, NHTSA
concludes that the benefits to vehicle
buyers from requiring higher fuel
efficiency will far outweigh the costs
they will be required to pay to obtain it.
However, this raises the question of why
current purchasing patterns do not
already result in higher average fuel
economy, and why stricter fuel
efficiency standards should be
necessary to achieve that goal.
As an illustration, Table IV.G.6–1
reports the agency’s estimates of the
average lifetime values of fuel savings
for MY 2012–2016 passenger cars and
light trucks calculated using future
retail fuel prices, which are those likely
to be used by vehicle buyers to project
the value of fuel savings they expect
from higher fuel economy. The table
compares NHTSA’s estimates of the
average lifetime value of fuel savings for
cars and light trucks to the price
increases it projects to result as
manufacturers attempt to recover their
costs for complying with increased
CAFE standards for those model years
by increasing vehicle sales prices. As
the table shows, the agency’s estimates
of the present value of lifetime fuel
savings (discounted using the OMBrecommended 3% rate) substantially
outweigh projected vehicle price
increases for both cars and light trucks
in every model year, even under the
assumption that all of manufacturers’
technology outlays are passed on to
buyers in the form of higher selling
prices for new cars and light trucks. By
model year 2016, NHTSA projects that
average lifetime fuel savings will exceed
the average price increase by more than
$2,000 for cars, and by more than $2,700
for light trucks.
TABLE IV.G.6–1—VALUE OF LIFETIME FUEL SAVINGS VS. VEHICLE PRICE INCREASES
Model year
Fleet
Measure
2012
2013
2014
2015
2016
Value of Fuel Savings .........................
Average Price Increase ......................
$759
505
$1,349
573
$1,914
690
$2,480
799
$2,932
907
Light Trucks ........
Difference .....................................
Value of Fuel Savings .........................
Average Price Increase ......................
255
828
322
897
1,634
416
1,264
2,277
621
1,680
2,887
752
2,025
3,700
961
Difference .....................................
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Passenger Cars ..
506
1,218
1,656
2,135
2,739
The comparisons above immediately
raise the question of why current
vehicle purchasing patterns do not
already result in average fuel economy
levels approaching those that this rule
would require, and why stricter CAFE
standards should be necessary to
increase the fuel economy of new cars
and light trucks. They also raise the
question of why manufacturers do not
elect to provide higher fuel economy
even in the absence of increases in
CAFE standards, since the comparisons
in Table IV.G.6–1 suggest that doing so
would increase the value of many new
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vehicle models by far more than it
would raise the cost of producing them
(and thus raise their purchase prices),
thus presumably increasing sales of new
vehicles. More specifically, why would
potential buyers of new vehicles
hesitate to make investments in higher
fuel economy that would produce the
substantial economic returns illustrated
by the comparisons presented in Table
IV.G.6–1? And why would
manufacturers voluntarily forego
opportunities to increase the
attractiveness, value, and competitive
positioning of their car and light truck
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models by improving their fuel
economy?
The majority of comments received on
this topic answered these questions by
pointing out many reasons why the
market for vehicle fuel economy does
not appear to work perfectly, and
accordingly, that properly designed
CAFE standards would be expected to
increase consumer welfare. Some of
these imperfections might stem from
standard market failures (such as an
absence of adequate information on the
part of consumers); some of them might
involve findings in behavioral
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economics (including, for example, a
lack of sufficient consumer attention to
long-term savings, or a lack of salience,
to consumers at the time of purchase, of
relevant benefits, including fuel and
time savings). Both theoretical and
empirical research suggests that many
consumers do not make energy-efficient
investments even when those
investments would pay off in the
relatively short-term.735 This research is
in line with related findings that
consumers may underweigh benefits
and costs that are less salient or that
will be realized only in the future.736
Existing work provides support for
the agency’s conclusion that the benefits
buyers will receive from requiring
manufacturers to increase fuel economy
far outweigh the costs they will pay to
acquire those benefits, by identifying
aspects of normal behavior that may
explain buyers’ current reluctance to
purchase vehicles whose higher fuel
economy appears to offer an attractive
economic return. For example,
consumers’ understandable aversion to
the prospect of losses (‘‘loss aversion’’)
may produce an exaggerated sense of
uncertainty about the value of future
fuel savings, making consumers
reluctant to purchase a more fuelefficient vehicle seem unattractive, even
when doing so is likely to be a sound
economic decision. Compare the finding
in Greene et al. (2009) to the effect 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.737
The well-known finding that as gas
prices rise, consumers show more
735 Jaffe, A. B., and Stavins, R. N. (1994). The
Energy Paradox and the Diffusion of Conservation
Technology. Resource and Energy Economics, 16(2);
see Hunt Alcott and Nathan Wozny, Gasoline
Prices, Fuel Economy, and the Energy Paradox
(2010, available at https://web.mit.edu/allcott/www/
Allcott%20and%20Wozny%202010%20%20Gasoline%20Prices,%
20Fuel%20Economy,%20and%20the%
20Energy%20Paradox.pdf.
736 Hossain, Janjim, and John Morgan (2009).
‘‘ * * * Plus Shipping and Handling: Revenue
(Non)Equivalence in Field Experiments on eBay,’’
Advances in Economic Analysis and Policy vol. 6;
Barber, Brad, Terrence Odean, and Lu Zheng (2005).
‘‘Out of Sight, Out of Mind: The Effects of Expenses
on Mutual Fund Flows,’’ Journal of Business vol. 78,
no. 6, pp. 2095–2020.
737 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. Surprisingly, the authors find that
uncertainty regarding the future price of gasoline
appears to be less important than uncertainty
surrounding the expected lifetimes of new vehicles.
(Docket NHTSA–2009–0059–0154).
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willingness to pay for fuel-efficient
vehicles is not inconsistent with the
possibility that many consumers
undervalue gasoline costs and fuel
economy at the time of purchase. In
ordinary circumstances, such costs may
be a relatively ‘‘shrouded’’ attribute in
consumers’ decisions, in part because
the savings are cumulative and extend
over a significant period of time. This
claim fits well with recent findings to
the effect that many consumers are
willing to pay less than $1 upfront to
obtain a $1 benefit reduction in
discounted gasoline costs.738
Some research suggests that the
consumers’ apparent unwillingness to
purchase more fuel efficient vehicles
stems from their inability to value future
fuel savings correctly. For example,
Larrick and Soll (2008) find evidence
that consumers do not understand how
to translate changes in fuel economy,
which is denominated in miles per
gallon, into resulting changes in fuel
consumption, measured in gallons per
time period.739 Sanstad and Howarth
(1994) argue that consumers resort to
imprecise but convenient rules of thumb
to compare vehicles that offer different
fuel economy ratings, and that this
behavior can cause many buyers to
underestimate the value of fuel savings,
particularly from significant increases in
fuel economy.740 If the behavior
identified in these studies is
widespread, then the agency’s estimates
suggesting that the benefits to vehicle
owners from requiring higher fuel
economy significantly exceed the costs
of providing it are indeed likely to be
correct.
Another possible reconciliation of the
agency’s claim that the average vehicle
buyer will experience large fuel savings
from the higher CAFE standards this
rule establishes with the fact that the
average fuel economy of vehicles
currently purchased falls well short of
the new standards is that the values of
future savings from higher fuel economy
vary widely across consumers. As an
illustration, one recent review of
consumers’ willingness to pay for
improved fuel economy found estimates
that varied from less than 1% to almost
ten times the present value of the
resulting fuel savings when those are
discounted at 7% over the vehicle’s
expected lifetime.741 The wide variation
738 See
Alcott and Wozny.
R. P., and J.B. Soll (2008). ‘‘The MPG
illusion.’’ Science 320: 1593–1594.
740 Sanstad, A., and R. Howarth (1994). ‘‘ ‘Normal’
Markets, Market Imperfections, and Energy
Efficiency.’’ Energy Policy 22(10): 811–818.
741 Greene, David L., ‘‘How Consumers Value Fuel
Economy: A Literature Review,’’ Draft report to U.S.
Environmental Protection Agency, Oak Ridge
739 Larrick,
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25653
in these estimates undoubtedly reflects
methodological and measurement
differences among the studies surveyed.
However, it may also reveal that the
expected savings from purchasing a
vehicle with higher fuel economy vary
widely among individuals, because they
travel different amounts, have different
driving styles, or simply have varying
expectations about future fuel prices.
These differences reflect the
possibility that many buyers with high
valuations of increased fuel economy
already purchase vehicle models that
offer it, while those with lower values
of fuel economy emphasize other
vehicle attributes in their purchasing
decisions. A related possibility is that
because the effects of differing fuel
economy levels are relatively modest
when compared to those provided by
other, more prominent features of new
vehicles—passenger and cargo-carrying
capacity, performance, safety, etc.—it is
simply not in many shoppers’ interest to
spend the time and effort necessary to
determine the economic value of higher
fuel economy, attempt to isolate the
component of a new vehicle’s selling
price that is related to its fuel economy,
and compare these two. (This possibility
is consistent with the view that fuel
economy is a relatively ‘‘shrouded’’
attribute.) In either case, the agency’s
estimates of the average value of fuel
savings that will result from requiring
cars and light trucks to achieve higher
fuel economy may be correct, but those
savings may not be large enough to lead
a sufficient number of buyers to push
for vehicles with higher fuel economy to
increase average fuel economy from its
current levels.
Defects in the market for cars and
light trucks could also lead
manufacturers to undersupply fuel
economy, even in cases where many
buyers were willing to pay the increased
prices necessary to provide it.
To be sure, the relevant market, taken
as a whole, has a great deal of
competition. But even in those
circumstances, there may not such
competition with respect to all vehicle
attributes. Incomplete or ‘‘asymmetric’’
access to information on vehicle
attributes such as fuel economy—
whereby manufacturers of new vehicles
or sellers of used cars and light trucks
National Laboratory, December 29, 2009; see Table
10, p. 37.
See also David Greene 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–
0472–0045). The study actually calculated the
willingness to pay for reduced vehicle operating
costs, of which vehicle fuel economy is a major
component.
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have more complete knowledge of the
value of purchasing higher fuel
economy, than do potential buyers—
may also prevents sellers of new or used
vehicles from capturing its full value. In
this situation, the level of fuel efficiency
provided in the markets for new or used
vehicles might remain persistently
lower than that demanded by potential
buyers (at least if they are wellinformed).
It is also possible that deliberate
decisions by manufacturers of cars and
light trucks, rather than constraints on
the combinations of fuel economy,
carrying capacity, and performance that
manufacturers can offer using current
technologies, limit the range of fuel
economy available to buyers within
individual vehicle market segments,
such as full-size automobiles, small
SUVs, or minivans. As an illustration,
once a potential buyer has decided to
purchase a minivan, the range of fuel
economy among current models extends
only from 18 to 24 mpg.742
Manufacturers might make such
decisions if they underestimate the
premiums that shoppers in certain
market segments are willing to pay for
more fuel-efficient versions of the
vehicle models they currently offer to
prospective buyers within those
segments. If this occurs, manufacturers
may fail to supply levels of fuel
efficiency as high as those buyers are
willing to pay for, and the average fuel
efficiency of their entire new vehicle
fleets could remain below the levels that
potential buyers demand and are willing
to pay for. (Of course this possibility is
most realistic if it is also assumed that
buyers are imperfectly informed or if
fuel economy savings are not
sufficiently salient.) However, other
commenters suggested that, if one
assumes a perfectly functioning market,
there must be unidentified consumer
welfare losses that could offset the
private fuel savings that consumers are
currently foregoing.
One explanation for this apparent
paradox is that NHTSA’s estimates of
benefits and costs from requiring
manufacturers to improve the fuel
efficiency of their vehicle models do not
match potential vehicle buyers’
assessment of the likely benefits and
costs from requiring higher fuel
efficiency. This could occur because the
agency’s underlying assumptions about
some of the factors that affect the value
of fuel savings differ from those made
by potential buyers, because NHTSA
has used different estimates for some
components of the benefits from saving
fuel than do buyers, or because the
agency has failed to account for some
potential costs of achieving higher fuel
economy.
For example, buyers may not value
increased fuel economy as highly as the
agencies’ calculations suggest, because
they have shorter time horizons than the
full vehicle lifetimes assumed by
NHTSA and EPA, or because, when
buying vehicles, they discount future
fuel future savings using higher rates
than those prescribed by OMB for
evaluating Federal regulations. Potential
buyers may also anticipate lower fuel
prices in the future than those forecast
by the Energy Information
Administration, or may expect larger
differences between vehicles rated and
actual on-road MPG levels than the
agencies’ estimate.
To illustrate the first of these
possibilities, Table IV.G.6–2 shows the
effect of differing assumptions about
vehicle buyers’ time horizons for
assessing the value of future fuel
savings. Specifically, the table compares
the average value of fuel savings from
purchasing a MY 2016 car or light truck
when fuel savings are evaluated over
different time horizons to the estimated
increase in its price. This table shows
that as reported previously in Table
IV.G.6–2, when fuel savings are
evaluated over the entire expected
lifetime of a MY 2016 car
(approximately 14 years) or light truck
(about 16 years), their discounted
present value (using the OMBrecommended 3% discount rate)
lifetime fuel savings exceeds the
estimated average price increase by
more than $2,000 for cars and by more
than $2,700 for light trucks.
If buyers are instead assumed to
consider fuel savings over a 10-year
time horizon, however, the present
value of fuel savings exceeds the
projected price increase for a MY 2016
car by about $1,300, and by somewhat
more than $1,500 for a MY 2016 light
truck. Finally, Table VI.G.6–2 shows
that under the assumption that buyers
consider fuel savings only over the
length of time for which they typically
finance new car purchases (slightly
more than 5 years during 2009), the
value of fuel savings exceeds the
estimated increase in the price of a MY
2016 car by only about $350, and the
corresponding difference is reduced to
slightly more than $500 for a MY 2016
light truck.
TABLE IV.G.6–2—VALUE OF FUEL SAVINGS VS. VEHICLE PRICE INCREASES WITH ALTERNATIVE ASSUMPTIONS ABOUT
VEHICLE BUYER TIME HORIZONS
Value over alternative time horizons
Vehicle
Measure
Expected
lifetime 743
10 years
Average loan
term 744
Fuel Savings ..................................................
Price Increase ................................................
$2,932
907
$2,180
907
$1,254
907
MY 2016 Light Truck ......................................
Difference ................................................
Fuel Savings ..................................................
Price Increase ................................................
2,025
3,700
961
1,273
2,508
961
347
1,484
961
Difference ................................................
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MY 2016 Passenger Car ................................
2,739
1,547
523
Potential vehicle buyers may also
discount future fuel future savings using
higher rates than those typically used to
evaluate Federal regulations. OMB
guidance prescribes that future benefits
and costs of regulations that mainly
742 This is the range of combined city and
highway fuel economy levels from lowest (Toyota
Siena 4WD) to highest (Mazda 5) available for
model year 2010; https://www.fueleconomy.gov/feg/
bestworstEPAtrucks.htm (last accessed February 15,
2010).
743 Expected lifetimes are approximately 14 years
for cars and 16 years for light trucks.
744 Average term on new vehicle loans made by
auto finance companies during 2009 was 62
months; See Board of Governors of the Federal
Reserve System, Federal Reserve Statistical Release
G.19, Consumer Credit. Available at https://www.
federalreserve.gov/releases/g19/Current (last
accessed March 1, 2010).
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Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
affect private consumption decisions, as
will be the case if manufacturers’ costs
for complying with higher fuel economy
standards are passed on to vehicle
buyers, should be discounted using a
consumption rate of time preference.745
OMB estimates that savers currently
discount future consumption at an
average real or inflation-adjusted rate of
about 3 percent when they face little
risk about its likely level, which makes
it a reasonable estimate of the
consumption rate of time preference.
However, vehicle buyers may view the
value of future fuel savings that results
from purchasing a vehicle with higher
fuel economy as risky or uncertain, or
they may instead discount future
consumption at rates reflecting their
costs for financing the higher capital
outlays required to purchase more fuel-
efficient models. In either case, they
may discount future fuel savings at rates
well above the 3% assumed in NHTSA’s
evaluation in their purchase decisions.
Table IV.G.6–3 shows the effects of
higher discount rates on vehicle buyers’
evaluation of the fuel savings projected
to result from the CAFE standards
established by this rule, again using MY
2016 passenger cars and light trucks as
an example. As Table IV.G.6–1 showed
previously, average future fuel savings
discounted at the OMB 3% consumer
rate exceed the agency’s estimated price
increases by more than $2,000 for MY
2016 passenger cars and by more than
$2,700 for MY 2016 light trucks. If
vehicle buyers instead discount future
fuel savings at the average new-car loan
rate during 2009 (6.7%), however, these
differences decline to slightly more than
25655
$1,400 for cars and $1,900 for light
trucks, as Table IV.G.6–3 illustrates.
This is a potentially plausible
alternative assumption, because buyers
are likely to finance the increases in
purchase prices resulting from
compliance with higher CAFE standards
as part of the process of financing the
vehicle purchase itself. Finally, as the
table also shows, discounting future fuel
savings using a consumer credit card
rate (which averaged 13.4% during
2009) reduces these differences to less
than $800 for a MY 2016 passenger car
and less than $1,100 for the typical MY
2016 light truck. Note, however, that
even at these higher discount rates, the
table shows that the private net benefits
from purchasing a vehicle with the
average level of fuel economy this rule
requires remains large.
TABLE IV.G.6–3—VALUE OF FUEL SAVINGS VS. VEHICLE PRICE INCREASES WITH ALTERNATIVE ASSUMPTIONS ABOUT
CONSUMER DISCOUNT RATES
Value over alternative time horizons
New car loan
rate
(6.7%) 746
Consumer
credit card
rate
(13.4%) 747
Measure
MY 2016 Passenger Car ..................
Fuel Savings ....................................
Price Increase ..................................
$2,932
907
$2,336
907
$2,300
907
$1,669
907
MY 2016 Light Truck ........................
Difference ..................................
Fuel Savings ....................................
Price Increase ..................................
2,025
3,700
961
1,429
2,884
961
1,393
2,836
961
762
2,030
961
Difference ..................................
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OMB
consumer rate
(3%)
OMB
investment
rate
(7%)
Vehicle
2,739
1,923
1,875
1,069
Combinations of a shorter time
horizon and a higher discount rate
could further reduce or even eliminate
the difference between the value of fuel
savings and the agency’s estimates of
increases in vehicle prices. One
plausible combination would be for
buyers to discount fuel savings over the
term of a new car loan, using the
interest rate on that loan as a discount
rate. Doing so would reduce the amount
by which future fuel savings exceed the
estimated increase in the prices of MY
2016 vehicles to about $340 for
passenger cars and $570 for light trucks.
Some evidence also suggests directly
that vehicle buyers may employ
combinations of higher discount rates
and shorter time horizons for their
purchase decisions; for example,
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 it.748 As
these comparisons and evidence
illustrate, reasonable alternative
assumptions about how consumers
might evaluate the major benefit from
requiring higher fuel economy can
significantly affect the benefits they
expect to receive when they decide to
purchase a new vehicle.
Imaginable combinations of shorter
time horizons, higher discount rates,
and lower expectations about future fuel
prices or annual vehicle use and fuel
savings could make potential buyers
hesitant or even unwilling to purchase
vehicles offering the increased fuel
economy levels this rule will require
manufacturers to produce. At the same
time, they might cause vehicle buyers’
collective assessment of the aggregate
benefits and costs of this rule to differ
from NHTSA’s estimates. If consumers’
views about critical variables such as
future fuel prices or the appropriate
discount rate differ sufficiently from the
assumptions used by the agency, some
or perhaps many potential vehicle
buyers might conclude that the value of
fuel savings and other benefits they will
experience from higher fuel economy
are not sufficient to justify the increase
in purchase prices they expect to pay.
This would explain why their current
choices among available models do not
result in average fuel economy levels
745 Office of Management and Budget, Circular A–
4, ‘‘Regulatory Analysis,’’ September 17, 2003, 33.
Available at https://www.whitehouse.gov/omb/
assets/regulatory_matters_pdf/a-4.pdf (last accessed
March 1, 2010).
746 Average rate on 48-month new vehicle loans
made by commercial banks during 2009 was 6.72%;
See Board of Governors of the Federal Reserve
System, Federal Reserve Statistical Release G.19,
Consumer Credit. Available at https://www.
federalreserve.gov/releases/g19/Current (last
accessed March 1, 2010).
747 Average rate on consumer credit card accounts
at commercial banks during 2009 was 13.4%; See
Board of Governors of the Federal Reserve System,
Federal Reserve Statistical Release G.19, Consumer
Credit. Available at https://www.federalreserve.gov/
releases/g19/Current (last accessed March 1, 2010).
748 Kubik, M. (2006). Consumer Views on
Transportation and Energy. Second Edition.
Technical Report: National Renewable Energy
Laboratory. Available at Docket No. NHTSA–2009–
0059–0038.
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approaching those this rule would
require.
Another possibility is that achieving
the fuel economy improvements
required by stricter fuel economy
standards might mean that
manufacturers will forego planned
future improvements in performance,
carrying capacity, safety, or other
features of their vehicle models that
represent important sources of utility to
vehicle owners. Although the specific
economic values that vehicle buyers
attach to individual vehicle attributes
such as fuel economy, performance,
passenger- and cargo-carrying capacity,
and other sources of vehicles’ utility are
difficult to infer from their purchasing
decisions and vehicle prices, changes in
vehicle attributes can significantly affect
the overall utility that vehicles offer to
potential buyers. Foregoing future
improvements in these or other highlyvalued attributes could be viewed by
potential buyers as an additional cost of
improving fuel economy.
As indicated in its previous
discussion of technology costs, NHTSA
has approached this potential problem
by developing cost estimates for fuel
economy-improving technologies that
include allowances for any additional
manufacturing costs that would be
necessary to maintain the reference fleet
(or baseline) levels of performance,
comfort, capacity, or safety of light-duty
vehicle models to which those
technologies are applied. In doing so,
the agency followed the precedent
established by the 2002 NAS Report on
improving fuel economy, which
estimated ‘‘constant performance and
utility’’ costs for technologies that
manufacturers could employ to increase
the fuel efficiency of cars or light trucks.
Although NHTSA 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, safety,
carrying capacity, and utility of vehicle
models while improving their fuel
economy. The adoption of the footprintbased standards also addresses this
concern.
Finally, vehicle buyers may simply
prefer the choices of vehicle models
they now have available to the
combinations of price, fuel economy,
and other attributes that manufacturers
are likely to offer when required to
achieve higher overall fuel economy. If
this is the case, their choices among
models—and even some buyers’
decisions about whether to purchase a
new vehicle—will respond accordingly,
and their responses to these new
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choices will reduce their overall
welfare. Some may buy models with
combinations of price, fuel efficiency,
and other attributes that they consider
less desirable than those they would
otherwise have purchased, while others
may simply postpone buying a new
vehicle. The use of the footprint-based
standards, the level of stringency, and
the lead time this rule allows
manufacturers are all intended to ensure
that this does not occur. Although the
potential losses in buyers’ welfare
associated with these responses cannot
be large enough to offset the estimated
value of fuel savings reported in the
agencies’ analyses, they might reduce
the benefits from requiring
manufacturers to achieve higher fuel
efficiency, particularly in combination
with the other possibilities outlined
previously.
As the foregoing discussion suggests,
the agency does not have a complete
answer to the question of why the
apparently large differences between its
estimates of benefits from requiring
higher fuel economy and the costs of
supplying it do not result in higher
average fuel economy for new cars and
light trucks in the absence of this rule.
One explanation is that NHTSA’s
estimates are reasonable, and that for
the reasons outlined above, the market
for fuel economy is not operating
efficiently. NHTSA believes that the
existing literature gives support for the
view that because of various market
failures (including behavioral factors,
such as emphasis on the short-term and
a lack of salience), there are likely to be
substantial private gains, on net, from
the rule, but it will continue to
investigate new empirical literature as it
becomes available.
NHTSA acknowledges the possibility
that it has incorrectly characterized the
impact of the CAFE standards this rule
establishes on consumers. To recognize
this possibility, this section presents an
alternative accounting of the benefits
and costs of CAFE standards for MYs
2012–2016 passenger cars and light
trucks and discusses its implications.
Table IV.G.6–4 displays the economic
impacts of the rule as viewed from the
perspective of potential buyers, and also
reconciles the estimated net benefits of
the rule as they are likely to be viewed
by vehicle buyers with its net benefits
to the economy as a whole.
As the table shows, the total benefits
to vehicle buyers (line 4) consist of the
value of fuel savings at retail fuel prices
(line 1), the economic value of vehicle
occupants’ savings in refueling time
(line 2), and the economic benefits from
added rebound-effect driving (line 3).
As the zero entries in line 5 of the table
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suggest, the agency’s estimate of the
retail value of fuel savings reported in
line 1 is assumed to be correct, and no
losses in consumer welfare from
changes in vehicle attributes (other than
those from increases in vehicle prices)
are assumed to occur. Thus there is no
reduction in the total private benefits to
vehicle owners, so that net private
benefits to vehicle buyers (line 6) are
equal to total private benefits (reported
previously in line 4).
As Table IV.G.6–4 also shows, the
decline in fuel tax revenues (line 7) that
results from reduced fuel purchases is
in effect a social cost that offsets part of
the benefits of fuel savings to vehicle
buyers (line 1).749 Thus the sum of lines
1 and 7 is the savings in fuel production
costs that was reported previously as the
value of fuel savings at pre-tax prices in
the agency’s usual accounting of
benefits and costs. Lines 8 and 9 of
Table IV.G.6–4 report the value of
reductions in air pollution and climaterelated externalities resulting from
lower emissions during fuel production
and consumption, while line 10 reports
the savings in energy security
externalities to the U.S. economy from
reduced consumption and imports of
crude petroleum and refined fuel. Line
12 reports the costs of increased
congestion delays, accidents, and noise
that result from additional driving due
to the fuel economy rebound effect; net
social benefits (line 13) is thus the sum
of the change in fuel tax revenues, the
reduction in environmental and energy
security externalities, and increased
costs from added driving.
Line 14 of Table IV.G.6–4 shows
manufacturers’ technology outlays for
meeting higher CAFE standards for
passenger cars and light trucks, which
represent the principal cost of requiring
higher fuel economy. The net total
benefits (line 15 of the table) resulting
from the rule consist of the sum of
private (line 6) and external (line 13)
benefits, minus technology costs (line
14); as expected, the figures reported in
line 15 of the table are identical to those
reported previously in the agency’s
customary format.
Table IV.G.6–4 highlights several
important features of this rule’s
749 Strictly speaking, fuel taxes represent a
transfer of resources from consumers of fuel to
government agencies and not a use of economic
resources. Reducing the volume of fuel purchases
simply reduces the value of this transfer, and thus
cannot produce a real economic cost or benefit.
Representing the change in fuel tax revenues in
effect as an economy-wide cost is necessary to offset
the portion of fuel savings included in line 1 that
represents savings in fuel tax payments by
consumers. This prevents the savings in tax
revenues from being counted as a benefit from the
economy-wide perspective.
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economic impacts. First, comparing the
rule’s net private (line 6) and external
(line 13) benefits makes it clear that a
substantial majority of the benefits from
requiring higher fuel economy are
experienced by vehicle buyers, with
only a small share distributed
throughout the remainder of the U.S.
economy. In turn, the vast majority of
private benefits stem from fuel savings.
External benefits are small because the
value of reductions in environmental
and energy security externalities is
almost exactly offset by the decline in
fuel tax revenues and the increased
costs associated with added vehicle use
via the rebound effect of higher fuel
economy. As a consequence, the net
economic benefits of the rule mirror
closely its benefits to private vehicle
buyers and the technology costs for
achieving higher fuel economy, again
highlighting the importance of
accounting for any other effects of the
rule on the economic welfare of vehicle
buyers.
TABLE IV.G.6–4—PRIVATE, SOCIAL, AND TOTAL BENEFITS AND COSTS OF MY 2012–16 CAFE STANDARDS: PASSENGER
CARS PLUS LIGHT TRUCKS
Model year
Entry
2012
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
Value of Fuel Savings (at Retail Fuel Prices) ..........
Savings in Refueling Time ........................................
Consumer Surplus from Added Driving ....................
Total Private Benefits (= 1+ 2 + 3) ...........................
Reduction in Private Benefits ...................................
Net Private Benefits (= 1 + 2) ...................................
Change in Fuel Tax Revenues .................................
Reduced Health Damages from Criteria Emissions
Reduced Climate Damages from CO2 Emissions ....
Reduced Energy Security Externalities ....................
Reduction in Externalities (= 8 + 9 + 10) .................
Increased Costs of Congestion, etc .........................
Net Social Benefits (= 7 + 11 + 12) .........................
Technology Costs .....................................................
Net Social Benefits (= 6 + 12 ¥ 14) ........................
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As discussed in detail previously,
NHTSA believes that the aggregate
benefits from this rule amply justify its
aggregate costs, but it remains possible
that the agency has overestimated the
value of fuel savings to buyers and
subsequent owners of the cars and light
trucks to which higher CAFE standards
will apply. It is also possible that the
agency has failed to identify and value
reductions in consumer welfare that
could result from buyers’ responses to
changes in vehicle attributes that
manufacturers make as part of their
efforts to achieve higher fuel economy.
To acknowledge these possibilities,
NHTSA examines their potential impact
on the rule’s benefits and costs, showing
the rule’s economic impacts for MY
2012–16 passenger cars and light trucks
under varying theoretical assumptions
about the agency’s potential
overestimation of private benefits from
higher fuel economy and the value of
potential changes in other vehicle
attributes. See Chapter VIII of the FRIA.
7. What other impacts (quantitative and
unquantifiable) will these final
standards have?
In addition to the quantified benefits
and costs of fuel economy standards, the
final standards will have other impacts
that we have not quantified in monetary
terms. The decision on whether or not
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$10.5
0.7
0.7
11.9
0.0
11.9
¥1.3
0.5
0.9
0.5
1.9
¥0.7
0.0
5.9
6.0
2013
2014
$22.9
1.4
1.5
25.8
0.0
25.8
¥2.7
0.9
2.0
1.2
4.1
¥1.3
0.1
7.9
17.9
$32.9
1.9
2.2
37.0
0.0
37.0
¥3.8
1.3
2.9
1.6
5.9
¥1.9
0.1
10.5
26.6
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
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 final 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
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2015
$42.5
2.5
2.8
47.8
0.0
47.8
¥4.8
1.6
3.8
2.1
7.6
¥2.4
0.3
12.5
35.5
2016
$52.7
3.0
3.4
59.0
0.0
59.0
¥5.9
2.0
4.8
2.5
9.3
¥3.0
0.5
14.9
44.6
Total,
2012–2016
$161.6
9.4
10.5
181.5
0.0
181.5
¥18.5
6.4
14.5
8.0
28.8
¥9.4
1.0
51.7
130.7
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. Several
commenters agreed. These innovative
approaches may reduce the cost of the
final rule in its later years, and also
increase the set of feasible technologies
in future years.
We have attempted to estimate the
effect of learning on known technologies
within the period of the rulemaking. We
have not attempted to estimate the
extent to which not-yet-invented
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 final rule
raises vehicle costs by over $900 by
2016, and for some manufacturers costs
will increase by $1,000–$1,800.
Depending on the retail price of the
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vehicle, this could represent a
significant increase in the overall
vehicle cost and subsequently increase
insurance rates, operation costs, and
maintenance costs. Comprehensive
insurance costs are likely to be directly
related to price increases, but liability
premiums will go up by a smaller
proportion because the bulk of liability
coverage reflects the cost of personal
injury. The impact on operation and
maintenance costs is less clear, because
the maintenance burden and useful life
of each technology are not known.
However, one of the common
consequences of using more complex or
innovative technologies is a decline in
vehicle reliability and an increase in
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 for
purposes of this final rule. The agency
will analyze this issue further for future
rulemakings to attempt to gauge its
impact more completely.
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.
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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 most vehicles
will to some extent be impacted by the
standards. 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.
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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. Elsewhere in this analysis,
NHTSA estimates that vehicle sales will
increase. This would occur because 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’ costs. Under these
circumstances, 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
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 would decline, as
would 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.
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 or decrease the
cost of blended gasoline and diesel
depending on crude oil prices and tax
subsidies. The potential extra cost of
renewable fuels would be borne through
a cross-subsidy: The price of every
gallon of blended gasoline could rise
sufficiently to pay for any extra cost of
renewable fuels. However, if the price of
fuel increases enough, the consumer
could actually realize a savings through
the increased usage of renewable fuels.
The final CAFE rule, by reducing total
fuel consumption, could 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.
These effects are indirectly
incorporated in NHTSA’s analysis of the
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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 corresponding
losses from the induced reduction in
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 final rule
will itself be small.
Macroeconomic Impacts of This Rule
The final rule will have a number of
consequences that may have short-run
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
passenger cars and light trucks 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 final rule,
however a discussion of the economywide impacts of this rule conducted by
EPA is presented in Section III.H and is
included in the docket. 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 final rule would
impact the U.S. economy in ways that
extend beyond the transportation sector.
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Military Expenditures
This analysis contains quantified
estimates for the social cost of
petroleum imports based on the risk of
oil market disruption. We have not
included estimates of monopsony
effects or the cost of military
expenditures associated with petroleum
imports.
Distributional Effects
The final rule analysis provides a
national-level distribution of impacts for
gas price and similar variables. NHTSA
also shows the effects of the EIA high
and low gas price forecasts on the
aggregate benefits in the sensitivity
analysis. Generally, this rule has the
greatest impact on those individuals
who purchase vehicles. In terms of how
the benefits of the rule might accrue
differently for different consumers,
consumers who drive more than our
mean estimates for VMT will see more
fuel savings, while those who drive less
than our mean VMT estimates will see
less fuel savings.
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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
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
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transportation.750 NHTSA’s
classification rule directly tracks those
two broad groups of non-passenger
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.751
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
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, NHTSA recognizes that
manufacturers may have an incentive to
classify vehicles as light trucks if the
750 49 U.S.C. 32901(a)(18). We note that the
statute refers both to vehicles that are 4WD and to
vehicles over 6,000 lbs GVWR as potential
candidates for off-road capability, if they also meet
the ‘‘significant feature * * * designed for offhighway operation’’ as defined by the Secretary.
NHTSA would consider ‘‘AWD’’ vehicles as 4WD
for purposes of this determination—they send
power to all wheels of the vehicle all the time,
while 4WD vehicles may only do so part of the
time, which appears to make them equal candidates
for off-road capability given other necessary
characteristics.
751 538 F.3d 1172 (9th Cir. 2008).
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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 often the case
given the current fleet, 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 and towing and
hauling capacity (and correspondingly,
although not necessarily, heavier
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 choose to make such
changes before or during the model
years covered by this rulemaking.
In the NPRM, in looking forward to
model years beyond 2011 and
considering how CAFE should operate
in the context of the National Program
and previously-received comments as
requested by President Obama, NHTSA
sought comment on the following
potential changes to NHTSA’s vehicle
classification system, as well as 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
‘‘3-row’’ 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
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
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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 did not feel that it
could say with certainty that moving
these vehicles could negatively affect
potential stringency levels for either
passenger cars or light trucks. Thus,
although such a change would not be
made applicable during the MY 2012–
2016 time frame, NHTSA sought
comment on why the agency 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.
Comments received on this issue were
split between support and opposition.
As perhaps expected, the Alliance,
AIAM, NADA, Chrysler, Ford, and
Toyota all commented in favor of
maintaining 3-row vehicles as light
trucks indefinitely. The Alliance and
Chrysler stated that the existing
definitions for light trucks are consistent
with Congressional intent in EPCA and
EISA, given that Congress could have
changed the 3-row definition in passing
EISA but did not do so. The Alliance,
AIAM, and Chrysler also argued that the
functional characteristics of 3-row
vehicles do make them ‘‘truck-like,’’
citing their ‘‘high load characteristics’’
and ability to carry cargo if their seats
are stowed or removed. Ford and Toyota
emphasized the need for stability in the
definitions as manufacturers adjust to
the recent reclassification of many 2WD
SUVs from the truck to the car fleet, and
the Alliance argued further that moving
the 3-row vehicles to the car fleet would
simply deter manufacturers from
continuing to provide them, causing
consumers to purchase larger full-size
vans instead and resulting in less fuel
savings and emissions reductions.
Toyota stated further that no significant
changes have occurred in the
marketplace (as in, not all 2WD SUVs
suddenly have 3 rows) to trigger
additional reclassification beyond that
required by the MY 2011 final rule.
Hyundai neither supported nor objected
to reclassification, but requested ample
lead time for the industry if any changes
are eventually made.
Other commenters favored
reclassification of 3-row vehicles from
the truck to the car fleet: NJ DEP
expressed general support for
reclassifying 3-row vehicles for MYs
2017 and beyond, while the UCSB
student commenters seemed to support
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reclassifying these vehicles for the
current rulemaking. The UCSB students
stated that EPCA/EISA properly
distinguishes light trucks based on their
‘‘specialized utility,’’ either their ability
to go off-road or to transport material
loads, but that 3-row vehicles do not
generally have such utility as sold, and
are clearly primarily sold and used for
transporting passengers. The UCSB
students suggested that reclassifying the
3-row vehicles from the truck to the car
fleet could help to ensure the
anticipated levels of fuel savings by
moving the fleet closer to the 67/33 fleet
split assumed in the agencies’ analysis
for MY 2016, and stated that this would
increase fuel economy over the long
term. The students urged NHTSA to
look at the impact on fuel savings from
reclassifying these vehicles for the
model years covered by the rulemaking.
In response, NHTSA did conduct
such an analysis to attempt to consider
the impact of moving these vehicles. As
previously stated, the agency’s
hypothesis is that moving 3-row
vehicles from the truck to the car fleet
will tend to bring the achieved fuel
economy levels down in both fleets—
the car fleet achieved levels could
theoretically fall due to the introduction
of many more vehicles that are
relatively heavy for their footprint and
thus comparatively less fuel economycapable, while the truck fleet achieved
levels could theoretically fall due to the
characteristics of the vehicles remaining
in the fleet (4WDs and pickups, mainly)
that are often comparatively less fueleconomy capable than 3-row vehicles,
although more vehicles would be
subject to the relatively more stringent
passenger car standards, assuming the
curves were not refit to the data.
The agency first identified which
vehicles should be moved. We
identified all of the 3-row vehicles in
the baseline (MY 2008) fleet,752 and
then considered whether any could be
properly classified as a light truck under
a different provision of 49 CFR 523.5—
about 40 vehicles were classifiable
under § 523.5(b) as off-highway capable.
The agency then transferred those
remaining 3-row vehicles from the light
truck to the passenger car input sheets
for the Volpe model, re-estimated the
gap in stringency between the passenger
car and light truck standards, shifted the
curves to obtain the same overall
average required fuel economy as under
the final standards, and ran the model
to evaluate potential impacts (in terms
of costs, fuel savings, etc.) of moving
these vehicles. The results of this
752 Of the 430 light trucks models in the fleet, 175
of these had 3 rows.
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analysis may be found in the same
location on NHTSA’s Web site as the
results of the analysis of the final
standards. In summary, moving the
vehicles reduced the stringency of the
passenger car standards by
approximately 0.8 mpg on average for
the five years of the rule, and reduced
the stringency of the light truck
standards by approximately 0.2 mpg on
average for the five years of the rule. It
also caused the gap between the car
curve and the truck curve to decrease or
narrow slightly, by 0.1 mpg. However,
the analysis also showed that such a
shift in 3-row vehicles could result in
approximately 676 million fewer gallons
of fuel consumed (equivalent to about 1
percent of the reduction in fuel
consumption under the final standards)
and 7.1 mmt fewer CO2 emissions
(equivalent to about 1 percent of the
reduction in CO2 emissions under the
final standards) over the lifetime of the
MYs 2012–2016 vehicles. This result is
attributable to slight differences (due to
rounding precision) in the overall
average required fuel economy levels in
MYs 2012–2014, and to the retention of
the relatively high lifetime mileage
accumulation (compared to ‘‘traditional’’
passenger cars) of the vehicles moved
from the light truck fleet to the
passenger car fleet.
The changes in overall costs and
vehicle price did not necessarily go in
the same direction for both fleets,
however. Overall costs of applying
technology for the passenger car fleet
went up approximately $1 billion per
year for each of MYs 2012–2016, while
overall costs for the light truck fleet
went down by an average of
approximately $800 million for each
year, such that the net effect was
approximately $200 million additional
spending on technology each year
(equivalent to about 2 percent of the
average increase in annual technology
outlays under the final standards).
Assuming manufacturers would pass
that cost forward to consumers by
increasing vehicle costs, vehicle prices
would increase by an average of
approximately $13 during MYs 2012–
2016.
However, one important point to note
in this comparative analysis is that, due
to time constraints, the agency did not
attempt to refit the respective fleet target
curves or to change the intended
required stringency in MY 2016 of 34.1
mpg for the combined fleets. If we had
refitted curves following the same
procedures described above in Section
II, considering the vehicles in question,
we expect that we might have obtained
a somewhat steeper passenger car curve,
and a somewhat flatter light truck curve.
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If so, this might have increased the gap
in between portions of the passenger car
and light truck curves.
NHTSA agrees with the industry
commenters that some degree of
stability in the passenger car and light
truck definitions will assist the industry
in making the transition to the
stringency of the new National Program,
and therefore will not reclassify 3-row
vehicles to the passenger car fleet for
purposes of MYs 2012–2016. Going
forward, the real question is how to
balance the benefits of regulatory
stability against the potential benefits of
greater fuel savings if reclassification is
determined to lead in that direction.
NHTSA believes that this question
merits much further analysis before the
agency can make a decision for model
years beyond MY 2016, and will
provide further opportunity for public
comment regarding that analysis prior to
finalizing any changes in the future.
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
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
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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 sought comment in the
NPRM on how the agency might go
about reviewing this question as more
information about manufacturer
behavior is accumulated, but no
commenters really responded to this
issue directly, although several cited the
possibility that manufacturers might
cease to build 2WD SUVs as a way of
avoiding the higher passenger car curve
targets in arguing that the agencies
should implement backstop standards
for all fleets. Since NHTSA has already
stated above that it will revisit the
backstop question as necessary in the
future, we may as well add that we will
consider the need to classify ‘‘like’’
vehicles together as necessary in the
future.
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 suggested in the
NPRM that it could explore additional
approaches, although it cautioned that
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.).
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NHTSA sought comment on whether
and why it should pursue any of these
courses of action.
Some commenters (ICCT, CBD,
NESCAUM) did raise the issue of
removing the regulatory distinction
between cars and trucks and setting
standards for the entire fleet of vehicles,
but those commenters did not appear to
recognize the fact that EPCA/EISA
expressly requires that NHTSA set
separate standards for passenger cars
and light trucks. As the statute is
currently written, NHTSA does not
believe that a single standard would be
appropriate unless the observed
relationship between footprint and fuel
economy of the two fleets converged
significantly over time. Nevertheless,
NHTSA will continue to monitor the
issue going forward.
Besides these issues in vehicle
classification, NHTSA additionally
received comments from two
manufacturers on issues not raised by
NHTSA in the NPRM. VW requested
clarification with respect to how the
agency evaluates a vehicle for off-road
capability under 49 CFR 523.5(b)(2),
asking the agency to measure vehicles
with ‘‘active ride height management’’ at
the ‘‘height setting representative of offroad operation if the vehicle has the
capability to change ride height.’’
NHTSA issued an interpretation to
Porsche in 2004 addressing this issue,
when Porsche asked whether a drivercontrolled variable ride height
suspension system could be used in the
‘‘off-road’’ ride height position to meet
the suspension parameters required for
an off- road classification
determination.753 Porsche argued that a
vehicle should not need to satisfy the
four-out-of-five criteria at all ride
heights in order to be deemed capable
of off-highway operation. NHTSA
agreed that 523.5(b)(2) does not require
a vehicle to meet four of the five criteria
at all ride heights, but stated that a
vehicle must meet four out of the five
criteria in at least one ride height. The
agency determined that it would be
appropriate to measure the vehicle’s
running clearance with the vehicle’s
adjustable suspension placed in the
position(s) intended for off-road
operation under real-world conditions.
Thus, NHTSA clarifies that the agency
would consider it appropriate to
measure vehicles for off-road capability
at the height setting intended for offroad operation under real-world
conditions. However, we note that
before this question need be asked and
answered, the vehicle must first either
753 Available at https://isearch.nhtsa.gov/files/
porschevrhs.html (last accessed Mar. 1, 2010).
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be equipped with 4WD or be rated at
more than 6,000 pounds gross vehicle
weight to be eligible for classification as
a light truck under 49 CFR 523.5(b).
The final comment on the issue of
vehicle classification was received from
Honda, who recommended that
deformable aero parts, such as strakes,
should be excluded from the ride height
measurements that determine whether a
vehicle qualifies as a truck for off-road
capability. The air strakes described by
Honda are semi-deformable parts
similar to a mud flap that can be used
to improve a vehicle’s aerodynamics,
and thus to improve its fuel economy.
Honda argued that NHTSA would deter
the application of this technology if it
did not agree to measure ride height
with the air strakes at their most
deformed state, because otherwise a
vehicle so equipped would have to be
classified as a passenger car and thus be
faced with the more stringent standard.
In response, Honda did not provide
enough information to the agency for
the agency to make a decision with
regard to how air strakes should be
considered in measuring a vehicle for
off-road capability. NHTSA personnel
would prefer to directly examine a
vehicle equipped with these devices
before considering the issue further. The
agency will defer consideration of this
issue to another time, and no changes
will be made in this final rule in
response to this comment.
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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
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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.754 The reports for the current
model year are submitted to NHTSA
every December and July. As of the time
of this final rule, NHTSA has received
pre-model year reports from
manufacturers for MY 2010, and
anticipates receiving mid-model year
reports for MY 2010 in July of this 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 proposed to amend
part 537 to allow for electronic
submission of the pre- and mid-model
year CAFE reports. The only comments
addressing this proposal were from
Ferrari, who supported it in the interest
of efficiency, and Ford, who did not
object as long as CBI was sufficiently
protected. Having received no
comments objecting, NHTSA is
finalizing this change to part 537.
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
754 49 CFR part 537 is authorized by 49 U.S.C.
32907.
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determine compliance with the CAFE
standards. In measuring the fuel
economy of passenger cars, EPA is
required by EPCA755 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.
As discussed above in Section III, a
number of commenters raised the issue
of whether the city and highway test
procedures and the calculation are still
appropriate or whether they may be
outdated. Several commenters argued
that the calculation should be more
‘‘real-world’’: For example, ACEEE
stated that EPA should use a ‘‘correction
factor’’ like the one used for the fuel
economy label in the interim until test
procedures can be changed, while
BorgWarner, Cummins, Honeywell,
MECA, and MEMA argued that EPA
should change the weighting of the city
and highway cycles (to more highway
and less city) to reflect current
American driving patterns and to avoid
biasing the calculation against
technologies that provide greater
efficiency in highway driving than in
city driving. Sierra Club et al.
commented that the fact that EPA was
proposing to allow off-cycle credits
indicated that the test procedures and
the calculation needed updating.
Several commenters (API, James Hyde,
MECA, NACAA, and NY DEC) stated
that the test procedures should use more
‘‘real-world’’ fuel, like E–10 instead of
‘‘indolene clear.’’ The UCSB students
also had a number of comments aimed
at making the test procedures more
thorough and real-world. Several
industry-related commenters (AIAM,
Ferrari, and Ford) argued to the contrary
that existing test procedures and
calculations are fine for now, and that
any changes would require significant
lead time to allow manufacturers to
adjust their plans to the new
procedures.
Statutorily, the decision to change the
test procedures or calculation is within
EPA’s discretion, so NHTSA will not
attempt to answer these comments in
detail, see supra Section III for EPA’s
responses. We note simply that the
agency recognizes the need for lead time
for the industry if test procedures were
to change in the future to become more
real-world, and will keep it in mind.
One notable shortcoming of the 1975
test procedure is that it does not include
755 49
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a provision for air conditioner usage
during the test cycle. As discussed in
Section III above, 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
equipping 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. In the NPRM, NHTSA
sought comment regarding
implementing such amendments
beginning in MY 2017 and also on the
more immediate 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. NHTSA emphasized
that modernizing the passenger car test
procedures as well would not be
possible under EPCA as currently
written.
Comments were split as to whether
the test procedure should be changed.
Several manufacturers and
manufacturer groups (BMW, GM,
Toyota, VW, the Alliance) opposed
changes to the test procedures to
account for A/C usage on the grounds
that any changes could create negative
unintended consequences. Public
Citizen also opposed changes to the test
procedure, arguing that the fuel
economy information presented to the
consumer on the fuel economy label is
already confusing, and that further
changes to the light truck test
procedures when there was no authority
to change the passenger car test
procedures would simply result in more
confusion. In contrast, NJ DEP fully
supported changes to the light truck test
procedures beginning with MY 2017,
and an individual commenter (Weber)
also supported the inclusion of A/C in
the test procedures to represent realworld ‘‘A/C on’’ time.
However, some of the same
commenters—BMW, Toyota, and VW,
for example—that opposed changes to
the test procedure supported NHTSA
allowing credits for A/C. Toyota stated
that it supported anything that
increased compliance flexibility, while
VW emphasized that A/C credits for
CAFE would help to address the fact
that NHTSA’s standards could end up
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being more stringent than EPA’s for
manufacturers relying heavily on A/C
improvements to meet the GHG
standards. NJ DEP also supported
interim A/C credits for light trucks, but
in contrast to VW, argued that the light
truck standards would have to be made
more stringent to account for those
credits if they were allowed.
Other commenters (Chrysler, Daimler,
Ferrari) supported interim A/C credits
for light truck CAFE, but stated that
such credits could simply be added to
EPA’s calculation of CAFE under 49
U.S.C. 32904(c) without any change in
the test procedure ever being necessary.
Daimler stated that the prohibition on
changing the test procedure, according
to legislative history, was to avoid
sudden and dramatic changes and
provide consistency for manufacturers
in the beginning of the CAFE program,
but that nothing indicated that EPA was
barred from updating the way a
manufacturer’s fuel economy is
calculated after the test procedures are
followed. Daimler emphasized that EPA
has broad authority in how it calculates
fuel economy, and that adding credits at
the end of the calculation would make
CAFE more consistent with the GHG
program and recognize real-world
benefits not measured by the test cycle.
Daimler argued that if EPA did not
include A/C credits as part of the
calculation, it would remove incentives
to improve A/C, because those gains
could not be used for CAFE compliance
and NHTSA has no authority to include
A/C in determining stringency, because
A/C is a ‘‘parasitic load’’ that does not
impact mpg.
Some commenters opposed interim
A/C credits. CARB stated that no A/C
credits should be given under EPCA
unless the test procedures can be
changed to fully account for A/C and
NHTSA is given clear authority for
A/C, while GM stated that NHTSA’s
authority to create additional types of
credits must be limited by the fact that
Congress clearly provided in EPCA for
some types of CAFE credits but not for
A/C-related credits for CAFE.
NHTSA has decided not to implement
interim A/C credits for purposes of this
final rule and MYs 2012–2016 light
trucks. Changes to the test procedure for
light trucks will be considered by the
agencies in subsequent rulemakings.
While NHTSA agrees with
commenters that the EPA authority to
consider how fuel economy is
calculated is broad, especially as to light
trucks, we disagree that credits could
simply be added to the CAFE
calculation without making parallel
changes in CAFE standard stringency to
reflect their availability. CAFE
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stringency is determined, in part, with
reference to the technologies available
to manufacturers to improve mpg. If a
technology draws power from the
engine, like A/C, then making that
technology more efficient to reduce its
load on the engine will conserve fuel,
consistent with EPCA’s purposes.
However, as noted above, some
technologies that improve mpg are not
accounted for in current CAFE test
procedures. NHTSA agrees that the test
procedures should be updated to
account for the real-world loads on the
engine and their impact on fuel
economy, but recognizes that
manufacturers will need lead-time and
advance notice in order to ready
themselves for such changes and their
impact on CAFE compliance.
Thus, if manufacturers are able to
achieve improvements in mpg that are
not reflected on the test cycle, then the
level of CAFE that they are capable of
achieving is higher than that which
their performance on the test cycle
would otherwise indicate, which
suggests, in turn, that a higher
stringency is feasible. NHTSA has
determined that the current CAFE levels
being finalized today are feasible using
traditional ‘‘tailpipe technologies’’ alone.
If manufacturers are capable of
improving fuel economy beyond that
level using A/C technologies, and wish
to receive credit for doing so, then
NHTSA believes that more stringent
CAFE standards would need to be
established. Not raising CAFE could
allow manufacturers to leave tailpipe
technology on the table and make
cheaper A/C improvements, which
would not result in the maximum
feasible fuel savings contemplated by
EPCA.
Because raising CAFE stringency in
conjunction with allowing A/C credits
was not a possibility clearly
contemplated in the NPRM, NHTSA
does not believe that it would be within
scope of notice for purposes of this
rulemaking. Accordingly, the final rule
cannot provide for interim A/C credits.
However, if NHTSA were to allow A/C
credits in the future, NHTSA believes it
would be required to increase standard
stringency accordingly, to avoid losses
in fuel savings, as stated above. NHTSA
will consider this approach further,
ensuring that any changes to the
treatment of A/C and accompanying
changes in CAFE stringency are made
with sufficient notice and lead-time.
b. NHTSA Then Analyzes EPA-Certified
CAFE Values for Compliance
Determining CAFE compliance is
fairly straightforward: After testing, EPA
verifies the data submitted by
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manufacturers and issues final CAFE
reports to manufacturers and to NHTSA
between April and October of each year
(for the previous model year), and
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
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 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
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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.756
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 757 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
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
756 Honeywell commented that any fines imposed
and collected under the CAFE and GHG standards
should be appropriated to the development of
vehicle technologies that continue to improve fuel
economy in the future, and that the direct
application of the penalties collected would
support the underlying legislative policy and drive
innovation. While NHTSA certainly would not
oppose such an outcome, it would lie within the
hands of Congress and not the agency to direct the
use of the fines in that manner.
757 49 U.S.C. 30120, Remedies for defects and
noncompliance.
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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.
Several commenters encouraged the
agency to increase the transparency of
how the agency monitors and enforces
CAFE compliance. EDF, Public Citizen,
Sierra Club et al., UCS, and Porsche all
commented that NHTSA should publish
an annual compliance report for
manufacturers, and Porsche suggested
that it be available online. Sierra Club
et al. and Porsche stated that this would
help clarify manufacturers’ credit status
(for the benefit of the public and
manufacturers looking to purchase
credits, respectively) and sales, and
Sierra Club et al. further stated that the
agency should make public all
information regarding credits and
attained versus projected fleet average
mpg levels. EDF similarly urged the
agency to provide publicly a compliance
report every year that would include
any recommended adjustments to the
program, enforcement actions, or
prospective policy action to ensure the
policy objectives are achieved.
In response, NHTSA agrees that there
could be substantial benefits to
increasing the transparency of
information concerning the credit
holdings of each credit holder. Along
with the MY 2011 final rule, NHTSA
issued a new regulation 49 CFR part 536
to implement the new CAFE credit
trading and transfer programs
authorized by EISA. Paragraph 536.5(e)
requires that we periodically publish
credit holding information. NHTSA
plans to make this information available
to the public on the NHTSA Web site.
The exact format that will be used to
display this information has not been
finalized but it is our plan to begin
making this information available no
later than calendar year 2011 to
coincide with MY 2011 when
manufacturers may begin utilizing
credit trades and transfers.
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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.
(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).760 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
2019.761 The maximum fuel economy
increase which may be attributed to the
incentive is thus as follows:
mpg
increase
Model year
mstockstill on DSKB9S0YB1PROD with RULES2
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,
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 0.15.758 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 0.15.759
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
MYs 1993–2014 .........................
MY 2015 .....................................
MY 2016 .....................................
MY 2017 .....................................
MY 2018 .....................................
MY 2019 .....................................
After MY 2019 ............................
49 CFR part 538 implements the
statutory alternative-fueled and dualfueled automobile manufacturing
incentive. NHTSA updated part 538 as
part of this final rule to reflect the EISA
changes extending the incentive to MY
2019, 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
758 49
759 49
U.S.C. 32905(a).
U.S.C. 32905(b).
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760 49
1.2
1.0
0.8
0.6
0.4
0.2
0
U.S.C. 32905(c).
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.
761 49
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25665
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. The manufacturer would then be
allowed to weight the gasoline and
alternative fuel test results based on the
proportion of actual usage of both fuels,
as discussed above in Section III.
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 requested
comment in the NPRM on whether it
should seek legislative changes to revise
its authority to address this issue.
NHTSA received only one comment
on this issue: VW commented that
NHTSA should not seek a change in its
authority, because Congress’ intent for
NHTSA is already clear. VW did,
however, encourage NHTSA to include
the statutory FFV credit phase-out in
Part 538, which the agency is doing.
b. Credit Trading and Transfer
As part of 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.762 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 ‘‘carry-forward’’ 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 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.763 EISA also prohibits credits
762 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.
763 Ford and Toyota both commented on
NHTSA’s use of the adjustment factor: Ford stated
that it preferred a streamlined ‘‘megagrams’’
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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 2012–2017.764 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
approach like EPA was proposing, while Toyota
stated that NHTSA and EPA should use consistent
VMT estimates for purposes of all analysis and for
use in the adjustment factor. In response to Ford,
NHTSA is maintaining use of the adjustment factor
just finalized last March, which uses mpg rather
than gallons or grams and is thus consistent with
the rest of the CAFE program. In response to
Toyota, NHTSA agrees that consistency of VMT
estimates should be maintained and will revise the
adjustment factor as necessary.
764 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.
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only in the fleet in which they were
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 sought comment in
the NPRM on this interpretation of
EISA.
Only one commenter, VW,
commented on NHTSA’s interpretation
of EISA as allowing the banking of
transferred credits, and agreed with it.
VW suggested that NHTSA revise part
536 to clarify accordingly, and that
NHTSA include the statutory transfer
cap in part 536 as well. While NHTSA
does not believe that including the
statutory transfer cap in the regulation
is necessary, NHTSA will revise Part
536 in this final rule by amending the
definition of ‘‘transfer’’ as follows (in
bold and italics):
Transfer means the application by a
manufacturer of credits earned by that
manufacturer in one compliance category or
credits acquired be trade (and originally
earned by another manufacturer in that
category) to achieve compliance with fuel
economy standards with respect to a different
compliance category. For example, a
manufacturer may purchase light truck
credits from another manufacturer, and
transfer them to achieve compliance in the
manufacturer’s domestically manufactured
passenger car fleet. Subject to the credit
transfer limitations of 49 U.S.C. 32903
(g)(3), credits can also be transferred
across compliance categories and
banked or saved in that category to be
carried forward or backward to address
a credit shortfall.
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.
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NHTSA has collected $785,772,714.50
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 2008
fleets, six manufacturers paid CAFE
fines for not meeting an applicable
standard—Ferrari, Maserati, MercedesBenz, Porsche, Chrysler and Fiat—for a
total of $12,922,255,50.
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 conformity
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.
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
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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
requested in the NPRM 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.
Only Ferrari and Daimler commented
on this issue. Both manufacturers
argued that raising the penalty would
have no impact on fuel savings and
would simply hurt the manufacturers
forced to pay it. Daimler stated further
that the agency’s asking for a
quantitative analysis ignores the fact
that manufacturers pay fines because
they cannot increase energy savings any
further. Thus, again, the agency finds
itself without a clear quantitative
explanation of what the benefits and
drawbacks to raising the penalty might
be, but it continues to appear that the
range of possible increase is insufficient
to result in additional substantial energy
conservation. NHTSA will therefore
defer consideration of this issue for
purposes of this rulemaking.
4. Other CAFE Enforcement Issues—
Variations in Footprint
NHTSA has a standardized test
procedure for determining vehicle
footprint,765 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.766
mstockstill on DSKB9S0YB1PROD with RULES2
‘‘Track width,’’ in turn, is defined as ‘‘the
lateral distance between the centerlines
of the base tires at ground, including the
camber angle.’’ 767 ‘‘Wheelbase’’ is
defined as ‘‘the longitudinal distance
between front and rear wheel
centerlines.’’ 768
NHTSA began requiring
manufacturers to submit this
information on footprint, wheelbase,
and track width as part of their premodel year reports in MY 2008 for light
trucks, and will require manufacturers
765 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).
766 49 CFR 523.2.
767 Id.
768 Id.
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to submit this information for passenger
cars as well beginning in MY 2010.
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 as
discussed below.
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,769
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
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
769 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).
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25667
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. No comments were
received on this issue.
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 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
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
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accurate result. No comments were
received on this issue.
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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. No comments were received on
this issue.
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
600. Under that Part, ‘‘model type’’
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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 sought comment in the NPRM
on any potential benefits or drawbacks
to requiring a more standardized
reporting methodology. NHTSA
requested that, if commenters
recommend increasing standardization,
they provide specific examples of what
information should be required and how
NHTSA should require it to be provided
but no comments were received on this
specific issue.
However, on a related topic, Honda
and Toyota both commented on the
equations and corresponding terms used
to calculate the fleet required standards.
Both manufacturers indicated that the
terms defined for use in the equations
could be interpreted differently by
vehicle manufacturers. For example, the
term ‘‘footprint of a vehicle model’’
could be interpreted to mean that a
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manufacturer only has to use one
representative footprint within a model
type or that it is necessary to use all the
unique footprints and corresponding
fuel economy target standards within a
model type when determining a fleet
target standard. This issue is discussed
in more detail in Section IV.E. above.
5. Other CAFE Enforcement Issues—
Miscellaneous
Hyundai commented that 49 CFR
537.9 appeared to contain erroneous
references to 40 CFR 600.506 and
600.506(a)(2), which seemed not to
exist, and asked the agency to check
those references. In response, NHTSA
examined the issue and found that 40
CFR 600.506 was, in fact, eliminated by
a final rule published on April 6, 1984
(49 FR 13832). That section of 40 CFR
originally required manufacturers to
submit preliminary CAFE data to EPA
prior to submitting the final end of the
year data. EPA’s primary intent for
eliminating the requirement, as stated in
the final rule, was to reduce
administration burden. To address these
inaccurate references, NHTSA is
revising part 537 to delete references to
40 CFR 600.506. This will not impact
the existing requirements for the premodel year, mid-model year and
supplemental reports manufacturers
must submit to NHTSA under part 537.
J. Other Near-Term Rulemakings
Mandated by EISA
1. Commercial Medium- and HeavyDuty On-Highway Vehicles and Work
Trucks
EISA added new provisions to 49
U.S.C. 32902 requiring DOT, in
consultation with DOE and EPA, to
conduct a study regarding a program to
require improvements in the fuel
efficiency of commercial medium- and
heavy-duty on-highway vehicles and
work trucks and then to conduct a
rulemaking to adopt and implement
such a program. In the study, the agency
must examine the fuel efficiency of
commercial medium- and heavy-duty
on-highway vehicles 770 and work
trucks 771 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. Then the
agency must determine in a rulemaking
770 Defined as an on-highway vehicle with a gross
vehicle weight rating of 10,000 pounds or more.
771 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.
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proceeding how to implement a
commercial medium- and heavy-duty
on-highway vehicle and work truck fuel
efficiency improvement program
designed to achieve the maximum
feasible improvement, and adopt and
implement appropriate test methods,
measurement metrics, fuel economy
standards, and compliance and
enforcement protocols that are
appropriate, cost-effective, and
technologically feasible for commercial
medium- and heavy-duty on-highway
vehicles and work trucks. The agency is
working closely with EPA on
developing a proposal for these
standards.
2. Consumer Information on Fuel
Efficiency and Emissions
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
• 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
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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. The agency
is working closely with EPA on
developing a proposal for these
regulations.
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.
K. Record of Decision
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 GHG emissions. 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.
In accordance with President Obama’s
May 19, 2009 announcement, this final
rule promulgates the fuel economy
standards for MYs 2012–2016. This final
rule constitutes the Record of Decision
(ROD) for NHTSA’s MYs 2012–2016
CAFE standards, pursuant to the
National Environmental Policy Act
(NEPA) and the Council on
Environmental Quality’s (CEQ)
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implementing regulations.772 See 40 CFR
1505.2.
As required by CEQ regulations, this
final rule and ROD sets forth the
following: (1) The agency’s decision; (2)
alternatives considered by NHTSA in
reaching its decision, including the
environmentally preferable alternative;
(3) the factors balanced by NHTSA in
making its decision, including
considerations of national policy; (4)
how these factors and considerations
entered into its decision; and (5) the
agency’s preferences among alternatives
based on relevant factors, including
economic and technical considerations
and agency statutory missions. This
final rule also briefly addresses
mitigation.
The Agency’s Decision
In the DEIS and the FEIS, the agency
identified the approximately 4.3-percent
average annual increase alternative as
NHTSA’s Preferred Alternative. After
carefully reviewing and analyzing all of
the information in the public record
including technical support documents,
the FEIS, and public and agency
comments submitted on the DEIS, the
FEIS, and the NPRM, NHTSA has
decided to proceed with the Preferred
Alternative. The Preferred Alternative
requires approximately a 4.3-percent
average annual increase in mpg for MYs
2012–2016. This decision results in an
estimated required MY 2016 fleetwide
37.8 mpg for passenger cars and 28.7
mpg for light trucks. As stated in the
FEIS, the Preferred Alternative results in
a combined estimated required
fleetwide 34.1 mpg in MY 2016.
Following publication of the FEIS, the
Federal government Interagency
Working Group on Social Cost of Carbon
made public a revised estimate of the
Social Cost of Carbon to support Federal
regulatory activities where reducing CO2
emissions is an important potential
outcome. NHTSA relied upon the
interagency group’s interim guidance
published in August 2009 for the FEIS
analysis. For this final rule NHTSA has
updated the analysis and now uses the
central SCC value of $21 per metric ton
(2010 emissions) identified in the
interagency group’s revised guidance.773
See Section IV.C.3.l.iii.
The group’s purpose in developing
new estimates of the SCC was to allow
772 NEPA is codified at 42 U.S.C. 4321–47. CEQ
NEPA implementing regulations are codified at 40
Code of Federal Regulations (CFR) Parts 1500–08.
773 The $21/ton estimate is for 2010 emissions
and increases over time because of damages
resulting from increased GHG concentrations. $21
is the average SCC at the 3 percent discount rate.
The other three estimates include: Avg SCC at 5%
($5–$16); Avg SCC at 2.5% ($35–$65); and 95th
percentile at 3% ($65–$136).
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Federal agencies to incorporate the
social benefits of reducing carbon
dioxide (CO2) emissions into costbenefit analyses of regulatory actions
that have small, or ‘‘marginal,’’ impacts
on cumulative global emissions, as most
Federal regulatory actions can be
expected to have. The interagency group
convened on a regular basis to consider
public comments, explore the technical
literature in relevant fields, and discuss
key inputs and assumptions in order to
generate SCC estimates. The revised
SCC estimates represent the interagency
group’s consideration of the literature
and judgments about how to monetize
some of the benefits of GHG
mitigation.774
Incorporating the revised estimate,
NHTSA’s analysis indicates that the
Agency’s Decision will likely result in
slightly greater fuel savings and CO2
emissions reductions than those noted
in the EIS. The revised SCC valuation
applied for purposes of the final rule
resulted in a slightly smaller gap in
stringency between the passenger car
and light truck standards; the ratio of
passenger car stringency (i.e., average
required fuel economy) to light truck
stringency in MY 2016 shrank from
1.318 to 1.313, or about 0.4 percent.
Because manufacturers projected to pay
civil penalties (rather than fully
complying with CAFE standards)
account for a smaller share of the light
truck market than of the passenger car
market, and because lifetime mileage
accumulation is somewhat higher for
light trucks than for passenger cars, this
slight shift in relative stringency caused
average fuel economy levels achieved
under the preferred alternative to
increase by about 0.02 mpg during MYs
2012–2016, resulted in corresponding
lifetime (i.e., over the full useful life of
MYs 2012–2016 vehicles) fuel savings
increases of about 0.9 percent, and
corresponding increases in lifetime CO2
emission reductions of about 1.1
percent. For environmental impacts
associated with NHTSA’s Decision, see
Section IV.G of this final rule.
The incorporation of the revised
interagency estimate of SCC results in
minimal changes to the required
fleetwide mpg for some model years
covered by this final rule. All changes
are less than or equal to .1 mpg (but may
reflect an increase when rounding up
during calculations) and continue to
result, on average, in a 4.3 percent
annual increase in mpg.775 See Section
774 The
interagency group intends to update these
estimates as the science and economic
understanding of climate change and its impacts on
society improves over time.
775 There are no ‘‘substantial changes to the
proposed action’’ and there are no ‘‘significant new
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IV.F for discussion of required annual
fleetwide mpg.
For a discussion of the agency’s
selection of the Preferred Alternative as
NHTSA’s Decision, see Section IV.F of
this final rule.
Alternatives Considered by NHTSA in
Reaching Its Decision, Including the
Environmentally Preferable Alternative
When preparing an EIS, NEPA
requires an agency to compare the
potential environmental impacts of its
proposed action and a reasonable range
of alternatives. NHTSA identified
alternative stringencies that represent
the spectrum of potential actions the
agency could take. The environmental
impacts of these alternatives, in turn,
represent the spectrum of potential
environmental impacts that could result
from NHTSA’s chosen action in setting
CAFE standards. Specifically, the DEIS
and FEIS analyzed the impacts of the
following eight ‘‘action’’ alternatives: 3Percent Alternative (Alternative 2), 4Percent Alternative (Alternative 3),
Preferred Alternative (Alternative 4), 5Percent Alternative (Alternative 5), an
alternative that maximizes net benefits
(MNB) (Alternative 6), 6-Percent
Alternative (Alternative 7), 7-Percent
Alternative (Alternative 8), and an
alternative under which total cost
equals total benefit (TCTB) (Alternative
9). The DEIS and FEIS also analyzed the
impacts that would be expected if
NHTSA imposed no new requirements
(the No Action Alternative). In
accordance with CEQ regulations, the
agency selected a Preferred Alternative
in the DEIS and the FEIS (the
approximately 4.3-percent average
annual increase alternative).
In response to public comments, the
FEIS expanded the analysis to
determine how the proposed
alternatives were affected by variations
in the economic assumptions input into
the computer model NHTSA uses to
calculate the costs and benefits of
various potential CAFE standards (the
Volpe model). Variations in economic
assumptions can be used to examine the
sensitivity of costs and benefits of each
of the alternatives, including future fuel
prices, the value of reducing CO2
emissions (referred to as the social cost
of carbon or SCC), the magnitude of the
rebound effect, and the value of oil
import externalities. Different
combinations of economic assumptions
circumstances or information relevant to
environmental concerns and bearing on the
proposed action or its impacts.’’ Therefore,
consistent with 40 CFR 1502.9(c), no supplement to
the EIS is required. Moreover, the environmental
impacts of this decision fall within the spectrum of
impacts analyzed in the DEIS and the FEIS.
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can also affect the calculation of
environmental impacts of the various
action alternatives. This occurs partly
because some economic inputs to the
Volpe model—notably fuel prices and
the size of the rebound effect—influence
its estimates of vehicle use and fuel
consumption, the main factors that
determine emissions of GHGs, criteria
air pollutants, and airborne toxics. See
section 2.4 of the FEIS for a discussion
of the sensitivity analysis conducted for
the FEIS.
The agency considered and analyzed
each of the individual economic
assumptions to determine which
assumptions most accurately represent
future economic conditions. For a
discussion of the analysis supporting
the selection of the economic
assumptions relied on by the agency in
this final rule, see Section IV.C.3.
Also in response to comments, the
agency conducted a national-scale
photochemical air quality modeling and
health risk assessment for a subset of the
DEIS alternatives to support and
confirm the health effects and healthrelated economic estimates of the EIS.
The photochemical air quality study is
included as Appendix F to the EIS. The
study used air quality modeling and
health benefits analysis tools to quantify
the air quality and health-related
benefits associated with the alternative
CAFE standards. Four alternatives from
the DEIS were modeled: the No Action
Alternative and Alternative 2 (the 3Percent Alternative) to represent fuel
economy requirements at the lower end
of the range; Alternative 4 (the Preferred
Alternative) and Alternative 8 (the 7Percent Alternative) to represent fuel
economy requirements at the higher end
of the range.
The agency compared the potential
environmental impacts of alternative
mpg levels, analyzing direct, indirect,
and cumulative impacts. For a
discussion of the environmental impacts
associated with each of the alternatives,
see Chapters 3 and 4 of the FEIS.
Alternative 8 (the 7-Percent
Alternative) is the overall
Environmentally Preferable Alternative,
because it would result in the largest
reductions in fuel use and GHG
emissions by vehicles produced during
MYs 2012–2016 among the alternatives
considered. Under each alternative the
agency considered, the reduction in fuel
consumption resulting from higher fuel
economy causes emissions that occur
during fuel refining and distribution to
decline. For most pollutants, this
decline is more than sufficient to offset
the increase in tailpipe emissions that
results from increased driving due to the
fuel economy rebound effect, leading to
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a net reduction in total emissions from
fuel production, distribution, and use.
Because it leads to the largest reductions
in fuel refining, distribution, and
consumption among the alternatives
considered, Alternative 8 would also
lead to the largest net reductions in
emissions of CO2 and other GHGs, most
criteria air pollutants,776 as well as the
mobile source air toxics (MSATs)
benzene and diesel particulate matter
(diesel PM).
However, NHTSA’s environmental
analysis indicates that emissions of the
MSATs acetaldehyde, acrolein, 1,3butadiene, and formaldehyde would
increase under some alternatives, with
the largest increases in emissions of
these MSATs projected to occur under
Alternative 8 in most future years. This
occurs because the rates at which these
MSATs are emitted during fuel refining
and distribution are very low relative to
their emission rates during vehicle use.
As a consequence, the reductions in
their total emissions during fuel refining
and distribution that result from lower
fuel use are insufficient to offset the
increases in emissions that result from
additional vehicle use. The amount by
which increased tailpipe emissions of
these MSATs exceeds the reductions in
their emissions during fuel refining and
distribution increases for alternatives
that require larger improvements in fuel
economy, and in most future years is
smallest under Alternative 2 (which
would increase CAFE standards least
rapidly among the action alternatives)
and largest under Alternative 8 (which
would require the most rapid increase
in fuel economy). Thus while
Alternative 8 is the environmentally
preferable alternative on the basis of
CO2 and other GHGs, most criteria air
pollutants, and some MSATs, other
alternatives are environmentally
preferable from the standpoint of the
criteria air pollutants fine particulate
matter and sulfur oxides, as well as the
MSATs acetaldehyde, acrolein, 1,3butadiene, and formaldehyde. Overall,
however, NHTSA considers Alternative
8 to be the Environmentally Preferable
Alternative.
For additional discussion regarding
the alternatives considered by the
776 Reductions in emissions of two criteria air
pollutants, fine particulate matter (PM2.5) and sulfur
oxides (SOX), are forecast to be slightly larger for
Alternative 9 (TCTB) than for Alternative 8.
Because the estimates of health benefits depend
most critically on changes in particulate matter
emissions, this causes the health benefits estimates
reported in this FEIS to be slightly larger for
Alternative 9 than for Alternative 8. See Section 3.3
of the FEIS. Nonetheless, for the other reasons
explained above, NHTSA considers Alternative 8 to
be the overall Environmentally Preferable
Alternative.
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agency in reaching its decision,
including the Environmentally
Preferable Alternative, see Section IV.F
of this final rule. For a discussion of the
environmental impacts associated with
each alternative, see Chapters 3 and 4 of
the FEIS.
Factors Balanced by NHTSA in Making
Its Decision
For discussion of the factors balanced
by NHTSA in making its decision, see
Sections IV.D. and IV.F of this final rule.
How the Factors and Considerations
Balanced by NHTSA Entered Into Its
Decision
For discussion of how the factors and
considerations balanced by the agency
entered into NHTSA’s Decision, see
Section IV.F of this final rule.
The Agency’s Preferences Among
Alternatives Based on Relevant Factors,
Including Economic and Technical
Considerations and Agency Statutory
Missions
For discussion of the agency’s
preferences among alternatives based on
relevant factors, including economic
and technical considerations, see
Section IV.F of this final rule.
Mitigation
The CEQ regulations specify that a
ROD must ‘‘state whether all practicable
means to avoid or minimize
environmental harm from the
alternative selected have been adopted,
and if not, why they were not.’’ 49 CFR
1505.2(c). The majority of the
environmental effects of NHTSA’s
action are positive, i.e., beneficial
environmental impacts, and would not
raise issues of mitigation. The only
negative environmental impacts are the
projected increase in emissions of
carbon monoxide and certain air toxics,
as discussed above under the
Environmentally Preferable Alternative,
and in Section 2.6 and Chapter 5 of the
FEIS. The agency forecasts these
increases because, under all the
alternatives analyzed in the EIS,
increase in vehicle use due to improved
fuel economy is projected to result in
growth in total miles traveled by
passenger cars and light trucks. This
growth is exacerbated by the expected
growth in the number of passenger cars
and light trucks in use in the United
States. The growth in travel outpaces
emissions reductions for some
pollutants, resulting in projected
increases for these pollutants.
NHTSA’s authority to promulgate
new fuel economy standards is limited
and does not allow regulation of vehicle
emissions or of factors affecting vehicle
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emissions, including driving habits.
Consequently, under the CAFE program,
NHTSA must set standards but is unable
to take steps to mitigate the impacts of
these standards. However, we note that
the Department of Transportation is
currently implementing initiatives that
work toward the stated Secretarial
policy goal of reducing annual vehicle
miles traveled. Chapter 5 of the FEIS
outlines a number of other initiatives
across government that could ameliorate
the environmental impacts of motor
vehicle use.
L. Regulatory Notices and Analyses
Following is a discussion of
regulatory notices and analyses relevant
to this rulemaking.
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;
(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 is economically significant.
Accordingly, OMB reviewed it under
Executive Order 12866. The rule is also
significant within the meaning of the
Department of Transportation’s
Regulatory Policies and Procedures.
The benefits and costs of this rule are
described above. Because the rule is
economically significant under both the
Department of Transportation’s
procedures and OMB guidelines, the
agency has prepared a Final Regulatory
Impact Analysis (FRIA) 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 rule. The
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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 final
rule meets these criteria on all counts.
2. National Environmental Policy Act
Under NEPA, a Federal agency must
prepare an Environmental Impact
Statement (EIS) on proposed actions
that could significantly impact the
quality of the human environment. The
requirement is designed to serve three
major functions: (1) To provide the
decisionmaker(s) with a detailed
description of the potential
environmental impacts of a proposed
action prior to its adoption, (2) to
rigorously explore and evaluate all
reasonable alternatives, and (3) to
inform the public of, and allow
comment on, such efforts.
In addition, the CEQ regulations
emphasize agency cooperation early in
the NEPA process, and allow a lead
agency (in this case, NHTSA) to request
the assistance of other agencies that
either have jurisdiction by law or have
special expertise regarding issues
considered in an EIS.777 NHTSA invited
EPA to be a cooperating agency because
of its special expertise in the areas of
climate change and air quality. On May
12, 2009, EPA agreed to become a
cooperating agency.778
NHTSA, in cooperation with EPA,
prepared a draft EIS (DEIS), solicited
public comments in writing and in a
public hearing, and prepared a final EIS
(FEIS) responding to those comments.
Specifically, in April 2009, NHTSA
published an NOI to prepare an EIS for
proposed MYs 2012–2016 CAFE
standards.779 See 40 CFR 1501.7.
777 40
CFR 1501.6.
with the National Fuel Efficiency
Policy that the President announced on May 19,
2009, EPA and NHTSA published their Notice of
Upcoming Joint Rulemaking to ensure a
coordinated National Program on GHG emissions
and fuel economy for passenger cars, light-duty
trucks, and medium-duty passenger vehicles.
NHTSA takes no position on whether the EPA
proposed rule on GHG emissions could be
considered a ‘‘connected action’’ under the CEQ
regulation at 40 CFR Section 1508.25. For purposes
of the EIS, however, NHTSA decided to treat the
EPA proposed rule as if it were a ‘‘connected action’’
under that regulation to improve the usefulness of
the EIS for NHTSA decisionmakers and the public.
NHTSA is aware that Section 7(c) of the Energy
Supply and Environmental Coordination Act of
1974 expressly exempts from NEPA requirements
EPA action taken under the CAA. See 15 U.S.C.
793(c)(1).
779 See Notice of Intent to Prepare an
Environmental Impact Statement for New Corporate
Average Fuel Economy Standards, 74 FR 14857
(Apr. 1, 2009).
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778 Consistent
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alternative standards for the NHTSA
CAFE Program pursuant to the National
Environmental Policy Act (NEPA), the
Council on Environmental Quality
(CEQ) regulations implementing NEPA,
DOT Order 5610.1C, and NHTSA
regulations.782 The FEIS compared the
potential environmental impacts of
alternative mile per gallon (mpg) levels
considered by NHTSA for the final rule.
It also analyzed direct, indirect, and
cumulative impacts and analyzes
impacts in proportion to their
significance. See the FEIS and the FEIS
Summary for a discussion of the
environmental impacts analyzed.
Docket Nos. NHTSA–2009–0059–0140,
NHTSA–2009–0059–0141.
The MYs 2012–2016 CAFE standards
adopted in this final rule have been
informed by analyses contained in the
Final Environmental Impact Statement,
Corporate Average Fuel Economy
Standards, Passenger Cars and Light
Trucks, Model Years 2012–2016, Docket
No. NHTSA–2009–0059 (FEIS). For
purposes of this rulemaking, the agency
referred to an extensive compilation of
technical and policy documents
available in NHTSA’s EIS/Rulemaking
docket and EPA’s docket. NHTSA’s EIS
and rulemaking docket and EPA’s
rulemaking docket can be found on the
Web at https://www.regulations.gov,
Reference Docket Nos.: NHTSA–2009–
0059 (EIS and Rulemaking) and EPA–
HQ–OAR–2009–0472 (EPA
Rulemaking).
Based on the foregoing, the agency
concludes that the environmental
analysis and public involvement
process complies with NEPA
implementing regulations issued by
CEQ, DOT Order 5610.1C, and NHTSA
regulations.783
On September 25, 2009, EPA issued
its Notice of Availability of the DEIS,780
triggering the 45-day public comment
period. See 74 FR 48951. See also 40
CFR 1506.10. In accordance with CEQ
regulations, the public was invited to
submit written comments on the DEIS
until November 9, 2009. See 40 CFR
1503, et seq.
NHTSA mailed (both electronically
and through regular U.S. mail) over 500
copies of the DEIS to interested parties,
including Federal, State, and local
officials and agencies; elected officials,
environmental and public interest
groups; Native American tribes; and
other interested individuals. NHTSA
held a public hearing on the DEIS at the
National Transportation Safety Board
Conference Center in Washington, DC
on October 30, 2009.
NHTSA received 11 written
comments from interested stakeholders,
including Federal agencies, state
agencies, environmental advocacy
groups, and private citizens. In addition,
three interested parties spoke at the
public hearing. The transcript from the
public hearing and written comments
submitted to NHTSA are part of the
administrative record, and are available
on the Federal Docket, which can be
found on the Web at https://www.
regulations.gov, Reference Docket No.
NHTSA–2009–0059.
NHTSA reviewed and analyzed all
comments received during the public
comment period and revised the FEIS in
response to comments on the EIS where
appropriate.781 For a more detailed
discussion of NHTSA’s scoping and
comment periods, see Section 1.5 and
Chapter 10 of the FEIS.
On February 22, 2010, NHTSA
submitted the FEIS to the EPA. NHTSA
also mailed (both electronically and
through regular U.S. mail) over 500
copies of the FEIS to interested parties
and posted the FEIS on its Web site,
https://www.nhtsa.gov/portal/
fueleconomy.jsp. On March 3, 2010,
EPA published a Notice of Availability
of the FEIS in the Federal Register. See
75 FR 9596.
The FEIS analyzes and discloses the
potential environmental impacts of the
proposed MYs 2012–2016 CAFE
standards for the total fleet of passenger
cars and light trucks and reasonable
3. Clean Air Act (CAA)
The CAA (42 U.S.C. 7401) is the
primary Federal legislation that
addresses air quality. Under the
authority of the CAA and subsequent
amendments, the EPA has established
National Ambient Air Quality Standards
(NAAQS) for six criteria pollutants,
which are relatively commonplace
pollutants that can accumulate in the
atmosphere as a result of normal levels
of human activity. The EPA is required
to review the NAAQS every five years
and to change the levels of the standards
780 Also on September 25, 2009, NHTSA
published a Federal Register Notice of Availability
of its DEIS. See 74 FR 48894. NHTSA’s Notice of
Availability also announced the date and location
of a public hearing, and invited the public to
participate at the hearing on October 30, 2009, in
Washington, DC. See id.
781 The agency also changed the FEIS as a result
of updated information that became available after
issuance of the DEIS.
782 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.
783 NEPA is codified at 42 U.S.C. 4321–4347.
CEQ’s NEPA implementing regulations are codified
at 40 CFR parts 1500–1508, and NHTSA’s NEPA
implementing regulations are codified at 49 CFR
part 520.
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if warranted by new scientific
information.
The air quality of a geographic region
is usually assessed by comparing the
levels of criteria air pollutants found in
the atmosphere to the levels established
by the NAAQS. Concentrations of
criteria pollutants within the air mass of
a region are measured in parts of a
pollutant per million parts of air (ppm)
or in micrograms of a pollutant per
cubic meter (μg/m3) of air present in
repeated air samples taken at designated
monitoring locations. These ambient
concentrations of each criteria pollutant
are compared to the permissible levels
specified by the NAAQS in order to
assess whether the region’s air quality is
potentially unhealthful.
When the measured concentrations of
a criteria pollutant within a geographic
region are below those permitted by the
NAAQS, the region is designated by the
EPA as an attainment area for that
pollutant, while regions where
concentrations of criteria pollutants
exceed Federal standards are called
nonattainment areas (NAAs). Former
NAAs that have attained the NAAQS are
designated as maintenance areas. Each
NAA is required to develop and
implement a State Implementation Plan
(SIP), which documents how the region
will reach attainment levels within time
periods specified in the CAA. In
maintenance areas, the SIP documents
how the State intends to maintain
compliance with the NAAQS. When
EPA changes a NAAQS, States must
revise their SIPs to address how they
will attain the new standard.
Section 176(c) of the CAA prohibits
Federal agencies from taking actions in
nonattainment or maintenance areas
that do not ‘‘conform’’ to the State
Implementation Plan (SIP). The purpose
of this conformity requirement is to
ensure that Federal activities do not
interfere with meeting the emissions
targets in the SIPs, do not cause or
contribute to new violations of the
NAAQS, and do not impede the ability
to attain or maintain the NAAQS. The
EPA has issued two sets of regulations
to implement CAA Section 176(c):
• The Transportation Conformity
Rules (40 CFR part 51 subpart T), which
apply to transportation plans, programs,
and projects funded under title 23
United States Code (U.S.C.) or the
Federal Transit Act. Highway and
transit infrastructure projects funded by
FHWA or the Federal Transit
Administration (FTA) usually are
subject to transportation conformity.
• The General Conformity Rules (40
CFR part 51 subpart W) apply to all
other Federal actions not covered under
transportation conformity. The General
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Conformity Rules established emissions
thresholds, or de minimis levels, for use
in evaluating the conformity of a
project. If the net emission increases
due to the project are less than these
thresholds, then the project is presumed
to conform and no further conformity
evaluation is required. If the emission
increases exceed any of these
thresholds, then a conformity
determination is required. The
conformity determination may entail air
quality modeling studies, consultation
with EPA and State air quality agencies,
and commitments to revise the SIP or to
implement measures to mitigate air
quality impacts.
The CAFE standards and associated
program activities are not funded under
title 23 U.S.C. or the Federal Transit
Act. Further, CAFE standards are
established by NHTSA and are not an
action undertaken by FHWA or FTA.
Accordingly, the CAFE standards are
not subject to transportation conformity.
The General Conformity Rules contain
several exemptions applicable to
‘‘Federal actions,’’ which the conformity
regulations define as: ‘‘any activity
engaged in by a department, agency, or
instrumentality of the Federal
Government, or any activity that a
department, agency or instrumentality
of the Federal Government supports in
any way, provides financial assistance
for, licenses, permits, or approves, other
than activities [subject to transportation
conformity].’’ 40 CFR 51.852.
‘‘Rulemaking and policy development
and issuance’’ are exempted at 40 CFR
51.853(c)(2)(iii). Since NHTSA’s CAFE
standards involve a rulemaking process,
its action is exempt from general
conformity. Also, emissions for which a
Federal agency does not have a
‘‘continuing program responsibility’’ are
not considered ‘‘indirect emissions’’
subject to general conformity under 40
CFR 51.852. ‘‘Emissions that a Federal
agency has a continuing program
responsibility for means emissions that
are specifically caused by an agency
carrying out its authorities, and does not
include emissions that occur due to
subsequent activities, unless such
activities are required by the Federal
agency.’’ 40 CFR 51.852. Emissions that
occur as a result of the final CAFE
standards are not caused by NHTSA
carrying out its statutory authorities and
clearly occur due to subsequent
activities, including vehicle
manufacturers’ production of passenger
car and light truck fleets and consumer
purchases and driving behavior. Thus,
changes in any emissions that result
from NHTSA’s final CAFE standards are
not those for which the agency has a
‘‘continuing program responsibility’’ and
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NHTSA is confident that a general
conformity determination is not
required. NHTSA has evaluated the
potential impacts of air emissions under
NEPA.
4. National Historic Preservation Act
(NHPA)
The NHPA (16 U.S.C. 470) sets forth
government policy and procedures
regarding ‘‘historic properties’’—that is,
districts, sites, buildings, structures, and
objects included in or eligible for the
National Register of Historic Places
(NRHP). See also 36 CFR part 800.
Section 106 of the NHPA requires
Federal agencies to ‘‘take into account’’
the effects of their actions on historic
properties. The agency concludes that
the NHPA is not applicable to NHTSA’s
Decision, because it does not directly
involve historic properties. The agency
has, however, conducted a qualitative
review of the related direct, indirect,
and cumulative impacts, positive or
negative, of the alternatives on
potentially affected resources, including
historic and cultural resources. See
Sections 3.5 and 4.5 of the FEIS.
5. Executive Order 12898
(Environmental Justice)
Under Executive Order 12898, Federal
agencies are required to identify and
address any disproportionately high and
adverse human health or environmental
effects of its programs, policies, and
activities on minority populations and
low-income populations. NHTSA
complied with this order by identifying
and addressing the potential effects of
the alternatives on minority and lowincome populations in Sections 3.5 and
4.5 of the FEIS, where the agency set
forth a qualitative analysis of the
cumulative effects of the alternatives on
these populations.
6. Fish and Wildlife Conservation Act
(FWCA)
The FWCA (16 U.S.C. 2900) provides
financial and technical assistance to
States for the development, revision,
and implementation of conservation
plans and programs for nongame fish
and wildlife. In addition, the Act
encourages all Federal agencies and
departments to utilize their authority to
conserve and to promote conservation of
nongame fish and wildlife and their
habitats. The agency concludes that the
FWCA is not applicable to NHTSA’s
Decision, because it does not directly
involve fish and wildlife.
7. Coastal Zone Management Act
(CZMA)
The Coastal Zone Management Act
(16 U.S.C. 1450) provides for the
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preservation, protection, development,
and (where possible) restoration and
enhancement of the nation’s coastal
zone resources. Under the statute, States
are provided with funds and technical
assistance in developing coastal zone
management programs. Each
participating State must submit its
program to the Secretary of Commerce
for approval. Once the program has been
approved, any activity of a Federal
agency, either within or outside of the
coastal zone, that affects any land or
water use or natural resource of the
coastal zone must be carried out in a
manner that is consistent, to the
maximum extent practicable, with the
enforceable policies of the State’s
program.
The agency concludes that the CZMA
is not applicable to NHTSA’s Decision,
because it does not involve an activity
within, or outside of, the nation’s
coastal zones. The agency has, however,
conducted a qualitative review of the
related direct, indirect, and cumulative
impacts, positive or negative, of the
alternatives on potentially affected
resources, including coastal zones. See
Sections 3.5 and 4.5 of the FEIS.
8. Endangered Species Act (ESA)
Under Section 7(a)(2) of the
Endangered Species Act (ESA) Federal
agencies must ensure that actions they
authorize, fund, or carry out are ‘‘not
likely to jeopardize’’ federally listed
threatened or endangered species or
result in the destruction or adverse
modification of the designated critical
habitat of these species. 16 U.S.C.
1536(a)(2). If a Federal agency
determines that an agency action may
affect a listed species or designated
critical habitat, it must initiate
consultation with the appropriate
Service—the U.S. Fish and Wildlife
Service (FWS) of the Department of the
Interior and/or National Oceanic and
Atmospheric Administration’s National
Marine Fisheries Service (NOAA
Fisheries Service) of the Department of
Commerce, depending on the species
involved—in order to ensure that the
action is not likely to jeopardize the
species or destroy or adversely modify
designated critical habitat. See 50 CFR
402.14. Under this standard, the Federal
agency taking action evaluates the
possible effects of its action and
determines whether to initiate
consultation. See 51 FR 19926, 19949
(Jun. 3, 1986).
NHTSA has reviewed applicable ESA
regulations, case law, guidance, and
rulings in assessing the potential for
impacts to threatened and endangered
species from the proposed CAFE
standards. NHTSA believes that the
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agency’s action of setting CAFE
standards, which will result in
nationwide fuel savings and,
consequently, emissions reductions
from what would otherwise occur in the
absence of the agency’s CAFE standards,
does not require consultation with
NOAA Fisheries Service or the FWS
under section 7(a)(2) of the ESA. For
additional discussion of the agency’s
rationale, see Appendix G of the FEIS.
Accordingly, NHTSA has concluded its
review of this action under Section 7 of
the ESA.
NHTSA has worked with EPA to
assess ESA requirements and develop
the agencies’ responses to comments
addressing this issue. NHTSA notes that
EPA has reached the same conclusion as
NHTSA, and has determined that ESA
consultation is not required for its
action taken today pursuant to the Clean
Air Act. EPA’s determination with
regard to ESA is set forth in its response
to comments regarding ESA
requirements, and can be found in
EPA’s Response to Comments
document, which EPA will place in the
EPA docket for this rulemaking (OAR–
2009–0472), and on the EPA Web site.
As set forth therein, EPA adopts the
reasoning of NHTSA’s response in
Appendix G of the FEIS as applied to
EPA’s rulemaking action.
9. Floodplain Management (Executive
Order 11988 & DOT Order 5650.2)
These Orders require Federal agencies
to avoid the long- and short-term
adverse impacts associated with the
occupancy and modification of
floodplains, and to restore and preserve
the natural and beneficial values served
by floodplains. Executive Order 11988
also directs agencies to minimize the
impact of floods on human safety,
health and welfare, and to restore and
preserve the natural and beneficial
values served by floodplains through
evaluating the potential effects of any
actions the agency may take in a
floodplain and ensuring that its program
planning and budget requests reflect
consideration of flood hazards and
floodplain management. DOT Order
5650.2 sets forth DOT policies and
procedures for implementing Executive
Order 11988. The DOT Order requires
that the agency determine if a proposed
action is within the limits of a base
floodplain, meaning it is encroaching on
the floodplain, and whether this
encroachment is significant. If
significant, the agency is required to
conduct further analysis of the proposed
action and any practicable alternatives.
If a practicable alternative avoids
floodplain encroachment, then the
agency is required to implement it.
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In this rulemaking, the agency is not
occupying, modifying and/or
encroaching on floodplains. The agency,
therefore, concludes that the Orders are
not applicable to NHTSA’s Decision.
The agency has, however, conducted a
review of the alternatives on potentially
affected resources, including
floodplains. See Section 4.5 of the FEIS.
10. Preservation of the Nation’s
Wetlands (Executive Order 11990 &
DOT Order 5660.1a)
These Orders require Federal agencies
to avoid, to the extent possible,
undertaking or providing assistance for
new construction located in wetlands
unless the agency head finds that there
is no practicable alternative to such
construction and that the proposed
action includes all practicable measures
to minimize harms to wetlands that may
result from such use. Executive Order
11990 also directs agencies to take
action to minimize the destruction, loss
or degradation of wetlands in
‘‘conducting Federal activities and
programs affecting land use, including
but not limited to water and related land
resources planning, regulating, and
licensing activities.’’ DOT Order 5660.1a
sets forth DOT policy for interpreting
Executive Order 11990 and requires that
transportation projects ‘‘located in or
having an impact on wetlands’’ should
be conducted to assure protection of the
Nation’s wetlands. If a project does have
a significant impact on wetlands, an EIS
must be prepared.
The agency is not undertaking or
providing assistance for new
construction located in wetlands. The
agency, therefore, concludes that these
Orders do not apply to NHTSA’s
Decision. The agency has, however,
conducted a review of the alternatives
on potentially affected resources,
including wetlands. See Section 4.5 of
the FEIS.
11. Migratory Bird Treaty Act (MBTA),
Bald and Golden Eagle Protection Act
(BGEPA), Executive Order 13186
The MBTA provides for the protection
of migratory birds that are native to the
United States by making it illegal for
anyone to pursue, hunt, take, attempt to
take, kill, capture, collect, possess, buy,
sell, trade, ship, import, or export any
migratory bird covered under the
statute. The statute prohibits both
intentional and unintentional acts.
Therefore, the statute is violated if an
agency acts in a manner that harms a
migratory bird, whether it was intended
or not. See, e.g., United States v. FMC
Corp., 572 F.2d 902 (2nd Cir. 1978).
The BGEPA (16 U.S.C. 668) prohibits
any form of possession or taking of both
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bald and golden eagles. Under the
BGEPA, violators are subject to criminal
and civil sanctions as well as an
enhanced penalty provision for
subsequent offenses.
Executive Order 13186,
‘‘Responsibilities of Federal Agencies to
Protect Migratory Birds,’’ helps to
further the purposes of the MBTA by
requiring a Federal agency to develop a
Memorandum of Understanding (MOU)
with the Fish and Wildlife Service when
it is taking an action that has (or is likely
to have) a measurable negative impact
on migratory bird populations.
The agency concludes that the MBTA,
BGEPA, and Executive Order 13186 do
not apply to NHTSA’s Decision, because
there is no disturbance and/or take
involved in NHTSA’s Decision.
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12. Department of Transportation Act
(Section 4(f))
Section 4(f) of the Department of
Transportation Act of 1966 (49 U.S.C.
303), as amended by Public Law § 109–
59, is designed to preserve publicly
owned parklands, waterfowl and
wildlife refuges, and significant historic
sites. Specifically, Section 4(f) of the
Department of Transportation Act
provides that DOT agencies cannot
approve a transportation program or
project that requires the use of any
publicly owned land from a significant
public park, recreation area, or wildlife
and waterfowl refuge, or any land from
a significant historic site, unless a
determination is made that:
• There is no feasible and prudent
alternative to the use of land, and
• The program or project includes all
possible planning to minimize harm to
the property resulting from use, or
• A transportation use of Section 4(f)
property results in a de minimis impact.
The agency concludes that the Section
4(f) is not applicable to NHTSA’s
Decision because this rulemaking does
not require the use of any publicly
owned land. For a more detailed
discussion, please see Section 3.5 of the
FEIS.
13. 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
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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
significant economic impact on a
substantial number of small entities.
I certify that this final rule will 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)).
The final rule directly affects twentyone large single stage motor vehicle
manufacturers.784 According to current
information, the final rule would also
affect two small domestic single stage
motor vehicle manufacturers, Saleen
and Tesla.785 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 above those finalized 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.
Ferrari commented that NHTSA will not
necessarily always grant the petitions of
small vehicle manufacturers for
alternative standards, and that therefore
784 BMW, Daimler (Mercedes), Chrysler, Ferrari,
Ford, Subaru, General Motors, Honda, Hyundai,
Kia, Lotus, Maserati, Mazda, Mitsubishi, Nissan,
Porsche, Subaru, Suzuki, Tata, Toyota, and
Volkswagen.
785 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.
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the relief is not guaranteed.786 In
response, NHTSA notes that the fact
that the agency may not grant a petition
for an alternative standard for one
manufacturer at one time does not mean
that the mechanism for handling small
businesses is unavailable for all. Thus,
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.
14. 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
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. Several state agencies
provided comments to the proposed
standards.
Additionally, 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 will apply nationally
under the National Program.
786 We note that Ferrari would not currently
qualify for such an alternative standard, because it
does not manufacture fewer than 10,000 passenger
automobiles per year, as required by 49 U.S.C.
32902(d) for exemption from the main passenger car
CAFE standard.
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15. Executive Order 12988 (Civil Justice
Reform)
Pursuant to Executive Order 12988,
‘‘Civil Justice Reform,’’ 787 NHTSA has
considered whether this rulemaking
would have any retroactive effect. This
final rule does not have any retroactive
effect.
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16. 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
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 final 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 final rule, 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 concluded that the final
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.
17. 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.
18. Executive Order 13045
Executive Order 13045788 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
reasonably foreseeable alternatives
considered by us.
Chapter 4 of NHTSA’s FEIS 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).789 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 FEIS 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. Increased temperatures, greater
evaporation, and heavy rain events have
been associated with adverse impacts on
788 62
FR 19885 (Apr. 23, 1997).
references referred to in the remainder of
this section are detailed in Section 7.4.5 of the FEIS.
789 The
787 61
FR 4729 (Feb. 7, 1996).
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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. 2005). 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. 2005).
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. 2005); toxins associated
with red tide directly affect the nervous
system (Epstein et al. 2005).
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
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 FEIS, NHTSA
has evaluated the environmental health
and safety effects of agency’s action on
children.
19. 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
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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
final CAFE standards.
20. Executive Order 13211
Executive Order 13211790 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
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 final rule and explain why
the final regulation is preferable to other
potentially effective and reasonably
feasible alternatives considered by us.
The final 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 final rulemaking
action is not designated as a significant
energy action.
40 CFR Part 86
Administrative practice and
procedure, Confidential business
information, Incorporation by reference,
Labeling, Motor vehicle pollution,
Reporting and recordkeeping
requirements.
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
49 CFR Part 536 and 537
Fuel economy, Reporting and
recordkeeping requirements.
■
Authority: 42 U.S.C. 7401–7671q.
Administrative practice and
procedure, Fuel economy, Motor
vehicles, Reporting and recordkeeping
requirements.
Environmental Protection Agency
40 CFR Chapter I
Accordingly, EPA amends 40 CFR
Chapter I as follows:
■
PART 85—CONTROL OF AIR
POLLUTION FROM MOBILE SOURCES
1. The authority citation for part 85
continues to read as follows:
■
In accordance with 49 U.S.C.
32902(j)(1), we submitted this final rule
to the Department of Energy for review.
That Department did not make any
comments that we have not addressed.
Subpart T—[Amended]
22. Privacy Act
§ 85.1902
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.
*
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Confidential business information,
Imports, Labeling, Motor vehicle
pollution, Reporting and recordkeeping
requirements, Research, Warranties.
790 66
FR 28355 (May 18, 2001).
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3. The authority citation for part 86
continues to read as follows:
49 CFR Part 538
Authority: 42 U.S.C. 7401–7671q.
40 CFR Part 85
with CO2, CH4, N2O, and carbon-related
exhaust emission standards;
*
*
*
*
*
(d) The phrase Voluntary Emissions
Recall shall mean a repair, adjustment,
or modification program voluntarily
initiated and conducted by a
manufacturer to remedy any emissionrelated defect for which direct
notification of vehicle or engine owners
has been provided, including programs
to remedy defects related to emissions
standards for CO2, CH4, N2O, and/or
carbon-related exhaust emissions.
*
*
*
*
*
PART 86—CONTROL OF EMISSIONS
FROM NEW AND IN–USE HIGHWAY
VEHICLES AND ENGINES
Fuel economy.
21. Department of Energy Review
List of Subjects
25677
2. Section 85.1902 is amended by
revising paragraphs (b) and (d) to read
as follows:
■
Definitions.
*
*
*
*
(b) The phrase emission-related defect
shall mean:
(1) A defect in design, materials, or
workmanship in a device, system, or
assembly described in the approved
Application for Certification (required
by 40 CFR 86.1843–01 and 86.1844–01,
and by 40 CFR 86.001–22 and similar
provisions of 40 CFR part 86) which
affects any parameter or specification
enumerated in appendix VIII of this
part; or
(2) A defect in the design, materials,
or workmanship in one or more
emissions control or emission-related
parts, components, systems, software or
elements of design which must function
properly to assure continued
compliance with vehicle emission
requirements, including compliance
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4. Section 86.1 is amended by adding
paragraphs (b)(2)(xxxix) through (xl) to
read as follows:
■
§ 86.1
Reference materials.
*
*
*
*
*
(b) * * *
(2) * * *
(xxxix) SAE J2064, Revised December
2005, R134a Refrigerant Automotive
Air-Conditioned Hose, IBR approved for
§ 86.166–12.
(xl) 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.
*
*
*
*
*
Subpart B—[Amended]
5. Section 86.111–94 is amended by
revising paragraph (b) introductory text
to read as follows:
■
§ 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 40 CFR 1065.275 for the
determination of N2O (required for 2015
and later model year vehicles). A heated
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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:
*
*
*
*
*
6. Section 86.113–04 is amended by
revising the entry for RVP in the table
in paragraph (a)(1) to read as follows:
■
§ 86.113–04
*
Item
*
*
*
*
*
*
*
7. A new § 86.127–12 is added to read
as follows:
■
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§ 86.127–12
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 (d) of this
section, and the contents of §§ 86.135–
00, 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. Paragraph (e) of this
section discusses fuel spitback
emissions. Paragraphs (f) and (g) of this
section discuss the additional test
elements of aggressive driving (US06)
and air conditioning (SC03) that
comprise the exhaust emission
components of the SFTP. Paragraphs (h)
and (i) of this section are applicable to
all vehicle emission test procedures.
(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,
NMOG, CO, NOX, CO2, N2O, CH4,
CH3OH, C2H5OH, C2H4O, and HCHO.
(2) Particulates.
(3) Evaporative HC (for gasolinefueled, methanol-fueled and gaseousfueled vehicles) and CH3OH (for
methanol-fueled vehicles). The
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*
ASTM test method No.
*
*
*
*
*
RVP 2, 3 .....................................................................................................................................
*
Fuel specifications.
*
*
(a) * * *
(1) * * *
*
*
evaporative testing portion of the
procedure occurs after the exhaust
emission test; however, exhaust
emissions need not be sampled to
complete a test for evaporative
emissions.
(4) Fuel spitback (this test is not
required for gaseous-fueled vehicles).
(b) The FTP Otto-cycle exhaust
emission test is designed to determine
gaseous THC, NMHC, NMOG, 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 approximately
11 miles (approximately 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 the
test described in paragraph (b) of this
section. For petroleum-fueled dieselcycle 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
paragraph (b) of this section. For
methanol- and ethanol-fueled vehicles,
THC, methanol, formaldehyde, CO, CO2,
CH4, N2O, and NOX are collected
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*
D 323
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*
*
Value
*
8.7–9.2 (60.0–63.4)
*
continuously for analysis as in
paragraph (b) of this section.
Additionally, for ethanol-fueled
vehicles, ethanol and acetaldehyde are
collected continuously for analysis as in
paragraph (b) of this section. 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) The evaporative emission test
(gasoline-fueled vehicles, methanolfueled and gaseous-fueled vehicles) is
designed to determine hydrocarbon and
methanol evaporative emissions as a
consequence of diurnal temperature
fluctuation, urban driving and hot soaks
following drives. It is associated with a
series of events that a vehicle may
experience and that may result in
hydrocarbon and/or methanol vapor
losses. The test procedure is designed to
measure:
(1) Diurnal emissions resulting from
daily temperature changes (as well as
relatively constant resting losses),
measured by the enclosure technique
(see § 86.133–96);
(2) Running losses resulting from a
simulated trip performed on a chassis
dynamometer, measured by the
enclosure or point-source technique (see
§ 86.134–96; this test is not required for
gaseous-fueled vehicles); and
(3) Hot soak emissions, which result
when the vehicle is parked and the hot
engine is turned off, measured by the
enclosure technique (see § 86.138–96).
(e) Fuel spitback emissions occur
when a vehicle’s fuel fill neck cannot
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accommodate dispensing rates. The
vehicle test for spitback consists of a
short drive followed immediately by a
complete refueling event. This test is
not required for gaseous-fueled vehicles.
(f) The element of the SFTP for
exhaust emissions related to aggressive
driving (US06) is designed to determine
gaseous THC, NMHC, CO, CO2, CH4,
and NOX emissions from gasoline-fueled
or diesel-fueled vehicles (see § 86.158–
08 Supplemental test procedures;
overview, and § 86.159–08 Exhaust
emission test procedures for US06
emissions). The test cycle simulates
urban driving speeds and accelerations
that are not represented by the FTP
Urban Dynamometer Driving Schedule
simulated trips discussed in paragraph
(b) of this section. The test consists of
vehicle operation on a chassis
dynamometer through a specified
driving cycle (see paragraph (g), US06
Dynamometer Driving Schedule, of
appendix I to this part). 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.
(g)(1) The element of the SFTP related
to the increased exhaust emissions
caused by air conditioning operation
(SC03) is designed to determine gaseous
THC, NMHC, CO, CO2, CH4, and NOX
emissions from gasoline-fueled or diesel
fueled vehicles related to air
conditioning use (see § 86.158–08
Supplemental Federal test procedures;
overview and § 86.160–00 Exhaust
emission test procedure for SC03
emissions). The test cycle simulates
urban driving behavior with the air
conditioner operating. The test consists
of engine startups and vehicle operation
on a chassis dynamometer through
specified driving cycles (see paragraph
(h), SC03 Dynamometer Driving
Schedule, of appendix I to this part). 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. The testing
sequence includes an approved
preconditioning cycle, a 10 minute soak
with the engine turned off, and the SC03
cycle with measured exhaust emissions.
(2) The SC03 air conditioning test is
conducted with the air conditioner
operating at specified settings and the
ambient test conditions of:
(i) Air temperature of 95 °F;
(ii) 100 grains of water/pound of dry
air (approximately 40 percent relative
humidity);
(iii) Simulated solar heat intensity of
850 W/m2 (see § 86.161–00(d)); and
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(iv) Air flow directed at the vehicle
that will provide representative air
conditioner system condenser cooling at
all vehicle speeds (see § 86.161–00(e)).
(3) Manufacturers have the option of
simulating air conditioning operation
during testing at other ambient test
conditions provided they can
demonstrate that the vehicle tail pipe
exhaust emissions are representative of
the emissions that would result from the
SC03 cycle test procedure and the
ambient conditions of paragraph (g)(2)
of this section. The simulation test
procedure must be approved in advance
by the Administrator (see §§ 86.162–03
and 86.163–00).
(h) Except in cases of component
malfunction or failure, all emission
control systems installed on or
incorporated in a new motor vehicle
shall be functioning during all
procedures in this subpart. Maintenance
to correct component malfunction or
failure shall be authorized in
accordance with § 86.007–25 or
§ 86.1834–01 as applicable.
(i) Background concentrations are
measured for all species for which
emissions measurements are made. For
exhaust testing, this requires sampling
and analysis of the dilution air. For
evaporative testing, this requires
measuring initial concentrations. (When
testing methanol-fueled vehicles,
manufacturers may choose not to
measure background concentrations of
methanol and/or formaldehyde, and
then assume that the concentrations are
zero during calculations.)
8. A new § 86.135–12 is added 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
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25679
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 2015 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 § 86.110–94. Parallel
samples of the dilution air are similarly
analyzed for THC, CO, CO2, CH4, NOX,
and, for 2015 and later model year
vehicles, N2O. For natural gas-fueled,
liquefied petroleum gas-fueled and
methanol-fueled vehicles, bag samples
are collected and analyzed for THC (if
not sampled continuously), CO, CO2,
CH4, NOX, and, for 2015 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 2015 and later
model year vehicles, N2O.
(b) During dynamometer operation, a
fixed speed cooling fan shall be
positioned so as to direct cooling air to
the vehicle in an appropriate manner
with the engine compartment cover
open. In the case of vehicles with front
engine compartments, the fan shall be
squarely positioned within 12 inches
(30.5 centimeters) of the vehicle. In the
case of vehicles with rear engine
compartments (or if special designs
make the above impractical), the cooling
fan shall be placed in a position to
provide sufficient air to maintain
vehicle cooling. The fan capacity shall
normally not exceed 5300 cfm (2.50 m3/
sec). However, if the manufacturer can
show that during field operation the
vehicle receives additional cooling, and
that such additional cooling is needed
to provide a representative test, the fan
capacity may be increased, additional
fans used, variable speed fan(s) may be
used, and/or the engine compartment
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cover may be closed, if approved in
advance by the Administrator. For
example, the hood may be closed to
provide adequate air flow to an
intercooler through a factory installed
hood scoop. Additionally, the
Administrator may conduct
certification, fuel economy and in-use
testing using the additional cooling setup approved for a specific vehicle.
(c) The vehicle speed as measured
from the dynamometer rolls shall be
used. A speed vs. time recording, as
evidence of dynamometer test validity,
shall be supplied on request of the
Administrator.
(d) Practice runs over the prescribed
driving schedule may be performed at
test point, provided an emission sample
is not taken, for the purpose of finding
the minimum throttle action to maintain
the proper speed-time relationship, or to
permit sampling system adjustment.
Note: When using two-roll
dynamometers a truer speed-time trace
may be obtained by minimizing the
rocking of the vehicle in the rolls; the
rocking of the vehicle changes the tire
rolling radius on each roll. This rocking
may be minimized by restraining the
vehicle horizontally (or nearly so) by
using a cable and winch.
(e) The drive wheel tires may be
inflated up to a gauge pressure of 45 psi
(310 kPa) in order to prevent tire
damage. The drive wheel tire pressure
shall be reported with the test results.
(f) If the dynamometer has not been
operated during the 2-hour period
immediately preceding the test, it shall
be warmed up for 15 minutes by
operating at 30 mph (48 kph) using a
non-test vehicle or as recommended by
the dynamometer manufacturer.
(g) If the dynamometer horsepower
must be adjusted manually, it shall be
set within 1 hour prior to the exhaust
emissions test phase. The test vehicle
shall not be used to make this
adjustment. Dynamometers using
automatic control of pre-selectable
power settings may be set anytime prior
to the beginning of the emissions test.
(h) The driving distance, as measured
by counting the number of
dynamometer roll or shaft revolutions,
shall be determined for the transient
cold start, stabilized cold start, and
transient hot start phases of the test. The
revolutions shall be measured on the
same roll or shaft used for measuring
the vehicle’s speed.
(i) Four-wheel drive and all-wheel
drive vehicles may be tested either in a
four-wheel drive or a two-wheel drive
mode of operation. In order to test in the
two-wheel drive mode, four-wheel drive
and all-wheel drive vehicles may have
one set of drive wheels disengaged;
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four-wheel and all-wheel drive vehicles
which can be shifted to a two-wheel
mode by the driver may be tested in a
two-wheel drive mode of operation.
■ 9. 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 light-duty 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
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 soak
periods longer than two hours,
precondition the vehicle using one full
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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
600 seconds as described in paragraph
(d)(4) of this section. Air conditioning
systems with automatic temperature
controls are finished with the test after
this 600 second idle period. Manually
controlled air conditioning systems
must complete one additional idle
period as 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
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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
operation, 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 tenth of
a 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 tenth of
a 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 tenth of
a 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.
(f) The Administrator may prescribe
procedures other than those in this
section for air conditioning systems
and/or vehicles that may not be
susceptible to satisfactory testing by the
procedures and methods in this section.
For example, the Administrator may
prescribe alternative air conditioning
system settings for systems with
controls that are not able to meet the
requirements in this section.
10. 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
rate in grams per year from vehiclebased 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
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.
(b) Rigid pipe connections. 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.
25681
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 = 0.522 × [(0.3 × HSSP) +
(0.2 × LSSP) + (0.2 × STV) + (0.2 ×
TXV)]
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.
LSSP = The number of low side service ports.
STV = The total number of switches,
transducers, and pressure relief valves.
TXV = The number of refrigerant control
devices.
(d) Flexible hoses. Determine the
permeation emission rate in grams per
year for each segment of flexible hose
using the following equation, and then
sum the values for all hoses in the
system to calculate a total flexible hose
emission rate for the system. Hose end
connections shall be included in the
calculations in paragraph (b) of this
section.
Grams/YRFH = 0.00522 × (3.14159 × ID
× L × ER)
Where:
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 for ER from the
following table:
ER
Material/configuration
High-pressure side
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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).
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(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:
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0.0216
0.0054
0.00225
Low-pressure side
0.0144
0.0036
0.00167
Grams/YRC = 0.00522 × [(300 × OHS) +
(200 × MHS) + (150 × FAP) + (100
× GHS) + (1500/SSL)]
Where:
Grams/YRC = The emission rate for the
compressors in the air conditioning
system, in grams per year.
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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) 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
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.
Subpart S—[Amended]
11. A new § 86.1801–12 is added to
read as follows:
■
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§ 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
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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
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 heavy-duty
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 are 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 greenhouse gas
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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), nitrous
oxide (N2O), and methane (CH4).
(j) Exemption from greenhouse gas
emission standards for small businesses.
Manufacturers that qualify as a small
business under the Small Business
Administration regulations in 13 CFR
part 121 are exempt from the
greenhouse gas emission standards
specified in § 86.1818–12 and in
associated provisions in this part and in
part 600 of this chapter. Both U.S.-based
and non-U.S.-based businesses are
eligible for this exemption. The
following categories of businesses (with
their associated NAICS codes) may be
eligible for exemption based on the
Small Business Administration size
standards in 13 CFR 121.201.
(1) Vehicle manufacturers (NAICS
code 336111).
(2) Independent commercial
importers (NAICS codes 811111,
811112, 811198, 423110, 424990, and
441120).
(3) Alternate fuel vehicle converters
(NAICS codes 335312, 336312, 336322,
336399, 454312, 485310, and 811198).
(k) Conditional exemption from
greenhouse gas emission standards.
Manufacturers meeting the eligibility
requirements described in paragraph
(k)(1) and (2) of this section may request
a conditional exemption from
compliance with the emission standards
described in § 86.1818–12 paragraphs
(c) through (e) and associated provisions
in this part and in part 600 of this
chapter. The terms ‘‘sales’’ and ‘‘sold’’ as
used in this paragraph (k) shall mean
vehicles produced and delivered for sale
(or sold) in the states and territories of
the United States. For the purpose of
determining eligibility the sales of
related companies shall be aggregated
according to the provisions of
§ 86.1838–01(b)(3).
(1) Eligibility requirements. Eligibility
as determined in this paragraph (k) shall
be based on the total sales of combined
passenger automobiles and light trucks.
Manufacturers must meet one of the
requirements in paragraph (k)(1)(i) or
(ii) of this section to initially qualify for
this exemption.
(i) A manufacturer with 2008 or 2009
model year sales of more than zero and
fewer than 5,000 is eligible for a
conditional exemption from the
greenhouse gas emission standards
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described in § 86.1818–12 paragraphs
(c) through (e).
(ii) A manufacturer with 2008 or 2009
model year sales of more than zero and
fewer than 5,000 while under the
control of another manufacturer, where
those 2008 or 2009 model year vehicles
bore the brand of the producing
manufacturer but were sold by or
otherwise under the control of another
manufacturer, and where the
manufacturer producing the vehicles
became independent no later than
December 31, 2010, is eligible for a
conditional exemption from the
greenhouse gas emission standards
described in § 86.1818–12 paragraphs
(c) through (e).
(2) Maintaining eligibility for
exemption from greenhouse gas
emission standards. To remain eligible
for exemption under this paragraph (k)
the manufacturer’s average sales for the
three most recent consecutive model
years must remain below 5,000. If a
manufacturer’s average sales for the
three most recent consecutive model
years exceeds 4999, the manufacturer
will no longer be eligible for exemption
and must meet applicable emission
standards according to the provisions in
this paragraph (k)(2).
(i) If a manufacturer’s average sales for
three consecutive model years exceeds
4999, and if the increase in sales is the
result of corporate acquisitions, mergers,
or purchase by another manufacturer,
the manufacturer shall comply with the
emission standards described in
§ 86.1818–12 paragraphs (c) through (e),
as applicable, beginning with the first
model year after the last year of the
three consecutive model years.
(ii) If a manufacturer’s average sales
for three consecutive model years
exceeds 4999 and is less than 50,000,
and if the increase in sales is solely the
result of the manufacturer’s expansion
in vehicle production, the manufacturer
shall comply with the emission
standards described in § 86.1818–12
paragraphs (c) through (e), as applicable,
beginning with the second model year
after the last year of the three
consecutive model years.
(iii) If a manufacturer’s average sales
for three consecutive model years
exceeds 49,999, the manufacturer shall
comply with the emission standards
described in § 86.1818–12 paragraphs
(c) through (e), as applicable, beginning
with the first model year after the last
year of the three consecutive model
years.
(3) Requesting the conditional
exemption from standards. To be
exempted from the standards described
in § 86.1818–12(c) through (e), the
manufacturer must submit a declaration
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to EPA containing a detailed written
description of how the manufacturer
qualifies under the provisions of this
paragraph (k). The declaration must
describe eligibility information that
includes the following: model year 2008
and 2009 sales, sales volumes for each
of the most recent three model years,
detailed information regarding
ownership relationships with other
manufacturers, details regarding the
application of the provisions of
§ 86.1838–01(b)(3) regarding the
aggregation of sales of related
companies, and documentation of goodfaith efforts made by the manufacturer
to purchase credits from other
manufacturers. This declaration must be
signed by a chief officer of the company,
and must be made prior to each model
year for which the exemption 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 exemption is requested, but
not later than December of the calendar
year prior to the model year for which
exemption is requested. A conditional
exemption will be granted when EPA
approves the exemption declaration.
The declaration must be sent to the
Environmental Protection Agency at the
following address: Director, Compliance
and Innovative Strategies Division, U.S.
Environmental Protection Agency, 2000
Traverwood Drive, Ann Arbor,
Michigan 48105.
■ 12. 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.’’
■ g. By revising the definition for ‘‘Basic
engine.’’
■ h. By adding the definition for
‘‘Carbon-related exhaust emissions.’’
■ i. By adding the definition for
‘‘Combined CO2.’’
■ j. By adding the definition for
‘‘Combined CREE.’’
■ 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.’’
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25683
o. By adding the definition for
‘‘Footprint.’’
■ p. By adding the definition for ‘‘Fuel
cell electric vehicle.’’
■ q. By adding the definition for
‘‘Highway fuel economy test procedure.’’
■ r. By adding the definition for ‘‘Hybrid
electric vehicle.’’
■ s. By adding the definition for
‘‘Interior volume index.’’
■ t. By revising the definition for
‘‘Model type.’’
■ 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
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 length and type of flexible hose (e.g.,
rubber, standard barrier or veneer, ultralow 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.
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(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.
*
*
*
*
*
Carbon-related exhaust emissions
(CREE) has the meaning given in
§ 600.002–08 of this chapter.
*
*
*
*
*
Combined CO2 means the CO2 value
determined for a vehicle (or vehicles) by
averaging the city and highway CO2
values, weighted 0.55 and 0.45
respectively.
Combined CREE means the CREE
value determined for a vehicle (or
vehicles) by averaging the city and
highway fuel CREE values, weighted
0.55 and 0.45 respectively.
*
*
*
*
*
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:
(1) The vehicle is capable of drawing
recharge energy 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).
(3) The vehicle does not have an
onboard combustion engine/generator
system as a means of providing
electrical energy.
*
*
*
*
*
Engine code means a unique
combination within a test group of
displacement, fuel injection (or
carburetor) calibration, choke
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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 and on a
methanol or ethanol fuel, or any mixture
of the petroleum fuel and methanol or
ethanol. Methanol-fueled and ethanolfueled 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 vehicle means an electric
vehicle propelled solely by an electric
motor where energy for the motor is
supplied by an electrochemical cell that
produces electricity via the noncombustion reaction of a consumable
fuel, typically hydrogen.
*
*
*
*
*
Highway Fuel Economy Test
Procedure (HFET) has the meaning
given in § 600.002–08 of this chapter.
*
*
*
*
*
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, where recharge energy for the
energy storage system comes solely from
sources on board the vehicle.
*
*
*
*
*
Interior volume index has the
meaning given in § 600.315–08 of this
chapter.
*
*
*
*
*
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Model type has the meaning given in
§ 600.002–08 of this chapter.
*
*
*
*
*
Motor vehicle has the meaning given
in § 85.1703 of this chapter.
*
*
*
*
*
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 § 88.104–
94(g) of this chapter.
Plug-in hybrid electric vehicle (PHEV)
means a hybrid electric vehicle that 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.
*
*
*
*
*
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.
*
*
*
*
*
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.
*
*
*
*
*
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Wheelbase is the longitudinal
distance between front and rear wheel
centerlines.
*
*
*
*
*
■ 13. A new § 86.1805–12 is added to
read as follows:
§ 86.1805–12
Useful life.
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(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 the
fleet average CO2 emission standards in
§ 86.1818–12.
(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.
■ 14. 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
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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,
CH4, and N2O are not required to be
monitored by the OBD system.
*
*
*
*
*
■ 15. A new § 86.1809–12 is added to
read as follows:
§ 86.1809–12
Prohibition of defeat devices.
(a) No new light-duty vehicle, lightduty truck, medium-duty passenger
vehicle, or complete heavy-duty vehicle
shall be equipped with a defeat device.
(b) The Administrator may test or
require testing on any vehicle at a
designated location, using driving
cycles and conditions that may
reasonably be expected to be
encountered in normal operation and
use, for the purposes of investigating a
potential defeat device.
(c) For cold temperature CO and cold
temperature NMHC emission control,
the Administrator will use a guideline
to determine the appropriateness of the
CO and NMHC emission control at
ambient temperatures between 25 °F
(the upper bound of the FTP test
temperature range) and 68 °F (the lower
bound of the FTP test temperature
range). The guideline for CO emission
congruity across the intermediate
temperature range is the linear
interpolation between the CO standard
applicable at 25 °F and the CO standard
applicable at 68 °F. The guideline for
NMHC emission congruity across the
intermediate temperature range is the
linear interpolation between the NMHC
FEL pass limit (e.g. 0.3499 g/mi for a 0.3
g/mi FEL) applicable at 20 °F and the
Tier 2 NMOG standard to which the
vehicle was certified at 68 °F, where the
intermediate temperature NMHC level is
rounded to the nearest hundredth for
comparison to the interpolated line. For
vehicles that exceed this CO emissions
guideline or this NMHC emissions
guideline upon intermediate
temperature cold testing:
(1) If the CO emission level is greater
than the 20 °F emission standard, the
vehicle will automatically be considered
to be equipped with a defeat device
without further investigation. If the
intermediate temperature NMHC
emission level, rounded to the nearest
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25685
hundredth, is greater than the 20 °F FEL
pass limit, the vehicle will be presumed
to have a defeat device unless the
manufacturer provides evidence to
EPA’s satisfaction that the cause of the
test result in question is not due to a
defeat device.
(2) If the CO emission level does not
exceed the 20 °F emission standard, the
Administrator may investigate the
vehicle design for the presence of a
defeat device under paragraph (d) of this
section. If the intermediate temperature
NMHC emission level, rounded to the
nearest hundredth, does not exceed the
20 °F FEL pass limit the Administrator
may investigate the vehicle design for
the presence of a defeat device under
paragraph (d) of this section.
(d) The following provisions apply for
vehicle designs designated by the
Administrator to be investigated for
possible defeat devices:
(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 the Highway Fuel
Economy Test Procedure (described in
subpart B of 40 CFR part 600), or the Air
Conditioning Idle Test (described in
§ 86.165–12), when the vehicle is
operated under conditions that may
reasonably be expected to be
encountered in normal operation and
use.
(2) The following information
requirements apply:
(i) Upon request by the Administrator,
the manufacturer must provide an
explanation containing detailed
information regarding test programs,
engineering evaluations, design
specifications, calibrations, on-board
computer algorithms, and design
strategies incorporated for operation
both during and outside of the Federal
emission test procedures.
(ii) For purposes of investigations of
possible cold temperature CO or cold
temperature NMHC defeat devices
under this paragraph (d), the
manufacturer must provide an
explanation to show, to the satisfaction
of the Administrator, that CO emissions
and NMHC emissions are reasonably
controlled in reference to the linear
guideline across the intermediate
temperature range.
(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
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monoxide, carbon dioxide, oxides of
nitrogen, nitrous oxide, methane, and
formaldehyde measured on the Federal
Test Procedure (subpart B of this part)
and on the Highway Fuel Economy Test
Procedure (subpart B of 40 CFR part
600) does not occur in the temperature
range of 20 to 86 °F. For diesel vehicles,
the engineering evaluation must also
include particulate emissions.
■ 16. 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.
*
*
*
*
*
■ 17. A new § 86.1818–12 is added to
read as follows:
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§ 86.1818–12 Greenhouse gas emission
standards for light-duty vehicles, light-duty
trucks, and medium-duty passenger
vehicles.
(a) Applicability. This section
contains standards and other regulations
applicable to the emission of the air
pollutant defined as the aggregate group
of six greenhouse gases: Carbon dioxide,
nitrous oxide, methane,
hydrofluorocarbons, perfluorocarbons,
and sulfur hexafluoride. This section
applies to 2012 and later model year
LDVs, LDTs and MDPVs, including
multi-fuel vehicles, vehicles fueled with
alternative fuels, hybrid electric
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vehicles, plug-in hybrid electric
vehicles, electric vehicles, and fuel cell
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 medium-duty passenger
vehicles. Manufacturers that qualify as a
small business according to the
requirements of § 86.1801–12(j) are
exempt from the emission standards in
this section. Manufacturers that have
submitted a declaration for a model year
according to the requirements of
§ 86.1801–12(k) for which approval has
been granted by the Administrator are
conditionally exempt from the emission
standards in paragraphs (c) through (e)
of this section for the approved model
year.
(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 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 passenger automobiles
and light trucks, 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 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 Temporary Leadtime Allowance
Alternative Standards for qualifying
manufacturers specified in paragraph (e)
of this section shall not include vehicles
subject to the Temporary Leadtime
Allowance Alternative 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
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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:
Model year
2012
2013
2014
2015
2016
CO2 target
value
(grams/mile)
......................................
......................................
......................................
......................................
and later ......................
244.0
237.0
228.0
217.0
206.0
(B) For passenger automobiles with a
footprint of greater than 56 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 ......................
315.0
307.0
299.0
288.0
277.0
(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 and rounded to the nearest 0.1
grams/mile:
Target CO2 = [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
......................................
......................................
......................................
......................................
and later ......................
b
50.5
43.3
34.8
23.4
12.7
(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
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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:
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)(3)(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.
CO2 target
(d) In-use CO2 exhaust emission
Model year
value
standards. The in-use exhaust CO2
(grams/mile)
emission standard shall be the
2012 ......................................
294.0 combined city/highway carbon-related
2013 ......................................
284.0 exhaust emission value calculated for
2014 ......................................
275.0
2015 ......................................
261.0 the appropriate vehicle carline/
2016 and later ......................
247.0 subconfiguration according to the
provisions of § 600.113–08(g)(4) of this
(B) For light trucks with a footprint of chapter multiplied by 1.1 and rounded
to the nearest whole gram per mile. For
greater than 66 square feet, the gram/
in-use vehicle carlines/
mile CO2 target value shall be selected
subconfigurations for which a combined
for the appropriate model year from the
city/highway carbon-related exhaust
following table:
emission value was not determined
CO2 target
under § 600.113(g)(4) of this chapter, the
Model year
value
in-use exhaust CO2 emission standard
(grams/mile)
shall be the combined city/highway
2012 ......................................
395.0 carbon-related exhaust emission value
2013 ......................................
385.0 calculated according to the provisions of
2014 ......................................
376.0 § 600.208–12 of this chapter for the
2015 ......................................
362.0 vehicle model type (except that total
2016 and later ......................
348.0 model year production data shall be
used instead of sales projections)
(C) For light trucks with a footprint
multiplied by 1.1 and rounded to the
that is greater than 41 square feet and
nearest whole gram per mile. For
less than or equal to 66 square feet, the
vehicles that are capable of operating on
gram/mile CO2 target value shall be
multiple fuels, including but not limited
calculated using the following equation
to alcohol dual fuel, natural gas dual
and rounded to the nearest 0.1 grams/
fuel and plug-in hybrid electric
mile:
vehicles, a separate in-use standard
Target CO2 = (4.04 × f) + b
shall be determined for each fuel that
the vehicle is capable of operating on.
Where:
f is the footprint, as defined in § 86.1803; and These standards apply to in-use testing
performed by the manufacturer
b is selected from the following table for the
appropriate model year:
pursuant to regulations at § 86.1845–04
and 86.1846–01 and to in-use testing
Model year
b
performed by EPA.
(e) Temporary Lead Time Allowance
2012 ......................................
128.6
2013 ......................................
118.7 Alternative Standards. (1) The interim
2014 ......................................
109.4 fleet average CO2 standards in this
2015 ......................................
95.1 paragraph (e) are optionally applicable
2016 and later ......................
81.1 to each qualifying manufacturer, where
the terms ‘‘sales’’ or ‘‘sold’’ as used in
(ii) Calculation of fleet average CO2
this paragraph (e) means vehicles
standards for light trucks. In each model produced and delivered for sale (or
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sold) in the states and territories of the
United States.
(i) A qualifying manufacturer is a
manufacturer with sales of 2009 model
year combined passenger automobiles
and light trucks of greater than zero and
less than 400,000 vehicles.
(A) If a manufacturer sold less than
400,000 but more than zero 2009 model
year combined passenger automobiles
and light trucks while under the control
of another manufacturer, where those
2009 model year passenger automobiles
and light trucks bore the brand of the
producing manufacturer, and where the
producing manufacturer became
independent no later than December 31,
2010, the producing manufacturer is a
qualifying manufacturer.
(B) In the case where two or more
qualifying manufacturers combine as
the result of merger or the purchase of
50 percent or more of one or more
companies by another company, and if
the combined 2009 model year sales of
the merged or combined companies is
less than 400,000 but more than zero
(combined passenger automobiles and
light trucks), the corporate entity formed
by the combination of two or more
qualifying manufacturers shall continue
to be a qualifying manufacturer. The
total number of vehicles that the
corporate entity is allowed to include
under the Temporary Leadtime
Allowance Alternative Standards shall
be determined by paragraph (e)(2) or
(e)(3) of this section where sales is the
total combined 2009 model year sales of
all of the merged or combined
companies. Vehicles sold by the
companies that combined by merger/
acquisition to form the corporate entity
that were subject to the Temporary
Leadtime Allowance Alternative
Standards in paragraph (e)(4) of this
section prior to the merger/acquisition
shall be combined to determine the
remaining number of vehicles that the
corporate entity may include under the
Temporary Leadtime Allowance
Alternative Standards in this paragraph
(e).
(C) In the case where two or more
manufacturers combine as the result of
merger or the purchase of 50 percent or
more of one or more companies by
another company, and if the combined
2009 model year sales of the merged or
combined companies is equal to or
greater than 400,000 (combined
passenger automobiles and light trucks),
the new corporate entity formed by the
combination of two or more
manufacturers is not a qualifying
manufacturer. Such a manufacturer
shall meet the emission standards in
paragraph (c) of this section beginning
with the model year that is numerically
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two years greater than the calendar year
in which the merger/acquisition(s) took
place.
(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) A qualifying manufacturer may
not use these Temporary Leadtime
Allowance Alternative Standards until
they have used all available banked
credits and/or credits available for
transfer accrued under § 86.1865–12(k).
A qualifying manufacturer with a net
positive credit balance calculated under
§ 86.1865–12(k) in any model year after
considering all available credits either
generated, carried forward from a prior
model year, transferred from other
averaging sets, or obtained from other
manufacturers, may not use these
Temporary Leadtime Allowance
Alternative Standards in such model
year.
(2) Qualifying manufacturers may
select any combination of 2012 through
2015 model year passenger automobiles
and/or light trucks to include under the
Temporary Leadtime Allowance
Alternative Standards determined in
this paragraph (e) 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.
(3) Qualifying manufacturers with
sales of 2009 model year combined
passenger automobiles and light trucks
in the United States of greater than zero
and less than 50,000 vehicles may select
any combination of 2012 through 2015
model year passenger automobiles and/
or light trucks to include under the
Temporary Leadtime Allowance
Alternative Standards determined in
this paragraph (e) up to a cumulative
total of 200,000 vehicles, and
additionally may select up to 50,000
2016 model year vehicles to include
under the Temporary Leadtime
Allowance Alternative Standards
determined in this paragraph (e). To be
eligible for the provisions of this
paragraph (e)(3) qualifying
manufacturers must provide annual
documentation of good-faith efforts
made by the manufacturer to purchase
credits from other manufacturers.
Without such documentation, the
manufacturer may use the Temporary
Leadtime Allowance Alternative
Standards according to the provisions of
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paragraph (e)(2) of this section, and the
provisions of this paragraph (e)(3) shall
not apply. 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.
(4) To calculate the applicable
Temporary Leadtime Allowance
Alternative Standards, 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 Temporary Leadtime
Allowance Alternative Standards,
subject to the limitations expressed in
paragraphs (e)(1) through (3) of this
section.
(i) The Temporary Leadtime
Allowance Alternative Standard
applicable to qualified passenger
automobiles as defined in § 600.002–08
of this chapter 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 Temporary Leadtime
Allowance Alternative Standard.
(ii) The Temporary Leadtime
Allowance Alternative Standard
applicable to qualified light trucks (i.e.
non-passenger automobiles as defined
in § 600.002–08 of this chapter) 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 Temporary Leadtime Allowance
Alternative Standard.
(5) Manufacturers choosing to
optionally apply these standards are
subject to the restrictions on credit
banking and trading specified in
§ 86.1865–12.
(f) Nitrous oxide (N2O) and methane
(CH4) exhaust emission standards for
passenger automobiles and light trucks.
Each manufacturer’s fleet of combined
passenger automobile and light trucks
must comply with N2O and CH4
standards using either the provisions of
paragraph (f)(1) of this section or the
provisions of paragraph (f)(2) of this
section. The manufacturer may not use
the provisions of both paragraphs (f)(1)
and (f)(2) of this section in a model year.
For example, a manufacturer may not
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use the provisions of paragraph (f)(1) of
this section for their passenger
automobile fleet and the provisions of
paragraph (f)(2) for their light truck fleet
in the same model year.
(1) Standards applicable to each test
group.
(i) 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.
(ii) 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.
(2) Including N2O and CH4 in fleet
averaging program. Manufacturers may
elect to not meet the emission standards
in paragraph (f)(1) of this section.
Manufacturers making this election
shall include N2O and CH4 emissions in
the determination of their fleet average
carbon-related exhaust emissions, as
calculated in subpart F of part 600 of
this chapter. Manufacturers using this
option must include both N2O and CH4
full useful life values in the fleet average
calculations for passenger automobiles
and light trucks. Use of this option will
account for N2O and CH4 emissions
within the carbon-related exhaust
emission value determined for each
model type according to the provisions
part 600 of this chapter. This option
requires the determination of full useful
life emission values for both the Federal
Test Procedure and the Highway Fuel
Economy Test.
■ 18. Section 86.1823–08 is amended by
adding paragraph (m) to read as follows:
§ 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.
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(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. (i) For
manufacturers complying with the
emission standards for N2O and CH4
specified in § 86.1818–12(f)(1),
deterioration factors for N2O and CH4
shall be determined according to the
provisions of paragraphs (a) through (l)
of this section.
(ii) For manufacturers complying with
the fleet averaging option for N2O and
CH4 as allowed under § 86.1818–
12(f)(2), separate deterioration factors
shall be determined for the FTP and
HFET test cycles. Therefore 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.
(iii) For the 2012 through 2014 model
years only, manufacturers may use
alternative deterioration factors. For
N2O, the alternative deterioration factor
to be used to adjust FTP and HFET
emissions is the deterioration factor
determined for NOX emissions
according to the provisions of this
section. For CH4, the alternative
deterioration factor to be used to adjust
FTP and HFET emissions is the
deterioration factor determined for
NMOG or NMHC emissions according to
the provisions of this section.
(3) Other carbon-related exhaust
emissions. Deterioration factors shall be
determined according to the provisions
of paragraphs (a) through (l) of this
section. Optionally, in lieu of
determining emission-specific FTP and
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HFET deterioration factors for CH3OH
(methanol), HCHO (formaldehyde),
C2H5OH (ethanol), and C2H4O
(acetaldehyde), manufacturers may use
the deterioration factor determined for
NMOG or NMHC emissions according to
the provisions of this section.
(4) 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.
■ 19. Section 86.1827–01 is amended by
revising paragraph (a)(5) and by adding
paragraph (f) to read as follows:
(G) For the 2012 through 2014 model
years 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.
*
*
*
*
*
■ 21. Section 86.1835–01 is amended as
follows:
■ a. By revising paragraph (a)(4).
■ b. By revising paragraph (b)(1)
introductory text.
■ c. By adding paragraph (b)(1)(vi).
■ d. By revising paragraph (b)(3).
■ e. By revising paragraph (c)(1)(ii).
§ 86.1827–01
§ 86.1835–01
testing.
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 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.
■ 20. 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.
*
*
*
*
*
(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) * * *
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Confirmatory certification
(a) * * *
(4) Retesting for fuel economy reasons
or for compliance with greenhouse gas
exhaust emission standards in § 86.181–
12 may be conducted under the
provisions of § 600.008–08 of this
chapter.
(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 carbon-related
exhaust 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 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).
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(i) For use in the fuel economy and
exhaust greenhouse gas 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 by doing so will also accept as
official the calculated CREE value
associated with the lower fuel economy
test results.
(ii) The manufacturer shall conduct a
second retest of the FTP or highway test
if the fuel economy 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 fuel economy
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 exhaust greenhouse gas fleet
averaging program) the lowest fuel
economy of the original test, the first
confirmatory test, and the second
confirmatory test fuel economy results,
and by doing so will also accept as
official the calculated CREE value
associated with the lowest fuel economy
test results.
(c) * * *
(1) * * *
(ii) Official test results for fuel
economy and exhaust CO2 emission
purposes are determined in accordance
with the provisions of § 600.008–08 of
this chapter.
*
*
*
*
*
■ 22. Section 86.1841–01 is amended by
adding paragraph (a)(3) and revising
paragraph (b) to read as follows:
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§ 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
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subject, at both full and intermediate
useful life as appropriate for that test
group.
*
*
*
*
*
■ 23. 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).
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).
*
*
*
*
*
■ 24. Section 86.1846–01 is amended by
revising paragraphs (a)(1) and (b)
introductory text to read as follows:
§ 86.1845–04 Manufacturer in-use
verification testing requirements.
§ 86.1846–01 Manufacturer in-use
confirmatory 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.
*
*
*
*
*
(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 part 600, subpart B of this chapter.
*
*
*
*
*
(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 part 600,
subpart B of this chapter. 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
(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
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.
*
*
*
*
*
■ 25. Section 86.1848–10 is amended by
adding paragraph (c)(9) to read as
follows:
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§ 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
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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).
*
*
*
*
*
■ 26. A new § 86.1854–12 is added to
read as follows:
mstockstill on DSKB9S0YB1PROD with RULES2
§ 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
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§§ 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
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)).
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(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
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.
■ 27. 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.
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(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 emissions.
(c) Altitude. Altitude requirements for
CO2 standards are provided in
§ 86.1810–09(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 greenhouse gas emission standards
in § 86.1818–12 according to the
provisions of § 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
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 (j) 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
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§ 86.1844–01(d)(11) and § 86.1810–09(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 part 600 subpart F (in units
of grams per mile rounded to the nearest
whole number) 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:
(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 Temporary Leadtime Allowance
Alternative Standards specified in
§ 86.1818–12(e), if applicable; and
(iv) Light trucks subject to the
Temporary Leadtime Allowance
Alternative 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)(9).
(2) The certificate issued for each test
group requires all model types within
that test group to meet the in-use
emission standards to which each
model type is certified as outlined in
§ 86.1818–12(d).
(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) 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
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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)(8) 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)(8) of this section). A manufacturer
will be subject to penalties on an
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)(8) 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
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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 and
separately for passenger automobiles
and light trucks, 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
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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 § 600.511–80 of this chapter; and
Vehicle Lifetime Miles is 195,264 for
passenger automobiles and 225,865 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.
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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
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)(8) of this
section).
(iii) Special provisions for
manufacturers using the Temporary
Leadtime Allowance Alternative
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
Temporary Leadtime Allowance
Alternative Standards specified in
§ 86.1818–12(e).
(B) Credits generated by a passenger
automobile or light truck averaging set
subject to the Temporary Leadtime
Allowance Alternative Standards
specified in § 86.1818–12(e)(4)(i) or (ii)
of this section may be used to offset a
deficit generated by an averaging set
subject to the Temporary Leadtime
Allowance Alternative Standards
through the 2015 model year, except
that manufacturers qualifying under the
provisions of § 86.1818–12(e)(3) may
use such credits to offset a deficit
generated by an averaging set subject to
the Temporary Leadtime Allowance
Alternative Standards through the 2016
model year .
(C) Credits generated by an averaging
set subject to the Temporary Leadtime
Allowance Alternative Standards
specified in § 86.1818–12(e)(4)(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).
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(D) Credits generated by vehicles
subject to the Temporary Leadtime
Allowance Alternative Standards
specified in § 86.1818–12(e)(4)(i) or (ii)
may be banked for use in a future model
year (to offset a deficit generated by an
averaging set subject to the Temporary
Leadtime Allowance Alternative
Standards). All such credits shall expire
at the end of the 2015 model year,
except that manufacturers qualifying
under the provisions of § 86.1818–
12(e)(3) may use such credits to offset a
deficit generated by an averaging set
subject to the Temporary Leadtime
Allowance Alternative Standards
through the 2016 model year.
(E) A manufacturer with any vehicles
subject to the Temporary Leadtime
Allowance Alternative Standards
specified in § 86.1818–12(e)(4)(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 or bank 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. 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 debits were
first incurred and round to the nearest
whole number to determine the number
of vehicles not meeting the fleet average
CO2 standards.
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(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
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) 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.
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(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.
(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
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requested by the Administrator.
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
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
§ 86.1867–12(b) of this section shall
include in the 2012 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
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under paragraph § 86.1867–12(c) shall
include in the 2012 report, separately
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 cumulative model year
production of eligible vehicles starting
with the 2009 model year.
(C) The carbon-related exhaust
emission value by model type and
model year.
(v) Manufacturers calculating early
off-cycle technology credits under
paragraph § 86.1867–12(d) shall include
in the 2012 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 of
this chapter, 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
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 voiding 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.
■ 28. A new § 86.1866–12 is added to
subpart S to read as follows:
§ 86.1866–12
programs.
CO2 fleet average credit
(a) Incentive for certification of
advanced technology vehicles. Electric
vehicles, plug-in hybrid electric
vehicles, and fuel cell vehicles, as those
terms are defined in § 86.1803–01, that
are certified and produced in the 2012
through 2016 model years may be
eligible for a reduced CO2 emission
value under the provisions of this
paragraph (a) and under the provisions
of part 600 of this chapter.
(1) Electric vehicles, fuel cell vehicles,
and plug-in hybrid electric vehicles may
use a value of zero (0) grams/mile of
CO2 to represent the proportion of
electric operation of a vehicle that is
derived from electricity that is generated
from sources that are not onboard the
vehicle.
(2) The use of zero (0) grams/mile CO2
is limited to the first 200,000 combined
electric vehicles, plug-in hybrid electric
25695
vehicles, and fuel cell vehicles
produced and delivered for sale by a
manufacturer in the 2012 through 2016
model years, except that a manufacturer
that produces and delivers for sale
25,000 or more such vehicles in the
2012 model year shall be subject to a
limitation on the use of zero (0) grams/
mile CO2 to the first 300,000 combined
electric vehicles, plug-in hybrid electric
vehicles, and fuel cell vehicles
produced and delivered for sale by a
manufacturer in the 2012 through 2016
model years.
(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
(b) for each air conditioning system that
the manufacturer is using to generate
CO2 credits. Manufacturers may also
generate early air conditioning
refrigerant leakage credits under this
paragraph (b) for the 2009 through 2011
model years according to the provisions
of § 86.1867–12(b).
(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:
Where:
MaxCredit is 12.6 (grams CO2-equivalent/
mile) for air conditioning systems using
HFC–134a, and 13.8 (grams CO2equivalent/mile) 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
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the calculated rate is less than 8.3 grams/
year (4.1 grams/year for systems using
electric compressors) the rate for the
purpose of this formula shall be 8.3
grams/year (4.1 grams/year for systems
using electric compressors);
The constant 16.6 is the average passenger
car impact of air conditioning leakage in
units of grams/year;
GWPREF means the global warming potential
of the refrigerant as indicated in
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paragraph (b)(5) of this section or as
otherwise determined by the
Administrator;
GWPHFC134a means the global warming
potential of HFC–134a as indicated in
paragraph (b)(5) of this section or as
otherwise determined by the
Administrator.
(ii) Light trucks:
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⎡ ⎛ Leakage ⎞ ⎛ GWPREF ⎞ ⎤
Leakage credit = MaxCredit × ⎢1 − ⎜
⎟⎥
⎟×⎜
⎥
⎢
⎣ ⎝ 16.6 ⎠ ⎝ GWPHFC134a ⎠ ⎦
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⎡ ⎛ Leakage ⎞ ⎛ GWPREF ⎞ ⎤
Leakage credit = MaxCredit × ⎢1 − ⎜
⎟⎥
⎟×⎜
⎢
⎥
⎣ ⎝ 20.7 ⎠ ⎝ GWPHFC134a ⎠ ⎦
(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
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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 195,264 and for
light trucks shall be 225,865.
(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).
(5) The following values for
refrigerant global warming potential
(GWPREF), or alternative values as
determined by the Administrator, shall
be used in the calculations of this
paragraph (b). The Administrator will
determine values for refrigerants not
included in this paragraph (b)(5) upon
request by a manufacturer.
(i) For HFC–134a, GWPREF = 1430;
(ii) For HFC–152a, GWPREF = 124;
(iii) For HFO–1234yf,: GWPREF = 4;
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(iv) For CO2, GWPREF = 1.
(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
(c) for the 2009 through 2011 model
years according to the provisions of
§ 86.1867–12(b). 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 (e.g. a compressor that
controls displacement based on
temperature setpoint and/or cooling
demand of the air conditioning system
control settings inside the passenger
compartment): 1.7 g/mi.
(ii) Reduced reheat, with externallycontrolled, fixed-displacement or
pneumatic variable displacement
compressor (e.g. a compressor that
controls displacement based on
conditions within, or internal to, the air
conditioning system, such as head
pressure, suction pressure, or evaporator
outlet temperature): 1.1 g/mi.
(iii) Default to recirculated air with
closed-loop control of the air supply
(sensor feedback to control interior air
quality) whenever the ambient
temperature is 75 °F or higher: 1.7 g/mi.
Air conditioning systems that operated
with closed-loop control of the air
supply at different temperatures may
receive credits by submitting an
engineering analysis to the
Administrator for approval.
(iv) Default to recirculated air with
open-loop control air supply (no sensor
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feedback) whenever the ambient
temperature is 75 °F or higher: 1.1 g/mi.
Air conditioning systems that operate
with open-loop control of the air supply
at different temperatures may receive
credits by submitting an engineering
analysis to the Administrator for
approval.
(v) Blower motor controls which limit
wasted electrical energy (e.g. pulse
width modulated power controller): 0.9
g/mi.
(vi) Internal heat exchanger (e.g. a
device that transfers heat from the highpressure, liquid-phase refrigerant
entering the evaporator to the lowpressure, gas-phase refrigerant exiting
the evaporator): 1.1 g/mi.
(vii) Improved condensers and/or
evaporators with system analysis on the
component(s) indicating a coefficient of
performance improvement for the
system of greater than 10% when
compared to previous industry standard
designs): 1.1 g/mi.
(viii) Oil separator: 0.6 g/mi. The
manufacturer must submit an
engineering analysis demonstrating the
increased improvement of the system
relative to the baseline design, where
the baseline component for comparison
is the version which a manufacturer
most recently had in production on the
same vehicle design or in a similar or
related vehicle model. The
characteristics of the baseline
component shall be compared to the
new component to demonstrate the
improvement.
(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:
Credit = the CO2 efficiency credit value in
grams per mile determined in paragraph
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ER07MY10.049</MATH>
Where:
MaxCredit is 15.6 (grams CO2-equivalent/
mile) for air conditioning systems using
HFC–134a, and 17.2 (grams CO2equivalent/mile) 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/year (5.2 grams/year for systems
using electric compressors) the rate for
the purpose of this formula shall be 10.4
grams/year (5.2 grams/year for systems
using electric compressors);
The constant 20.7 is the average passenger
car impact of air conditioning leakage in
units of grams/year;
GWPREF means the global warming potential
of the refrigerant as indicated in
paragraph (b)(5) of this section or as
otherwise determined by the
Administrator;
GWPR134a means the global warming
potential of HFC–134a as indicated in
paragraph (b)(5) of this section or as
otherwise determined by the
Administrator.
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(c)(2) or (c)(5) of this section, whichever
is applicable.
Production = The total number of passenger
cars or light trucks, whichever is
applicable, produced with the air
conditioning system to which to the
efficiency credit value from paragraph
(c)(2) of this section applies.
VLM = vehicle lifetime miles, which for
passenger cars shall be 195,264 and for
light trucks shall be 225,865.
(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 21.3 grams per minute.
(A) If the increased CO2 emissions
determined from the Idle Test Procedure
in § 86.165–14 is less than or equal to
14.9 grams/minute, the total credit value
for use in paragraph (c)(3) of this section
shall be as determined in paragraph
(c)(2) of this section.
(B) If the increased CO2 emissions
determined from the Idle Test Procedure
in § 86.165–14 is greater than 14.9
grams/minute and less than 21.3 grams/
minute, the total credit value for use in
paragraph (c)(3) of this section shall be
as determined according to the
following formula:
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⎡ ⎛ ITP − 14.9 ⎞ ⎤
TCV = TCV1 × ⎢1 − ⎜
⎟⎥
6.4
⎠⎦
⎣ ⎝
Where:
TCV = The total credit value for use in
paragraph (c)(3) of this section;
TCV1 = The total credit value determined
according to paragraph (c)(2) of this
section; and
ITP = the increased CO2 emissions
determined from the Idle Test Procedure
in § 86.165–14.
(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
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
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25697
sources to maintain freshness of the
cabin air and prevent fogging of
windows 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 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) Improved condensers and/or
evaporators 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.
The manufacturer must submit an
engineering analysis demonstrating the
increased improvement of the system
relative to the baseline design, where
the baseline component(s) for
comparison is the version which a
manufacturer most recently had in
production on the same vehicle design
or in a similar or related vehicle model.
The dimensional characteristics (e.g.,
tube configuration/thickness/spacing,
and fin density) of the baseline
component(s) shall be compared to the
new component(s) to demonstrate the
improvement in coefficient of
performance.
(vi) 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. With prior EPA
approval, manufacturers may optionally
generate credits applicable to the CO2
fleet average program described in
§ 86.1865–12 by implementing
innovative technologies that have a
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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 criteria in this
paragraph (d)(1) must be met as
determined by the Administratory:
(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
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
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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 § 600.114–
08 of this chapter.
(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
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 (rounded to the
nearest whole number) shall be
calculated separately for passenger
automobiles and light trucks according
to the following formula:
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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 195,264 and for
light trucks shall be 225,865.
(3) Notice and opportunity for public
comment. The Administrator will
publish a notice of availability in the
Federal Register notifying the public of
a manufacturer’s proposed alternative
off-cycle credit calculation
methodology. The notice will include
details regarding the proposed
methodology, but will not include any
Confidential Business Information. The
notice will include instructions on how
to comment on the methodology. The
Administrator will take public
comments into consideration in the
final determination, and will notify the
public of the final determination.
Credits may not be accrued using an
approved methodology until the model
year following the final approval.
29. 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 EPA
approval and 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. The terms
‘‘sales’’ and ‘‘sold’’ as used in this section
shall mean vehicles produced and
delivered for sale in the states and
territories of the United States.
(a) Early fleet average CO2 reduction
credits. Manufacturers may optionally
generate credits for reductions in their
fleet average CO2 emissions achieved in
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
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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
§ 600.510–12 of this chapter, 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
§ 600.510–12(j)(2)(ii)(B) of this chapter,
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
§ 600.510–12(j)(2)(iii)(B) of this chapter,
without the use of the 0.15
multiplicative factor.
(D) The average carbon-related
exhaust emissions for alcohol dual
fueled model types shall be the value
measured using gasoline or diesel fuel,
as applicable, and shall be calculated
according to the provisions of
§ 600.510–12(j)(2)(vi) of this chapter,
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 the value
measured using gasoline or diesel fuel,
as applicable, and shall be calculated
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according to the provisions of
§ 600.510–12(j)(2)(vii) of this chapter,
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) Carbon-related exhaust emission
values for electric, fuel cell, and plugin hybrid electric model types 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.
Model year
LDV/LDT1
2009 ..................
2010 ..................
2011 ..................
323
301
267
LDT2/HLDT/
MDPV
439
420
390
(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
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 § 600.511–80 of this chapter; and
Vehicle Lifetime Miles is 195,264 for the
LDV/LDT1 averaging set and 225,865 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
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may not be carried forward from any of
the 2009–2011 model years into the
2012 model year, and credits earned in
the 2009 model year may not be traded
to other manufacturers.
(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
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
California and 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
vehicle emissions from any of the
following categories of motor vehicles:
Passenger cars, light-duty 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, and credits earned in
the 2009 model year may not be traded
to other manufacturers.
(3) Pathway 3. Pathway 3 credits are
those credits earned under Pathway 2 as
described in paragraph (a)(2) of this
section in California 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 California
and 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
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motor vehicles identified in this
paragraph (a)(3). The results of such
calculations will be reported to the
Administrator for use in determining
compliance with the applicable CO2
early credit threshold values.
(ii) 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.
(iii) 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.
(iv) Average carbon-related exhaust
emission values shall be determined
according to the provisions of
§ 600.510–12 of this chapter, 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
§ 600.510–12(j)(2)(ii)(B) of this chapter,
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
§ 600.510–12(j)(2)(iii)(B) of this chapter,
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
§ 600.510–12(j)(2)(vi) of this chapter,
without the use of 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
§ 600.510–12(j)(2)(vii) of this chapter,
without the use of the 0.15
multiplicative factor and with F = 0.
(F) Section 600.510–12(j)(3) of this
chapter shall not apply. Electric, fuel
cell, 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
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vehicle credits under paragraph (c) of
this section.
(v) 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
determined under 49 CFR 533.5 and
rounding to the nearest whole gram per
mile.
(vi) 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:
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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 § 600.511–80 of this chapter 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 195,264 for the
LDV/LDT1 averaging set and 225,865 for
the LDT2/HLDT/MDPV averaging set.
(vii) 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, and credits earned in
the 2009 model year may not be traded
to other manufacturers.
(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 California and 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
§ 86.1866–12(b) and/or air conditioning
efficiency credits according to the
provisions of § 86.1866–12(c) in model
years 2009 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 are required to
comply with California greenhouse gas
requirements in model years 2009–2011
(for California and section 177 states)
may not generate early air conditioning
credits for vehicles sold in California
and the section 177 states as determined
in paragraph (a)(2)(i) of this section.
(c) Early advanced technology vehicle
incentive. Vehicles eligible for this
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incentive are electric vehicles, fuel cell
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
vehicles, and plug-in hybrid electric
vehicles in their fleet averages
calculated under any of the early credit
pathways 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 the advanced technology
vehicle incentive, the manufacturer will
apply the 2009, 2010, and/or 2011
model type sales volumes and their
model type emission levels to the
manufacturer’s fleet average calculation.
(ii) The early advanced technology
vehicle incentive 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
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.
(4) Manufacturers may use zero
grams/mile to represent the carbonrelated exhaust emission values for the
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electric operation of 2009 through 2011
model year electric vehicles, fuel cell
vehicles, and plug-in hybrid electric
vehicles subject to the limitations in
§ 86.1866–12(a). The 2009 through 2011
model year vehicles using zero grams
per mile shall count against the 200,000
or 300,000 caps on use of this credit
value, whichever is applicable under
§ 86.1866–12(a).
(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) in
model years 2009 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.
(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 appropriate averaging sets (e.g. LDV/
LDT1 and LDT2/HLDT/MDPV averaging
sets for pathways 1 and 2; LDV, LDT/
2011 MDPV, LDV/LDT1 and LDT2/
HLDT/MDPV averaging sets for Pathway
3; LDV and LDT/2011 MDPV averaging
sets for Pathway 4):
(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
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25701
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.
(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
30. The authority citation for part 600
continues to read as follows:
■
Authority: 49 U.S.C. 32901–23919q, Pub.
L. 109–58.
31. 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
32. The heading for subpart A is
revised as set forth above.
■ 33. 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
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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
§ 86.1818–12 of this chapter.
■ 34. 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 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.’’
■ k. By adding the definition for ‘‘Track
width.’’
■ l. By adding the definition for
‘‘Wheelbase.’’
Hybrid electric vehicle (HEV) has the
meaning given in § 86.1803–01 of this
chapter.
*
*
*
*
*
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)
has the meaning given in § 86.1803–01
of this chapter.
*
*
*
*
*
Track width has the meaning given in
§ 86.1803–01 of this chapter.
*
*
*
*
*
Wheelbase has the meaning given in
§ 86.1803–01 of this chapter.
*
*
*
*
*
■ 35. Section 600.006–08 is amended as
follows:
■ a. By revising the section heading.
■ b. By revising paragraph (b)(2)(ii).
■ c. By revising paragraph (b)(2)(iv).
■ d. By revising paragraph (c)
introductory text.
■ e. By adding paragraph (c)(5).
■ f. By revising paragraph (e).
■ g. By revising paragraph (g)(3).
§ 600.002–08
§ 600.006–08 Data and information
requirements for fuel economy data
vehicles.
Definitions.
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*
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Base tire means the tire specified as
standard equipment by the
manufacturer.
*
*
*
*
*
Carbon-related exhaust emissions
(CREE) means the summation of the
carbon-containing constituents of the
exhaust emissions, with each
constituent adjusted by a coefficient
representing the carbon weight fraction
of each constituent relative to the CO2
carbon weight fraction, as specified in
§ 600.113–08. For example, carbonrelated exhaust emissions (weighted 55
percent city and 45 percent highway)
are used to demonstrate compliance
with fleet average CO2 emission
standards outlined in § 86.1818(c) of
this chapter.
*
*
*
*
*
Electric vehicle has the meaning given
in § 86.1803–01 of this chapter.
*
*
*
*
*
Footprint has the meaning given in
§ 86.1803–01 of this chapter.
*
*
*
*
*
Fuel cell has the meaning given in
§ 86.1803–01 of this chapter.
Fuel cell vehicle has the meaning
given in § 86.1803–01 of this chapter.
*
*
*
*
*
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*
*
*
*
*
(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
calibrations for the electric motor, motor
controller, battery configuration, or
other components on the test vehicle as
well as the design tolerances.
*
*
*
*
*
(c) The manufacturer shall submit the
following fuel economy data:
*
*
*
*
*
(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. Manufacturers
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incorporating N2O and CH4 emissions in
their fleet average carbon-related
exhaust emissions as allowed under
§ 86.1818(f)(2) of this chapter shall also
submit N2O and CH4 emission data
where applicable. The fuel economy
and CO2 emission test results shall be
adjusted in accordance with paragraph
(g) of this section.
*
*
*
*
*
(e) In lieu of submitting actual data
from a test vehicle, a manufacturer may
provide fuel economy and carbonrelated exhaust emission 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 and
carbon-related exhaust emission 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 carbon-related exhaust emission
(CREE) test data generated by vehicles
with engine-drive system combinations
with more than 6,200 miles by using the
following equation:
CREE4,000mi = CREET[0.979 + 5.25 ×
10¥6(mi)]
Where:
CREE4,000mi = CREE emission data adjusted to
4,000-mile test point.
CREE T = Tested emissions value of CREE in
grams per mile.
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
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shall be rounded in accordance with
§ 86.1837–01 of this chapter as
applicable. CREE values shall be
rounded to the nearest gram per mile.
*
*
*
*
*
■ 36. 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
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*
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(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 § 86.1823–08 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
emissions data, and for which emission
standards apply, must be covered by a
certificate of conformity under part 86
of this chapter before:
*
*
*
*
*
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37. Section 600.008–08 is amended by
revising the section 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 carbon-related exhaust
emissions value from the test results
associated with the lowest fuel economy
results.
*
*
*
*
*
■ 38. Section 600.010–08 is amended by
revising paragraph (d) to read as
follows:
§ 600.010–08 Vehicle test requirements
and minimum data requirements.
*
*
*
*
*
(d) Minimum data requirements for
the manufacturer’s average fuel
economy and average carbon-related
exhaust emissions. For the purpose of
calculating the manufacturer’s average
fuel economy and average carbonrelated exhaust emissions under
§ 600.510, the manufacturer shall
submit FTP (city) and HFET (highway)
test data representing at least 90 percent
of the manufacturer’s actual model year
production, by configuration, for each
category identified for calculation under
§ 600.510–08(a).
■ 39. Section 600.011–93 is amended to
read as follows:
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§ 600.011–93
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Reference materials.
(a) Incorporation by reference. The
documents referenced in this section
have been incorporated by reference in
this part. The 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 inspected at the U.S.
Environmental Protection Agency,
Office of Air and Radiation, 1200
Pennsylvania Ave., NW., Washington,
DC 20460, phone (202) 272–0167, 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 and is
available from the sources listed below:
(b) ASTM. The following material is
available from the American Society for
Testing and Materials. Copies of these
materials may be obtained from
American Society for Testing and
Materials, ASTM International, 100 Barr
Harbor Drive, P.O. Box C700, West
Conshohocken, PA 19428–2959, phone
610–832–9585. https://www.astm.org/.
(1) ASTM E 29–67 (Reapproved 1973)
Standard Recommended Practice for
Indicating Which Places of Figures Are
To Be Considered Significant in
Specified Limiting Values, IBR
approved for §§ 600.002–93 and
600.002–08.
(2) 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, IBR approved for
§§ 600.113–93, 600.510–93, 600.113–08,
600.510–08, and 600.510–12.
(3) ASTM D 3343–90 Standard Test
Method for Estimation of Hydrogen
Content of Aviation Fuels, IBR approved
for §§ 600.113–93 and 600.113–08.
(4) ASTM D 3338–92 Standard Test
Method for Estimation of Net Heat of
Combustion of Aviation Fuels, IBR
approved for §§ 600.113–93 and
600.113–08.
(5) ASTM D 240–92 Standard Test
Method for Heat of Combustion of
Liquid Hydrocarbon Fuels by Bomb
Calorimeter, IBR approved for
§§ 600.113–93, 600.510–93, 600.113–08,
and 600.510–08.
(6) ASTM D975–04c Standard
Specification for Diesel Fuel Oils, IBR
approved for § 600.107–08.
(7) ASTM D 1945–91 Standard Test
Method for Analysis of Natural Gas By
Gas Chromatography, IBR approved for
§§ 600.113–93, 600.113–08.
(c) SAE Material. The following
material is available from the Society of
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Automotive Engineers. Copies of these
materials may be obtained from Society
of Automotive Engineers World
Headquarters, 400 Commonwealth Dr.,
Warrendale, PA 15096–0001, phone
(877) 606–7323 (U.S. and Canada) or
(724) 776–4970 (outside the U.S. and
Canada), or at https://www.sae.org.
(1) Motor Vehicle Dimensions—
Recommended Practice SAE 1100a
(Report of Human Factors Engineering
Committee, Society of Automotive
Engineers, approved September 1973 as
revised September 1975), IBR approved
for §§ 600.315–08 and 600.315–82.
(2) [Reserved]
Subpart B—Fuel Economy and
Carbon-Related Exhaust Emission
Regulations for 1978 and Later Model
Year Automobiles—Test Procedures
40. The heading for subpart B is
revised as set forth above.
■ 41. A new § 600.101–12 is added to
subpart B to read as follows:
■
§ 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
average fuel economy shall be
interpreted to also mean average carbonrelated exhaust emissions.
■ 42. Section 600.111–08 is amended by
revising paragraph (f) to read as follows:
§ 600.111–08
Test procedures.
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*
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*
(f) Special Test Procedures. The
Administrator may prescribe test
procedures, other than those set forth in
this Subpart B, for any vehicle which is
not susceptible to satisfactory testing
and/or testing results by the procedures
set forth in this part. For example,
special test procedures may be used for
advanced technology vehicles,
including, but not limited to battery
electric vehicles, fuel cell vehicles,
plug-in hybrid electric vehicles and
vehicles equipped with hydrogen
internal combustion engines.
Additionally, the Administrator may
conduct fuel economy and carbonrelated exhaust emission testing using
the special test procedures approved for
a specific vehicle.
■ 43. A new § 600.113–12 is added to
subpart B to read as follows:
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§ 600.113–12 Fuel economy and carbonrelated exhaust emission 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 and carbon-related exhaust
emission 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
manufacturers selecting the fleet
averaging option for N2O and CH4 as
allowed under § 86.1818–12(f)(2) of this
chapter the calculations of the carbonrelated exhaust emissions require the
input of grams/mile values for nitrous
oxide (N2O) and methane (CH4).
Emissions shall be determined 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) Calculate the FTP fuel economy.
(1) Calculate the weighted grams/mile
values for the FTP test for CO2, HC, and
CO, and where applicable, CH3OH,
C2H5OH, C2H4O, HCHO, NMHC, N2O
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.
(2) Calculate separately the grams/
mile values for the cold transient phase,
stabilized phase and hot transient phase
of the FTP test. For vehicles with more
than one source of propulsion energy,
one of which is a rechargeable energy
storage system, or vehicles with special
features that the Administrator
determines may have a rechargeable
energy source, whose charge can vary
during the test, calculate separately the
grams/mile values for the cold transient
phase, stabilized phase, hot transient
phase and hot stabilized phase of the
FTP test.
(b) Calculate the HFET fuel economy.
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(1) Calculate the mass values for the
highway fuel economy test for HC, CO
and CO2, and where applicable, CH3OH,
C2H5OH, C2H4O, HCHO, NMHC, N2O
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.
(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, N2O 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) Calculate the cold temperature
FTP fuel economy.
(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, N2O and CH4 as
specified in § 86.144(b) of this chapter.
For 2008 through 2010 diesel-fueled
vehicles, HC measurement is optional.
(2) Calculate separately the grams/
mile values for the cold transient phase,
stabilized phase and hot transient phase
of the cold temperature FTP test in
§ 86.244 of this chapter.
(3) Measure and record the test fuel’s
properties as specified in paragraph (f)
of this section.
(d) Calculate the US06 fuel economy.
(1) Calculate the total grams/mile
values for the US06 test for HC, CO and
CO2, and where applicable, CH3OH,
C2H5OH, C2H4O, HCHO, NMHC, N2O
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, N2O 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
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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.
(3) Measure and record the test fuel’s
properties as specified in paragraph (f)
of this section.
(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, N2O and CH4 as
specified in § 86.144(b) of this chapter.
(2) Measure and record the test fuel’s
properties as specified in paragraph (f)
of this section.
(f) Fuel property determination and
analysis.
(1) Gasoline test fuel properties shall
be determined by analysis of a fuel
sample taken from the fuel supply. A
sample shall be taken after each
addition of fresh fuel to the fuel supply.
Additionally, the fuel shall be
resampled once a month to account for
any fuel property changes during
storage. Less frequent resampling may
be permitted if EPA concludes, on the
basis of manufacturer-supplied data,
that the properties of test fuel in the
manufacturer’s storage facility will
remain stable for a period longer than
one month. The fuel samples shall be
analyzed to determine the following fuel
properties:
(i) Specific gravity measured using
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’’ (incorporated by reference at
§ 600.011–93).
(ii) Carbon weight fraction measured
using ASTM D 3343–90 ‘‘Standard Test
Method for Estimation of Hydrogen
Content of Aviation Fuels’’
(incorporated by reference at § 600.011–
93).
(iii) Net heating value (Btu/lb)
determined using ASTM D 3338–92
‘‘Standard Test Method for Estimation of
Net Heat of Combustion of Aviation
Fuels’’ (incorporated by reference at
§ 600.011–93).
(2) Methanol 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’’ (incorporated by
reference at § 600.011–93) for the blend,
or:
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(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’’ (incorporated by
reference at § 600.011–93) for the
gasoline fuel component and also for the
methanol fuel component and
combining as follows:
SG = SGg × volume fraction gasoline +
SGm × volume fraction methanol.
(ii)(A) Carbon weight fraction using
the following equation:
CWF = CWFg × MFg + 0.375 × MFm
Where:
CWFg = Carbon weight fraction of gasoline
portion of blend measured using ASTM
D 3343–90 ‘‘Standard Test Method for
Estimation of Hydrogen Content of
Aviation Fuels’’ (incorporated by
reference at § 600.011–93).
MFg = Mass fraction gasoline = (G × SGg)/
(G × SGg + M × SGm)
MFm = Mass fraction methanol = (M × SGm)/
(G × SGg + M × SGm)
Where:
G = Volume fraction gasoline.
M = Volume fraction methanol.
SGg = Specific gravity of gasoline as
measured using 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’’
(incorporated by reference at § 600.011–
93).
SGm = Specific gravity of methanol as
measured using 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’’
(incorporated by reference at § 600.011–
93).
(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).
(3) Natural gas test fuel shall be
analyzed to determine the following fuel
properties:
(i) Fuel composition measured using
ASTM D 1945–91 ‘‘Standard Test
Method for Analysis of Natural Gas By
Gas Chromatography’’ (incorporated by
reference at § 600.011–93).
(ii) Specific gravity measured as based
on fuel composition per ASTM D 1945–
91 ‘‘Standard Test Method for Analysis
of Natural Gas by Gas Chromatography’’
(incorporated by reference at § 600.011–
93).
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(iii) Carbon weight fraction, based on
the carbon contained only in the
hydrocarbon constituents of the fuel.
This equals the weight of carbon in the
hydrocarbon constituents divided by the
total weight of fuel.
(iv) Carbon weight fraction of the fuel,
which equals the total weight of carbon
in the fuel (i.e, includes carbon
contained in hydrocarbons and in CO2)
divided by the total weight of fuel.
(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’’ (incorporated by
reference at § 600.011–93) for the blend.
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’’ (incorporated by
reference at § 600.011–93) for the
gasoline fuel component and also for the
methanol fuel component and
combining as follows.
SG = SGg × volume fraction gasoline +
SGm × volume fraction ethanol.
(ii)(A) Carbon weight fraction using
the following equation:
CWF = CWFg × MFg + 0.521 × MFe
Where:
CWFg = Carbon weight fraction of gasoline
portion of blend measured using ASTM
D 3343–90 ‘‘Standard Test Method for
Estimation of Hydrogen Content of
Aviation Fuels’’ (incorporated by
reference at § 600.011–93).
MFg = Mass fraction gasoline = (G × SGg)/
(G × SGg + E × SGm)
MFe = Mass fraction ethanol = (E × SGm)/(G
× SGg + E × SGm)
Where:
G = Volume fraction gasoline.
E = Volume fraction ethanol.
SGg = Specific gravity of gasoline as
measured using 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’’
(incorporated by reference at § 600.011–
93).
SGm = Specific gravity of ethanol as
measured using 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’’
(incorporated by reference at § 600.011–
93).
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(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).
(g) Calculate separate FTP, highway,
US06, SC03 and Cold temperature FTP
fuel economy and carbon-related
exhaust emissions from the grams/mile
values for total HC, CO, CO2 and, where
applicable, CH3OH, C2H5OH, C2H4O,
HCHO, NMHC, N2O, 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) Emission values for fuel economy
calculations. The emission values
(obtained per paragraph (a) through (e)
of this section, as applicable) used in
the calculations of fuel economy in 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
fuel economy in this section shall be
rounded to the nearest gram/mile.
(2) Emission values for carbon-related
exhaust emission calculations.
(i) 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
§ 86.1823–08 of this chapter, then these
test values shall be used in the
calculations of carbon-related exhaust
emissions in this section.
(ii) 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 § 86.1823–08 of this
chapter, then these test values shall be
adjusted by the appropriate
deterioration factor determined
according to § 86.1823–08 of this
chapter before being used in the
calculations of carbon-related exhaust
emissions in this section. For vehicles
within a test group, the appropriate
NMOG deterioration factor may be used
in lieu of the deterioration factors for
CH3OH, C2H5OH, and/or C2H4O
emissions.
(iii) The emission values determined
in paragraph (g)(2)(A) or (B) 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
carbon-related exhaust emissions in this
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section shall be rounded to the nearest
gram/mile.
(iv) For manufacturers complying
with the fleet averaging option for N2O
and CH4 as allowed under § 86.1818–
12(f)(2) of this chapter, N2O and CH4
emission values for use in the
calculation of carbon-related exhaust
emissions in this section shall be the
values determined according to
paragraph (g)(2)(iv)(A), (B), or (C) of this
section.
(A) The FTP and HFET test values as
determined for the emission data
vehicle according to the provisions of
§ 86.1835–01 of this chapter. These
values shall apply to all vehicles tested
under this section that are included in
the test group represented by the
emission data vehicle and shall be
adjusted by the appropriate
deterioration factor determined
according to § 86.1823–08 of this
chapter before being used in the
calculations of carbon-related exhaust
emissions in this section.
(B) The FTP and HFET test values as
determined according to testing
conducted under the provisions of this
subpart. These values shall be adjusted
by the appropriate deterioration factor
determined according to § 86.1823–08 of
this chapter before being used in the
calculations of carbon-related exhaust
emissions in this section.
(C) For the 2012 through 2014 model
years only, manufacturers may use an
assigned value of 0.010 g/mi for N2O
FTP and HFET test values. This value is
not required to be adjusted by a
deterioration factor.
(3) 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.
(4) For the purpose of determining the
applicable in-use emission standard
under § 86.1818–12(d) of this chapter,
the combined city/highway carbonrelated exhaust emission value for a
vehicle subconfiguration is calculated
by arithmetically averaging the FTPbased city and HFET-based highway
carbon-related exhaust emission values,
as determined in § 600.113(a) and (b) of
this section for the subconfiguration,
weighted 0.55 and 0.45 respectively,
and rounded to the nearest tenth of a
gram per mile.
(h)(1) For gasoline-fueled automobiles
tested on test fuel specified in § 86.113–
04(a) of this chapter, the fuel economy
in miles per gallon is to be calculated
using the following equation and
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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)(i) For 2012 and later model year
gasoline-fueled automobiles tested on
test fuel specified in § 86.113–04(a) of
this chapter, 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/0.273 × HC) + (1.571 ×
CO) + CO2
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.
CWF = Carbon weight fraction of test fuel as
obtained in paragraph (g) of this section.
(ii) For manufacturers complying with
the fleet averaging option for N2O and
CH4 as allowed under § 86.1818–12(f)(2)
of this chapter, the carbon-related
exhaust emissions in grams per mile for
2012 and later model year gasolinefueled automobiles tested on test fuel
specified in § 86.113–04(a) of this
chapter is to be calculated using the
following equation and rounded to the
nearest 1 gram per mile:
CREE = [(CWF/0.273) × NMHC] + (1.571
× CO) + CO2 + (298 × N2O) + (25
× CH4)
Where:
CREE means the carbon-related exhaust
emissions as defined in § 600.002–08.
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.
N2O = Grams/mile N2O as obtained in
paragraph (g) of this section.
CH4 = Grams/mile CH4 as obtained in
paragraph (g) of this section.
CWF = Carbon weight fraction of test fuel as
obtained in paragraph (g) of this section.
E:\FR\FM\07MYR2.SGM
07MYR2
Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
(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)(i) 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 = (3.172 × HC) + (1.571 × CO) +
CO2
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.
(ii) For manufacturers complying with
the fleet averaging option for N2O and
CH4 as allowed under § 86.1818–12(f)(2)
of this chapter, the carbon-related
exhaust emissions in grams per mile for
2012 and later model year diesel-fueled
automobiles is to be calculated using the
following equation and rounded to the
nearest 1 gram per mile:
CREE = (3.172 × NMHC) + (1.571 × CO)
+ CO2 + (298 × N2O) + (25 × CH4)
Where:
CREE means the carbon-related exhaust
emissions as defined in § 600.002–08.
NMHC = Grams/mile NMHC as obtained in
paragraph (g) of this section.
CO = Grams/mile CO as obtained in
paragraph (g) of this section.
20:30 May 06, 2010
Where:
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
paragraph (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.
(2)(i) 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/0.273 × 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
(ii) For manufacturers complying with
the fleet averaging option for N2O and
CH4 as allowed under § 86.1818–12(f)(2)
of this chapter, the carbon-related
exhaust emissions in grams per mile for
2012 and later model year methanolfueled automobiles and automobiles
designed to operate on mixtures of
gasoline and methanol is to be
calculated using the following equation
and rounded to the nearest 1 gram per
mile:
CREE = [(CWFexHC/0.273) × NMHC] +
(1.571 × CO) + (1.374 × CH3OH) +
(1.466 × HCHO) + CO2 + (298 ×
N2O) + (25 × CH4)
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).
NMHC = 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.
N2O = Grams/mile N2O as obtained in
paragraph (g) of this section.
CH4 = Grams/mile CH4 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 Mar<15>2010
(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))
(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 220001
DNG = density of the natural gas fuel [grams/
ft3 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
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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\07MYR2.SGM
07MYR2
ER07MY10.051</MATH>
mstockstill on DSKB9S0YB1PROD with RULES2
mpg e =
CO2 = Grams/mile CO2 as obtained in
paragraph (g) of this section.
N2O = Grams/mile N2O as obtained in
paragraph (g) of this section.
CH4 = Grams/mile CH4 as obtained in
paragraph (g) of this section.
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Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
CO2NG = FCNG × DNG × WFCO2
CO2NG = grams of carbon dioxide in the
natural gas fuel consumed per mile of
travel.
FC NG =
Where:
( 0.749 × CH 4 ) + ( CWFNMHC × NMHC ) + (0.429 × CO) + ( 0.273 × CO2 )
CWFNG × D NG
= cubic feet of natural gas fuel consumed per
mile
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’’ (incorporated by
reference at § 600.011–93).
(2)(i) 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 = 2.743 × CH4 + CWFNMHC/0.273
× NMHC + 1.571 × CO + CO2
mstockstill on DSKB9S0YB1PROD with RULES2
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.
(ii) For manufacturers complying with
the fleet averaging option for N2O and
CH4 as allowed under § 86.1818–12(f)(2)
of this chapter, the carbon-related
exhaust emissions in grams per mile for
2012 and later model year automobiles
fueled with natural gas is to be
calculated using the following equation
and rounded to the nearest 1 gram per
mile:
CREE = (25 × CH4) + [(CWFNMHC/0.273)
× NMHC] + (1.571 × CO) + CO2 +
(298 × N2O)
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.
VerDate Mar<15>2010
20:30 May 06, 2010
Jkt 220001
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.
N2O = Grams/mile N2O as obtained in
paragraph (g) of this section.
(l)(1) For ethanol-fueled automobiles
and automobiles designed to operate on
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 C2H5OH (ethanol) as
obtained in paragraph (d) of this section.
C2H4O = Grams/mile C2H4O (acetaldehyde)
as obtained in paragraph (d) of this
section.
(2)(i) 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/0.273 × HC) + (1.571
× CO) + (1.374 × CH3OH) + (1.466
× HCHO) + (1.911 × C2H5OH) +
(1.998 × C2H4O) + CO2
Where:
PO 00000
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Fmt 4701
Sfmt 4700
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 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 C2H5OH (ethanol) as
obtained in paragraph (d) of this section.
C2H4O = Grams/mile C2H4O (acetaldehyde)
as obtained in paragraph (d) of this
section.
(ii) For manufacturers complying with
the fleet averaging option for N2O and
CH4 as allowed under § 86.1818–12(f)(2)
of this chapter, the carbon-related
exhaust emissions in grams per mile for
2012 and later model year ethanolfueled automobiles and automobiles
designed to operate on mixtures of
gasoline and ethanol is to be calculated
using the following equation and
rounded to the nearest 1 gram per mile:
CREE = [(CWFexHC/0.273) × NMHC] +
(1.571 × CO) + (1.374 × CH3OH) +
(1.466 × HCHO) + (1.911 × C2H5OH)
+ (1.998 × C2H4O) + CO2 + (298 ×
N2O) + (25 × CH4)
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
paragraph (f)(4) of this section.
NMHC = 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 C2H5OH (ethanol) as
obtained in paragraph (d) of this section.
C2H4O = Grams/mile C2H4O (acetaldehyde)
as obtained in paragraph (d) of this
section.
N2O = Grams/mile N2O as obtained in
paragraph (g) of this section.
E:\FR\FM\07MYR2.SGM
07MYR2
ER07MY10.052</MATH>
25708
Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
CH4 = Grams/mile CH4 as obtained in
paragraph (g) of this section.
(m) Carbon-related exhaust emissions
for electric vehicles, fuel cell vehicles
and plug-in hybrid electric vehicles.
Manufacturers shall determine carbonrelated exhaust emissions for electric
vehicles, fuel cell vehicles, and plug-in
hybrid electric vehicles according to the
provisions of this paragraph (m). Subject
to the limitations described in
§ 86.1866–12(a) of this chapter, the
manufacturer may be allowed to use a
value of 0 grams/mile to represent the
emissions of fuel cell vehicles and the
proportion of electric operation of
electric vehicles and plug-in hybrid
electric vehicles that is derived from
electricity that is generated from sources
that are not onboard the vehicle, as
described in paragraphs (m)(1) through
(3) of this section.
(1) For 2012 and later model year
electric vehicles, but not including fuel
cell vehicles, the carbon-related exhaust
emissions in grams per mile is to be
calculated using the following equation
and rounded to the nearest one gram per
mile:
CREE = CREEUP¥CREEGAS
Where:
CREE means the carbon-related exhaust
emission value as defined in § 600.002–
08, which may be set equal to zero for
eligible 2012 through 2016 model year
electric vehicles as described in
§ 86.1866–12(a) of this chapter.
CREEUP = 0.7670 × EC, and
CREEGAS = 0.2485 × TargetCO2,
Where:
EC = The vehicle energy consumption in
watt-hours per mile, determined
according to procedures established by
the Administrator under § 600.111–08(f).
TargetCO2 = The CO2 Target Value
determined according to § 86.1818–
12(c)(2) of this chapter for passenger
automobiles and according to § 86.1818–
12(c)(3) of this chapter for light trucks.
(2) For 2012 and later model year
plug-in hybrid electric vehicles, the
carbon-related exhaust emissions in
grams per mile is to be calculated using
the following equation and rounded to
the nearest one gram per mile:
CREE = CREECD + CREECS,
Where:
CREE means the carbon-related exhaust
emission value as defined in § 600.002–
08.
CREECS = The carbon-related exhaust
emissions determined for chargesustaining operation according to
procedures established by the
Administrator under § 600.111–08(f);
and
CREECD = (ECF × CREECDEC) + [(1 – ECF) ×
CREECDGAS]
Where:
CREECD = The carbon-related exhaust
emissions determined for chargedepleting operation determined
according to the provisions of this
section for the applicable fuel and
according to procedures established by
the Administrator under § 600.111–08(f);
CREECDEC = The carbon-related exhaust
emissions determined for electricity
consumption during charge-depleting
operation, which shall be determined
using the method specified in paragraph
(m)(1) of this section and according to
procedures established by the
Administrator under § 600.111–08(f),
and which may be set equal to zero for
eligible 2012 through 2016 model year
vehicles as described in § 86.1866–12(a)
of this chapter;
CREECDGAS = The carbon-related exhaust
emissions determined for chargedepleting operation determined
according to the provisions of this
section for the applicable fuel and
according to procedures established by
the Administrator under § 600.111–08(f);
and
ECF = Electricity consumption factor as
determined by the Administrator under
§ 600.111–08(f).
(3) For 2012 and later model year fuel
cell vehicles, the carbon-related exhaust
emissions in grams per mile shall be
calculated using the method specified in
paragraph (m)(1) of this section, except
that CREEUP shall be determined
25709
according to procedures established by
the Administrator under § 600.111–
08(f). As described in § 86.1866–12(a) of
this chapter the value of CREE may be
set equal to zero for eligible 2012
through 2016 model year fuel cell
vehicles.
(n) 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 for fuel economy
and carbon-related exhaust emissions
may be used in lieu of the methods
described in this section if shown to
yield equivalent or superior results and
if approved in advance by the
Administrator.
44. Section 600.114–08 is amended as
follows:
■ a. By revising the section 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 chapter.
*
*
*
*
*
(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 =
Where:
StartCREEX = 3.6 × (Bag1CREEX ¥
Bag3CREEX)
Where:
Bag Y CREEX = 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 =
VerDate Mar<15>2010
22:27 May 06, 2010
Jkt 220001
0.82 × [(0.48 × Bag275CREE) + (0.41 ×
BAG375CREE) + (0.11× US06 CityCREE)]
+
0.18 × [(0.5 × Bag220CREE) + (0.5 ×
Bag320CREE)] +
0.144 × [SC03 CREE ¥ ((0.61 × Bag375CREE)
+ (0.39 × Bag275CREE))]
Where:
BagYXCREE = carbon-related exhaust
emissions in grams per mile over Bag Y
at temperature X.
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Fmt 4701
Sfmt 4700
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.
(e) Highway carbon-related exhaust
emissions. For each vehicle tested,
determine the 5-cycle highway carbonrelated exhaust emissions using the
following equation:
E:\FR\FM\07MYR2.SGM
07MYR2
ER07MY10.053</MATH>
mstockstill on DSKB9S0YB1PROD with RULES2
⎛ ( 0.76 × StartCREE 75 + 0.24 × StartCREE 20 ) ⎞
0.33 × ⎜
⎟
⎜
⎟
4.1
⎝
⎠
25710
Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
HighwayCREE = 0.905 × (StartCREE +
RunningCREE)
(1) StartCREE =
Where:
⎛ ( 0.76 × StartCREE 75 + 0.24 × StartCREE 20 ) ⎞
0.33 × ⎜
⎟
⎜
⎟
60
⎝
⎠
Where:
StartCREEX = 3.6 × (BagCREEX ¥
Bag3CREEX)
(2) Running CREE =
1.007 × [(0.79 × US06 Highway CREE) + (0.21
× HFET CREE)] + 0.045 × [SC03 CREE ¥
((0.61 × Bag375CREE) + (0.39 ×
Bag275CREE))]
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,
SC03 CREE = carbon-related exhaust
emissions in grams per mile over the
SC03 test.
(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
4-bag sampling method is used,
manufacturers may use the equations in
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
⎝
⎠
Where:
(1) StartCREE75 =
3.6 × (Bag1CREE75 ¥ Bag3CREE75) + 3.9 ×
(Bag2CREE75 ¥ Bag4CREE75)
and
(2) StartCREE20 =
3.6 × (Bag1CREE20 ¥ Bag3CREE20)
(B) RunningCREE =
0.82 × [(0.48 × Bag475CREE) + (0.41 ×
Bag375CREE) + (0.11 × US06 City CREE)]
+ 0.18 × [(0.5 × Bag220CREE) + (0.5 ×
Bag320CREE)] + 0.144 × [SC03 CREE ¥
((0.61 × Bag375CREE) + (0.39 ×
Bag475CREE))]
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.
(ii) Highway carbon-related exhaust
emissions.
HighwayCREE = 0.905 × (StartCREE +
RunningCREE)
Where:
(A) StartCREE =
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22:27 May 06, 2010
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(2) Two-bag FTP equations. If the 2bag sampling method is used for the
75 °F FTP test, it must be used to
determine both city and highway
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Sfmt 4700
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 =
E:\FR\FM\07MYR2.SGM
07MYR2
ER07MY10.056</MATH>
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.
ER07MY10.055</MATH>
Where:
StartCREE75 = 3.6 × (Bag1CREE75 ¥
Bag3CREE75) + 3.9 × (Bag2CREE75 ¥
Bag4CREE75)
and
StartCREE20 = 3.6 × (Bag1CREE20 ¥
Bag3CREE20)
(B) RunningCREE =
1.007 × [(0.79 × US06 Highway CREE) + (0.21
× HFET CREE)] + 0.045 × [SC03 CREE ¥
((0.61 × Bag375CREE) + (0.39 ×
Bag475CREE))]
Where:
ER07MY10.054</MATH>
mstockstill on DSKB9S0YB1PROD with RULES2
⎛ ( 0.76 × StartCREE 75 + 0.24 × StartCREE 20 ) ⎞
0.33 × ⎜
⎟
⎜
⎟
60
⎝
⎠
Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
25711
⎛ ( 0.76 × StartCREE 75 + 0.24 × StartCREE 20 ) ⎞
0.33 × ⎜
⎟
⎜
⎟
4.1
⎝
⎠
phases 3 and 4 of the FTP test conducted
at an ambient temperature of 75 °F.
(B) RunningCREE =
0.82 × [(0.90 × Bag3⁄475CREE) + (0.10 × US06
City CREE)] + 0.18 × [(0.5 × Bag220CREE)
+ (0.5 × Bag320CREE)] + 0.144 × [SC03
CREE ¥ (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
Where:
Start CREE75 = 3.6 × (Bag 1⁄2 CREE75 ¥ Bag
3⁄4 CREE )
75
and
Start CREE20 = 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
Bag X/Y FE75 = carbon-related exhaust
emissions in grams per mile of fuel
during combined phases 1 and 2 or
phases 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 =
Subpart C—Procedures for Calculating
Fuel Economy and Carbon-Related
Exhaust Emission Values for 1977 and
Later Model Year Automobiles
45. The heading for subpart C is
revised as set forth above.
■
46. A new § 600.201–12 is added to
subpart C to read as follows:
mstockstill on DSKB9S0YB1PROD with RULES2
■
§ 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.
47. A new § 600.206–12 is added to
subpart C to read as follows:
■
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20:30 May 06, 2010
Jkt 220001
§ 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
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
§ 600.208–12(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
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Fmt 4701
Sfmt 4700
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–
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
paragraph (a)(1) or (2) of this section,
E:\FR\FM\07MYR2.SGM
07MYR2
ER07MY10.057</MATH>
Where:
Start CREE75 = 7.5 × (Bag1⁄2CREE75 ¥
Bag3⁄4CREE75)
and
Start CREE20 = 3.6 × (Bag1CREE20 ¥
Bag3CREE20)
(B) RunningCREE =
1.007 × [(0.79 × US06 Highway CREE) + (0.21
× HFET CREE)] + 0.045 × [SC03 CREE ¥
Bag3⁄475CREE]
Where:
US06 Highway 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 gram 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 Bag 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.
ER07MY10.058</MATH>
⎛ ( 0.76 × StartCREE 75 + 0.24 × StartCREE 20 ) ⎞
0.33 × ⎜
⎟
⎜
⎟
60
⎝
⎠
25712
Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
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 paragraph (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.
(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.
■ 48. A new § 600.208–12 is added to
subpart C to read as follows:
mstockstill on DSKB9S0YB1PROD with RULES2
§ 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 § 600.206–12(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
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20:30 May 06, 2010
Jkt 220001
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.
(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 of this chapter.
(4) Vehicle configuration fuel
economy and carbon-related exhaust
emission values, as determined in
§ 600.206–12 (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
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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.
(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
E:\FR\FM\07MYR2.SGM
07MYR2
mstockstill on DSKB9S0YB1PROD with RULES2
Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
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 § 600.206–12
(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
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.
VerDate Mar<15>2010
20:30 May 06, 2010
Jkt 220001
(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—[Amended]
49. 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
50. The heading for subpart F is
revised as set forth above.
■ 51. 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. The provisions of this
subpart are applicable to medium-duty
passenger vehicles and to manufacturers
of such vehicles.
■ 52. 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
paragraph (b) of this section for any
running change approved or
implemented under §§ 86.079–32,
86.079–33, 86.082–34, or 86.1842–01 of
this chapter, 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
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25713
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 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.
(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 § 600.208–12(a)(2), the
manufacturer shall submit fuel economy
and carbon-related exhaust emissions
data for each subconfiguration added by
a running change.
■ 53. 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.
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Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
(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.
■ 54. A new § 600.510–12 is added to
subpart F to read as follows:
mstockstill on DSKB9S0YB1PROD with RULES2
§ 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
categories 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 as
determined by the Secretary of
Transportation. For example, categories
may include, but are not limited to
domestically manufactured and/or nondomestically manufactured passenger
automobiles as determined by the
Secretary of Transportation.
(ii) [Reserved]
(iii) An average fuel economy
calculation will be made for the
category of trucks as determined by the
Secretary of Transportation. For
example, categories may include, but
are not limited to domestically
manufactured trucks, non-domestically
manufactured trucks, light-duty trucks,
medium-duty passenger vehicles, and/
or heavy-duty trucks as determined by
the Secretary of Transportation.
(iv) [Reserved]
(2) Average carbon-related exhaust
emissions will be calculated to the
nearest one gram per mile for the
categories 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
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(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
§ 600.208–12 of this section except that:
(i) Separate fuel economy values will
be calculated for model types and base
levels associated with car lines for each
category of passenger automobiles and
light trucks as determined by the
Secretary of Transportation pursuant to
paragraph (a)(1) of this section.
(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–
12(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 for each
category of passenger automobiles and
light trucks as determined by the
Secretary of Transportation pursuant to
paragraph (a)(1) of this section.
(ii) Total model year production data,
as required by this subpart will be used
instead of sales projections; and
(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)(1) of this section as follows:
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Sfmt 4700
(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
§ 600.208–12(b)(5)(i); and
(B) The combined model type fuel
economy value for operation on alcohol
fuel as determined in § 600.208–
12(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–
12(b)(5)(i); and
(B) The combined model type fuel
economy value for operation on natural
gas as determined in § 600.208–
12(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
are part of an approved credit plan
under the provisions of 15 U.S.C. 2003.
(e) For passenger automobile
categories identified in paragraph (a)(1)
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
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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
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
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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 premeasured
using a test method which has been
approved in advance by the
Administrator.
(B) The density for alcohol fuels shall
be premeasured using 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’’
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25715
(incorporated by reference at § 600.011–
93).
(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) For model years 1993 and later,
and for each category of automobile
identified in paragraph (a)(1) of this
section, the maximum increase in
average fuel economy determined in
paragraph (c) of this section attributable
to alcohol dual fuel automobiles and
natural gas dual fuel automobiles shall
be as follows:
Model year
1993–2014 ........................
2015 ..................................
2016 ..................................
2017 ..................................
2018 ..................................
2019 ..................................
2020 and later ..................
Maximum increase
(mpg)
1.2
1.0
0.8
0.6
0.4
0.2
0.0
(1) The Administrator shall calculate
the increase in average fuel economy to
determine if the maximum increase
provided in paragraph (h) of this section
has been reached. The Administrator
shall calculate the average fuel economy
for each category of automobiles
specified in paragraph (a)(1) of this
section by subtracting the average fuel
economy 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 from the average fuel
economy values determined in
paragraph (c) of this section. The
difference is limited to the maximum
increase specified in paragraph (h) of
this section.
(2) [Reserved]
(i) For model years 2012 through
2015, and for each category of
automobile identified in paragraph
(a)(1) of this section, the maximum
decrease in average carbon-related
exhaust emissions determined in
paragraph (j) of this section attributable
to alcohol dual fuel automobiles and
natural gas dual fuel automobiles shall
be calculated using the following
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formula, and rounded to the nearest
tenth of a gram per mile:
mstockstill on DSKB9S0YB1PROD with RULES2
Where:
FltAvg = The fleet average CREE value for
passenger automobiles or light trucks
determined for the applicable model year
according to paragraph (j) of this section,
except by assuming all alcohol dual fuel
and natural gas dual fuel automobiles are
operated exclusively on gasoline (or
diesel) fuel.
MPGMAX = The maximum increase in miles
per gallon determined for the
appropriate model year in paragraph (h)
of this section.
(1) The Administrator shall calculate
the decrease in average carbon-related
exhaust emissions to determine if the
maximum decrease provided in this
paragraph (i) has been reached. The
Administrator shall calculate the
average carbon-related exhaust
emissions for each category of
automobiles specified in paragraph (a)
of this section by subtracting the average
carbon-related exhaust emission values
determined in paragraph (j) 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)(1) of this section as
follows:
(1) Divide the total production
volume of that category of automobiles
into:
(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
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8887
⎤
⎡ 8887
⎢ FltAvg − MPGMAX ⎥
⎦
⎣
− FltAvg
accordance with paragraph (b)(2) of this
section multiplied by 0.15 and rounded
to the nearest gram per mile, except that
manufacturers complying with the fleet
averaging option for N2O and CH4 as
allowed under § 86.1818–12(f)(2) of this
chapter must perform this calculation
such that N2O and CH4 values are not
multiplied by 0.15; 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
multiplied by 0.15 and rounded to the
nearest gram per mile, except that
manufacturers complying with the fleet
averaging option for N2O and CH4 as
allowed under § 86.1818–12(f)(2) of this
chapter must perform this calculation
such that N2O and CH4 values are not
multiplied by 0.15; 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 § 600.208–12(b)(5)(i); and
(B) The combined model type carbonrelated exhaust emissions value for
operation on alcohol fuel as determined
in § 600.208–12(b)(5)(ii) multiplied by
0.15 provided the requirements of
paragraph (g) of this section are met,
except that manufacturers complying
with the fleet averaging option for N2O
and CH4 as allowed under § 86.1818–
12(f)(2) of this chapter must perform
this calculation such that N2O and CH4
values are not multiplied by 0.15; or
(v) For natural gas dual fuel model
types, for model years 2012 through
2015, the arithmetic average of the
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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 as
determined in § 600.208–12(b)(5)(i); and
(B) The combined model type carbonrelated exhaust emissions value for
operation on natural gas as determined
in § 600.208–12(b)(5)(ii) multiplied by
0.15 provided the requirements of
paragraph (g) of this section are met,
except that manufacturers complying
with the fleet averaging option for N2O
and CH4 as allowed under § 86.1818–
12(f)(2) of this chapter must perform
this calculation such that N2O and CH4
values are not multiplied by 0.15.
(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 § 600.208–12(b)(5)(ii); and
CREEgas = The combined model type carbonrelated exhaust emissions value for
operation on gasoline or diesel fuel as
determined in § 600.208–12(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)
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 § 600.208–12(b)(5)(ii); and
CREEgas = The combined model type carbonrelated exhaust emissions value for
E:\FR\FM\07MYR2.SGM
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Maximum Decrease =
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operation on gasoline or diesel fuel as
determined in § 600.208–12(b)(5)(i).
(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
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.
■ 55. A new § 600.512–12 is added to
subpart F to read as follows:
mstockstill on DSKB9S0YB1PROD with RULES2
§ 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
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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.
(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);
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25717
(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
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.
(8) For 2008–2010 light truck model
year reports, the average fuel economy
standard or the ‘‘required fuel economy
level’’ pursuant to 49 CFR part 533, as
applicable. Model year reports for light
trucks meeting required fuel economy
levels pursuant to 49 CFR 533.5(g) and
(h) shall include information in
sufficient detail to verify the accuracy of
the calculated required fuel economy
level. Such information is expected to
include but is not limited to, production
information for each unique footprint
within each model type contained in the
model year report and the formula used
to calculate the required fuel economy
level. Model year reports for required
fuel economy levels shall include a
statement that the method of measuring
vehicle track width, measuring vehicle
wheelbase and calculating vehicle
footprint is accurate and complies with
applicable Department of
Transportation requirements.
(9) For 2011 and later model year
reports, the ‘‘required fuel economy
level’’ pursuant to 49 CFR parts 531 or
533, as applicable. Model year reports
shall include information in sufficient
detail to verify the accuracy of the
calculated required fuel economy level,
including but is not limited to,
production information for each unique
footprint within each model type
contained in the model year report and
the formula used to calculate the
required fuel economy level. Model year
reports shall include a statement that
the method of measuring vehicle track
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width, measuring vehicle wheelbase
and calculating vehicle footprint is
accurate and complies with applicable
Department of Transportation
requirements.
(10) For 2012 and later model year
reports, the ‘‘required fuel economy
level’’ pursuant to 49 CFR parts 531 or
533 as applicable, and the applicable
fleet average CO2 emission standards.
Model year reports shall include
information in sufficient detail to verify
the accuracy of the calculated required
fuel economy level and fleet average
CO2 emission standards, including but
is not limited to, production
information for each unique footprint
within each model type contained in the
model year report and the formula used
to calculate the required fuel economy
level and fleet average CO2 emission
standards. Model year reports shall
include a statement that the method of
measuring vehicle track width,
measuring vehicle wheelbase and
calculating vehicle footprint is accurate
and complies with applicable
Department of Transportation and EPA
requirements.
(11) For 2012 and later model year
reports, a detailed (but easy to
understand) list of vehicle models and
the applicable in-use CREE emission
standard. The list of models shall
include the applicable carline/
subconfiguration parameters (including
carline, equivalent test weight, roadload horsepower, axle ratio, engine
code, transmission class, transmission
configuration and basic engine); the test
parameters (ETW and a, b, c,
dynamometer coefficients) and the
associated CREE emission standard. The
manufacturer shall provide the method
of identifying EPA engine code for
applicable in-use vehicles.
■ 56. A new § 600.514–12 is added to
subpart F to read as follows:
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§ 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
model year, each manufacturer shall
submit a pre-model year report.
(2) The pre-model year report
required by this section for each model
year must be submitted before the
model year begins and before the
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20:30 May 06, 2010
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certification of any test group, no later
than December 31 of the calendar year
two years before the model year. For
example the pre-model year report for
the 2012 model year must be submitted
no later than December 31, 2010.
(3) Each report required by this
section must:
(i) Identify the report as a pre-model
year report;
(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) Be based upon all information
and data available to the manufacturer
approximately 30 days before the report
is submitted to the Administrator.
(b) Content of pre-model year reports.
(1) Each pre-model year report must
include the following information for
each compliance category for the
applicable future model year and to the
extent possible, two model years into
the future:
(i) The manufacturer’s estimate of its
footprint-based fleet average CO2
standards (including temporary lead
time allowance alternative standards, if
applicable);
(ii) Projected total and model-level
production volumes for each applicable
standard category;
(iii) Projected fleet average CO2
compliance level for each applicable
standard category; and the model-level
CO2 emission values which form the
basis of the projection;
(iv) Projected fleet average CO2 credit/
debit status for each applicable standard
category;
(v) A description of the various credit,
transfer and trading options that will be
used to comply with each applicable
standard category, including the amount
of credit the manufacturer intends to
generate for air conditioning leakage, air
conditioning efficiency, off-cycle
technology, and various early credit
programs;
(vi) A description of the method
which will be used to calculate the
carbon-related exhaust emissions for
any electric vehicles, fuel cell vehicles
and plug-in hybrid vehicles;
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(vii) A summary by model year
(beginning with the 2009 model year) of
the number of electric vehicles, fuel cell
vehicles and plug-in hybrid vehicles
using (or projected to use) the advanced
technology vehicle incentives program;
(viii) The methodology which will be
used to comply with N2O and CH4
emission standards; and
(ix) Other information requested by
the Administrator.
(2) Manufacturers must submit, in the
pre-model year report for each model
year in which a credit deficit is
generated (or projected to be generated),
a compliance plan demonstrating how
the manufacturer will comply with the
fleet average CO2 standard by the end of
the third year after the deficit occurred.
Department of Transportation
49 CFR Chapter V
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 amends 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 as follows:
a. By revising paragraph (a)
introductory text.
■ b. By revising paragraph (c).
■ c. By redesignating paragraph (d) as
paragraph (e).
■ d. By adding a new paragraph (d).
■
■
§ 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.
E:\FR\FM\07MYR2.SGM
07MYR2
Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
CAFErequired =
Figure 2 :
25719
∑ Production
Production
∑ TARGET
i
i
i
i
i
Where:
CAFErequired is the required level for a given
fleet (domestic passenger automobiles or
import passenger automobiles),
Subscript i is a designation of multiple
groups of automobiles, where each
group’s designation, i.e., i = 1, 2, 3, etc.,
represents automobiles that share a
unique model type and footprint within
the applicable fleet, either domestic
passenger automobiles or import
passenger automobiles.
Productioni is the number of passenger
automobiles produced for sale in the United
States within each ith designation, i.e., which
shares the same model type and footprint.
TARGETi is the fuel economy target in
miles per gallon (mpg) applicable to the
TARGET =
Figure 3 :
Where:
TARGET is the fuel economy target (in mpg)
applicable to vehicles of a given
footprint (FOOTPRINT, in square feet),
footprint of passenger automobiles within
each ith designation, i.e., which shares the
same model type and footprint, calculated
according to Figure 3 and rounded to the
nearest hundredth of a mpg, i.e., 35.455 =
35.46 mpg, 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
III, and
The MIN and MAX functions take the
minimum and maximum, respectively,
of the included values.
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:
35.95
36.80
37.75
39.24
41.09
2011
2012
2013
2014
2015
2016
......................................
......................................
......................................
......................................
......................................
......................................
*
*
0.0005308
0.0005308
0.0005308
0.0005308
0.0005308
0.006057
0.005410
0.004725
0.003719
0.002573
27.8
30.7
31.4
32.1
33.3
34.7
Appendix A to Part 531—Example of
Calculating Compliance Under
§ 531.5(c)
Assume a hypothetical manufacturer
(Manufacturer X) produces a fleet of
domestic passenger automobiles in MY 2012
as follows:
*
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ER07MY10.060</MATH>
ER07MY10.061</MATH>
*
27.95
28.46
29.03
29.90
30.96
d
3. Add Appendix A to Part 531 to read
as follows:
Minimum
standard
Model year
c
■
TABLE IV
*
mstockstill on DSKB9S0YB1PROD with RULES2
b
25720
Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
Appendix A, Table 1
Model type
Group
1
2
3
4
5
6
7
8
9
...............
...............
...............
...............
...............
...............
...............
...............
...............
Basic engine
(L)
Carline name
PC
PC
PC
PC
PC
PC
PC
PC
PC
A FWD .............................
A FWD .............................
A FWD .............................
A AWD ............................
A AWD ............................
B RWD ............................
B RWD ............................
C AWD ............................
C FWD ............................
Transmission
class
1.8
1.8
2.5
1.8
2.5
2.5
2.5
3.2
3.2
1,500
2,000
2,000
1,000
3,000
8,000
2,000
5,000
3,000
Total ..............................................................................................................................................................................................
27,500
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2-door
2-door
4-door
4-door
2-door
4-door
4-door
4-door
2-door
sedan .........................
sedan .........................
wagon ........................
wagon ........................
hatchback ...................
wagon ........................
sedan .........................
sedan .........................
coupe .........................
Volume
34.0
34.6
33.8
34.4
32.9
32.2
33.1
30.6
28.5
Note to Appendix A, Table 1.
Manufacturer X’s required corporate average
fuel economy level standard under § 531.5(c)
A5
M6
A6
A6
M6
A6
A7
A7
M6
Actual
measured fuel
economy
(mpg)
Description
would first be calculated by determining the
fuel economy targets applicable to each
unique model type and footprint
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combination for model type groups 1–9 as
illustrated in Appendix A, Table 2:
E:\FR\FM\07MYR2.SGM
07MYR2
25721
Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
Appendix A, Table 2
unique model type and footprint
combination.
Manufacturer X calculates a fuel
economy target standard for each
Model type
Wheelbase
(inches)
Track
width
F&R
average
(inches)
Description
2-door sedan
2-door sedan
2-door sedan
4-door wagon
4-door wagon
2-door
hatchback.
4-door wagon
4-door wagon
4-door sedan
4-door sedan
2-door coupe
205/75R14
215/70R15
215/70R15
215/70R15
235/60R15
225/65R16
99.8
99.8
99.8
100.0
100.0
99.6
61.2
60.9
60.9
60.9
61.2
59.5
42.4
42.2
42.2
42.3
42.5
41.2
900
600
2,000
2,000
1,000
3,000
35.01
35.14
35.14
35.08
35.95
35.81
235/65R16
265/55R18
235/65R17
265/55R18
225/65R16
109.2
109.2
109.2
111.3
111.3
67.2
66.8
67.8
67.8
67.2
51.0
50.7
51.4
52.4
51.9
4,000
4,000
2,000
5,000
3,000
30.19
30.33
29.99
29.52
29.76
Total ..................................................................................................................................................................................
27,500
Group
Carline name
1a ........
1b ........
2 ..........
3 ..........
4 ..........
5 ..........
PC
PC
PC
PC
PC
PC
A
A
A
A
A
A
FWD ........
FWD ........
FWD ........
FWD ........
AWD .......
AWD .......
6a ........
6b ........
7 ..........
8 ..........
9 ..........
PC
PC
PC
PC
PC
B RWD
B RWD
B RWD
C AWD
C FWD
.......
.......
.......
.......
.......
Basic
engine
(L)
Transmission
class
1.8
1.8
1.8
2.5
1.8
2.5
A5
A5
M6
A6
A6
M6
2.5
2.5
2.5
3.2
3.2
A6
A6
A7
A7
M6
mstockstill on DSKB9S0YB1PROD with RULES2
Note to Appendix A, Table 2. With the
appropriate fuel economy targets determined
for each unique model type and footprint
combination, Manufacturer X’s required fuel
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20:30 May 06, 2010
Jkt 220001
Footprint
(ft2)
Fuel
economy
target
standard
(mpg)
Base tire
size
economy target standard would be calculated
as illustrated in Appendix A, Figure 1.
BILLING CODE 6560–50–P
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Volume
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20:30 May 06, 2010
Jkt 220001
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25722
Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
BILLING CODE 6560–50–C
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
4. The authority citation for part 533
continues to read as follows:
§ 533.5
Authority: 49 U.S.C. 32902; delegation of
authority at 49 CFR 1.50.
(a) * * *
*
*
*
■
Figure 2 :
CAFErequired =
Requirements.
*
*
∑ Production
Production
∑ TARGET
i
i
i
Where:
CAFErequired is the required level for a given
fleet,
VerDate Mar<15>2010
20:30 May 06, 2010
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Subscript i is a designation of multiple
groups of light trucks, where each
group’s designation, i.e., i = 1, 2, 3, etc.,
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Sfmt 4700
represents light trucks that share a
unique model type and footprint within
the applicable fleet.
E:\FR\FM\07MYR2.SGM
07MYR2
ER07MY10.064</MATH>
i
i
ER07MY10.063</GPH>
mstockstill on DSKB9S0YB1PROD with RULES2
Note to Appendix A, Figure 2. Since the
actual average fuel economy of Manufacturer
X’s fleet is 32.0 mpg, as compared to its
required fuel economy level of 31.8 mpg,
Manufacturer X complied with the CAFE
standard for MY 2012 as set forth in
§ 531.5(c).
25723
25724
Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
Productioni is the number of units of light
trucks produced for sale in the United
States within each ith designation, i.e.,
which share the same model type and
footprint.
Figure 3 :
Where:
TARGET is the fuel economy target (in mpg)
applicable to vehicles of a given
footprint (FOOTPRINT, in square feet),
TARGETi is the fuel economy target in miles
per gallon (mpg) applicable to the
footprint of light trucks within each ith
designation, i.e., which shares the same
model type and footprint, calculated
according to Figure 3 and rounded to the
TARGET =
nearest hundredth of a mpg, i.e., 35.455
= 35.46 mpg, 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
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
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
29.82
30.67
31.38
32.72
34.42
6. Amend Appendix A to Part 533 by
revising Tables 1 and 2 and Figures 1
and 2 to read as follows:
■
c
22.27
22.74
23.13
23.85
24.74
Appendix A, Table 1
Pickup
Pickup
Pickup
Pickup
Pickup
Pickup
Pickup
Pickup
Pickup
Pickup
Pickup
A 2WD
B 2WD
C 2WD
C 2WD
C 4WD
D 2WD
E 2WD
E 2WD
F 2WD
F 4WD
F 4WD
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
Transmission
class
4
4
4.5
4
4.5
4.5
5
5
4.5
4.5
4.5
800
200
300
400
400
400
500
500
1,600
800
800
Total ..............................................................................................................................................................................................
6,700
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Reg cab, MB .........................
Reg cab, MB .........................
Reg cab, LB ..........................
Ext cab, MB ...........................
Crew cab, SB ........................
Crew cab, SB ........................
Ext cab, LB ............................
Crew cab, MB ........................
Reg cab, LB ..........................
Ext cab, MB ...........................
Crew cab, SB ........................
Volume
27.1
27.6
23.9
23.7
23.5
23.6
22.7
22.5
22.5
22.3
22.2
Note to Appendix A, Table 1.
Manufacturer X’s required corporate average
A5
M5
A5
M5
A5
A6
A6
A6
A5
A5
A5
Actual
measured fuel
economy
(mpg)
Description
fuel economy level under § 533.5(i) would
first be calculated by determining the fuel
PO 00000
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Sfmt 4700
economy targets applicable to each unique
model type and footprint combination for
model type groups (1–11) illustrated in
Appendix A, Table 2:
E:\FR\FM\07MYR2.SGM
07MYR2
ER07MY10.065</MATH>
1 ...............
2 ...............
3 ...............
4 ...............
5 ...............
6 ...............
7 ...............
8 ...............
9 ...............
10 .............
11 .............
0.014900
0.013968
0.013225
0.011920
0.010413
Assume a hypothetical manufacturer
(Manufacturer X) produces a fleet of light
trucks in MY 2012 as follows:
Basic engine
(L)
Carline name
0.0004546
0.0004546
0.0004546
0.0004546
0.0004546
Appendix A to Part 533—Example of
Calculating Compliance Under
§ 533.5(i)
Model type
Group
d
25725
Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
Appendix A, Table 2
Manufacturer X calculates a fuel
economy target standard value for each
unique model type and footprint
combination.
Model type
Wheelbase
(inches)
Track
width
F&R average
(inches)
Description
Reg cab, MB
Reg cab, MB
Reg cab, MB
Reg cab, LB
Ext cab, MB
Crew cab, SB
Crew cab, SB
Crew cab, SB
Ext cab, LB ..
Crew cab,
MB.
Reg cab, LB
Ext cab, MB
Crew cab, SB
235/75R15
235/75R15
235/70R16
255/70R17
255/70R17
275/70R17
255/70R17
285/70R17
255/70R17
285/70R17
100.0
100.0
100.0
125.0
125.0
150.0
125.0
125.0
125.0
125.0
68.8
68.2
68.4
68.8
68.8
69.0
68.8
69.2
68.8
69.2
47.8
47.4
47.5
59.7
59.7
71.9
59.7
60.1
59.7
60.1
800
100
100
300
400
400
200
200
500
500
27.30
27.44
27.40
23.79
23.79
22.27
23.79
23.68
23.79
23.68
255/70R17
275/70R17
285/70R17
125.0
150.0
150.0
68.9
69.0
69.2
59.8
71.9
72.1
1,600
800
800
23.76
22.27
22.27
Total ..................................................................................................................................................................................
6,700
Group
Basic engine (L)
Carline name
A 2WD
B 2WD
B 2WD
C 2WD
C 2WD
C 4WD
D 2WD
D 2WD
E 2WD
E 2WD
Transmission
class
1 ..........
2a ........
2b ........
3 ..........
4 ..........
5 ..........
6a ........
6b ........
7 ..........
8 ..........
Pickup
Pickup
Pickup
Pickup
Pickup
Pickup
Pickup
Pickup
Pickup
Pickup
..
..
..
..
..
..
..
..
..
..
4
4
4
4.5
4
4.5
4.5
4.5
5
5
A5
M5
M5
A5
M5
A5
A6
A6
A6
A6
9 ..........
10 ........
11 ........
Pickup F 2WD ..
Pickup F 4WD ..
Pickup F 4WD ..
4.5
4.5
4.5
A5
A5
A5
mstockstill on DSKB9S0YB1PROD with RULES2
Note to Appendix A, Table 2. With the
appropriate fuel economy targets determined
for each unique model type and footprint
combination, Manufacturer X’s required fuel
VerDate Mar<15>2010
22:27 May 06, 2010
Jkt 220001
Footprint
(ft2)
Fuel
economy
target
standard
(mpg)
Base tire
size
economy target standard would be calculated
as illustrated in Appendix A, Figure 1.
BILLING CODE 6560–50–P
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E:\FR\FM\07MYR2.SGM
07MYR2
Volume
VerDate Mar<15>2010
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22:27 May 06, 2010
Jkt 220001
PO 00000
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Fmt 4701
Sfmt 4725
E:\FR\FM\07MYR2.SGM
07MYR2
ER07MY10.066</GPH>
mstockstill on DSKB9S0YB1PROD with RULES2
25726
Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
mstockstill on DSKB9S0YB1PROD with RULES2
PART 536—TRANSFER AND TRADING
OF FUEL ECONOMY CREDITS
7. The authority citation for part 563
continues to read as follows:
■
Authority: Sec. 104, Pub. L. 110–140 (49
U.S.C. 32903); delegation of authority at 49
CFR 1.50.
VerDate Mar<15>2010
22:27 May 06, 2010
8. Amend § 536.3 by revising the
definition of ‘‘Transfer’’ in paragraph (b)
to read as follows:
■
Note to Appendix A, Figure 2. Since the
actual average fuel economy of Manufacturer
X’s fleet is 23.3 mpg, as compared to its
required fuel economy level of 23.5 mpg,
Manufacturer X did not comply with the
CAFE standard for MY 2012 as set forth in
section 533.5(i).
Jkt 220001
§ 536.3
Definitions.
*
*
*
*
*
(b) * * *
Transfer means the application by a
manufacturer of credits earned by that
manufacturer in one compliance
category or credits acquired be trade
(and originally earned by another
manufacturer in that category) to
achieve compliance with fuel economy
standards with respect to a different
compliance category. For example, a
manufacturer may purchase light truck
credits from another manufacturer, and
transfer them to achieve compliance in
PO 00000
Frm 00405
Fmt 4701
Sfmt 4700
the manufacturer’s domestically
manufactured passenger car fleet.
Subject to the credit transfer limitations
of 49 U.S.C. 32903(g)(3), credits can also
be transferred across compliance
categories and banked or saved in that
category to be carried forward or
backwards later to address a credit
shortfall.
*
*
*
*
*
■ 9. Amend § 536.4 by revising the
values for the terms VMTe and VMTu in
paragraph (c) to read as follows:
§ 536.4
Credits.
*
*
*
*
*
(c) * * *
VMTe = Lifetime vehicle miles
traveled as provided in the following
E:\FR\FM\07MYR2.SGM
07MYR2
ER07MY10.067</GPH>
BILLING CODE 6560–50–C
25727
25728
Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations
table for the model year and compliance
category in which the credit was earned.
VMTu = Lifetime vehicle miles
traveled as provided in the following
table for the model year and compliance
category in which the credit is used for
compliance.
Lifetime Vehicle Miles Traveled (VMT)
Model year
2012
Passenger Cars ...................................................................
Light Trucks .........................................................................
*
*
*
*
10. 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.
11. Amend § 537.5 by revising
paragraph (c)(4) to read as follows:
■
General requirements for reports.
*
*
*
*
*
(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.
*
*
*
*
*
12. Amend § 537.6 by removing
paragraph (c)(1) and redesignating
paragraph (c)(2) as paragraph (c).
■ 13. 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.
mstockstill on DSKB9S0YB1PROD with RULES2
*
*
*
*
*
(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,
*
*
*
*
*
22:27 May 06, 2010
2015
178,652
209,974
180,497
212,040
2016
182,134
213,954
§ 538.1
§ 537.8
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.
■ 18. Revise § 538.2 to read as follows:
Supplementary reports.
*
*
*
*
*
(c)(1) Each report required by
paragraph (a)(1), (2), or (3) of this
section must be submitted in
accordance with § 537.5(c) not more
than 45 days after the date on which the
manufacturer determined, or could have
determined with reasonable diligence,
that a report is required under
paragraph (a)(1), (2), or (3) of this
section.
(2) [Reserved]
*
*
*
*
*
15. Amend § 537.9 by revising
paragraph (c) to read as follows:
■
§ 537.9 Determination of fuel economy
values and average fuel economy.
*
[Amended]
VerDate Mar<15>2010
177,366
208,537
14. Amend § 537.8 by revising
paragraph (c)(1) and removing and
reserving paragraph (c)(2) to read as
follows:
■
§ 537.6
177,238
208,471
2014
■
*
PART 537—AUTOMOTIVE FUEL
ECONOMY REPORTS
§ 537.5
2013
Jkt 220001
*
*
*
*
(c) Average fuel economy. Average
fuel economy must be based upon fuel
economy values calculated under
paragraph (b) of this section for each
model type and must be calculated in
accordance with subpart F of 40 CFR
part 600, except that fuel economy
values for running changes and for new
base levels are required only for those
changes made or base levels added
before the average fuel economy is
required to be submitted under this part.
*
*
*
*
*
PART 538—MANUFACTURING
INCENTIVES FOR ALTERNATIVE FUEL
VEHICLES
16. The authority citation for part 538
continues to read as follows:
■
Authority: 49 U.S.C. 32901, 32905, and
32906; delegation of authority at 49 CFR 1.50.
■
17. Revise § 538.1 to read as follows:
PO 00000
Frm 00406
Fmt 4701
Sfmt 9990
§ 538.2
Scope.
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
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 natural gas.
■ 19. Amend § 538.7 by revising
paragraph (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: April 1, 2010.
Ray LaHood,
Secretary, Department of Transportation.
Dated: April 1, 2010.
Lisa P. Jackson,
Administrator, Environmental Protection
Agency.
[FR Doc. 2010–8159 Filed 5–6–10; 8:45 am]
BILLING CODE 6560–50–P
E:\FR\FM\07MYR2.SGM
07MYR2
]]>Agencies
[Federal Register Volume 75, Number 88 (Friday, May 7, 2010)]
[Rules and Regulations]
[Pages 25324-25728]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-8159]
[[Page 25323]]
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Part II
Environmental Protection Agency
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Department of Transportation
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National Highway Traffic Safety Administration
40 CFR Parts 85, 86, and 600; 49 CFR Parts 531, 533, 536, et al.
Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate
Average Fuel Economy Standards; Final Rule
Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and
Regulations
[[Page 25324]]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 85, 86, and 600
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Parts 531, 533, 536, 537 and 538
[EPA-HQ-OAR-2009-0472; FRL-9134-6; NHTSA-2009-0059]
RIN 2060-AP58; RIN 2127-AK50
Light-Duty Vehicle Greenhouse Gas Emission Standards and
Corporate Average Fuel Economy Standards; Final Rule
AGENCY: Environmental Protection Agency (EPA) and National Highway
Traffic Safety Administration (NHTSA).
ACTION: Final rule.
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SUMMARY: EPA and NHTSA are issuing this joint Final Rule 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 Final Rule 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 finalizing greenhouse gas emissions standards
under the Clean Air Act, and NHTSA is finalizing 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 will 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. NHTSA's final rule also constitutes the agency's
Record of Decision for purposes of its National Environmental Policy
Act (NEPA) analysis.
DATES: This final rule is effective on July 6, 2010, sixty days after
date of publication in the Federal Register. The incorporation by
reference of certain publications listed in this regulation is approved
by the Director of the Federal Register as of July 6, 2010.
ADDRESSES: EPA and NHTSA have established dockets for this action under
Docket ID No. EPA-HQ-OAR-2009-0472 and NHTSA-2009-0059, respectively.
All documents in the docket are listed on the https://www.regulations.gov Web site. Although listed in the index, some
information is not publicly available, e.g., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, is not placed on the Internet and will be
publicly available only in hard copy form. Publicly available docket
materials are available either electronically through https://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:
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\ 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.
------------------------------------------------------------------------
Examples of potentially
Category NAICS codes \A\ regulated entities
------------------------------------------------------------------------
Industry................. 336111, 336112..... Motor vehicle
manufacturers.
Industry................. 811112, 811198, Commercial Importers of
541514. Vehicles and Vehicle
Components.
------------------------------------------------------------------------
\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.
Table of Contents
I. Overview of Joint EPA/NHTSA National Program
A. Introduction
1. Building Blocks of the National Program
2. Public Participation
B. Summary of the Joint Final Rule and Differences From the
Proposal
1. Joint Analytical Approach
2. Level of the Standards
3. Form of the Standards
4. Program Flexibilities
5. Coordinated Compliance
C. Summary of Costs and Benefits of the National Program
1. Summary of Costs and Benefits of NHTSA's CAFE Standards
2. Summary of Costs and Benefits of EPA's GHG Standards
D. Background and Comparison of NHTSA and EPA Statutory
Authority
II. Joint Technical Work Completed for This Final Rule
[[Page 25325]]
A. Introduction
B. Developing the Future Fleet for Assessing Costs, Benefits,
and Effects
1. Why did the agencies establish a baseline and reference
vehicle fleet?
2. How did the agencies develop the baseline vehicle fleet?
3. How did the agencies develop the projected MY 2011-2016
vehicle fleet?
4. How was the development of the baseline and reference fleets
for this Final Rule different from NHTSA's historical approach?
5. How does manufacturer product plan data factor into the
baseline used in this Final Rule?
C. Development of Attribute-Based Curve Shapes
D. Relative Car-Truck Stringency
E. Joint Vehicle Technology Assumptions
1. What technologies did the agencies consider?
2. How did the agencies determine the costs and effectiveness of
each of these technologies?
F. Joint Economic Assumptions
G. What are the estimated safety effects of the final MYs 2012-
2016 CAFE and GHG standards?
1. What did the agencies say in the NPRM with regard to
potential safety effects?
2. What public comments did the agencies receive on the safety
analysis and discussions in the NPRM?
3. How has NHTSA refined its analysis for purposes of estimating
the potential safety effects of this Final Rule?
4. What are the estimated safety effects of this Final Rule?
5. How do the agencies plan to address this issue going forward?
III. EPA Greenhouse Gas Vehicle Standards
A. Executive Overview of EPA Rule
1. Introduction
2. Why is EPA establishing this Rule?
3. What is EPA adopting?
4. Basis for the GHG Standards Under Section 202(a)
B. 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 CO2 Standards Will Be
Implemented for Individual Manufacturers
4. Averaging, Banking, and Trading Provisions for CO2
Standards
5. CO2 Temporary Lead-Time Allowance Alternative
Standards
6. Deferment of CO2 Standards for Small Volume
Manufacturers With Annual Sales Less Than 5,000 Vehicles
7. Nitrous Oxide and Methane Standards
8. Small Entity Exemption
C. Additional Credit Opportunities for CO2 Fleet
Average Program
1. Air Conditioning Related Credits
2. Flexible Fuel and Alternative Fuel Vehicle Credits
3. Advanced Technology Vehicle Incentives for Electric Vehicles,
Plug-in Hybrids, and Fuel Cell Vehicles
4. Off-Cycle Technology Credits
5. Early Credit Options
D. Feasibility of the Final 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 decides between
options to improve CO2 performance to meet a fleet
average standard?
6. Why are the final 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 Duty Vehicles and Fuel Economy Labeling
F. How will this Final Rule 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 Climate Indicators Associated With the
Rule's GHG Emissions Reductions
G. How will the standards 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 program?
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 Final Rule and Record of Decision for Passenger Car and
Light Truck CAFE Standards for MYs 2012-2016
A. Executive Overview of NHTSA Final Rule
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 Final 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. Energy Policy and Conservation Act, as Amended by the Energy
Independence and Security Act
C. Development and Feasibility of the Final Standards
1. How was the baseline and reference vehicle fleet developed?
2. How were the technology inputs developed?
3. How did NHTSA develop the economic assumptions?
4. How does NHTSA use the assumptions in its modeling analysis?
5. How did NHTSA develop the shape of the target curves for the
final standards?
D. Statutory Requirements
1. EPCA, as Amended by EISA
2. Administrative Procedure Act
3. National Environmental Policy Act
E. What are the final 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 final standards fulfill NHTSA's statutory
obligations?
G. Impacts of the Final CAFE Standards
1. How will these standards improve fuel economy and reduce GHG
emissions for MY 2012-2016 vehicles?
2. How will these standards improve fleet-wide fuel economy and
reduce GHG emissions beyond MY 2016?
[[Page 25326]]
3. How will these final standards impact non-GHG emissions and
their associated effects?
4. What are the estimated costs and benefits of these final
standards?
5. How would these standards impact vehicle sales?
6. Potential Unquantified Consumer Welfare Impacts of the Final
Standards
7. What other impacts (quantitative and unquantifiable) will
these final 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
5. Other CAFE Enforcement Issues--Miscellaneous
J. Other Near-Term Rulemakings Mandated by EISA
1. Commercial Medium- and Heavy-Duty On-Highway Vehicles and
Work Trucks
2. Consumer Information on Fuel Efficiency and Emissions
K. NHTSA's Record of Decision
L. Regulatory Notices and Analyses
1. Executive Order 12866 and DOT Regulatory Policies and
Procedures
2. National Environmental Policy Act
3. Clean Air Act (CAA)
4. National Historic Preservation Act (NHPA)
5. Executive Order 12898 (Environmental Justice)
6. Fish and Wildlife Conservation Act (FWCA)
7. Coastal Zone Management Act (CZMA)
8. Endangered Species Act (ESA)
9. Floodplain Management (Executive Order 11988 & DOT Order
5650.2)
10. Preservation of the Nation's Wetlands (Executive Order 11990
& DOT Order 5660.1a)
11. Migratory Bird Treaty Act (MBTA), Bald and Golden Eagle
Protection Act (BGEPA), Executive Order 13186
12. Department of Transportation Act (Section 4(f))
13. Regulatory Flexibility Act
14. Executive Order 13132 (Federalism)
15. Executive Order 12988 (Civil Justice Reform)
16. Unfunded Mandates Reform Act
17. Regulation Identifier Number
18. Executive Order 13045
19. National Technology Transfer and Advancement Act
20. Executive Order 13211
21. Department of Energy Review
22. 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 final rules
whose benefits will address the urgent and closely intertwined
challenges of energy independence and security and global warming.
These rules will implement a strong and coordinated Federal greenhouse
gas (GHG) 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 rules will achieve
substantial reductions of 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. NHTSA's final
rule also constitutes the agency's Record of Decision for purposes of
its NEPA analysis.
This joint rulemaking 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 GHG emissions and improve fuel economy for all new cars
and light-duty trucks sold in the United States.\3\ The National
Program will deliver additional environmental and energy benefits, cost
savings, and administrative efficiencies on a nationwide basis that
would likely not be available under a less coordinated approach. The
National Program also represents 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. The National Program will allow automakers to
produce and sell a single fleet nationally, mitigating 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, 2009 \4\ and responds to the President's January 26,
2009 memorandum on CAFE standards for model years 2011 and beyond,\5\
the details of which can be found in Section IV of this joint notice.
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\3\ 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/. 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/.
\4\ 74 FR 24007 (May 22, 2009).
\5\ Available at: https://www.whitehouse.gov/the_press_office/Presidential_Memorandum_Fuel_Economy/.
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Climate change is widely viewed as a significant long-term threat
to the global environment. As summarized in the Technical Support
Document for EPA's Endangerment and Cause or Contribute Findings under
Section 202(a) of the Clear Air Act, anthropogenic emissions of GHGs
are very likely (90 to 99 percent probability) the cause of most of the
observed global warming over the last 50 years.\6\ The primary GHGs of
concern are carbon dioxide (CO2), methane, nitrous oxide,
hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride. Mobile
sources emitted 31 percent of all U.S. GHGs in 2007 (transportation
sources, which do not include certain off-highway sources, account for
28 percent) and have been the fastest-growing source of U.S. GHGs since
1990.\7\ Mobile sources addressed in the recent endangerment and
contribution findings under CAA section 202(a)--light-duty vehicles,
heavy-duty trucks, buses, and motorcycles--accounted for 23 percent of
all U.S. GHG in 2007.\8\ Light-duty vehicles emit CO2,
methane, nitrous oxide, and hydrofluorocarbons and are responsible for
nearly 60 percent of all mobile source GHGs and over 70 percent of
Section 202(a) mobile source GHGs. For light-duty vehicles in 2007,
CO2 emissions represent about 94 percent of all greenhouse
emissions (including HFCs), and the CO2 emissions measured
over the EPA tests used for fuel economy compliance represent about 90
percent of total light-duty vehicle GHG emissions.9 10
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\6\ ``Technical Support Document for Endangerment and Cause or
Contribute Findings for Greenhouse Gases Under Section 202(a) of the
Clean Air Act'' Docket: EPA-HQ-OAR-2009-0472-11292, https://epa.gov/climatechange/endangerment.html.
\7\ U.S. Environmental Protection Agency. 2009. Inventory of
U.S. Greenhouse Gas Emissions and Sinks: 1990-2007. EPA 430-R-09-
004. Available at https://epa.gov/climatechange/emissions/downloads09/GHG2007entire_report-508.pdf.
\8\ U.S. EPA. 2009 Technical Support Document for Endangerment
and Cause or Contribute Findings for Greenhouse Gases under Section
202(a) of the Clean Air Act. Washington, DC. pp. 180-194. Available
at https://epa.gov/climatechange/endangerment/downloads/Endangerment%20TSD.pdf.
\9\ U.S. Environmental Protection Agency. 2009. Inventory of
U.S. Greenhouse Gas Emissions and Sinks: 1990-2007. EPA 430-R-09-
004. Available at https://epa.gov/climatechange/emissions/downloads09/GHG2007entire_report-508.pdf.
\10\ U.S. Environmental Protection Agency. RIA, Chapter 2.
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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.
[[Page 25327]]
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 historically unprecedented U.S. 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.
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.\11\
While there are emission control technologies that reduce the
pollutants (e.g., carbon monoxide) produced by imperfect combustion of
fuel by capturing or converting them to other compounds, 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.
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\11\ 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.
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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 a provision in EPCA as originally
enacted in 1975 requires the use of the 1975 passenger car test
procedures under which vehicle air conditioners are not turned on
during fuel economy testing.\12\ 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 \13\ is
then used to calculate the amount of fuel that had to be consumed per
mile in order to 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.
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\12\ Although EPCA does not require the use of 1975 test
procedures for light trucks, those procedures are used for light
truck CAFE standard testing purposes.
\13\ This is the method that EPA uses to determine compliance
with NHTSA's CAFE standards.
---------------------------------------------------------------------------
b. EPA's GHG 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,\14\ a case involving
EPA's a 2003 denial of a petition for rulemaking to regulate GHG
emissions from motor vehicles under section 202(a) of the Clean Air Act
(CAA).\15\ The Court held that GHGs fit within the definition of air
pollutant in 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.'' \16\ The case was remanded
back to the Agency for reconsideration in light of the Court's
decision.\17\
---------------------------------------------------------------------------
\14\ 549 U.S. 497 (2007).
\15\ 68 FR 52922 (Sept. 8, 2003).
\16\ 549 U.S. at 531-32.
\17\ 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. Also see 74 FR 18886, at 1888-
90 (April 24, 2009).
---------------------------------------------------------------------------
On December 15, 2009, EPA published two findings (74 FR 66496):
That emissions of GHGs from new motor vehicles and motor vehicle
engines contribute to air pollution, and that the air pollution may
reasonably be anticipated to endanger public health and welfare.
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.\18\ The granting of the waiver permits California and the
other states to proceed with implementing the California emission
standards.
---------------------------------------------------------------------------
\18\ 74 FR 32744 (July 8, 2009).
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In addition, to promote the National Program, in May 2009,
California announced its commitment to take several actions in support
of the National Program, including revising its
[[Page 25328]]
program for MYs 2009-2011 to facilitate compliance by the automakers,
and revising its program for MYs 2012-2016 such that compliance with
the Federal GHG standards will be deemed to be compliance with
California's GHG standards. This will allow the single national fleet
produced by automakers to meet the two Federal requirements and to meet
California requirements as well. California is proceeding with a
rulemaking intended to revise its 2004 regulations to meet its
commitments. Several automakers and their trade associations also
announced their commitment to take several actions in support of the
National Program, including not contesting the final GHG and CAFE
standards for MYs 2012-2016, not contesting any grant of a waiver of
preemption under the CAA for California's GHG standards for certain
model years, and to stay and then dismiss all pending litigation
challenging California's regulation of GHG emissions, including
litigation concerning preemption under EPCA of California's and other
states' GHG standards.
2. Public Participation
The agencies proposed their respective rules on September 28, 2009
(74 FR 49454), and received a large number of comments representing
many perspectives on the proposed rule. The agencies received oral
testimony at three public hearings in different parts of the country,
and received written comments from more than 130 organizations,
including auto manufacturers and suppliers, States, environmental and
other non-governmental organizations (NGOs), and over 129,000 comments
from private citizens.
The vast majority of commenters supported the central tenets of the
proposed CAFE and GHG programs. That is, there was broad support from
most organizations for a National Program that achieves a level of 250
gram/mile fleet average CO2, which would be 35.5 miles per
gallon if the automakers were to meet this CO2 level solely
through fuel economy improvements. The standards will be phased in over
model years 2012 through 2016 which will allow manufacturers to build a
common fleet of vehicles for the domestic market. In general,
commenters from the automobile industry supported the proposed
standards as well as the credit opportunities and other compliance
provisions providing flexibility, while also making some
recommendations for changes. Environmental and public interest non-
governmental organizations (NGOs), as well as most States that
commented, were also generally supportive of the National Program
standards. Many of these organizations also expressed concern about the
possible impact on program benefits, depending on how the credit
provisions and flexibilities are designed. The agencies also received
specific comments on many aspects of the proposal.
Throughout this notice, the agencies discuss many of the key issues
arising from the public comments and the agencies' responses. In
addition, the agencies have addressed all of the public comments in the
Response to Comments document associated with this final rule.
B. Summary of the Joint Final Rule and Differences From the Proposal
In this joint rulemaking, EPA is establishing GHG emissions
standards under the Clean Air Act (CAA), and NHTSA is establishing
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 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.
NHTSA and EPA have coordinated closely and worked jointly in
developing their respective final rules. This is reflected in many
aspects of this joint rule. 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 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 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 finalizing. Finally, 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 establishing
standards that result in a harmonized National Program.
This joint final rule 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 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 finalized in this
notice will 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, increased use of hybrid and
other advanced technologies, and the initial commercialization of
electric vehicles and plug-in hybrids. NHTSA's and EPA's assessments of
likely vehicle technologies that manufacturers will employ to meet the
standards are discussed in detail below and in the Joint TSD.
The National Program is estimated to result in approximately 960
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 (MYs) 2012 through 2016.
In total, the combined EPA and NHTSA 2012-2016 standards will 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 actions also will provide important energy
security benefits, as light-duty vehicles are about 95 percent
dependent on oil-based fuels. The agencies project that the total
benefits of the National Program will be more than $240 billion at a 3%
discount rate, or more than $190 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 National Program will be less than
$1,000. The average U.S. consumer who purchases a vehicle outright is
estimated to save enough in lower fuel costs over the first three years
to offset
[[Page 25329]]
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 will see immediate
savings due to their vehicle's lower fuel consumption in the form of a
net reduction in annual costs of $130-$180 throughout the duration of
the loan (that is, the fuel savings will outweigh the increase in loan
payments by $130-$180 per year). Whether a consumer takes out a loan or
purchases a new vehicle outright, over the lifetime of a model year
2016 vehicle, the consumer's net savings could be more than $3,000. The
average 2016 MY vehicle will emit 16 fewer metric tons of
CO2-equivalent emissions (that is, CO2 emissions
plus HFC air conditioning leakage emissions) during its lifetime.
Assumptions that underlie these conclusions are discussed in greater
detail in the agencies' respective regulatory impact analyses and in
Section III.H.5 and Section IV.
This joint rule also results in important regulatory convergence
and certainty to automobile companies. Absent this rule, 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 rule will 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, 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 will
be deemed to be compliance with California's GHG standards. This will
allow the single national fleet used by automakers to meet the two
Federal requirements and to meet California requirements as well.
California is proceeding with a rulemaking intended to revise its 2004
regulations to meet its commitments. EPA and NHTSA are confident that
these GHG and CAFE standards will successfully harmonize both the
Federal and State programs for MYs 2012-2016 and will 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.
A successful and sustainable automotive industry depends upon,
among other things, continuous technology innovation in general, and
low GHG emissions and high fuel economy vehicles in particular. In this
respect, this action will 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 action covers MYs 2012-2016, many stakeholders
encouraged EPA and NHTSA to also begin working toward standards for MY
2017 and beyond that would maintain a single nationwide program. The
agencies recognize the importance of and are committed to a strong,
coordinated national program for light-duty vehicles for model years
beyond 2016.
Key elements of the National Program finalized today are the level
and form of the GHG and CAFE standards, the available compliance
mechanisms, and general implementation elements. These elements are
summarized in the following section, with more detailed discussions
about EPA's GHG program following in Section III, and about NHTSA's
CAFE program in Section IV. This joint final rule responds to the wide
array of comments that the agencies received on the proposed rule. This
section summarizes many of the major comments on the primary elements
of the proposal and describes whether and how the final rule has
changed, based on the comments and additional analyses. Major comments
and the agencies' responses to them are also discussed in more detail
in later sections of this preamble. For a full summary of public
comments and EPA's and NHTSA's responses to them, please see the
Response to Comments document associated with this final rule.
1. Joint Analytical Approach
NHTSA and EPA have worked closely together on nearly every aspect
of this joint final rule. The extent and results of this collaboration
are reflected in the elements of the respective NHTSA and EPA rules, 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 include the build up of the baseline and
reference fleets, the derivation of the shape of the curves that define
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.
EPA and NHTSA have jointly developed attribute curve shapes that
each agency is using for its final standards. 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 analysis 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. 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 the new standards. These are the OMEGA and Volpe
models for EPA and NHTSA, respectively. The models and their inputs can
also be found in the docket. Further description of the model and
outputs can be found in Sections III 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 final standards, which are summarized in the
sections below.
The vast majority of public comments expressed strong support for
the joint analytical work performed for the proposal. Commenters
generally agreed with the analytical work and its results, and
supported the transparency of the analysis and its underlying data.
Where commenters raised specific points, the agencies have considered
them and made changes where appropriate. The agencies' further
evaluation of various technical issues also led to a limited number of
changes. A detailed discussion of these issues can be found in Section
II of this preamble, and the Joint TSD.
2. Level of the Standards
In this notice, EPA and NHTSA are establishing two separate sets of
standards, each under its respective statutory authorities. EPA is
setting national CO2 emissions standards for light-duty
vehicles under section 202(a) of the Clean Air Act. These standards
will require these vehicles to meet an
[[Page 25330]]
estimated combined average emissions level of 250 grams/mile of
CO2 in model year 2016. NHTSA is setting CAFE standards for
passenger cars and light trucks under 49 U.S.C. 32902. These standards
will require manufacturers of those vehicles to meet an estimated
combined average fuel economy level of 34.1 mpg in model year 2016. The
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' standards include some important differences.
Under the CO2 fleet average standards adopted 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 final CO2 standards. NHTSA did
not do so because EPCA does not allow vehicle manufacturers to use air
conditioning credits in complying with CAFE standards for passenger
cars.\19\ 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, improvement in the efficiency of passenger car air conditioners
is not considered as a possible control technology for purposes of
CAFE.
---------------------------------------------------------------------------
\19\ There is no such statutory limitation with respect to light
trucks.
---------------------------------------------------------------------------
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 for MY 2016.
The 250 grams per mile of CO2 equivalent emissions limit is
equivalent to 35.5 mpg \20\ 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 setting 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.
---------------------------------------------------------------------------
\20\ 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.
---------------------------------------------------------------------------
The vast majority of public comments expressed strong support for
the National Program standards, including the stringency of the
agencies' respective standards and the phase-in from model year 2012
through 2016. There were a number of comments supporting standards more
stringent than proposed, and a few others supporting less stringent
standards, in particular for the 2012-2015 model years. The agencies'
consideration of comments and their updated technical analyses led to
only very limited changes in the footprint curves and did not change
the agencies' projections that the nationwide fleet will achieve a
level of 250 grams/mile by 2016 (equivalent to 35.5 mpg). The responses
to these comments are discussed in more detail in Sections III and IV,
respectively, and in the Response to Comments document.
As proposed, NHTSA and EPA's final standards, like the standards
NHTSA promulgated in March 2009 for 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.\21\ The standards that
must be met by each manufacturer's fleet will be determined by
computing the sales-weighted average (harmonic average for CAFE) of the
targets applicable to each of the manufacturer's passenger cars and
light trucks. Under these footprint-based standards, the levels
required of individual manufacturers will depend, as noted above, on
the mix of vehicles sold. NHTSA's and EPA's respective standards are
shown in the tables below. It is important to note that the standards
are the attribute-based curves established by each agency. The values
in the tables below reflect the agencies' projection of the
corresponding fleet levels that will result from these attribute-based
curves.
---------------------------------------------------------------------------
\21\ See 49 CFR 523.2 for the exact definition of ``footprint.''
---------------------------------------------------------------------------
As a result of public comments and updated economic and future
fleet projections, EPA and NHTSA have updated the attribute based
curves for this final rule, as discussed in detail in Section II.B of
this preamble and Chapter 2 of the Joint TSD. This update in turn
affects costs, benefits, and other impacts of the final standards.
Thus, the agencies have updated their overall projections of the
impacts of the final rule standards, and these results are only
slightly different from those presented in the proposed rule.
As shown in Table I.B.2-1, NHTSA's fleet-wide CAFE-required levels
for passenger cars under the final standards are projected to increase
from 33.3 to 37.8 mpg between MY 2012 and MY 2016. Similarly, fleet-
wide CAFE levels for light trucks are projected to increase from 25.4
to 28.8 mpg. 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
numbers do not include the effects of other flexibilities and credits
in the program. These standards represent a 4.3 percent average annual
rate of increase relative to the MY 2011 standards.\22\
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\22\ 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
30.4 mpg for passenger cars, 24.4 mpg for light trucks, and 27.6 mpg
for the combined fleet.
Table I.B.2-1--Average Required Fuel Economy (mpg) Under Final CAFE Standards
--------------------------------------------------------------------------------------------------------------------------------------------------------
2011-base 2012 2013 2014 2015 2016
--------------------------------------------------------------------------------------------------------------------------------------------------------
Passenger Cars.......................................... 30.4 33.3 34.2 34.9 36.2 37.8
Light Trucks............................................ 24.4 25.4 26.0 26.6 27.5 28.8
-----------------------------------------------------------------------------------------------
Combined Cars & Trucks.............................. 27.6 29.7 30.5 31.3 32.6 34.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 25331]]
Accounting for the expectation that some manufacturers could
continue to pay civil penalties rather than achieving required CAFE
levels, and the ability to use FFV credits,\23\ NHTSA estimates that
the CAFE standards will 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: \24\
---------------------------------------------------------------------------
\23\ The penalties are similar in function to essentially
unlimited, fixed-price allowances.
\24\ NHTSA's estimates account for availability of CAFE credits
for the sale of flexible-fuel vehicles (FFVs), and for the potential
that some manufacturers will pay civil penalties rather than comply
with the CAFE standards. This yields NHTSA's estimates of the real-
world fuel economy that will likely be achieved under the final CAFE
standards. NHTSA has not included any potential impact of car-truck
credit transfer in its estimate of the achieved CAFE levels.
Table I.B.2-2--Projected Fleet-Wide Achieved CAFE Levels Under the Final Footprint-Based CAFE Standards (mpg)
----------------------------------------------------------------------------------------------------------------
2012 2013 2014 2015 2016
----------------------------------------------------------------------------------------------------------------
Passenger Cars.................. 32.3 33.5 34.2 35.0 36.2
Light Trucks.................... 24.5 25.1 25.9 26.7 27.5
-------------------------------------------------------------------------------
Combined Cars & Trucks...... 28.7 29.7 30.6 31.5 32.7
----------------------------------------------------------------------------------------------------------------
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.* * *
'' \25\
---------------------------------------------------------------------------
\25\ 49 U.S.C. 32902(b)(4).
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Based on NHTSA's current market forecast, the agency's estimates of
these minimum standards under the MY 2012-2016 CAFE standards (and, for
comparison, the final MY 2011 standard) are summarized below in Table
I.B.2-3.\26\ For eventual compliance calculations, the final calculated
minimum standards will be updated to reflect the average fuel economy
level required under the final standards.
---------------------------------------------------------------------------
\26\ 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.
Table I.B.2-3--Estimated Minimum Standard for Domestically Manufactured Passenger Cars Under MY 2011 and MY 2012-
2016 CAFE Standards for Passenger Cars (mpg)
----------------------------------------------------------------------------------------------------------------
2011 2012 2013 2014 2015 2016
----------------------------------------------------------------------------------------------------------------
27.8 30.7 31.4 32.1 33.3 34.7
----------------------------------------------------------------------------------------------------------------
EPA is establishing GHG emissions standards, and Table I.B.2-4
provides EPA's estimates of their projected overall fleet-wide
CO2 equivalent emission levels.\27\ The g/mi values are
CO2 equivalent values because they include the projected use
of air conditioning (A/C) credits by manufacturers, which include both
HFC and CO2 reductions.
---------------------------------------------------------------------------
\27\ 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.
Table I.B.2-4--Projected Fleet-Wide Emissions Compliance Levels Under the Footprint-Based CO2 Standards (g/mi)
----------------------------------------------------------------------------------------------------------------
2012 2013 2014 2015 2016
----------------------------------------------------------------------------------------------------------------
Passenger Cars.................. 263 256 247 236 225
Light Trucks.................... 346 337 326 312 298
-------------------------------------------------------------------------------
Combined Cars & Trucks...... 295 286 276 263 250
----------------------------------------------------------------------------------------------------------------
As shown in Table I.B.2-4, fleet-wide CO2 emission level
requirements for cars are projected to increase in stringency from 263
to 225 g/mi between MY 2012 and MY 2016. Similarly, fleet-wide
CO2 equivalent emission level requirements for trucks are
projected to increase in stringency from 346 to 298 g/mi. As shown, the
overall fleet average CO2 level requirements are projected
to increase in stringency from 295 g/mi in MY 2012 to 250 g/mi in MY
2016.
EPA anticipates that manufacturers will take advantage of program
flexibilities such as flexible 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.B.2-4, where full manufacturer
compliance without credit trading is assumed. Table I.B.2-5 shows EPA's
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 certain program
flexibilities including flex fueled vehicle credits and the temporary
lead time allowance alternative standards. The use of optional air
conditioning credits is considered both in this analysis of achieved
levels and of the
[[Page 25332]]
compliance levels described above. As can be seen in Table I.B.2-5, the
projected achieved levels are slightly higher for model years 2012-2015
due to EPA's assumptions about manufacturers' use of the regulatory
flexibilities, but by model year 2016 the achieved level is projected
to be 250 g/mi for the fleet.
Table I.B.2-5--Projected Fleet-Wide Achieved Emission Levels Under the Footprint-Based CO2 Standards (g/mi)
----------------------------------------------------------------------------------------------------------------
2012 2013 2014 2015 2016
----------------------------------------------------------------------------------------------------------------
Passenger Cars.................. 267 256 245 234 223
Light Trucks.................... 365 353 340 324 303
-------------------------------------------------------------------------------
Combined Cars & Trucks...... 305 293 280 266 250
----------------------------------------------------------------------------------------------------------------
Several auto manufacturers stated that the increasingly stringent
requirements for fuel economy and GHG emissions in the early years of
the program should follow a more linear phase-in. The agencies'
consideration of comments and of their updated technical analyses did
not lead to changes to the phase-in of the standards discussed above.
This issue is discussed in more detail in Sections II.D, and
