California State Motor Vehicle and Engine Pollution Control Standards; Heavy-Duty Vehicle and Engine Emission Warranty and Maintenance Provisions; Advanced Clean Trucks; Zero Emission Airport Shuttle; Zero-Emission Power Train Certification; Waiver of Preemption; Notice of Decision, 20688-20726 [2023-07184]

Download as PDF 20688 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices FOR FURTHER INFORMATION CONTACT: ENVIRONMENTAL PROTECTION AGENCY [EPA–HQ–OAR–2022–0330, EPA–HQ–OAR– 2022–0331; FRL–9900–02–OAR] California State Motor Vehicle and Engine Pollution Control Standards; Heavy-Duty Vehicle and Engine Emission Warranty and Maintenance Provisions; Advanced Clean Trucks; Zero Emission Airport Shuttle; ZeroEmission Power Train Certification; Waiver of Preemption; Notice of Decision Environmental Protection Agency (EPA). ACTION: Notice of decision. AGENCY: The Environmental Protection Agency (EPA) is granting the California Air Resources Board’s (CARB’s) requests for waivers of Clean Air Act (CAA) preemption for the following California regulations: the Heavy-Duty Vehicle and Engine Emission Warranty Regulations and Maintenance Provisions, the Advanced Clean Trucks Regulation, the Zero Emission Airport Shuttle Regulation, and the Zero-Emission Power Train Certification Regulation. EPA is issuing these decisions under the authority of CAA section 209. DATES: Petitions for review must be filed by June 5, 2023. ADDRESSES: EPA has established dockets for these requests under Docket ID EPA– HQ–OAR–2022–0330 and EPA–HQ– OAR–2022–0331. All documents relied upon in making these decisions, including those submitted to EPA by CARB, are contained in the public dockets. Publicly available docket materials are available electronically through www.regulations.gov. After opening the www.regulations.gov website, enter EPA–HQ–OAR–2022– 0330 or EPA–HQ–OAR–2022–0331 in the ‘‘Enter Keyword or ID’’ fill-in box to view documents in the record. Although a part of the official docket, Confidential Business Information (CBI) or other information whose disclosure is restricted by statute is not included in the public dockets. EPA’s Office of Transportation and Air Quality (OTAQ) maintains a web page that contains general information on its review of California waiver and authorization requests. Included on that page are links to prior waiver and authorization Federal Register notices, some of which are cited in this notice; the page can be accessed at https://www.epa.gov/stateand-localtransportation/vehicleemissionscalifornia-waivers-andauthorizations. ddrumheller on DSK120RN23PROD with NOTICES2 SUMMARY: VerDate Sep<11>2014 22:20 Apr 05, 2023 Jkt 259001 David Dickinson, Office of Transportation and Air Quality, U.S. Environmental Protection Agency, 1200 Pennsylvania Ave NW. Telephone: (202) 343–9256. Email: Dickinson.David@ epa.gov; or Kayla Steinberg, Office of Transportation and Air Quality, U.S. Environmental Protection Agency, 1200 Pennsylvania Ave. NW. Telephone: (202) 564–7658. Email: Steinberg.Kayla@epa.gov. SUPPLEMENTARY INFORMATION: Table of Contents I. Executive Summary II. Background A. EPA’s Consideration of CARB’s Request 1. 2018 HD Warranty Amendments 2. ACT, ZEAS, and ZEP Certification Regulations B. Principles Governing This Review 1. Scope of Preemption and Waiver Criteria Under the Clean Air Act 2. Deference to California 3. Standard and Burden of Proof III. Discussion A. Evaluation of CARB’s 2018 HD Warranty Amendments B. First Waiver Criterion: are California’s Protectiveness Determinations arbitrary and capricious? 1. EPA’s Historical Interpretation of Section 209(b)(1)(A) 2. CARB’s Discussion of California’s Protectiveness Determinations in the Waiver Requests a. 2018 HD Warranty Amendments b. ACT, ZEAS, and ZEP Certification Regulations 3. Comments on California’s Protectiveness Determinations 4. California’s Protectiveness Determinations Are Not Arbitrary and Capricious 5. Section 209(b)(1)(A) Conclusion C. Second Waiver Criterion: does California need its standards to meet compelling and extraordinary conditions? 1. EPA’s Historical Interpretation of Section 209(b)(1)(B) 2. CARB’s Discussion of California’s Need for the Standards in the Waiver Requests a. 2018 HD Warranty Amendments b. ACT, ZEAS, and ZEP Certification Regulations 3. Comments on Section 209(b)(1)(B) 4. California Needs Its Standards To Meet Compelling and Extraordinary Conditions 5. Section 209(b)(1)(B) Conclusion D. Third Waiver Criterion: are California’s regulations consistent with Section 202(a) of the Clean Air Act? 1. EPA’s Historical Interpretation of Section 209(b)(1)(C) 2. CARB’s Discussion of the Regulations’ Consistency with Section 202(a) in the Waiver Requests a. 2018 HD Warranty Amendments b. ACT, ZEAS, and ZEP Certification Regulations 3. Comments on Section 209(b)(1)(C) PO 00000 Frm 00002 Fmt 4701 Sfmt 4703 4. California’s Standards Are Consistent With Section 202(a) Under EPA’s Historical Approach a. 2018 HD Warranty Amendments b. ACT, ZEAS, and ZEP Certification Regulations 5. The Inapplicability of Section 202(a)(3)(C) to the Third Prong a. EPA’s Historical Practice Is Supported by the Text, Context, and Purpose of the Statute b. Neither AMC v. Blum nor the 1994 MDV Waiver Dictate a Contrary Interpretation 6. Section 209(b)(1)(C) Conclusion E. Other Issues 1. Energy Policy and Conservation Act (EPCA) 2. Equal Sovereignty and Other Constitutional Issues IV. Decision A. Judicial Review V. Statutory and Executive Order Reviews I. Executive Summary Today, as Administrator of the EPA, I am granting two separate requests for waivers of Clean Air Act (CAA) preemption regarding four California Air Resources Board (CARB) regulations for heavy-duty (‘‘HD’’) onroad vehicles and engines. CARB made these requests in two separate letters to EPA in October 2021 and December 2021, as described below. EPA is not taking action on CARB’s January 2022 request concerning CARB’s Omnibus Low NOX regulation.1 EPA will announce its decision regarding the Omnibus Low NOX Regulation waiver request in the future, by separate notice in the Federal Register. First, by letter dated October 22, 2021, CARB notified EPA that it had finalized amendments to its emission standards and associated test procedures for heavy-duty diesel vehicles and engines.2 These ‘‘2018 HD Warranty Amendments,’’ adopted by the CARB Board on June 28, 2018, extend the emissions warranty periods for 2022 and subsequent model year onroad heavy-duty diesel engines and for 2022 and subsequent model year diesel vehicles with a gross vehicle weight rating exceeding 14,000 pounds powered by such engines.3 In its letter to the Administrator, CARB requested that EPA determine the 2018 HD Warranty Amendments to be within the 1 Omnibus Low NO Waiver Request, Docket No. X EPA–HQ–OAR–2022–0332–0012; Omnibus Low NOX Waiver Support Document, Docket No. EPA– HQ–OAR–2022–0332–0009. 2 2018 HD Warranty Amendments Waiver Request, Docket No. EPA–HQ–OAR–2022–0330– 0007; 2018 HD Warranty Amendments Waiver Support Document, Docket No. EPA–HQ–OAR– 2022–0330–0004. 3 The 2018 HD Warranty Amendments are comprised of amendments to title 13, California Code of Regulations, sections 1956.8, 2035, 2036, and 2040. E:\FR\FM\06APN2.SGM 06APN2 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices ddrumheller on DSK120RN23PROD with NOTICES2 scope of a waiver the Administrator previously granted for California’s emission standards and associated test procedures for 2007 and subsequent model year heavy-duty diesel vehicles and engines or, alternatively, that EPA grant California a new waiver of preemption for the amendments. By today’s decision EPA finds that 2018 HD Warranty Amendments meet the criteria for a new waiver under section 209(b) of the Clean Air Act (CAA), 42 U.S.C. 7543(b). Second, CARB’s December 20, 2021, letter to the Administrator notified EPA that the CARB Board had finalized Advanced Clean Trucks (ACT), Zero Emission Airport Shuttle Bus (ZEAS), and Zero Emission Powertrain (ZEP) Certification Regulations.4 The ACT Regulation, adopted by the CARB Board on January 26, 2021, requires that manufacturers produce and sell increasing percentages of medium- and heavy-duty zero-emission vehicles (ZEVs) and near zero-emission vehicles (NZEVs) in California. These quantities of vehicles are based on increasingly higher percentages of manufacturers’ annual sales of onroad heavy-duty vehicles, beginning in the 2024 model year. The ZEAS Regulation, adopted by the CARB Board on June 27, 2019, establishes steadily increasing zeroemission airport shuttle fleet composition requirements for airport shuttle fleet owners who service the thirteen largest California airports. The ZEP Certification Regulation, adopted by the CARB Board on June 27, 2019, establishes certification requirements and optional emission standards for 2021 and subsequent model year medium- and heavy-duty ZEVs and the zero-emission powertrains installed in such vehicles.5 CARB requested that EPA grant a new waiver for each of these regulations. By today’s decision EPA finds that each of these three regulations meets the criteria for a new waiver under section 209(b). The legal framework for these decisions stems from the waiver provision first adopted by Congress in 1967, and later amended in 1977 (and amended again, as explained below, in 1990 when preemption of nonroad 4 ACT/ZEAS/ZEP Waiver Request, Docket No. EPA–HQ–OAR–2022–0331–0004; ACT/ZEAS/ZEP Waiver Support Document, Docket No. EPA–HQ– OAR–2022–0331–0003. 5 The ACT Regulation is at title 13, California Code of Regulation, sections 1963, and 1963.1 through 1963.5. The ZEAS Regulation is at title 17, California Code of Regulation, sections 95690.1, 95690.2, 95690.3, 95690.4, 95690.5, 95690.6, 95690.7, and 95690.8. The ZEP Certification Regulation is at title 13, California Code of Regulation, sections section 1956.8 and title 17, section 95663. VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 engine and vehicle emissions standards was addressed). In sections 209(a) and 209(b) of the Clean Air Act, Congress established that there would be only two programs for control of emissions from new motor vehicles—EPA emission standards adopted under the Clean Air Act, and California emission standards adopted under state law. Congress accomplished this by preempting all State and local governments from adopting or attempting to enforce emission standards for new motor vehicles, while at the same time providing that California could receive a waiver of preemption for its emission standards and accompanying enforcement procedures. Other states can only adopt standards that are identical to California’s standards. This statutory scheme struck an important balance that protected manufacturers from multiple and different state emission standards, while preserving California’s pivotal role as a laboratory for innovation in the control of emissions from new motor vehicles. Congress recognized that California could serve as a pioneer and a laboratory for the nation in setting new motor vehicle emission standards and the development of new emission control technologies. Further, Congress intentionally structured this waiver provision to restrict and limit EPA’s ability to deny a waiver. The provision was designed to ensure California’s broad discretion to determine the best means to protect the health and welfare of its citizens. Section 209(b) specifies that EPA must grant California a waiver if California determines that its standards are, in the aggregate, at least as protective of the public health and welfare as applicable Federal standards. EPA may deny a waiver only if it makes at least one of three findings specified under the Clean Air Act. The findings that permit EPA to deny a waiver (also referred to as the three waiver prongs) are: first, a finding that California’s determination that its standards are, in the aggregate, at least as protective as applicable Federal standards is arbitrary and capricious (section 209(b)(1)(A), or the first waiver prong); second, a finding that California has no need for such standards to meet compelling and extraordinary conditions (section 209(b)(1)(B), or the second waiver prong); or third, a finding that California’s standards and accompanying enforcement procedures are inconsistent with section 202(a) of the Clean Air Act (section 209(b)(1)(C), or the third waiver prong). Therefore, EPA’s role upon receiving a request for waiver of preemption from California is narrow and limited to PO 00000 Frm 00003 Fmt 4701 Sfmt 4703 20689 determining whether it is appropriate to make any of the three findings specified by the Clean Air Act. If the Agency cannot make at least one of the three findings, then the waiver must be granted.6 The courts have emphasized the narrowness of EPA’s review. In MEMA II the Court of Appeals for the District of Columbia Circuit stated that ‘‘[S]ection 209(b) sets forth the only waiver standards with which California must comply.’’ 7 EPA and the Court of Appeals for the District of Columbia Circuit have consistently interpreted section 209(b) as placing the burden on the opponents of a waiver to demonstrate that one of the criteria for a denial has been met.8 If California acts to amend a previously waived standard or accompanying enforcement procedure, the amendment may be considered within the scope of a previously granted waiver provided that it does not undermine California’s determination that its standards in the aggregate are as protective of public health and welfare as applicable Federal standards, does not affect the regulation’s consistency with section 202(a) of the Clean Air Act, and raises no new issues affecting EPA’s previous waiver decisions.9 In 1990, Congress also established that there would be only two programs for control of emissions from most nonroad vehicles and engines—EPA emission standards adopted under the Clean Air Act, and California emission standards adopted under state law. In section 209(e)(1) of the Act, Congress preempted all states, or political subdivisions thereof, from adopting or attempting to enforce any standard or other requirement relating to the control of emissions for certain types of new nonroad engines or vehicles.10 For all other nonroad engines, states, with the exception of California, are generally preempted from adopting and enforcing standards and 6 Motor and Equipment Manufacturers’ Association v. EPA (MEMA II), 142 F.3d 449, 462– 63 (D.C. Cir. 1998). 7 Id. (‘‘If EPA concludes that California’s standards pass this test, it is obligated to approve California’s waiver application.’’). 8 Motor and Equipment Manufacturers’ Association v. EPA (MEMA I), 627 F.2d 1095, 1121 (D.C. Cir. 1979). 9 45 FR 54130 (Aug. 14, 1980); 46 FR 36742 (July 15, 1981); 75 FR 44948, 444951 (July 30, 2010). 10 States are expressly preempted from adopting or attempting to enforce any standard or other requirement relating to the control of emissions from new nonroad engines which are used in construction equipment or vehicles or used in farm equipment or vehicles, and which are smaller than 175 horsepower. Such express preemption under section 209(e)(1) of the Act also applies to new locomotives or new engines used in locomotives. CAA section 209(e)(1), 42 U.S.C. 7543(e)(1)(A). E:\FR\FM\06APN2.SGM 06APN2 20690 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices ddrumheller on DSK120RN23PROD with NOTICES2 other requirements relating to the control of emissions.11 On June 13, 2022, EPA issued three notices of opportunity for hearing and comment for the California regulations at issue here: the first notice covered the Heavy-Duty Vehicle and Engine Emission Warranty and Maintenance Provisions; the second notice covered the Advanced Clean Trucks Regulation, the Zero Emission Airport Shuttle Regulation, and the Zero-Emission Power Train Certification Regulation; and the third notice covered the ‘‘Omnibus’’ Low NOX Regulation.12 EPA is only taking action on the first two notices in this decision. As part of EPA’s public comment process for CARB’s waiver requests, we have received comments from several states and organizations representing states, health and environmental organizations, industry, and other stakeholders. The vast majority of comments EPA received supported granting the waiver requests. Commenters generally supporting the waiver requests included CARB,13 environmental and public health organizations,14 state and local 11 Section 209(e)(2)(A) requires the Administrator to authorize California to adopt and enforce standards and other requirements relating to the control of emissions from such vehicles or engines under criteria similar to section 209(b) for new motor vehicles and engines. Considering the nearly identical language in both sections 209(b) and 209(e)(2)(A), EPA has reviewed California’s requests for authorization of nonroad vehicle or engine standards under section 209(e)(2)(A) using the same principles that it has historically applied in reviewing requests for waivers of preemption for new motor vehicle or new motor vehicle engine standards under section 209(b).This means that CARB’s nonroad standards must be consistent with the technological feasibility requirements of section 202(a)(2). See 80 FR 76169, 76170 (Dec. 9, 2015). See Engine Mfrs. Ass’n v. EPA, 88 F.3d 1075, 1087 (D.C. Cir. 1996) (‘‘. . . EPA was within the bounds of permissible construction in analogizing section 209(e) on nonroad sources to section 209(a) on motor vehicles.’’). This historical approach to nonroad authorizations is not being revisited here. 12 87 FR 35760 (June 13, 2022); 87 FR 35765 (June 13, 2022); and 87 FR 35768 (June 13, 2022). 13 CARB Initial 2018 HD Warranty Amendments Comments, Docket No. EPA–HQ–OAR–2022–0330– 0063; CARB Initial ACT Comments, Docket No. EPA–HQ–OAR–2022–0331–0127; CARB Supplemental Comments, Docket Nos. EPA–HQ– OAR–2022–0330–0072, EPA–HQ–OAR–2022– 0331–0133. 14 Environmental and Public Health Organizations, Docket Nos. EPA–HQ–OAR–2022– 0330–0066, EPA–HQ–OAR–2022–0331–0099; Health and Medical Organizations, Docket No. EPA–HQ–OAR–2022–0331–0057. VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 governments,15 states’ organizations,16 members of Congress,17 and some auto manufacturers.18 Commenters generally opposing the waiver requests included the Truck and Engine Manufacturers Association (EMA),19 the National Automobile Dealers Association (NADA),20 the American Fuel & Petrochemical Manufacturers (AFPM),21 the American Trucking Associations (ATA),22 the Western States Petroleum Association,23 and the Texas Public Policy Foundation.24 EPA has considered all comments including those submitted after the close of the comment period. After an evaluation of 15 See, e.g., State of California et al, Docket No. EPA–HQ–OAR–2022–0331–0092 (including comments submitted on behalf of the States of California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, Washington, Wisconsin, the Commonwealth of Massachusetts, the District of Columbia, and the City of New York); New York State Department of Environmental Conservation (NYSDEC), Docket Nos. EPA–HQ–OAR–2022–0330–0061, EPA–HQ– OAR–2022–0331–0103; Maine Department of Environmental Protection (Maine), Docket Nos. EPA–HQ–OAR–2022–0330–0034, EPA–HQ–OAR– 2022–0331–0074; Colorado Energy Office (Colorado), Docket No. EPA–HQ–OAR–2022–0331– 0034; Washington State Department of Ecology (Washington), Docket Nos. EPA–HQ–OAR–2022– 0330–0056, EPA–HQ–OAR–2022–0331–0079; South Coast Air Quality Management District (SCAQMD), Docket No. EPA–HQ–OAR–2022– 0331–0075; San Joaquin Valley Unified Air Pollution Control District (SJVUAPCD), Docket Nos. EPA–HQ–OAR–2022–0330–0055, EPA–HQ–OAR– 2022–0331–0106. 16 See, e.g., Northeast States for Coordinated Air Use Management (NESCAUM), Docket Nos. EPA– HQ–OAR–2022–0330–0017, EPA–HQ–OAR–2022– 0330–0053, EPA–HQ–OAR–2022–0330–0074, EPA– HQ–OAR–2022–0331–0104, EPA–HQ–OAR–2022– 0331–0135, ; National Association of Clean Air Agencies (NACAA), Docket Nos. EPA–HQ–OAR– 2022–0330–0035, EPA–HQ–OAR–2022–0330–0019, EPA–HQ–OAR–2022–0331–0067, EPA–HQ–OAR– 2022–0331–0029; Ozone Transport Commission (OTC), Docket Nos. EPA–HQ–OAR–2022–0330– 0062, EPA–HQ–OAR–2022–0330–0021, EPA–HQ– OAR–2022–0330–0075, EPA–HQ–OAR–2022– 0331–0105, EPA–HQ–OAR–2022–0331–0033, EPA– HQ–OAR–2022–0331–0136. 17 Padilla et al, Docket Nos. EPA–HQ–OAR– 2022–0330–0025, EPA–HQ–OAR–2022–0331–0038. 18 Tesla, Docket No. EPA–HQ–OAR–2022–0330– 0038, EPA–HQ–OAR–2022–0331–0060; Rivian, Docket No. EPA–HQ–OAR–2022–0331–0066. 19 EMA Testimony, Docket Nos. EPA–HQ–OAR– 2022–0330–0016, EPA–HQ–OAR–2022–0331–0026; EMA Initial Comments, Docket Nos. EPA–HQ– OAR–2022–0330–0032, EPA–HQ–OAR–2022– 0331–0071; EMA Supplemental Comments, Docket Nos. EPA–HQ–OAR–2022–0330–0071, EPA–HQ– OAR–2022–0331–0132, 20 NADA, Docket Nos. EPA–HQ–OAR–2022– 0330–0050, EPA–HQ–OAR–2022–0331–0090. 21 AFPM, Docket No. EPA–HQ–OAR–2022–0331– 0088. 22 ATA, Docket No. EPA–HQ–OAR–2022–0331– 0091. 23 Western States Petroleum Association, Docket No. EPA–HQ–OAR–2022–0331–0109. 24 Texas Public Policy Foundation, Docket No. EPA–HQ–OAR–2022–0330–0036, EPA–HQ–OAR– 2022–0331–0059. PO 00000 Frm 00004 Fmt 4701 Sfmt 4703 the record and comments, I have determined that the waiver opponents have not met their burden of proof in order for EPA to deny either of the two CARB waiver requests under any of the three waiver prongs set forth in section 209(b)(1). As such, EPA is granting CARB’s two waiver requests.25 II. Background A. EPA’s Consideration of CARB’s Request On June 13, 2022, EPA announced the opportunity for hearing and comment on CARB’s waiver requests in three Federal Register notices (FR Notices).26 EPA held one public hearing on June 29 and June 30, 2022, covering all three FR Notices.27 As noted above, EPA’s decision here pertains only to the 2018 HD Warranty Amendments, the ACT Regulation, the ZEAS Regulation, and the ZEP Certification Regulation. EPA has considered all comments submitted pertaining to these regulations, including those submitted after the close of the comment period.28 1. 2018 HD Warranty Amendments EPA’s June 2022 FR Notice on CARB’s waiver request regarding the 2018 HD Warranty Amendments asked for comment on several matters. Since CARB had submitted a within-the-scope request, EPA first invited comment on whether those amendments meet the criteria for EPA to confirm that they are 25 In deciding to grant these waiver requests, EPA is relying on its legal interpretation of the statute as explained in this notice. In each case, EPA believes that its interpretation constitutes the best interpretation of the statute, applying traditional principles of statutory interpretation. Further, to the extent there is any genuine ambiguity within the statute related to these interpretations, EPA believes it has reasonably resolved such ambiguity. See Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837, 866 (1984) (deference is owed to reasonable agency resolutions of statutory ambiguity). 26 87 FR 35760 (June 13, 2022); 87 FR 35765 (June 13, 2022); and 87 FR 35768 (June 13, 2022). 27 A transcript for each day of the hearing (June 29th and 30th, 2022) can be found in each docket. June 29th Hearing Transcript, Docket Nos. EPA– HQ–OAR–2022–0330–0028 and EPA–HQ–OAR– 2022–0331–0045, June 30th Hearing Transcript, Docket Nos. EPA–HQ–OAR–2022–0330–0029 and EPA–HQ–OAR–2022–0331–0044. 28 EMA Supplemental Comments, Docket Nos. EPA–HQ–OAR–2022–0330–0071, EPA–HQ–OAR– 2022–0331–0132; CARB Supplemental Comments, Docket Nos. EPA–HQ–OAR–2022–0330–0072, EPA–HQ–OAR–2022–0331–0133; Mass Comment Campaign sponsored by Union of Concerned Scientists, Docket Nos. EPA–HQ–OAR–2022–0330– 0073, EPA–HQ–OAR–2022–0331–0134; NESCAUM, Docket Nos. EPA–HQ–OAR–2022–0330–0074, EPA–HQ–OAR–2022–0331–0135; OTC, Docket Nos. EPA–HQ–OAR–2022–0330–0075, EPA–HQ–OAR– 2022–0331–0136; Mid-Atlantic/Northeast Visibility Union (MANEVU), Docket Nos. EPA–HQ–OAR– 2022–0330–0076, EPA–HQ–OAR–2022–0330–0077, EPA–HQ–OAR–2022–0331–0138, EPA–HQ–OAR– 2022–0331–0137. E:\FR\FM\06APN2.SGM 06APN2 ddrumheller on DSK120RN23PROD with NOTICES2 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices within the scope of prior waivers. Specifically, we requested comment on whether California’s 2018 HD Warranty Amendments: (1) Undermine California’s previous determination that its standards, in the aggregate, are at least as protective of public health and welfare as comparable Federal standards, (2) affect the consistency of California’s requirements with section 202(a) of the Act, and (3) raise any other ‘‘new issue’’ affecting EPA’s previous waiver or authorization determinations.29 EPA also solicited comment on whether it should grant a new waiver for the 2018 HD Warranty Amendments in the event that EPA cannot confirm that some or all of those amendments were within the scope of previous waivers. We therefore asked commenters to consider the three prongs for the denial of a waiver request under section 209(b)(1) of the CAA: whether (A) California’s determination that its motor vehicle emission standards are, in the aggregate, at least as protective of public health and welfare as applicable Federal standards is arbitrary and capricious, (B) California does not need such standards to meet compelling and extraordinary conditions, and (C) California’s standards and accompanying enforcement procedures are inconsistent with section 202(a) of the Clean Air Act.30 Regarding section 209(b)(1)’s second prong, EPA must grant a waiver request unless the Agency finds that California ‘‘does not need such State standards to meet compelling and extraordinary conditions.’’ EPA has interpreted the phrase ‘‘need[s] such State standards to meet compelling and extraordinary conditions’’ to mean that California needs a separate motor vehicle program as a whole in order to address compelling and extraordinary conditions in California (also known as the ‘‘traditional’’ interpretation). EPA noted its intention to use the traditional interpretation and sought comment on whether California needs the 2018 HD Warranty Amendments under section 209(b)(1)(B).31 With regard to section 209(b)(1)’s third prong, EPA has historically considered consistency with section 202(a) to require that California’s standards are technologically feasible within the lead time provided, giving due consideration to costs, and that California and applicable Federal test procedures are consistent. EPA 29 87 FR at 35762. 30 Id. 31 Id. at 35762–63. VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 20691 requested comment on what provisions from section 202(a) apply to California due to the reference to section 202(a) in section 209(b)(1)(C). EPA invited comment on how such provisions, to the extent they may apply to California’s standards or enforcement procedures, should be considered in the context of EPA’s evaluation of CARB’s waiver request under the third prong.32 provision first adopted by Congress in 1967 and its subsequent amendments.36 In title II of the CAA, Congress established only two programs for control of emissions from new motor vehicles—EPA emission standards adopted under the CAA and California emission standards adopted under its state law.37 Congress accomplished this by preempting all state and local governments from adopting or enforcing 2. ACT, ZEAS, and ZEP Certification emission standards for new motor Regulations vehicles, while at the same time EPA’s June 2022 FR Notice on CARB’s providing that California could receive waiver request regarding the Advanced a waiver of preemption for its emission Clean Truck Regulation (ACT), the Zero standards and enforcement procedures in keeping with its prior experience Emission Airport Shuttle (ZEAS) regulating motor vehicles, its role as a Regulation, and the Zero-Emission laboratory for innovation in emission Power Train (ZEP) Certification reduction technologies for vehicles, and Regulation asked for comment on several matters. We requested comment its serious air quality problems. This framework struck an important balance on all aspects of a full waiver analysis that protected manufacturers from applicable to each of the three multiple and different state emission regulations. Therefore, we asked standards and preserved a pivotal role commenters to consider the three waiver prongs under section 209(b)(1) of for California in the advancement of control of emissions from new motor the CAA. EPA also noted its intention vehicles. Recognizing both the harsh to use the traditional interpretation of reality of California’s air pollution and section 209(b)(1)(B) and sought California’s ability to serve as a pioneer comment on whether California needs and a laboratory for the nation in setting the ACT, ZEAS, and ZEP Certification new motor vehicle emission standards Regulations, as well what provisions and developing control technology, under section 202(a) should apply (and Congress intentionally structured this how such provisions should be waiver provision to restrict and limit evaluated) under section 209(b)(1)(C), which requires consistency with section EPA’s ability to deny a waiver to ensure that California had broad discretion in 202(a).33 selecting the best means to protect the B. Principles Governing this Review health and welfare of its citizens.38 Accordingly, section 209(a) preempts The CAA has been a paradigmatic states or political subdivisions from example of cooperative federalism, adopting or attempting to enforce any under which ‘‘States and the Federal standard relating to the control of Government [are] partners in the struggle against air pollution.’’ 34 In Title emissions from new motor vehicles or new motor vehicle engines.39 Under the II, Congress authorized EPA to promulgate emission standards for 36 Central Valley Chrysler-Jeep, Inc. v. Goldstene, mobile sources and generally preempted 529 F. Supp. 2d 1151, 1174 (‘‘The waiver provision states from adopting their own of the Clean Air Act recognizes that California has standards.35 At the same time, Congress exercised its police power to regulate pollution emissions from motor vehicles since before March created an important exception for the 30, 1966; a date that predates . . . the Clean Air State of California. 1. Scope of Preemption and Waiver Criteria Under the Clean Air Act The legal framework that governs today’s decisions stems from the waiver 32 Id. 33 87 FR 35768, 35770 (June 13, 2022). Motors Corp. v. United States, 496 U.S. 530, 532 (1990). 35 ‘‘The regulatory difference [between Titles I and II] is explained in part by the difficulty of subjecting motor vehicles, which readily move across state boundaries, to control by individual states.’’ Engine Mfrs. Ass’n v. EPA, 88 F.3d 1075, 1079 (D.C. Cir. 1996). Congress also asserted federal control in this area to avoid ‘‘the specter of an anarchic patchwork of federal and state regulatory programs’’ nationwide. See MEMA I, 627 F.2d 1095, 1109 (D.C. Cir. 1979). 34 General PO 00000 Frm 00005 Fmt 4701 Sfmt 4703 Act.’’). 37 Motor vehicles are ‘‘either ‘federal cars’ designed to meet the EPA’s standards or ‘California cars’ designed to meet California’s standards.’’ Engine Mfrs. Ass’n v. EPA, 88 F.3d 1075, 1079–80, 1088 (D.C. Cir. 1996) (‘‘Rather than being faced with 51 different standards, as they had feared, or with only one, as they had sought, manufacturers must cope with two regulatory standards.’’). 38 See, e.g., S. Rep. No. 403, 90th Cong., 1st Sess. 33 (1967) (The waiver of preemption is for California’s ‘‘unique problems and pioneering efforts.’’); 113 Cong. Rec. 30950, 32478 (‘‘[T]he State will act as a testing agent for various types of controls and the country as a whole will be the beneficiary of this research.’’) (Statement of Sen. Murphy); MEMA I, 627 F.2d 1095, 1111 (D.C. Cir. 1979). 39 42 U.S.C. 7543(a)–(a) Prohibition No State or any political subdivision thereof shall adopt or attempt to enforce any standard relating to the E:\FR\FM\06APN2.SGM Continued 06APN2 20692 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices ddrumheller on DSK120RN23PROD with NOTICES2 terms of section 209(b)(1), after notice and opportunity for public hearing, EPA must waive the application of section 209(a) to California unless the Administrator finds that at least one of three criteria to deny a waiver in section 209(b)(1)(A)–(C) has been met.40 EPA may thus deny a waiver, in the context of the Agency’s adjudicatory review, only if it makes at least one of these three factual findings (associated with the three waiver criteria) based on evidence in the record, including arguments that opponents of the waiver have provided. The 1970 CAA Amendments strengthened EPA’s authority to regulate vehicular ‘‘emission[s] of any air pollutant,’’ while reaffirming the corresponding breadth of California’s ability to regulate those emissions (by amending CAA section 202 and recodifying the waiver provision as section 209(b), respectively).41 Congress control of emissions from new motor vehicles or new motor vehicle engines subject to this part. No State shall require certification, inspection, or any other approval relating to the control of emissions from any new motor vehicle or new motor vehicle engine as condition precedent to the initial retail sale, titling (if any), or registration of such motor vehicle, motor vehicle engine, or equipment. 40 42 U.S.C. 7543(b)(1): (1) The Administrator shall, after notice and opportunity for public hearing, waive application of this section to any State which has adopted standards (other than crankcase emission standards) for the control of emissions from new motor vehicles or new motor vehicle engines prior to March 30, 1966, if the State determines that the State standards will be, in the aggregate, at least as protective of public health and welfare as applicable Federal standards. No such waiver shall be granted if the Administrator finds that—(A) the determination of the State is arbitrary and capricious, (B) such State does not need such State standards to meet compelling and extraordinary conditions, or (C) such State standards and accompanying enforcement procedures are not consistent with section 7521(a) of this title. 41 In the 1970 Amendments, section 202(a) was divided into section 202(a)(1) and section 202(a)(2). Section 202(a)(1) included the directive for the Administrator to ‘‘prescribe standards applicable to emissions of any air pollutant . . . which in his judgement cause, or contribute to, air pollution which may reasonably be anticipated to endanger publish health or welfare.’’ The previous lead time requirement in section 202(a) was moved to section 202(a)(2) and included the directive that any regulation prescribed under 202(a)(1) ‘‘shall take effect after 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.’’ The 1970 CAA did not change the cross reference to section 202(a) in section 209(b)(1)(C). See CARB Initial ACT/ZEAS/ZEP Comments at 11–12. As described below, the 1977 Amendments did not change the cross reference to section 202(a) in section 209(b)(1)(C) but did expand the flexibility afforded to California under section 209(b). The 1977 Amendments also added section 202(a)(3) directing EPA to set heavy-duty vehicle emission standards for certain emissions for the 1983 model year and later. (Congress having identified a need for standards in 1970 ‘‘had become impatient with the EPA’s failure to VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 also established the National Ambient Air Quality Standards (NAAQS) program, under which EPA issues air quality criteria and sets ambient air quality standards for so-called ‘‘criteria’’ pollutants, and states with regions that have levels of pollutants greater than those Federal standards must submit state implementation plans, or SIPs, indicating how they plan to attain the NAAQS. These attainment SIPs are often multi-year, comprehensive plans. With the CAA Amendments of 1977, Congress allowed California to consider the protectiveness of its standards ‘‘in the aggregate,’’ rather than requiring each California standard to be as or more stringent than its Federal counterpart, to enable stronger standards for a specific pollutant where a weaker standard for a second pollutant was necessary due to interactions between control technologies.42 Congress also approved EPA’s interpretation of the waiver provision as providing appropriate deference to California’s policy goals and consistent with Congress’s intent ‘‘to permit California to proceed with its own regulatory program’’ for new motor vehicle emissions.43 In addition, the 1977 Amendments demonstrated the significance of California’s standards to the Nation as a whole with Congress’ adoption of a new section 177. Section 177 permits other states addressing their own air pollution problems to adopt and enforce California new motor vehicle standards ‘‘for which a waiver has been granted’’ if certain criteria are met.44 promulgate a particulate standard’’ for heavy duty vehicles.’’ NRDC, 655 F.2d at 325 (citing S. Rep. No.127, 95th Cong., 1st Sess. 67 (1977), reprinted in 3 Legislative History 1441)). 42 42 U.S.C. 7543(b)(1). In further amendments to the Act in 1977, section 209 (formerly section 208) was amended to require the U.S. Environmental Protection Agency (EPA) to consider California’s standards as a whole, so that California could seek a waiver from preemption if its standards ‘‘in the aggregate’’ protected public health at least as well as Federal standards. See Clean Air Act Amendments of 1977, Pub. L. 95–95, section 207, 91 Stat. 685. See also Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. New York State Dep’t of Env’t Conservation, 17 F.3d 521, 525 (2d Cir. 1994). 43 H.R. Rep. No. 95–294, at 301 (1977). 44 This provision was intended to continue the balance, carefully drawn in 1967, between states’ need to meet increasingly stringent federal air pollution limits and the burden of compliance on auto-manufacturers. See, e.g., H.R. Rep. No. 294, 95th Cong., 1st Sess. 309–10 (1977) (‘‘[S]ection 221 of the bill broadens State authority, so that a State other than California . . . is authorized to adopt and enforce new motor vehicle emission standards which are identical to California’s standards. Here again, however, strict limits are applied . . . . This new State authority should not place an undue burden on vehicle manufacturers . . . .’’); Motor Vehicle Mfrs. Ass’n v. NYS Dep’t of Env’t Conservation, 17 F.3d 521, 527 (2d Cir. 1994) (‘‘Many states, including New York, are in danger PO 00000 Frm 00006 Fmt 4701 Sfmt 4703 Any state with qualifying SIP provisions may exercise this option and become a ‘‘section 177 State,’’ without first seeking the approval from EPA.45 Thus, the 1977 Amendments further recognize California’s important role in mobile source air pollution control, both by making it easier for California to obtain waivers (by allowing the State’s protectiveness determination to be made ‘‘in the aggregate’’) and by expanding the opportunity (via section 177) for other states to adopt California’s standards. Given the text, legislative history, and judicial precedent, EPA has consistently interpreted section 209(b) as requiring EPA to grant a waiver unless EPA or opponents of a waiver can demonstrate that one of the criteria for a denial has been met.46 In this context, since inception, EPA has recognized its limited discretion in reviewing California waiver requests. Therefore, EPA’s role upon receiving a request for waiver of preemption from California has consistently been limited and remains only to be to determine whether it is appropriate to make any of the three factual findings specified by the CAA. If the Agency cannot make at least one of the three findings, then the waiver must be granted. The three waiver criteria are properly seen as criteria for a denial. This reversal of the normal statutory structure embodies and is consistent with the congressional intent of providing deference to California to maintain and further develop its own new motor vehicle emission program. Additionally, in previous waiver decisions, EPA has noted that section 209(b)(1) specifies particular and limited grounds for rejecting a waiver and has therefore limited its review to of not meeting increasingly stringent federal air pollution limits . . . . It was in an effort to assist those states struggling to meet federal pollution standards that Congress, as noted earlier, directed in 1977 that other states could promulgate regulations requiring vehicles sold in their state to be in compliance with California’s emission standards or to ‘piggyback’ onto California’s preemption exemption. This opt-in authority, set forth in section 177 of the Act, 42 U.S.C. 7507, is carefully circumscribed to avoid placing an undue burden on the automobile manufacturing industry.’’) 45 CAA section 177, 42 U.S.C. 7507. 46 MEMA I, 627 F.2d at 1120–21 (‘‘The language of the statute and its legislative history indicate that California’s regulations, and California’s determination that they comply with the statute, when presented to the Administrator are presumed to satisfy the waiver requirements and that the burden of proving otherwise is on whoever attacks them.’’); MEMA II, 142 F.3d 449, 462 (D.C. Cir. 1998) (‘‘[S]ection 209(b) sets forth the only waiver standards with which California must comply. . . . If EPA concludes that California’s standards pass this test, it is obligated to approve California’s waiver application.’’). E:\FR\FM\06APN2.SGM 06APN2 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices those grounds.47 EPA has also noted that the structure Congress established for reviewing California’s standards is deliberately narrow, which further supports this approach. This has led EPA to reject arguments that are not specified in the statute as grounds for denying a waiver: The law makes it clear that the waiver requests cannot be denied unless the specific findings designated in the statute can properly be made. The issue of whether a proposed California requirement is likely to result in only marginal improvement in air quality not commensurate with its cost or is otherwise an arguably unwise exercise of regulatory power is not legally pertinent to my decision under section 209, so long as the California requirement is consistent with section 202(a) and is more stringent than applicable Federal requirements in the sense that it may result in some further reduction in air pollution in California. Thus, my consideration of all the evidence submitted concerning a waiver decision is circumscribed by its relevance to those questions that I may consider under section 209(b).48 EPA’s evaluation of accompanying enforcement procedures that are identified in section 209(b)(1)(C) is done by assessing the first and third waivers prongs at 209(b)(1)(A) and 209(b)(1)(C).49 2. Deference to California EPA has also consistently noted that the text, structure, and history of the California waiver provision clearly indicate both congressional intent and appropriate EPA practice of leaving decisions on ‘‘ambiguous and controversial matters of public policy’’ to California’s judgment.50 In waiver decisions, EPA has thus recognized that congressional intent in limiting review of California waiver requests to the section 209(b)(1) criteria was to ensure that the Federal government did not second-guess the wisdom of state policy.51 In an early waiver decision EPA highlighted this deference: ddrumheller on DSK120RN23PROD with NOTICES2 It is worth noting . . . I would feel constrained to approve a California approach 47 See, e.g., 78 FR 2112 (January 9, 2013); 87 FR 14332 (March 14, 2022) (SAFE 1 Reconsideration Decision). 48 78 FR at 2115 (footnote omitted). 49 87 FR 35760, 35762–63 (June 13, 2022). 50 40 FR 23102, 23103–04 (May 28, 1975); see also LEV I, 58 FR 4166 (January 13, 1993), Decision Document at 64. 51 Ford Motor Co. v. Environmental Protection Agency (Ford Motor), 606 F.2d 1293, 1302 (D.C. Cir. 1979) (‘‘The Administrator is charged with undertaking a single review in which he applies the deferential standards set forth in Section 209(b) to California and either grants or denies a waiver without exploring the consequences of nationwide use of the California standards or otherwise stepping beyond the responsibilities delineated by Congress.’’). VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 to the problem which I might also feel unable to adopt at the federal level in my own capacity as a regulator. The whole approach of the Clean Air Act is to force the development of new types of emission control technology where that is needed by compelling the industry to ‘‘catch up’’ to some degree with newly promulgated standards. Such an approach . . . may be attended with costs, in the shape of reduced product offering, or price or fuel economy penalties, and by risks that a wider number of vehicle classes may not be able to complete their development work in time. Since a balancing of these risks and costs against the potential benefits from reduced emissions is a central policy decision for any regulatory agency under the statutory scheme outlined above, I believe I am required to give very substantial deference to California’s judgments on this score.52 This view is further supported by the House Committee Report accompanying the 1977 amendments to the Clean Air Act. The Report explained that, although Congress had the opportunity to restrict the waiver provision, it instead elected to expand California’s flexibility to adopt a complete program of motor vehicle emission controls. According to the Report, the 1977 Amendments were intended to ratify and strengthen the California waiver provision and to affirm the underlying intent of that provision, i.e., to afford California the broadest possible discretion in selecting the best means to protect the health of its citizens and the public welfare.53 3. Standard and Burden of Proof In Motor and Equipment Manufacturers’ Association v. EPA, 627 F.2d 1095 (D.C. Cir. 1979) (MEMA I), the U.S. Court of Appeals for the District of Columbia stated, with regard to the standard and burden of proof, that the Administrator’s role in a section 209 proceeding is to: [C]onsider all evidence that passes the threshold test of materiality and . . . thereafter assess such material evidence against a standard of proof to determine whether the parties favoring a denial of the waiver have shown that the factual circumstances exist in which Congress intended a denial of the waiver.54 The court in MEMA I considered the standards of proof under section 209 for the two findings necessary to grant a waiver for an ‘‘accompanying enforcement procedure’’ (as opposed to the standards themselves): (1) Protectiveness in the aggregate and (2) 52 40 FR 23102, 23103–04 (May 28, 1975); LEV I, 58 FR 4166 (January 13, 1993), Decision Document at 64. 53 H.R. Rep. No 294, 95 Cong., 1st Sess. 301–02 (1977) (cited in MEMA I, 627 F.2d at 1110). 54 MEMA I, 627 F.2d at 1122. PO 00000 Frm 00007 Fmt 4701 Sfmt 4703 20693 consistency with CAA section 202(a) findings. The court instructed that ‘‘the standard of proof must take account of the nature of the risk of error involved in any given decision, and it therefore varies with the finding involved. We need not decide how this standard operates in every waiver decision.’’ 55 With respect to California’s protectiveness determination, the court upheld the Administrator’s position that to deny a waiver there must be clear and compelling evidence to show that the proposed procedures undermine the protectiveness of California’s standards.56 The court noted that this standard of proof also accords with the congressional intent to provide California with the broadest possible discretion in setting regulations it finds protective of the public health and welfare.57 With respect to the consistency finding, the court did not articulate a standard of proof applicable to all proceedings but found that the opponents of the waiver were unable to meet their burden of proof even if the standard were a mere preponderance of the evidence. Although MEMA I did not explicitly consider the standards of proof under section 209 concerning a waiver request for ‘‘standards,’’ as compared to accompanying enforcement procedures, there is nothing in the opinion to suggest that the court’s analysis would not apply with equal force to such determinations. EPA’s past waiver decisions have consistently made clear that: ‘‘[E]ven in the two areas concededly reserved for Federal judgment by this legislation—the existence of compelling and extraordinary conditions and whether the standards are technologically feasible—Congress intended that the standard of EPA review of the State decision to be a narrow one.’’ 58 Although EPA evaluates whether there are compelling and extraordinary conditions in California, the Agency nevertheless accords deference to California on its choices for how best to address such conditions in light of the extensive legislative history of section 209(b). As noted earlier, the burden of proof in a waiver proceeding is on EPA and the opponents of the waiver. This is clear from the statutory language stating that EPA ‘‘shall . . . waive’’ preemption unless one of three statutory factors is met. This reading was upheld by the D.C. Circuit in MEMA I, which concluded that this obligation rests 55 Id. 56 Id. 57 Id. 58 See, E:\FR\FM\06APN2.SGM e.g., 40 FR 21102–03 (May 28, 1975). 06APN2 20694 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices firmly with opponents of the waiver in a section 209 proceeding by holding that: The language of the statute and its legislative history indicate that California’s regulations, and California’s determinations that they must comply with the statute, when presented to the Administrator are presumed to satisfy the waiver requirements and that the burden of proving otherwise is on whoever attacks them. California must present its regulations and findings at the hearing and thereafter the parties opposing the waiver request bear the burden of persuading the Administrator that the waiver request should be denied.59 The Administrator’s burden, on the other hand, is to make a reasonable evaluation of the information in the record in coming to the waiver decision. As the court in MEMA I stated, ‘‘Here, too, if the Administrator ignores evidence demonstrating that the waiver should not be granted, or if he seeks to overcome that evidence with unsupported assumptions of his own, he runs the risk of having his waiver decision set aside as ‘arbitrary and capricious.’’ 60 Therefore, the Administrator’s burden is to act ‘‘reasonably.’’ 61 III. Discussion This section evaluates each of the two waiver requests and sets forth EPA’s rationale for granting each separate request.62 First, we identify the specific rubric by which we adjudicate each waiver request. Because the 2018 HD Warranty Amendments constitute ‘‘accompanying enforcement procedures,’’ as opposed to new standards, EPA evaluates this request under the more limited rubric for accompanying enforcement procedures, as detailed in section III.A below. However, even if EPA were to treat the 2018 HD Warranty Amendments as new onroad standards and evaluate them under the full waiver criteria applicable to such standards, the opponents of the waiver have failed to meet their burden of proof. We next turn to the three waiver criteria, which we evaluate in turn in sections III.B–D. For each waiver criterion, we set forth EPA’s general 59 MEMA ddrumheller on DSK120RN23PROD with NOTICES2 60 Id. I, 627 F.2d at 1121. at 1126. approach to evaluating the criterion, summarize the position of CARB and the commenters for each of the waiver requests, discuss EPA’s analysis of the criterion, and finally present our conclusion.63 Many of the waiver opponents’ arguments centered on the third waiver prong and, in particular, on an argument that, notwithstanding EPA’s conclusion that the California standards and accompanying enforcement procedures are feasible within the lead time given under the regulations, EPA must require California standards to include four years’ lead time required for certain Federal heavyduty vehicle standards set out in section 202(a)(3)(C). We address this argument in detail in section III.D.5. In every case, we conclude that the opponents of the waiver have failed to meet their burden of proof. Finally, EPA received comments outside the scope of this action. We discuss these comments, relating to preemption under the Energy Policy and Conservation Act (EPCA), the Equal Sovereignty Doctrine and other constitutional issues, in section III.E. As the scope of EPA’s review under section 209 is constrained, EPA has declined to consider them in granting these waiver requests. A. Evaluation of CARB’s 2018 HD Warranty Amendments With respect to the 2018 HD Warranty Amendments, we first address the proper rubric by which to evaluate this regulation. To determine the proper rubric, EPA first evaluates whether CARB’s 2018 HD Warranty Amendments should be considered standards or ‘‘accompanying enforcement procedures’’ because ‘‘section 209(b) refers to accompanying procedures only in the context of consistency with section 202(a).’’ 64 Specifically, under section 209(b)(1)(C), EPA is to deny a waiver if ‘‘such state standards and accompanying enforcement procedures are not consistent with section 202(a).’’ EPA then evaluates whether CARB’s request relating to its 2018 HD Warranty Amendments should be treated as within-the-scope of a prior waiver request or as a request for a new waiver. As we explain below, EPA concludes that CARB’s 2018 HD Warranty 61 Id. 62 EPA intends our grant of the waiver for each of the four California regulations at issue (i.e., 2018 HD Warranty Amendments, ACT, ZEAS, and ZEP Certification Regulations,) to be severable. Were a reviewing court to set aside our waiver action regarding any particular regulation, or portion of any particular regulation, EPA intends for the actions on the remaining regulations and the remaining portion of the affected regulation to remain in effect. VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 63 Although EPA issued separate Federal Notices that solicited comments on each waiver request, EPA is electing to grant waivers for all the regulations included in the two requests in this single document in which it discusses each of the two waiver criteria only once and then evaluates each of CARB’s regulations under each criterion and makes separate decisions with respect to each regulation. 64 MEMA I, 627 F.2d at 1111–12. PO 00000 Frm 00008 Fmt 4701 Sfmt 4703 Amendments are ‘‘accompanying enforcement procedures’’ and that it is also appropriate to treat CARB’s request as one for a new waiver. Given these determinations, EPA applies the first and third waiver prongs under 209(b)(1) (relating to California’s protectiveness determination and consistency with 202(a)) in evaluating CARB’s request. However, even if EPA were to treat CARB’s 2018 HD Warranty Amendment as a new standard for which California is seeking a new waiver and apply all three waiver prongs, EPA would nonetheless grant the waiver. CARB requested that the Administrator confirm that the 2018 HD Warranty Amendments fall within the scope of the 2005 waiver of preemption that the Administrator granted for California’s emission standards and associated test procedures for 2007 and subsequent model year heavy-duty diesel vehicles and engines, and its waiver request includes discussion of how each of the relevant prongs applicable to enforcement procedures (i.e., that the enforcement procedure does not undermine California’s protectiveness determination and that there is consistency between the Federal and California enforcement procedures) are within the scope of the previously granted waiver. In the alternative, CARB requested EPA grant a new waiver of preemption and discussed each of the relevant prongs for a new waiver (i.e., protectiveness, consistency and, if waiving a standard, the need for the program as a whole to meet compelling and extraordinary conditions in the state).65 CARB noted that the 2018 HD Warranty Amendments encompass several elements that individually and collectively establish more rigorous emissions warranty and emissions maintenance schedule requirements.66 EPA believes that the 2018 HD Warranty Amendments are properly 65 See 2018 HD Warranty Amendments Waiver Support Document at 18–25. CARB maintained that the 2018 HD Warranty Amendments are within the scope of the waiver EPA granted for CARB’s 2007 heavy-duty vehicle emission standards. 70 FR 50322 (August 26, 2005). Therefore, CARB’s waiver request included information to demonstrate that the 2018 HD Warranty Amendments do not undermine the previous protectiveness determination associated with the 2007 emission standards nor do the Amendments affect the consistency of the heavy-duty vehicles emission standards with section 202(a) of the CAA. CARB also stated that it is not aware of any new issues raised by the Amendments. Alternatively, CARB stated that, if EPA must grant CARB a new waiver for the Amendments (in addition to the two waiver criteria already discussed for the within-the-scope request), California continues to need a separate motor vehicle program to meet compelling and extraordinary conditions. 66 2018 HD Warranty Amendments Waiver Support Document at 18–25. E:\FR\FM\06APN2.SGM 06APN2 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices ddrumheller on DSK120RN23PROD with NOTICES2 considered accompanying enforcement procedures because they constitute criteria designed to determine compliance with applicable standards and are accordingly relevant to a manufacturer’s ability to produce vehicles and engines that comply with applicable standards for their useful lives.67 Because accompanying enforcement procedures are only contained in section 209(b)(1)(C), or the third waiver prong, EPA’s historical practice of considering whether to grant waivers for accompanying enforcement procedures tied to standards for which a waiver has already been granted is to determine only: (1) Whether the enforcement procedures threaten the validity of California’s determination that its standards are as protective of public health and welfare as applicable Federal standards, (i.e., the first prong) and (2) whether the Federal and California enforcement procedures are consistent (i.e., the third prong).68 EPA notes that these two criteria are similar to the questions EPA reviews for within-thescope requests for both standards and enforcement procedures. However, when reviewing amendments to a previously waived standard or accompanying enforcement procedure, for which CARB seeks a within-thescope determination from EPA, EPA also reviews whether the amendments raise any ‘‘new issues’’ affecting the Administrator’s previous waiver determination, and if there are new issues that trigger a full review of the relevant two prongs.69 In this instance, EPA believes new issues have been raised by the amendments and therefore it is appropriate to review the Amendments under the complete waiver criteria applicable to accompanying enforcement procedures (i.e., the first and third waiver prongs). Because under either compliance path the manufacturer is under an additional requirement that creates a new burden rather than a flexibility, EPA believes this necessarily creates a new question as to whether the accompanying enforcement procedure meets the 67 MEMA I at 1111–13 (‘‘In that setting we believe that the Administrator correctly classified the inuse maintenance regulations as accompanying enforcement procedures’ rather than as ‘‘standards.’’); Decision Document accompanying 51 FR 12391 (April 10, 1986), at 3. EPA sets emissions warranty periods under section 207(a) and not section 202(a). See, e.g., 48 FR 52170 (November 16, 1983). 68 MEMA I, 627 F.2d 1095, 1111, 1113; Decision Document accompanying 61 FR 53371 (Oct. 11, 1996) at 17; 74 FR 3030, 3032 (Jan. 16, 2009). 69 45 FR 54130 (Aug. 14, 1980); 46 FR 36742 (July 15, 1981); 75 FR 44948, 444951 (July 30, 2010). VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 requirements of the third waiver prong. EPA notes that there could be some level of uncertainty in determining whether ‘‘new issues’’ have been raised, including whether a compliance path where manufacturers only cover the costs of expected additional warranty claims is equivalent to a new, more stringent accompanying enforcement procedure. In addition, because the criteria for a within-the-scope waiver evaluation and a full waiver are similar, EPA believes it is prudent in this instance to review the request under the full waiver criteria (i.e., the relevant two prongs identified above). The 2018 HD Warranty Amendments encompass several elements that individually and collectively establish more rigorous emissions warranty and emissions maintenance schedule requirements that raise issues regarding the technological feasibility of the aggregate requirements applicable to new heavy-duty vehicles and engines. Therefore, EPA is evaluating the 2018 HD Warranty Amendments under the two waiver criteria below that apply to accompanying enforcement procedures.70 B. First Waiver Criterion: Are California’s Protectiveness Determinations Arbitrary and Capricious? We now turn to California’s protectiveness determinations for the regulations covered under each of its waiver requests. EPA’s evaluation of this first waiver prong is performed under the construct explained here. Section 209(b)(1)(A) of the Clean Air Act requires EPA to grant a waiver unless the Administrator finds that California’s determination that its State standards will be, in the aggregate, at least as protective of public health and welfare as applicable Federal standards, is arbitrary and capricious. EPA may not disregard California’s determination unless there is ‘‘clear and compelling evidence’’ to the contrary.71 Moreover, 70 EPA believes it is only necessary to review: (1) Whether the enforcement procedures are so lax that they threaten the validity of California’s determination that its standards are as protective of public health and welfare as applicable Federal standards, and (2) whether the Federal and California enforcement procedures are consistent. However, even if EPA were to review the enforcement procedures under the second waiver criterion (as EPA does in the alternative below, without conceding the second waiver criterion applies, which we include in the event that those opposed to the waiver believe the 2018 HD Warranty Amendments are equivalent to new emission standards rather than accompanying enforcement procedures), the opponents of the 2018 HD Warranty Amendments have not met their burden of proof regarding section 209(b)(1)(B). 71 MEMA I, 627 F.2d 1095, 1121–22 (D.C. Cir. 1979). PO 00000 Frm 00009 Fmt 4701 Sfmt 4703 20695 ‘‘[t]he language of the statute and its legislative history indicate that California’s regulations, and California’s determination that they comply with the statute, when presented to the Administrator are presumed to satisfy the waiver requirements.’’ 72 Additionally, it is ‘‘the parties opposing the waiver request bear the burden of persuading the Administrator that the waiver request should be denied.’’ 73 1. EPA’s Historical Interpretation of Section 209(b)(1)(A) EPA’s long-standing interpretation (also called the ‘‘traditional interpretation’’) is that the phrase ‘‘State standards’’ in section 209(b)(1) means the entire California new motor vehicle emissions program.74 Therefore, as explained below, when evaluating California’s protectiveness determination, EPA compares the California standards as a whole to the Federal standards. That comparison is undertaken within the broader context of the previously waived California program, which relies upon protectiveness determinations that EPA has previously found were not arbitrary and capricious.75 That evaluation follows the instruction of section 209(b)(2), which states: ‘‘If each State standard is at least as stringent as the comparable applicable Federal standard, such State standard shall be deemed to be at least as protective of health and welfare as such Federal standards for purposes of [209(b)(1)].’’ 76 To review California’s protectiveness determination in light of section 209(b)(2), EPA conducts its own analysis of the newly adopted California standards to comparable applicable Federal standards. The comparison 72 Id. See also Ford Motor, 606 F.2d 1293, 1297 (D.C. Cir. 1979). 73 MEMA I, 627 F.2d at 1121. 74 74 FR 32744, 32749 (July 8, 2009); 70 FR 50322 (Aug. 26, 2005); 77 FR 9239 (Feb. 16, 2012); 78 FR 2112, 2123 (Jan. 9, 2013). 75 36 FR 17458 (Aug. 31, 1971). (‘‘The law makes it clear that the waiver requests cannot be denied unless the specific finding designated in the statute can properly be made. The issue of whether a proposed California requirement is likely to result in only marginal improvement in air quality not commensurate with its cost or is otherwise an arguably unwise exercise of regulatory power is not legally pertinent to my decision under section 209, so long as the California requirement is consistent with section 202(a) and is more stringent than applicable Federal requirements in the sense that it may result in some further reduction in air pollution in California.’’). The ‘‘more stringent’’ standard expressed here in 1971 was superseded by the 1977 Amendments to section 209, which established that California’s standards must be, in the aggregate, at least as protective of public health and welfare as applicable Federal standards. The stringency standard remains, though, in section 209(b)(2). 76 CAA section 209(b)(2). E:\FR\FM\06APN2.SGM 06APN2 20696 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices quantitatively answers whether the new standards are more or less protective than the Federal standards. Section 209 provides two paths for finding that California’s protectiveness determination is reasonable. In addition to a side-by-side comparison of California and applicable Federal standards considering section 209(b)(2), California’s program can still be at least as protective as EPA’s program even if some (or even all) of the new or amended standards in a waiver request are less stringent than the applicable EPA standards if California’s program, as a whole, is at least as protective as the Federal standards as a whole.77 Thus, EPA first examines whether the side-by-side analysis under section 209(b)(2) resolves the protectiveness inquiry. If there are some EPA standards that are numerically more stringent that the California standards, then the question that EPA reviews is whether the new or amended California standards would cause the State’s new motor vehicle emissions program as a whole (‘‘in the aggregate’’) to become less protective than EPA’s program. A finding that California’s protectiveness determination was arbitrary and capricious under section 209(b)(1)(A) must be based upon ‘‘‘clear and compelling evidence’ to show that proposed [standards] undermine the protectiveness of California’s standards.’’ 78 As noted previously, when considering whether to grant waivers for accompanying enforcement procedures tied to standards for which a waiver has already been granted, EPA has long held that, under section 209(b)(1)(A)’s first prong, it will only address the question of whether the enforcement procedures are so lax that they threaten the validity of California’s previous determination that its standards are as protective of public health and welfare as applicable Federal standards.79 2. CARB’s Discussion of California’s Protectiveness Determinations in the Waiver Requests ddrumheller on DSK120RN23PROD with NOTICES2 a. 2018 HD Warranty Amendments With regard to the 2018 HD Warranty Amendments, CARB made a determination that the Amendments will not cause California’s motor vehicle 77 Id. 78 MEMA I, 627 F.2d at 1122. I, 627 F.2d 1095, 1113 n.36 (D.C. Cir. 1979)(The Administrator ‘‘explored whether the procedures had a negative effect on the protectiveness of the California standards for which a waiver had already been granted. See 43 FR 32183 (1978), reprinted in J.A. at 56. This inquiry is perfectly consistent with the Administrator’s past practice and his position in this court.’’) 79 MEMA VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 emission standards, in the aggregate, to be less protective of public health and welfare than applicable Federal standards in Resolution 18–24.80 CARB noted that the 2018 HD Warranty Amendments do not reduce the stringency of the previously waived emission standards or the associated test procedures for 2007 and subsequent model year heavy-duty diesel engines and vehicles, but instead establish emissions warranty requirements for heavy-duty diesel engines and heavyduty diesel vehicles that are more stringent than the corresponding Federal emission warranty requirements for such engines and vehicles.81 Second, the ACT, ZEAS, and ZEP waiver request also contained CARB’s summary of the Board’s protectiveness findings regarding its ZEAS Regulation and explained that there are no comparable Federal requirements.84 Finally, in the ACT, ZEAS, and ZEP waiver request, CARB noted that the ZEP Certification Regulation was also accompanied by the Board approved Resolution 19–15 that contained a determination that these regulations will not cause California’s motor vehicle emission standards, in the aggregate, to be less protective of public health and welfare than applicable Federal standards.85 b. ACT, ZEAS, and ZEP Certification Regulations Regarding CARB’s request for a waiver for the ACT Regulation, ZEAS Regulation, and ZEP Certification Regulation, CARB noted that it made protectiveness determinations for each respective regulation in the request. First, CARB stated that in Board Resolution 78–10 it determined that the requirements related to the control of emissions contained in the ACT Regulation will not cause California motor vehicle emission standards, in the aggregate, to be less protective of public health and welfare than applicable Federal standards, and that no basis exists for EPA’s Administrator to find that determination arbitrary and capricious.82 CARB noted that its ACT Regulation is clearly more stringent than any applicable Federal requirements because there are no comparable Federal requirements.83 3. Comments on California’s Protectiveness Determinations EPA did not receive any comment suggesting that CARB’s 2018 HD Warranty Amendments threaten the validity of California’s determination that its standards are as protective of public health and welfare as applicable Federal standards.86 However, EPA received several comments that claimed that CARB’s protectiveness determinations in support of the ACT Regulation and the ZEAS Regulation were arbitrary and capricious.87 One commenter claimed that CARB was pursuing a policy directive toward the acceleration of ZEVs in the medium- and heavy-duty truck sector by glossing over a number of impacts both within and outside the State of California that renders the ACT Regulation less protective than applicable Federal standards.88 Several commenters asserted that CARB overestimated the emission benefits of its standards, even though CARB noted that its standards would still enhance the relative protectiveness of the California 80 EPA–HQ–OAR–2022–0330–0004. 81 Id. at 19–20. CARB also noted that the newly established emission warranty periods for every category of California heavy-duty diesel engines and heavy-duty diesel vehicles exceed the corresponding federal emission warranty period of 5 years or 100,000 miles during this time frame. CARB also noted that the newly established minimum allowable maintenance schedules for emissions-related parts are more restrictive regarding allowable repairs or replacements of emissions-related parts than the corresponding federal allowable maintenance schedules, and the Amendments expand the scope of California’s emissions warranty beyond the federal emissions warranty by expressly encompassing components monitored by HD OBD systems which, when they fail, cause the HD OBD system’s malfunction indication light (MIL) to illuminate. Id. 82 EPA–HQ–OAR–2022–0331–0003. See Board Resolution 20–19. 83 Id. CARB further notes that ‘‘because California’s pre-existing motor vehicle emissions program does not require medium- or heavy-duty vehicles and engines to meet zero emission standards, it is evident that the ACT regulation will, in conjunction with other elements of California’s motor vehicle emissions program for medium and heavy-duty vehicles, render California’s motor vehicle emission emissions standards, in the aggregate, to be at least as protective of public health and welfare as applicable federal standards.’’ PO 00000 Frm 00010 Fmt 4701 Sfmt 4703 84 Id. at 20. See Board Resolution 19–16. at 20–21. 86 Although there is no information in the record that would support a finding that CARB’s protectiveness determination was arbitrary and capricious in a section ‘‘209(b)(2) type’’ of analysis, we note that, because section 209(b)(1)(A) calls for an analysis of whether California’s motor vehicle emission standards, in the aggregate, are as protective of public health and welfare as applicable Federal standards, EPA also incorporates the findings below regarding the protectiveness of the regulations in CARB’s ACT, ZEAS, and ZEP waiver request to the finding regarding the HD Warranty Amendments. 87 Although EPA discusses these comments as provided (meaning that some comments are discussed in the context of multiple regulations at once), EPA considered comments separately in its evaluation of California’s protectiveness determination for each regulation. 88 Valero at 2. This commenter asserted that CARB failed to conduct a full lifecycle analysis in order to understand the full emission impacts of battery electric vehicles and that CARB did not consider potential reductions that may be achieved by internal combustion engines. 85 Id. E:\FR\FM\06APN2.SGM 06APN2 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices ddrumheller on DSK120RN23PROD with NOTICES2 program that EPA previously found to be as protective as the Federal program.89 EPA did not receive any comments related to CARB’s protectiveness determination for the ZEP Certification Regulation. As noted above, EPA received comments that claimed that the ACT Regulation would slow down fleet turnover and that, by requiring zeroemission vehicles, this regulation would not ‘‘result in lower emissions of GHGs and other pollutants than can be achieved by internal combustion engine (ICE) vehicles.’’ 90 Another commenter contended that ‘‘to the extent a CARB [commercial truck or tractor (CMV)] rule or standard is technologically infeasible, or likely result in new CMVs that are cost prohibitive’’ or that raises reliability concerns then ‘‘the agency’’ would be acting ‘‘arbitrarily and capriciously’’ to issue such a rule or standard.91 In response, CARB noted that these commenters cannot establish ‘‘that delayed purchases or pre-buys or other purchasing choices would lead to emissions increases as a result of ACT or ZEAS’’ because ‘‘both regulations will require displacement of higheremitting conventional vehicles with zero-emission vehicles’’ and ‘‘[e]ven if that displacement is lower or slower than CARB estimated, these standards nonetheless could not make California’s motor vehicle program less protective than EPA’s.’’ 92 EPA also received comments that questioned the policy of CARB’s adoption of the ACT and ZEAS Regulations. One commenter claimed that maintaining the existing Federal standards would be the best way for California to minimize environmental impacts, based on a full lifecycle assessment of emissions, instead of California’s approach that would necessitate expensive battery electric technology that would slow fleet turnover.93 Regarding the ACT Regulation some commenters also 89 CARB Supplemental Comments, Docket Nos. EPA–HQ–OAR–2022–0330–0072, EPA–HQ–OAR– 2022–0331–0133. CARB noted that if there are any benefits from the new standards then their adoption cannot render the existing California program less protective. CARB stated that, since there are no comparable federal requirements for ACT and ZEAS, this logic is all the more true. 90 Valero at 2; see also AFPM at 8. 91 NADA at 2–3. We further address these latter comments in our analysis of the third waiver criterion below. In general, EPA has long explained that ‘‘questions concerning the effectiveness of the available technology are also within the category outside my permissible scope of inquiry,’’ under section 209(b)(1)(C). 41 FR 44209, 44210 (October 7, 1976). 92 CARB Supplemental Comments at 4. 93 AFPM at 8–12. VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 claimed that CARB should have adopted different regulatory approaches, such as one that incorporates increased introduction of renewable liquid and gaseous fuels, which the commenter claimed would be more cost effective.94 In response, CARB noted that EPA is precluded from considering different policy or hypothetical rulemaking options that CARB might have considered and rather is properly guided by the language at section 209(b)(2) that clearly states that if each state standard is at least as stringent as the comparable Federal standard that such California standards shall be deemed at least as protective of public health and welfare as such Federal standards for purposes of section 209(b)(1).95 4. California’s Protectiveness Determinations Are Not Arbitrary and Capricious As described above, EPA’s traditional analysis has been to evaluate California’s protectiveness determination by comparing the new California standards, or amendments, to applicable EPA emission standards for the same pollutants. The comparison of EPA and California standards is undertaken within the broader context of the previously waived California program, which relies upon protectiveness determinations that EPA has previously found were not arbitrary and capricious.96 The prior statutory requirement that each California standard be ‘‘more stringent’’ than the Federal standard was superseded by the 1977 Amendments to section 209, which established that a waiver must be granted where California’s standards are, in the aggregate, at least as protective of public health and welfare as applicable Federal standards. This was intended to afford California the broadest possible discretion in designing is motor vehicle emission program. EPA did not receive any comments or information in the record that demonstrated that CARB’s new, more stringent 2018 HD Warranty Amendments would threaten the 94 One commenter suggests that, to the extent the ACT Regulation is technologically infeasible or cost prohibitive for customers or otherwise raises reliability concerns, then CARB’s protectiveness determination would be arbitrary and capricious. Another commenter stated that California has not conducted any air quality analysis per dollar of investment relative to the existing Federal standards versus the ACT Regulation. This commenter claimed that a full life-cycle analysis would reveal that the existing Federal NOX standards are the better approach. AFPM at 12–15. 95 CARB Supplemental Comments at 2. 96 78 FR 2112, 2123 (January 9, 2013). PO 00000 Frm 00011 Fmt 4701 Sfmt 4703 20697 validity of CARB’s protectiveness determination applicable to these enforcement procedures. Based on the record EPA cannot make a determination that CARB’s protectiveness finding regarding the 2018 HD Warranty Amendments was arbitrary and capricious. EPA has received no comment or other information in the record to support an argument that EPA’s statutory interpretation of the first waiver prong for its analysis of the California emission standards (i.e., ACT Regulation, ZEAS Regulation, and ZEP Certification Regulation) is unreasonable. In addition, EPA received no comment or information that provided any type of numerical comparison of the stringency of CARB’s standards to applicable Federal standards. Specifically, there is no evidence in the record to demonstrate, by way of numerical comparison, that CARB’s standards are not as stringent, in the aggregate, as EPA’s requirements.97 To the extent that commenters stated that CARB overestimated the emission benefits of its standards, on the basis of the record EPA agrees with CARB that, under a numerical comparison of the standards, the new standards will still be more stringent than the Federal program— especially in the case of the ACT and ZEAS Regulations, which have no comparable Federal requirements. Therefore, we find that the opponents of the waiver have not met their burden of proof to demonstrate that any of CARB’s protectiveness determinations associated with the regulations contained in the two waiver requests were arbitrary and capricious and, 97 EPA notes that CARB’s protectiveness determinations, associated with each of the regulations contained in its waiver request were not arbitrary and capricious despite subsequent changes to the ‘‘applicable Federal standards’’ in section 209(b)(1)(A). In this case changes in the applicable standards are reflected in EPA’s recent rule to lower NOX and other air pollutants from heavy-duty vehicles and engines starting in the 2027 model year. See 88 FR 4296 (January 24, 2023). EPA’s regulation does not relate to emission warranty and other requirements for the same model year (2022– 2023) heavy-duty vehicles and engines as the 2018 HD Warranty Amendments. This is in contrast to EPA’s recent rulemaking where the extended emission warranty period takes place with the 2027 model year. Likewise, the EPA regulation does not relate to or does not set zero-emission vehicle requirements related to heavy-duty vehicles and engines as do the regulations contained in CARB’s ACT, ZEAS, and ZEP waiver request. In addition, at the time CARB submitted its waiver requests the ‘‘applicable Federal standards’’ were EPA’s regulations adopted in 2002 and applicable to 2007 and 2010 requirements, and not EPA’s most recent rulemaking. As noted, no evidence is in the record to demonstrate, by way of numerical comparison, that CARB’s standards are not as stringent, in the aggregate, as the prior EPA standards that commenced in the 2007 model year. E:\FR\FM\06APN2.SGM 06APN2 20698 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices therefore, EPA cannot deny the CARB’s waiver requests based on section 209(b)(1)(A). Additionally, in response to comments suggesting that CARB should have adopted different policies or different regulations, or that CARB’s ACT and ZEAS Regulations will not be effective, EPA notes that there are no comparable Federal standards mandating, for instance, sales of a certain percentage of ZEV and NZEV vehicles, or zero-emission airport shuttle fleet composition.98 As such, any enhancement to CARB’s motor vehicle emission program—including its heavy-duty vehicles standards—cannot render California’s program less protective than the applicable Federal standards. Likewise, and as we further address these latter comments in our analysis of the third waiver criterion below, EPA is not permitted in its statutory role to assess different, hypothetical CARB regulations that CARB might have adopted and then, in turn, compare those regulations to Federal standards.99 That is, the relevant question before EPA is whether California’s standards are in the aggregate at least as protective as the Federal ones, not whether California hypothetically should have adopted a different program that the commenter prefers. EPA also received no comments or evidence to support the view that zeroemission vehicles do not result in some degree of lower emissions—of either criteria pollutants or GHGs—than conventional vehicles do. EPA agrees with CARB that this logically supports ddrumheller on DSK120RN23PROD with NOTICES2 98 In general, EPA has long explained that ‘‘questions concerning the effectiveness of the available technology are also within the category outside [the Administrator’s] permissible scope of inquiry,’’ under section 209(b)(1)(C). 41 FR 44209, 44210 (October 7, 1976). 99 EPA has recognized that the intent of Congress in creating a limited review based on the section 209(b)(1) criteria was to ensure that the Federal government did not second-guess state policy choices. This has led EPA to state, ‘‘It is worth noting . . . I would feel constrained to approve a California approach to the problem which I might also feel unable to adopt at the federal level in my own capacity as a regulator. The whole approach of the Clean Air Act is to force the development of new types of emission control technology where that is needed by compelling the industry to ‘‘catch up’’ to some degree with newly promulgated standards. Such an approach * * * may be attended with costs, in the shaped of reduced product offering, or price or fuel economy penalties, and by risks that a wider number of vehicle classes may not be able to complete their development work in time. Since a balancing of these risks and costs against the potential benefits from reduced emissions is a central policy decision for any regulatory agency under the statutory scheme outlined above, I believe I am required to give very substantial deference to California’s judgments on this score.’’ 40 FR 23103–04. See also LEV I, 58 FR 4166 (January 13, 1993), Decision Document at 64. VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 a conclusion that the ACT and ZEAS Regulations, which require more and more of these vehicles, would increase the protectiveness of California’s program.100 Moreover, EPA does not agree with the commenters’ claims that considering lifecycle emissions renders the protectiveness finding arbitrary and capricious. First, the scope of EPA’s review of CARB’s protectiveness determination is narrow and need not include far-reaching assessments of the environmental or other impacts of CARB’s chosen regulations and associated policy decisions. Section 209(b)(1) does not require California or EPA to consider lifecycle emissions. Nor does it otherwise suggest that EPA must look broadly outside motor vehicle emissions to emissions from other sources, including those regulated under separate federal and state programs. Therefore, EPA is not required to consider potential broader environmental impacts in assessing protectiveness. Secondly, to the extent such impacts and decisions could be relevant to section 209(b)(1)(A), commenters failed to adduce sufficient evidence to support this argument considering California’s technical findings relating to this issue.101 EPA also finds no evidence in the record, to the extent commenters asserted that fleet turnover would be slower, that supports the view that an emissions increase would occur because of the ACT or ZEAS Regulations. Such claims, without evidence that the regulations result in less protective emission standards do not meet the 100 CARB Final Statement of Reasons for ACT Regulation at 105–06, https://ww2.arb.ca.gov/sites/ default/files/barcu/regact/2019/act2019/fsor.pdf; CARB Supplemental Comments at 3–4 (‘‘It is, in fact, unrefuted that zero-emission vehicles result in lower emissions (and not only of GHGs) than conventional vehicles. This fact naturally leads to the conclusion that requiring the sale (ACT) and use (ZEAS) of more and more of these vehicles increases the protectiveness of California’s program which has previously been found to be at least as protective as EPA’s.’’). 101 CARB Supplemental Comments at 3 (‘‘[T]he only analysis offered—a report by the American Transportation Research Institute—does nothing to undermine CARB’s determination. That report (also prepared after CARB’s protectiveness determination) focused only on lifecycle GHG emissions from Class 8 trucks engaged in long hauls, and, as such, it cannot undermine CARB’s protectiveness determination which was based on consideration of all affected pollutants and all regulated vehicles. In any event, even though it focused exclusively on the vehicles that CARB found the least promising for near-term electrification, the report nonetheless finds that zero-emission Class 8 trucks engaged in long hauls would have lower lifecycle GHG emissions than conventional Class 8 trucks. In other words, this report, too, supports the determination that California’s program with ACT is at least as protective as EPA’s federal program (which has no ACT-like standards)’’ (original emphasis)). PO 00000 Frm 00012 Fmt 4701 Sfmt 4703 burden of proof on the opponents of the waiver.102 Similar to commenters’ claims that the regulations would result in slower fleet turnover, statements that these purchasing decisions will result in fewer emission benefits does not otherwise demonstrate that CARB’s emission standards are less protective than applicable Federal standards, or that CARB’s protectiveness determination was arbitrary and capricious. 5. Section 202(b)(1)(A) Conclusion EPA believes that, given the lack of any comments or information in the record that demonstrate that CARB’s new more stringent 2018 HD Warranty Amendments would threaten the validity of CARB’s protectiveness determination, it has no basis to conclude that California’s determination that its standards are at least as protective is arbitrary and capricious and therefore deny CARB’s waiver request for the 2018 HD Warranty Amendments under section 209(b)(1)(A). The same conclusion applies were EPA to consider (in the alternative) the 2018 HD Warranty Amendments as emission standards as opposed to accompanying enforcement procedures. Further, based on the record before EPA, we cannot find that CARB was arbitrary and capricious in its respective findings that the California heavy-duty vehicle and engine standards, including the ACT Regulation, the ZEAS Regulation, and the ZEP Certification Regulation) are individually, and in the aggregate, at least as protective of public health and welfare as applicable Federal standards. CARB has provided reasonably detailed information to support its protectiveness determination. Commenters have not provided sufficient information and analysis that calls CARB’s analysis (associated with the California protectiveness determination) into question. Therefore, we find that the opponents of the waiver have not met their burden of proof to demonstrate that any of CARB’s protectiveness determinations associated with the regulations contained within their waiver requests were arbitrary and capricious and, therefore, EPA cannot deny CARB’s waiver requests based on section 209(b)(1)(A). 102 As previously mentioned, CARB performed a sensitivity analysis of both ‘‘pre-buy’’ and ‘‘no-buy’’ scenarios regarding both the ACT and ZEAS program. For the ACT Regulation, CARB found that it would cause no increases in emissions. CARB Supplemental Comments at 3–4. E:\FR\FM\06APN2.SGM 06APN2 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices C. Second Waiver Criterion: Does California Need Its Standards To Meet Compelling and Extraordinary Conditions? Under section 209(b)(1)(B) of the Act, EPA must grant a waiver for California vehicle and engines standards and accompanying enforcement procedures unless EPA finds that California ‘‘does not need such State standards to meet compelling and extraordinary conditions.’’ EPA has traditionally interpreted this provision as requiring consideration of whether California needs a separate motor vehicle program to meet compelling and extraordinary conditions.103 1. EPA’s Historical Interpretation of Section 209(b)(1)(B) For nearly the entire history of the waiver program, EPA has read the phrase ‘‘such State standards’’ in section 209(b)(1)(B) as referring back to standards ‘‘in the aggregate,’’ in the root paragraph of section 209(b)(1), which calls for California to make a protectiveness finding for its standards. EPA has interpreted the phrase ‘‘in the aggregate’’ as referring to California’s program as a whole, rather than each State standard, and as such the Agency evaluates both protectiveness and need with reference to California’s program as a whole.104 EPA has reasoned that both statutory provisions must be read together so that the Agency reviews the same standards (e.g., new motor vehicle emission standards program) for need under 209(b)(1)(B) that California considers in making its protectiveness determination, and that under this statutory framework EPA is to afford California discretion in assessing its need for its motor vehicle emission standards program.105 EPA has also explained that section 209(b)(1)(C) also supports the ‘‘whole program’’ interpretation of section 209(b)(1)(B), as EPA’s feasibility assessment necessarily must evaluate any interactions between the standards in the proposed program (as well as other existing compliance obligations) and whether those interactions create feasibility problems.106 The D.C. Circuit has held 103 87 FR 14332 (March 14, 2022). FR 18887, 18890 (May 3, 1984) (‘‘The interpretation that my inquiry under section 209(b)(1)(B) goes to California’s need for its own mobile source program is borne out not only by the legislative history, but by the plain meaning of the statue as well.’’). 105 74 FR 32744, 32751, n. 44, 32761, n.104 (July 8, 2009). See also 78 FR 2112, 2126–27, n.78 (January 9, 2013). 106 EPA notes there would be an inconsistency if ‘‘State standards’’ meant all California standards when used in section 209(b)(1) but only particular standards when used in 209(b)(1)(B) and ddrumheller on DSK120RN23PROD with NOTICES2 104 49 VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 that ‘‘[t]he expansive statutory language gives California (and in turn EPA) a good deal of flexibility in assessing California’s regulatory needs. We therefore find no basis to disturb EPA’s reasonable interpretation of the second criterion.’’ 107 In addressing the Agency’s reading of section 209(b)(1)(B) as addressing California’s need for the motor vehicle emission program standards program as a whole in the 1983 LEV waiver request, for example, EPA explained that: This approach to the ‘‘need’’ criterion is also consistent with the fact that because California standards must be as protective as Federal standards in the aggregate, it is permissible for a particular California standard or standards to be less protective than the corresponding Federal standard. For example, for many years, California chose to allow a carbon monoxide standard for passenger cars that was less stringent than the corresponding Federal standard as a ‘‘trade-off’’ for California’s stringent nitrogen oxide standard. Under a standard of review like that proposed by MVMA/AIAM, EPA could not approve a waiver request for only a less stringent California standard because such a standard, in isolation, necessarily could be found to be contributing to rather than helping, California’s air pollution problems.108 In 1994, EPA again had cause to explain the Agency’s reading of section 209(b)(1)(B) in the context of California’s particulate matter standards waiver request: 209(b)(1)(C). EPA has traditionally interpreted the third waiver criterion’s feasibility analysis as a whole-program approach. 87 FR 14361, n.266. See also 84 FR at 51345. 107 Am. Trucking Ass’n v. EPA, 600 F.3d 624, 627 (D.C. Cir. 2010) (ATA v. EPA). See also Dalton Trucking v. EPA, No. 13–74019 (9th Cir. 2021) (‘‘The EPA was not arbitrary and capricious in declining to find that ‘California does not need such California standards to meet compelling and extraordinary conditions,’ section 7543(e)(2)(A)(ii), under the alternative version of the needs test, which requires ‘a review of whether the Fleet Requirements are per se needed to meet compelling and extraordinary conditions,’ 78 FR at 58,103. The EPA considered ‘the relevant factors,’ Motor Vehicle Mfrs. Ass’n of U.S. v. State Farm Mut. Auto. Ins. Co., Inc., 463 U.S. 29, 42–43 (1983), including statewide air quality, 78 FR 58,104, the state’s compliance with Federal National Ambient Air Quality standards for ozone and PM2.5 on a statewide basis, id. at 58,103–04, the statewide public health benefits, id. at 58,104, and the utility of the Fleet Requirements in assisting California to meet its goals, id. at 58,110. Contrary to Dalton’s argument, the EPA did not limit its review to two of California’s fourteen air quality regions. The EPA examined the relevant data provided by CARB, and it articulated a ‘satisfactory explanation for its action including a rational connection between the facts found and the choice made.’ See Motor Vehicle Mfrs. Ass’n of U.S., Inc., 463 U.S. at 43 (cleaned up).’’). 108 58 FR 4166, LEV Waiver Decision Document at 50–51. PO 00000 Frm 00013 Fmt 4701 Sfmt 4703 20699 [T]o find that the ‘compelling and extraordinary conditions’ test should apply to each pollutant would conflict with the amendment to section 209 in 1977 allowing California to select standards ‘in the aggregate’ at least as protective as federal standards. In enacting that change, Congress explicitly recognized that California’s mix of standards could ‘include some less stringent than the corresponding federal standards.’ See H.R. Rep. No. 294, 95th Cong., 1st Sess. 302 (1977). Congress could not have given this flexibility to California and simultaneously assigned to the state the seemingly impossible task of establishing that ‘extraordinary and compelling conditions’ exist for each standard.109 Congress has also not disturbed this reading of section 209(b)(1)(B) as calling for EPA review of California’s whole program. With two noted exceptions described below, EPA has consistently interpreted this provision as requiring the Agency to consider whether California needs a separate motor vehicle emission program rather than the specific standards in the waiver request at issue to meet compelling and extraordinary conditions. Congress intended to allow California to address its extraordinary environmental conditions and foster its role as a laboratory for motor vehicle emissions control. The Agency’s longstanding practice therefore has been to evaluate CARB’s waiver requests with the broadest possible discretion to allow California to select the means it determines best to protect the health and welfare of its citizens in recognition of both the harsh reality of California’s air pollution and the importance of California’s ability to serve as a pioneer and a laboratory for the nation in setting new motor vehicle emission standards and developing control technology.110 EPA notes that ‘‘the statute does not provide for any probing substantive review of the California standards by federal officials.’’ 111 As a general matter, EPA has applied the traditional interpretation in the same way for all air pollutants, criteria and GHG pollutants alike.112 In a departure from its long-standing interpretation, EPA has on two separate instances limited its interpretation of this provision to California motor 109 49 FR at 18887, 18890. e.g., S. Rep. No. 403, 90th Cong., 1st Sess. 33 (1967) (The waiver of preemption is for California’s ‘‘unique problems and pioneering efforts.’’); 113 Cong. Rec. 30950, 32478 (‘‘[T]he State will act as a testing agent for various types of controls and the country as a whole will be the beneficiary of this research.’’) (Statement of Sen. Murphy). 111 Ford Motor, 606 F.2d 1293, 1300 (D.C. Cir. 1979). 112 74 FR at 32763–65; 76 FR 34693; 79 FR 46256; 81 FR 95982. 110 See, E:\FR\FM\06APN2.SGM 06APN2 20700 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices ddrumheller on DSK120RN23PROD with NOTICES2 vehicle standards that are designed to address local or regional air pollution problems.113 In both instances EPA determined that the traditional interpretation was not appropriate for standards designed to address a global air pollution problem and its effects and that it was appropriate to address such standards separately from the remainder of the program (the alternative interpretation).114 However, shortly after both instances, EPA explained that the reinterpretation of the second waiver prong in this manner is flawed and the alternative interpretation is inappropriate, finding that the traditional interpretation—in which EPA reviews the need for California’s motor vehicle program—is the best interpretation.115 In the SAFE 1 Reconsideration Decision, for example, the Agency evaluated the traditional interpretation and the appropriateness of interpreting section 209(b)(1)(B) in the same manner for all pollutants and provided a textual analysis of why both section 209(b)(1)(A) and section 209(b)(1)(C) better support interpreting 209(b)(1)(B) as referring to California’s need for its mobile source emission program rather than to California’s need for a specific standard. EPA has not identified any reason to revise the interpretation contained in the SAFE 1 Reconsideration Decision.116 Further, EPA’s two FR Notices for the HD waiver requests noted the intention to use the traditional interpretation.117 113 73 FR 12156 (March 8, 2008); SAFE 1 at 51310. 114 SAFE 1. In SAFE 1, EPA withdrew a portion of the waiver it had previously granted for California’s Advanced Clean Cars (ACC) program— specifically, the waiver for California’s zero emission vehicle (ZEV) mandate and the GHG emission standards within California’s ACC program. EPA based its action, in part, on its determination that California did not need these emission standards to meet compelling and extraordinary conditions, within the meaning of section 209(b)(1)(B) of the CAA. That determination was in turn based on EPA’s adoption of a new, GHG-pollutant specific interpretation of section 209(b)(1)(B). In any event, EPA expressly stated that its new interpretation of section 209(b)(1)(B) only applies to waiver requests for GHG emissionreducing standards, SAFE 1 at 51341, n. 263. Therefore, even under the SAFE 1 interpretation (which EPA does not agree with for the reasons explained below and in the SAFE 1 Reconsideration Decision), EPA’s traditional interpretation would still apply to this request given all of the standards at issue are, in whole or in part, related to the reduction of criteria pollutant emissions, or would otherwise meet the SAFE 1 alternative interpretation test as it applied to GHG emission. 115 74 FR 32744 (July 8, 2009); SAFE 1 Reconsideration Decision at 14333–34, 14352–55, 14358–62. 116 Id. 117 See 87 FR 35765, 3767 (June 13, 2022). VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 2. CARB’s Discussion of California’s Need for the Standards in the Waiver Requests a. 2018 HD Warranty Amendments As noted above, CARB maintained that the 2018 HD Warranty Amendments are an accompanying enforcement procedure and, as such, the second waiver prong at section 209(b)(1)(B) does not apply to the waiver analysis for this regulation. Alternatively, if EPA deems that the 2018 HD Warranty Amendments are standards subject to all three waiver prongs, then CARB maintained that the regulations meet the second waiver prong.118 CARB also noted the same conclusion applies whether this request involves a new waiver (as EPA has determined) or (in the alternative), a within-the-scope determination. b. ACT, ZEAS, and ZEP Certification Regulations CARB provided similar context in its ACT Regulation, ZEAS Regulation, and ZEP Certification Regulation waiver support document. CARB noted that ‘‘[t]hese three rulemaking actions individually and collectively implement measures in California’s State Implementation Plan (SIP) that are needed for California to achieve compliance with national ambient air quality standards and to reduce emissions of greenhouse gases (GHGs).’’ 119 CARB noted that its Executive Officer determined that ‘‘California needs a separate motor vehicle emission program to meet compelling and extraordinary conditions’’ based in part on a number of CARB Board findings and statements and information contained in Staff Reports for the regulations.120 CARB also noted that, even if an alternative interpretation of section 209(b)(1)(B) requires an assessment of the need for individual emission standards, CARB needs the ACT Regulation, ZEAS Regulation, and ZEP Certification Regulation to address compelling and extraordinary conditions that California faces from both criteria pollution and from climate change—each regulation 118 2018 HD Warranty Amendments Waiver Support Document at 23–25. CARB noted that ‘‘[t]he 2018 HD Warranty Amendments are projected to reduce statewide NOX and PM emissions by 0.75 tons per day (tpd) and 0.008 tpd respectively, by 2030. NOX emissions are projected to decrease in the South Coast Air Basin and in the San Joaquin Valley Air Basins by 0.24 and 0.18 tpd, respectively, by 2030.’’ Waiver Support Document at 2. 119 ACT/ZEAS/ZEP Waiver Support Document at 1. 120 ACT/ZEAS/ZEP Waiver Support Document at 22–25 (citing ACT/ZEAS/ZEP Waiver Request). PO 00000 Frm 00014 Fmt 4701 Sfmt 4703 expressly requires categories of medium and heavy-duty vehicles and their powertrains to emit no criteria or GHG pollutants, thereby addressing these conditions in California. CARB further notes that EPA has consistently found that California needs emission standards to address criteria pollutants, and as each of these standards reduces those pollutants EPA has no basis upon which to find that California does not need the standards.121 3. Comments on Section 209(b)(1)(B) EPA received several comments requesting a denial of the regulations under the two HD waiver requests based on section 209(b)(1)(B) grounds—that ‘‘such State does not need such State standards to meet compelling and extraordinary conditions.’’ Some commenters asserted that the need for California’s standards under the second waiver prong should be interpreted on a standard-by-standard basis. In the context of such an interpretation several commenters claimed that one or more of the standards in the waiver requests were not needed to meet compelling and extraordinary conditions. Regarding the interpretive issue of whether EPA should evaluate a need for the motor vehicle emission program versus an evaluation of the need for a specific standard, EPA received a comment that raises arguments that EPA has previously addressed in other waivers. For example, this commenter claimed that EPA continues to incorrectly interpret the waiver criteria in a manner that does not allow evaluation of each new California emission standard. The commenter asserted that EPA conflates the protectiveness criteria with the ‘‘Needs Test’’ in section 209(b)(1)(B).122 This 121 Id. at 27 (‘‘As discussed in Section I, the ACT regulation is projected to reduce emissions of NOX by 6.9 tons per day (tpd), and emissions of PM2.5 by 0.24 tpd by 2031, and the ZEAS regulation is projected to reduce emissions of NOX by 7.60 tons per year (tpy) emissions of PM2.5 by 0.15 tpy, and emissions of GHGs by 81 MMT per day of CO2e by 2031. By 2040, the ZEAS regulation is projected to reduce emissions of NOX by 9.99 tpy, emissions of PM2.5 by 1.7 tpy, and emissions of GHGs by 107 MMT per day of CO2e. These emissions reductions will assist California in its efforts to attain the national and state ambient air quality standards for particulate matter and ozone, reduce individual health risk, and meet climate change goals. EPA has consistently found that California ‘needs’ emissions standards to address the compelling and extraordinary conditions resulting from criteria pollutants, including emissions standards that expressly specify limitations of emissions of GHGs, and therefore has no basis to find that the regulations do not satisfy the ‘compelling and extraordinary’ criterion.’’). 122 Texas Public Policy Foundation at 2–4. This commenter also asserted that legislative intent does not justify EPA’s interpretation and that because California must submit a new waiver request each E:\FR\FM\06APN2.SGM 06APN2 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices ddrumheller on DSK120RN23PROD with NOTICES2 commenter also asserted that EPA’s traditional interpretation of the second waiver prong grants California with preferential regulatory treatment ‘‘by rubber-stamping every regulatory change CARB makes’’ and thus violates the equality of the states under the Equal Sovereignty doctrine and also raises questions of vast economic and political significance.123 EPA also received comments that there cannot be a need for GHG- and climate change-related standards (the ACT and ZEAS Regulations) under the second waiver prong. One commenter stated that the causes and effect of climate change are global, not local in nature, and therefore California does not need standards addressing climate change under the second waiver prong. Drawing on principles of equal sovereignty, one commenter asserted that section 209(b) is ‘‘unconstitutional to the extent it is construed to allow California to set emission standards aimed at addressing global climate change, as opposed to California’s local conventional pollution problems.’’ 124 As such, the commenter argued that California cannot need GHG standards because, unlike criteria pollutant emissions, GHG emissions in California ‘‘bear no relation’’ to ‘‘Californiaspecific circumstances’’ like the local conditions identified by Congress in enacting section 209.125 The commenter also argued that California does not need the ACT or ZEAS Regulations because the harms of climate change are not unique to California and cannot be alleviated by regulating emissions from sources in one state alone. Similarly, another commenter argued that, because climate change is a global issue, a single-state standard will be less effective and more disruptive to the economy than a Federal rule will.126 One commenter also asserted that, within the context of the alternative interpretation, California only needs to time it alters or adds emission standards that California must also demonstrate a need for such standards—a test different from whether California continues to need its motor vehicle emission program. 123 Id. at 3. See also AFPM at 16 (‘‘[T]he ‘whole program’ approach would effectively force EPA to grant a waiver for any later standard California proposes once EPA decided initially that California ‘needs’ its own motor vehicle program to address criteria pollution. EPA decisions made in the 1970s would tie EPA’s hands more than 50 years later and force approval of whatever new regulation CARB proposes for a waiver.’’). 124 AFPM at 2. To the extent that this commenter also argued that section 209(b) is ‘‘unconstitutional in all its applications’’ because it violates the equal sovereignty doctrine, that argument is addressed in section III.E.2. 125 Id. at 6–7. 126 ATA at 6–7. VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 reduce criteria air pollution in two air districts and cannot therefore ‘‘need’’ statewide standards.127 In its own comments, CARB noted that California needs to reduce criteria pollution along major roadways throughout many parts of the State and that even if California only needed to reduce criteria pollutants in the two districts with the worst overall air quality, statewide standards are still needed due to trucks travelling from one part of the State to these districts.128 CARB noted that EPA has consistently found these challenges, and the conditions that give rise to them, are ‘‘extraordinary and compelling’’ and thus that California needs a separate new motor vehicle emissions program.129 CARB explained that its ZEV requirements (i.e., the ACT Regulation, ZEAS Regulation, and ZEP Certification Regulation) will result in no tailpipe emissions, reduced brake wear PM emissions, and lower upstream emissions. As such, CARB stated that, at a minimum, California ‘‘needs’’ its ZEV requirements to achieve reductions in criteria pollution emissions including in extreme nonattainment areas and other areas overburdened by unhealthy air quality.130 127 Texas Public Policy Foundation at 3. Supplemental Comments at 5–6, n.36. See also CARB Initial ACT/ZEAS/ZEP Comments at 11, 14–15 ((‘‘[B]oth the South Coast and San Joaquin Valley air districts—which are home to over half of California’s population—are classified as ‘extreme nonattainment areas for the 2008 eighthour federal ozone standard.’’’) (‘‘Indeed, California has the only extreme nonattainment regions for ozone in the country, and the San Joaquin Valley has the highest PM2.5 levels in the country.’’). 129 CARB Initial ACT/ZEAS/ZEP Comments at 14. 130 Id. See also Environmental and Public Health Organizations at 31–33 (‘‘California continues to experience some of the worst air quality in the nation. The South Coast and San Joaquin Valley Air Basins are in non-attainment of the national ambient air quality standards for PM2.5 and ozone. The South Coast has never met any of the federal ozone standards established pursuant to the Clean Air Act. . . California also faces compelling and extraordinary climate change impacts. With each passing year, the dangers of climate change and health-harming air pollution become more and more clear. Climate change worsens the effects of local pollutants: in addition to a severe increase in deadly wildfires and accompanying particulate pollution, increasing heat favors the formation of additional ozone, putting compliance with the ozone NAAQS further out of reach.’’); SCAQMD at 1 (‘‘The South Coast Air Basin continues to face extraordinary air pollution challenges . . . The area is nonattainment for fine particulates and classified ‘extreme’ for ozone nonattainment. . . . To highlight one aspect of one of the regulations, the Zero Emission Airport Shuttle Bus regulation will promote the use of zero-emission airport grand transportation at California’s commercial airports. The South Coast Air Basin happens to be home to five commercial airports. Among many necessary initiatives for attainment of the NAAQS, Southern California simply needs zero-emission airport transportation to succeed.’’). 128 CARB PO 00000 Frm 00015 Fmt 4701 Sfmt 4703 20701 EPA also received comments that California does not need the individual regulations in the waiver requests (as a factual matter) because there are other, more ‘‘robust’’ or ‘‘logical’’ existing or proposed standards and/or because these standards will not be effective in reducing criteria emissions. Regarding the 2018 HD Warranty Amendments, EPA received comment that California does not need such amendments because CARB’s Heavy-Duty Inspection & Maintenance Program is more effective and because EPA’s HD 2027 rule (‘‘a 50-state harmonized approach’’) would soon be finalized.131 EPA also received comment that California does not need the ACT Regulation because they may actually increase criteria emissions by making new trucks more expensive and slowing fleet turnover.132 4. California Needs Its Standards To Meet Compelling and Extraordinary Conditions With respect to the need for California’s standards to meet compelling and extraordinary conditions, EPA continues to apply the traditional interpretation of the waiver provision.133 Many of the adverse comments arguing against the traditional interpretation were also made in the SAFE 1 Reconsideration proceeding. EPA’s response to applicable comments on these arguments remains the same as in the SAFE 1 Reconsideration decision, and the Agency incorporates the relevant reasoning in that action here.134 As stated above and similar to the SAFE 1 Reconsideration decision, EPA continues to believe the best way to interpret this provision is to determine whether California continues to have compelling and extraordinary conditions giving rise to a need for its own new motor vehicle emission program.135 EPA believes this continues 131 ATA at 5–6. at 2–3. 133 EPA’s two notices for comment on CARB’s waiver requests noted that the review under the second waiver prong would be done under this traditional interpretation. EPA has not reopened this interpretive issue by these notices nor by this final decision. 134 87 FR 14332, 14334, 14352–55, 14358–62 (March 14, 2022). 135 To the extent comments contend that EPA’s interpretation of the second waiver prong provides preferential treatment to California over other States, EPA notes that the review of CARB waiver requests is limited to the criteria set forth in section 209 and that we need not engage in an Equal Sovereignty constitutional law analysis. (See SAFE 1 Reconsideration Decision at 14376). In any case, for the purposes of reviewing the second waiver prong, EPA incorporates the reasoning from the SAFE 1 Reconsideration Decision at 14360. As such, EPA evaluates CARB’s waiver requests based 132 AFPM E:\FR\FM\06APN2.SGM Continued 06APN2 20702 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices ddrumheller on DSK120RN23PROD with NOTICES2 to be true for section 209(b)(1)(B), which was at issue in the SAFE 1 Reconsideration action.136 EPA finds solely on the criteria in section 209(b)(1) and does not consider factors outside of those statutory criteria, including constitutional claims. EPA continues to note that Congress struck a reasonable balance in authorizing two standards (EPA’s and California’s if certain criteria are met) but that that equal sovereignty principle simply does not fit in section 209. EPA further addresses the commenter’s concerns relating to the Equal Sovereignty doctrine in the Other Issues section below. Similarly, to the extent that commenters contend that EPA’s traditional interpretation raises questions of vast economic and political significance where Congress must speak clearly, EPA believes that this doctrine is inapplicable. That doctrine posits that in certain extraordinary cases, Congress should not be presumed to delegate its own authority over matters of vast economic and political significance to Federal agencies in the absence of clear statutory authorization. These concerns have no logical connection to provisions that preserve state authority in areas that fall within the police powers of states, such as the protection of the environment. Further, EPA has consistently explained that section 209(b)(1) of the Act limits the Agency’s authority to deny California’s requests for waivers to the three criteria contained therein and as such the Agency has consistently refrained from reviewing California’s requests for waivers based on any other criteria. EPA acknowledges that California adopts its standards as a matter of law under its state police powers, that the Agency’s task in reviewing waiver requests is limited to evaluating California’s request according to the criteria in section 209(b). Furthermore, the language of section 209 provides clear statutory authorization for the waiver framework, and the history of section 209(b) and (e) provide additional evidence that Congress intended for California to have great deference in designing its own vehicle program. MEMA I, 627 F.2d at 1111. 136 EPA notes that if Congress had been concerned with only California’s smog problems when it enacted section 209(b) in 1967 it would have limited California’s ability to obtain a waiver to standards for only hydrocarbons and NOX, which are the known automotive pollutants that contribute to California’s smog problem. But Congress was aware that California would most likely decide to regulate other non-smog forming pollutants. ‘‘[T]he total program for control of automotive emissions is expected to include [in addition to hydrocarbons and oxides of nitrogen] carbon monoxide, lead and particulate matter.’’ 123 Cong. Rec. 30951 (November 2, 1967) (Remarks of Rep. Herlong). Further, Congress intended that California would serve as a pioneer and a laboratory for the nation in setting new motor vehicle emission standards and developing control technology, which extends to ZEVs, BEVs, FCVs and PHEVs. ‘‘The waiver of preemption is for California’s ‘‘unique problems and pioneering efforts.’’ S. Rep. No. 403, 90th Cong., 1st Sess. 33 (1967); 113 Cong. Rec. 30950, 32478 (‘‘[T]he State will act as a testing agent for various types of controls and the country as a whole will be the beneficiary of this research.’’) (Statement of Sen. Murphy). Thus, for example, in the 1990 Amendments Congress mandated California’s LEV program, which includes the ZEV program, in its State Implementation Plan provision regarding fleet programs required for certain non-attainment areas relating to issuing credits for innovative and cleaner vehicles. Specifically, ‘‘standards established by the Administrator under this paragraph . . . shall conform as closely as possible to standards which are established for the State of California for ULEV and ZEV vehicles in the same class. Section 246(f)(4). (‘‘[W]hen it amended the Act in 1990, [Congress recognized] California’s LEV program, including the ZEV mandate. See e.g., Act sections VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 that California has demonstrated that it needs its program to address compelling and extraordinary conditions, those arising from criteria pollution and separately, those arising from greenhouse gases. No comments have provided an analytical basis for undermining California’s need.137 Although nothing in the statutory text limits California’s program or the associated waivers to a certain category of air pollution problems, EPA notes that each of the regulations contained in the two waiver requests from CARB is clearly designed to address emissions of criteria pollutants and will have that effect, regardless of whether some also reduce greenhouse gases. As such, these standards are no different from all prior standards addressing criteria emissions that EPA has found to satisfy the section 209(b)(1)(B) inquiry. In any case, there is no statutory basis to suggest that GHG emissions should be treated any differently. Further, it is inappropriate for EPA to second-guess CARB’s policy choices and objectives in adopting its heavyduty vehicle and engine standards designed to achieve long term emission benefits for both criteria emissions and greenhouse gas emissions. EPA’s longstanding practice, based on the statutory text, legislative history, and precedent, calls for deference to California in its approach to addressing the interconnected nature of air pollution within the state. Critically, EPA is not to engage in ‘‘probing substantive review’’ of waiver requests,138 but rather to ‘‘afford California the broadest possible discretion in selecting the best means to protect the health of its citizens and the public welfare.’’ 139 As noted above, the term compelling and extraordinary conditions ‘‘does not refer to the levels of pollution directly.’’ 140 California continues to experience compelling and extraordinary conditions that cause it to need a separate motor vehicle emissions program. These include geographical 241(4), 243(f), 246(f)(4).’’ MVMA, 17 F.3d at 536.) See also 87 FR at 14360. 137 EPA notes that CARB ACT Regulation is only regulating emissions from new motor vehicles and that such standards are the types preempted under section 209(a). Section 209(b) requires EPA to waive such standards unless one or more of the specified criteria are found. CARB’s ACT Regulation is focused on emissions of air pollutants from this vehicle source and to EPA’s knowledge is not designed to address a broader set of transportation and energy issues nor is the scope of the waiver criteria in section 209 designed for such a broad and searching review. 138 Ford Motor, 606 F.2d 1293, 1300 (D.C. Cir. 1979). 139 MEMA II, 142 F.3d 449, 453 (D.C. Cir. 1998). 140 49 FR 18887, 18890 (May 3, 1984). PO 00000 Frm 00016 Fmt 4701 Sfmt 4703 and climatic conditions (like thermal inversions) that, when combined with large numbers and high concentrations of automobiles, create serious air pollution problems.141 For example, as stated in CARB’s waiver request and additional written comment, California and particularly the South Coast and San Joaquin Valley Air Basins continue to experience some of the worst air quality in the nation and continue to be in nonattainment with several NAAQS.142 In the context of these serious and long-lasting pollution challenges, California has demonstrated that every reduction in ozone precursor and particulate emissions is particularly critical. In addition, EPA did not receive any adverse comments suggesting that California no longer needs a separate motor vehicle emissions program to address the various conditions that lead to serious and unique air pollution problems in California. EPA did receive comment that contends that California does not have a need for its standards as only two areas in the State (the San Joaquin Valley and the South Coast) 141 In response to commenters that believe that the traditional interpretation is simply a ‘‘rubberstamp[ ]’’ because EPA has already once decided that California ‘‘needs’’ its own motor vehicle program, EPA notes that although California has yet to resolve its pollution problems, that does not mean it will never do so or that Congress could not aim for that goal. See 87 FR at 14336 n.22. So long as those problems persist, however, EPA’s affirmance of California’s need for a separate vehicle program allows California to continue to serve as a ‘‘laboratory’’ for resolving its own pollution problems and those of the entire nation. See MEMA I, 627 F.2d at 1109–11. 142 See, e.g., CARB Supplemental Comments at 5– 6, n.36; CARB Initial ACT/ZEAS/ZEP Comments at 11, 14–15; SJVUAPCD at 2 (‘‘Despite achieving significant emissions reductions through decades of implementing the most stringent stationary and mobile regulatory control program in the nation, significant additional reductions in nitrogen oxide (NOX) emissions are needed to attain the latest health-based National Ambient Air Quality Standards (NAAQS) for ozone and PM2.5.’’); State of California et al at 12–13 (‘‘Sixteen of the 8-hour ozone nonattainment areas are located in California and the only two extreme nonattainment areas in the nation are located in the South Coast Air Basin and San Joaquin Valley of California. Indeed, for the South Coast Air Basin to meet the federal ozone standards, overall NOX emissions need to be reduced by 70 percent from today’s levels by 2023, and approximately 80 percent by 2031.’’); Environmental and Public Health Organizations at 32 (‘‘California continues to experience some of the worst air quality in the nation. The South Coast and San Joaquin Valley Air Basins are in non-attainment of the national ambient air quality standards for PM2.5 and ozone. The South Coast has never met any of the federal ozone standards established pursuant to the Clean Air Act . . . [H]eavy-duty vehicles represent the largest source of NOX emissions reductions needed to attain the 2015 8hour ozone National Ambient Air Quality Standards (NAAQS), and California’s air quality regulations, like those at issue here, are central to the state’s attainment strategy for the South Coast Air Basin.’’). E:\FR\FM\06APN2.SGM 06APN2 ddrumheller on DSK120RN23PROD with NOTICES2 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices have serious air quality issues. EPA believes this commenter misses the mark for several reasons. The commenter provided no legal rationale for limiting the ‘‘compelling and extraordinary conditions’’ to those conditions experienced by all of California. In addition, California is responsible, in part, for developing State Implementation Plan (SIP) measures to address nonattainment and maintenance and EPA sees no basis to deny a waiver for regulations designed at the state level and that address emission sources that move around the state. Nor has the commenter provided sufficient data or analysis to demonstrate that other areas of California do not need the motor vehicle standards program to address compelling and extraordinary conditions. Based on the record, EPA is unable to identify any change in circumstances or any evidence to undermine EPA’s prior findings that California needs its motor vehicle emissions program to address compelling and extraordinary conditions. Therefore, using the traditional approach of reviewing the need for a separate California program to meet compelling and extraordinary conditions, EPA cannot deny any of the waiver requests. Further, EPA does not believe, to the extent that it is appropriate to examine the need for CARB’s individual heavyduty vehicle and engine standards to meet compelling and extraordinary conditions, that the opponents of the waiver requests have met their burden of proof that California does not need these standards. The record demonstrates that each regulation in the two waiver requests is designed to produce reductions in criteria emissions that continue to be a serious air quality concern in California, which is a result of its compelling and extraordinary conditions. While EPA believes that CARB has demonstrated the criteria emission reductions associated with its ACT, ZEAS, and ZEP Certification Regulations and therefore a need for such standards, EPA also believes that, to the extent such standards are designed to also address climate change conditions in California, such standards are needed to meet compelling and extraordinary conditions.143 EPA notes that the record contains evidence that global warming continues to pose an extraordinary threat to the economic well-being, public health, natural resources and environment in California. These adverse impacts include exacerbation of local air quality problems, severe wildfires, extreme 143 87 FR 14332, 14365–66 (March 14, 2022). VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 drought, acidification threats to marine ecosystems as carbon dioxide is absorbed by the ocean along California’s coastline, and a host of other impacts.144 EPA believes the same conditions and impacts assessed in the SAFE 1 Reconsideration Decision apply to this waiver decision and incorporates that analysis here.145 Regarding comments received that the 2018 HD Warranty Amendments are not needed because EPA’s HD 2027 rule and CARB’s Heavy-Duty Inspection & Maintenance Program are or will be more effective, EPA notes that California is entitled to substantial deference in its policy choices regarding the best path to address its air pollution problems, including the choice to adopt or retain emission standards that overlap with previous California standards and EPA’s standards.146 In the context of these arguments about effectiveness, it is important to note that under the statute, California’s standards in the aggregate must be as protective as EPA’s standards—there is no requirement that they be more protective. This reinforces the deference owed to California in its determination of whether it needs a particular configuration of standards as its program to address compelling and extraordinary conditions. In response to comments received that the specific regulations are not necessary (as a factual matter) because they may slow fleet turnover, EPA finds that these commenters have not met their burden of proof to demonstrate that such a result in fleet turnover will occur and that if it did occur, it would cause an increase in emissions. Commenters have also failed to demonstrate that 144 California Supplemental ACT Comments at 16–17, California also noted that the ACT Regulation will ensure the development and commercialization of technology required to achieve further emission reductions to address climate changes and to attain national ambient air quality standards (NAAQS) in California. 145 87 FR 14332, 14334, 14352–55, 14358–62. 146 See, e.g., 78 FR at 2129 (‘‘The Commenter . . . relies on the existence of the federal GHG standards and the ‘deemed to comply’ language to claim that there is no need for CARB’s GHG standards . . . EPA believes that the commenter does not appropriately appreciate the role that Congress envisioned California to play as an innovative laboratory that may set standards that EPA may ultimately harmonize with or that California or EPA may otherwise accept compliance with the others emission program as compliance with their own.’’). In addition, given that there are a variety of regulatory measures and levels of stringency that California may choose to address the durability of emission controls on vehicles and engines while in use, and the lack of evidence in the record that an inspection and maintenance program is more protective than a warranty regulation (or that both may be implemented at some point), EPA finds that opponents of the waiver have not met their burden of proof with evidence to support their policy preference on an inspection and maintenance program. PO 00000 Frm 00017 Fmt 4701 Sfmt 4703 20703 California does not continue to need every reduction in criteria pollutant emissions it can obtain.147 As EPA continues to believe California has compelling and extraordinary conditions, it is appropriate for EPA to continue giving substantial deference to California’s policy choices on how it chooses to protect public health and welfare and achieve its air quality objectives. 5. Section 209(b)(1)(B) Conclusion As previously explained, EPA believes that the traditional interpretation of the section 209(b)(1)(B) criterion is the best reading of the statute.148 The traditional approach is for EPA to evaluate California’s need for a separate motor vehicle emission program to meet compelling and extraordinary conditions. The issue of whether any particular standard is needed is not the inquiry directed under section 209(b)(1)(B). Applying the traditional approach of assessing California’s need for a separate motor vehicle emissions program to address compelling and extraordinary conditions, with the reasoning noted above and with due deference to California, EPA cannot deny the respective waiver requests. CARB has repeatedly demonstrated the need for its motor vehicle program to address compelling and extraordinary conditions in California and opponents of the waiver requests have not demonstrated that California does not need its state standards to meet compelling and extraordinary conditions. Therefore, I determine that I cannot deny either of the waiver requests under section 209(b)(1)(B). In addition, although EPA does not believe an interpretation that requires a demonstrated need for a specific standard is appropriate, EPA’s review of the complete record indicates that opponents of the waiver requests have not met the burden of proof necessary to demonstrate that California does not 147 CARB Supplemental Comments at 5–6 (‘‘But AFPM provides no evidence that ACT will slow fleet turnover at all, let alone to the degree necessary to increase pollution. And none of these comments refutes CARB’s conclusion that zeroemission vehicles placed into well-suited applications will be less expensive, over their lifetimes, than conventional ones, or explains why the requirement to sell a certain percentage of vehicles that will save owners or operators money would slow turnover to the (unspecified) extent required to increase emissions. Moreover, the recently passed Inflation Reduction Act includes numerous financial incentives that will decrease the cost of zero-emission heavy-duty vehicles, further undercutting the claim that the high costs of those vehicles will slow fleet turnover.’’). 148 87 FR 14332, 14334, 14352–55, 14358–62 (March 14, 2022). E:\FR\FM\06APN2.SGM 06APN2 20704 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices ddrumheller on DSK120RN23PROD with NOTICES2 need its ACT Regulation, ZEAS Regulation, ZEP Certification Regulation, and the 2018 HD Warranty Amendments when assessed individually. D. Third Waiver Criterion: Are California’s Regulations Consistent With Section 202(a) of the Clean Air Act? Under section 209(b)(1)(C), EPA must grant California’s waiver request unless the Agency finds that California’s standards and accompanying enforcement procedures are not consistent with section 202(a) of the Act. EPA’s longstanding approach to this third waiver criterion is limited to reviewing California’s feasibility assessment and evaluating whether the opponents of the waiver have met their burden of establishing: (1) That California’s standards are technologically infeasible, or (2) that California’s test procedures are inconsistent with the Federal test procedures. As with the other two criteria, our review is narrow and deferential to California. Each of CARB’s two waiver requests contained a demonstration that its standards in each request were based on technologies currently available or reasonably projected to be available in the lead time given and giving consideration to costs. As such, CARB argued that its standards did not create any issues regarding the consistency with section 202(a) requirements. CARB’s waiver requests included their state rulemaking records for each standard, including CARB’s detailed responses to any issues raised regarding technological feasibility. Commenters opposed to the waiver did not argue that the 2018 HD Warranty Amendments were not technologically feasible or that any of the waiver requests presented inconsistent test procedures. Further, while EPA received comment to suggest that CARB’s ACT Regulation and ZEAS Regulation were not appropriate policy choices, to the extent commenters raised feasibility issues regarding the ACT Regulation and ZEAS Regulation, such commenters either failed to meet the burden of proof to demonstrate infeasibility in light of California’s demonstration of feasibility or such comments fell beyond the scope of EPA’s technological feasibility review. As explained in detail below, based on our examination of the record, EPA finds that the commenters have failed to meet their burden of proof as to the third prong. In addition, certain commenters asserted that, even if the standards were actually feasible, EPA should VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 nonetheless deny the waiver based on the lead time and stability requirements for certain federal heavy-duty vehicle standards found in section 202(a)(3)(C) of the Act. These commenters claim that because the third waiver criterion requires California’s standards to be ‘‘consistent with’’ section 202(a), California must necessarily comply with section 202(a)(3)(C), as that is a subprovision of 202(a). This argument is inconsistent with the plain text of the statute. Congress used the phrase ‘‘consistent with,’’ not ‘‘compliant with.’’ The statutory phrase ‘‘consistent with’’ indicates that California’s standards should be congruent and compatible with section 202(a), which requires that Federal standards provide adequate lead time and consider cost. Thus, EPA interprets this prong of the waiver analysis to require California’s standards to be feasible. The statute does not, however, obligate California to comply with provisions of section 202(a) directed solely at the development and design of federal standards. This would make little sense given Congress’ intent to set up two motor vehicle programs in title II—with California’s program dedicated to address the state’s air quality problems and serve as a testing ground for motor vehicle emissions policy designs and technologies. If exactly the same requirements and conditions apply to both the Federal and the California programs, then they would necessarily overlap extensively if not completely, and California could not serve as the testing ground that Congress intended. Further, applying some of the language in 202(a) to California standards would directly conflict with the text and intent of the waiver provisions in section 209. For those reasons, for over five decades, EPA has consistently granted waivers to California without assessing compliance with section 202(a)(3)(C), with a single exception (in 1994). The commenters’ argument regarding section 202(a)(3)(C) fails for a number of additional reasons. That provision, which requires at least four years of lead time and three years of stability, is a companion to a specific Federal standard-setting mandate, section 202(a)(3)(A). That mandate is for EPA to promulgate certain heavy-duty criteria pollutant standards that reflect the greatest degree of emission reduction achievable giving appropriate consideration to a number of factors. Congress paired the mandated stringency with the lead time and stability requirements. By contrast, California may adopt state standards that are ‘‘in the aggregate’’ at least as PO 00000 Frm 00018 Fmt 4701 Sfmt 4703 protective as the Federal standards. As such, California is also not obligated to comply with either the maximum stringency requirements or the companion lead time provision in section 202(a)(3)(C) to provide the four years of lead time and three years of stability that Congress determined was needed for the federal market. This plain text reading is wellsupported by the history and purpose of the Act and is also consistent with administrative and judicial precedents. Commenters rely heavily on EPA’s single contrary decision in a 1994 medium-duty vehicle waiver (1994 MDV waiver) even though the interpretation contained in that decision was inconsistent with EPA’s historical practice in waiver decisions both before and after 1994.149 Indeed, by 2012 EPA had indicated that it did not believe section 202(a)(3)(C) applied to California’s heavy-duty engines and vehicle standards and issued a decision consistent with its historical practice.150 We acknowledge that the 1994 MDV waiver took a different position on this issue than we do today, but as explained below, we believe that our practice, both before and after the 1994 MDV waiver, represents the best understanding of the statute. Importantly, the interpretation in the 1994 MDV waiver is inconsistent with the plain text of the statute, as discussed below. In this action, EPA is therefore taking an approach similar to its approach both before and after the 1994 MDV waiver, and different from the 1994 MDV waiver.151 EPA believes that its historical practice and application of the ‘‘consistency with section 202(a)’’ language is permissible and is the best interpretation of the statute based on all the relevant factors. Additionally, commenters also mistakenly rely on the D.C. Circuit’s opinion in American Motors Corp. v. Blum, 603 F.2d 978 (D.C. Cir. 1979) (Blum). Blum addressed a different provision of the CAA and is distinguishable from the instant waivers. The balance of this section begins with a discussion of EPA’s longstanding approach to the third waiver criterion and relevant case law (III.D.1). We then 149 See 77 FR 9239, 9249 (February 16, 2012); 46 FR 22302, 22304 (1981). 150 77 FR at 9239. Moreover, in October 2000, EPA informed California of the intent to ‘‘conduct a new evaluation of . . . arguments . . . in regard to whether the lead time provisions of the Act apply to California. . . . [As well as] evaluate the applicability of the stability requirement in Section 202(a)(3)(C).’’ Letter from Margo Oge, Director, Office of Transportation and Air Quality, to Michael Kenny, CARB Executive Officer (Oct. 24, 2000). 151 FCC v. Fox Television Stations, Inc., 556 U.S. 502 (2009). E:\FR\FM\06APN2.SGM 06APN2 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices ddrumheller on DSK120RN23PROD with NOTICES2 summarize the positions of CARB and the commenters (III.D.2 and III.D.3 respectively). Subsequently, we evaluate the waiver requests under the historical approach, finding that those opposed to the waiver have failed to meet their burden of proof (III.D.4). We then explain why, contrary to the commenters’ arguments, the statutory lead time requirements in section 202(a)(3)(C) do not apply to California (III.D.5). A brief conclusion follows (III.D.6). 1. Historical Interpretation of Section 209(b)(1)(C) Under section 209(b)(1)(C), EPA must grant California’s waiver request unless the Agency finds that California standards and accompanying enforcement procedures are ‘‘not consistent’’ with section 202(a) of the Act.152 Section 202(a)(1) grants EPA authority to regulate motor vehicle emissions generally and the accompanying section 202(a)(2) specifies that those standards are to ‘‘take effect after 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.’’ 153 Thus, no specific lead time requirement applies to standards promulgated under section 202(a)(1). EPA has long limited its evaluation of whether California’s standards are consistent with section 202(a) to determining if: (1) There is inadequate lead time to permit the development of the necessary technology giving appropriate consideration to the cost of compliance within that time period; 154 or whether (2) California and Federal test procedures are incompatible so that a single vehicle could not be subjected to both tests.155 EPA has also explained that ‘‘the import of section 209(b) is not that California and Federal standards be identical, but that the Administrator not grant a waiver of Federal preemption where compliance with the California standards is not technologically feasible within available lead time.’’ 156 Further, EPA’s review is limited to the record on feasibility of the technology. Therefore, EPA’s review is narrow and does not extend to whether the regulations under review are the most effective or whether the technology incentivized by California’s regulations are the best policy choice or better choices should be evaluated. The Administrator has thus long explained that ‘‘questions concerning the effectiveness of the available technology are also within the category outside my permissible scope of inquiry,’’ under section 209(b)(1)(C).157 California’s accompanying enforcement procedures would also be inconsistent with section 202(a) if the Federal and California test procedures conflicted, i.e., if manufacturers would be unable to meet both the California and Federal test requirements with the same test vehicle. In determining whether California standards are inconsistent with section 202(a), EPA makes a finding as to whether there is inadequate lead time to permit the development of technology that is necessary to meet the standards for which a waiver is sought. For this finding, EPA considers whether adequate technology is presently available or already in existence and inuse. If technology is not presently 152 EPA must grant a waiver request unless it finds that there is: ‘‘[i]nadequate time to permit the development of the necessary technology given the cost of compliance within that time period.’’ H. Rep. No. 728, 90th Cong., 1st Sess. 21 (1967). ‘‘That California standards are not consistent with the intent of section 202(a) of the Act, including economic practicability and technological feasibility.’’ S. Rep. No. 403, 90th Cong. 1st Sess. 32 (1967). 153 CAA section 202(a)(2); H.R. Rep. No. 95–294, 95th Cong., 1st Sess. 301 (1977) (‘‘Also preemption could not be waived if California standards and enforcement procedures were found not to be ‘consistent with section 202(a)’ (relating to the technological feasibility of complying with these standards).’’). 154 Previous waivers of Federal preemption have thus stated that California’s standards are not consistent with section 202(a) if there is inadequate lead time to permit the development of technology necessary to meet those requirements, giving appropriate consideration to the cost of compliance within that time. See e.g., 36 FR 8172 (April 30, 1971) (HD MY 1972 and later MY); 38 FR 30136 (Nov. 1, 1973); 40 FR 23102, 23105 (May 28, 1975) (extending waiver of April 30, 1971, to MY 1975 HD standards); 40 FR 30311 (July 18, 1975); 70 FR 50322 (August 26, 2005) (2007 California Heavy- Duty Diesel Engine Standards); 71 FR 335 (Jan. 4, 2006) (2007 Engine Manufacturers Diagnostic standards); 77 FR 9239 (February 16, 2012) (HD Truck Idling Requirements); 79 FR 46256 (Aug. 7, 2014) (the first HD GHG emissions standard waiver, relating to certain new 2011 and subsequent model year tractor-trailers); 81 FR 95982 (December 29, 2016) (the second HD GHG emissions standard waiver, relating to CARB’s ‘‘Phase I’’ regulation for 2014 and subsequent model year tractor-trailers); 82 FR 4867 (January 17, 2017) (On-Highway HeavyDuty Vehicle In-Use Compliance Program). 155 To be consistent, the California certification procedures need not be identical to the Federal certification procedures. California procedures would be inconsistent, however, if manufacturers would be unable to meet the state and the Federal requirements with the same test vehicle in the course of the same test. See, e.g., 43 FR 32182 (July 25, 1978). 156 46 FR 22032, 22034–35 (April 15, 1981). 157 41 FR 44209, 44210 (October 7, 1976); 47 FR 7306, 7310 (February 18, 1982) (‘‘I am not empowered under the Act to consider the effectiveness of California’s regulations, since Congress intended that California should be the judge of ‘the best means to protect the health of its citizens and the public welfare.’’’ (Internal citations omitted)). VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 PO 00000 Frm 00019 Fmt 4701 Sfmt 4703 20705 available, EPA will consider whether California has provided adequate lead time for the development and application of necessary technology prior to the effective date of the standards for which a waiver is being sought. Additionally, the D.C. Circuit has held that ‘‘[i]n the waiver context, section 202(a) relates in relevant part to technological feasibility and to federal certification requirements. The technological feasibility component of section 202(a) obligates California to allow sufficient lead time to permit manufacturers to develop and apply the necessary technology. The federal certification component ensures that the Federal and California test procedures do not impose inconsistent certification requirements. Neither the court nor the agency has ever interpreted compliance with section 202(a) to require more.’’ 158 Regarding the technology costs portion of the technology feasibility analysis, when cost is at issue EPA evaluates the cost of developing and implementing control technology in the actual time provided by the applicable California regulations. The D.C. Circuit has stated that compliance cost ‘‘relates to the timing of a particular emission control regulation.’’ 159 In MEMA I, the court addressed the cost of compliance issue at some length in reviewing a waiver decision. According to the court: Section 202’s cost of compliance concern, juxtaposed as it is with the requirement that the Administrator provide the requisite lead time to allow technological developments, refers to the economic costs of motor vehicle emission standards and accompanying enforcement procedures. See S. Rep. No. 192, 89th Cong., 1st Sess. 5–8 (1965); H.R. Rep. No. 728 90th Cong., 1st Sess. 23 (1967), reprinted in U.S. Code Cong. & Admin. News 1967, p. 1938. It relates to the timing of a particular emission control regulation rather than to its social implications. Congress wanted to avoid undue economic disruption in the automotive manufacturing industry and also sought to avoid doubling or tripling the cost of motor vehicles to purchasers. It, therefore, requires that the emission control regulations be technologically feasible within economic parameters. Therein lies the intent of the cost of compliance requirement (emphasis added).160 Previous waiver decisions are fully consistent with MEMA I, which indicates that the cost of compliance must reach a very high level before the EPA can deny a waiver. Therefore, past decisions indicate that the costs must be 158 MEMA II, 142 F.3d 449, 463 (Emphasis added) (internal citations omitted). 159 MEMA v. EPA, 637 F.2d. 1118 (D.C. Cir. 1979). 160 MEMA I 627 F.2d at 1118 (emphasis added). See also id. at 1114, n.40 (‘‘[T]he ‘cost of compliance’ criterion relates to the timing of standards and procedures.’’). E:\FR\FM\06APN2.SGM 06APN2 20706 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices excessive to find that California’s standards are infeasible and therefore inconsistent with section 202(a).161 Regarding the burden of proof under the third prong, EPA has previously stated that the third prong’s feasibility determination is limited to: (1) Whether those opposed to the waiver have met their burden of establishing that California’s standards are technologically infeasible, including whether they include adequate lead time or (2) that California’s test procedures impose requirements inconsistent with the Federal test procedure. Additionally, the burden of proof regarding the cost component of feasibility also falls upon the waiver opponents. The scope of EPA’s review under this criterion is also narrow.162 This is consistent with the motivation behind section 209(b) to foster California’s role as a laboratory for motor vehicle emission control, in order ‘‘to continue the national benefits that might flow from allowing California to continue to act as a pioneer in this field.’’ 163 According to the D.C. Circuit, ‘‘The history of congressional consideration of the California waiver provision, from its original enactment up through 1977, indicates that Congress intended the State to continue and expand its pioneering efforts at adopting and enforcing motor vehicle emission standards different from and in large measure more advanced than the corresponding federal program; in short, to act as a kind of laboratory for innovation.’’ 164 EPA has thus long believed that California must be given substantial deference when adopting motor vehicle emission standards because such action may require new or improved technology to meet challenging levels of compliance. Over 50 years ago, EPA’s Administrator discussed this deference in an early waiver decision that approved a waiver request for California: ddrumheller on DSK120RN23PROD with NOTICES2 There is a well-established pattern that emission control technology have been phased in through use in California before 161 See, e.g., 47 FR 7306, 7309 (Feb. 18, 1982); 43 FR 25735 (Jun. 14, 1978); 46 FR 26371, 26373 (May 12, 1981). 162 41 FR 44208, 44210 (October 7, 1976)(‘‘While section 209(b) requires consideration of whether the adoption of standards by California is consistent with section 202(a), nevertheless [the Administrator’s] discretion in determining whether to deny the waiver is considerably narrower than [his] discretion to act or not to act in the context promulgating Federal standards under section 202(a).’’). 163 40 FR 23102, 23103 (May 28, 1975) (waiver decision citing views of Congressman Moss and Senator Murphy). 164 MEMA I, 627 F.2d 1095, 1110. VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 their use nationwide. This pattern grew out of early recognition that auto caused air pollution problems are unusually serious in California. In response to the need to control auto pollution, California led the nation in development of regulations to require control of emissions. This unique leadership was recognized by Congress in enacting federal air pollution legislation both in 1967 and 1970 by providing a special provision to permit California to continue to impose more stringent emission control requirements than applicable to the rest of the nation.165 In a subsequent waiver decision approving a waiver request for California, the Administrator stated: It is worth noting . . . I would feel constrained to approve a California approach to the problem which I might also feel unable to adopt at the federal level in my own capacity as a regulator. The whole approach of the Clean Air Act is to force the development of new types of emission control technology where that is needed by compelling the industry to ‘‘catch up’’ to some degree with newly promulgated standards. Such an approach * * * may be attended with costs, in the shape of a reduced product offering, or price or fuel economy penalties, and by risks that a wider number of vehicle classes may not be able to complete their development work in time. Since a balancing of these risks and costs against the potential benefits from reduced emissions is a central policy decision for any regulatory agency under the statutory scheme outlined above, I believe I am required to give very substantial deference to California’s judgments on this score.’’ 166 In keeping with this deferential posture, as noted earlier, EPA’s historical interpretation of section 209(b) has also been to assess whether California’s program of motor vehicle emission standards as a whole provides for adequate lead time consistent with section 202(a). This is because EPA’s long-standing interpretation is that the phrase ‘‘State standards’’ in section 209(b)(1) means the entire California new motor vehicle emissions program.167 Similar to the second waiver criterion, EPA has also historically viewed the third waiver criterion’s feasibility analysis as a whole-program assessment, i.e., one that ensures manufacturers have sufficient lead time to comply with the program’s standards as a whole, accounting for the 165 38 FR 10317, 10324 (April 26, 1973) (‘‘[T]he experience of Federal and State officials as well as the industry itself in meeting such standards for California will facilitate an orderly implementation of the more stringent, catalyst-forcing standards for California.’’). 166 40 FR 23102, 23104 (May 28, 1975). See also 78 FR 2111, 2115–16 (Jan. 9, 2013); 79 FR 46256, 46258 (Aug. 7, 2014); 81 FR 95982, 95984 (Dec. 29, 2016). 167 74 FR 32744, 32749 (July 8, 2009); 70 FR 50322 (Aug. 26, 2005); 77 FR 9239 (Feb. 16, 2012); 78 FR 2112, 2123 (Jan. 9, 2013). PO 00000 Frm 00020 Fmt 4701 Sfmt 4703 interactions between technologies necessary to meet both new and existing standards, and any interactions between those technologies that would affect feasibility.168 EPA’s assessment under section 209(b)(1)(C) is thus not in practice a standard-by-standard review. Rather it involves an analysis of feasibility that builds on prior analyses of feasibility and any impacts of the new standards on the feasibility of the remainder of the program.169 EPA has also long recognized that the laboratory role and nature of California’s standards may result in California amending or revising requirements after the grant of a waiver, or otherwise adjusting the implementation of the waived standards as circumstances dictate.170 EPA’s waiver practice when California amends a previously waived standard or accompanying enforcement procedure is to consider whether such an amendment is within the scope of a previously granted waiver or requires a new waiver. If EPA considers the amendment as within the scope of a prior waived standard, then the Agency reviews the amendment to determine that it does not undermine California’s determination that its standards in the aggregate are as protective of public health and welfare as applicable Federal standards, does not affect the regulation’s consistency with section 202(a), and raises no new issues affecting EPA’s previous waiver decisions. Decisions from the D.C. Circuit provide guidance regarding the lead time requirements of section 202(a). Section 202(a)(2) states that ‘‘any regulation prescribed under paragraph (1) of this subsection (and any revision thereof) shall take effect after such period as the Administrator finds necessary to permit the development and application of the requisite technology, giving appropriate 168 As a practical matter, EPA’s consideration of the third waiver prong, like the first waiver prong, does not necessitate in every case that EPA rereview previously-approved aspects of California’s program—for example, where it is evident that new standards will not interact with existing ones. But where a new waiver request might affect one of EPA’s previous assessments under any of the waiver criteria, EPA reviews the program as a whole—or any aspect necessary to confirm alignment with the statutory text. 87 FR at 14361 and n.266. 169 Id. at 14361. The feasibility assessment conducted for a new waiver request focuses on the standards in that request but builds on the previous feasibility assessments made for the standards already in the program and assesses any new feasibility risks created by the interaction between the standards in the petition and the existing standards. 170 See e.g., 68 FR 19811 (April 22, 2003), 71 FR 78190 (December 28, 2006), 75 FR 44948 (July 30, 2006). E:\FR\FM\06APN2.SGM 06APN2 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices consideration to the cost of compliance within such period.’’ For example, in Natural Resources Defense Council v. EPA (NRDC), the court reviewed claims that EPA’s PM standards for diesel cars and light trucks were both too stringent and not stringent enough. In upholding the EPA standards, the court concluded: ddrumheller on DSK120RN23PROD with NOTICES2 Given this time frame [a 1980 decision on 1985 model year standards]; we feel that there is substantial room for deference to the EPA’s expertise in projecting the likely course of development. The essential question in this case is the pace of that development, and absent a revolution in the study of industry, defense of such a projection can never possess the inescapable logic of a mathematical deduction. We think that the EPA will have demonstrated the reasonableness of its basis for projection if it answers any theoretical objections to the [projected control technology], identifies the major steps necessary in refinement of the technology, and offers plausible reasons for believing that each of those steps can be completed in the time available.171 Another key case addressing the lead time requirements of section 202(a) is International Harvester v. Ruckelshaus (International Harvester). In International Harvester, the court reviewed EPA’s decision to deny applications by several automobile and truck manufacturers for a one-year suspension of the 1975 emission standards for light-duty vehicles. In the suspension proceeding, the manufacturers presented data which, on its face, showed little chance of compliance with the 1975 standards, but which, at the same time, contained many uncertainties and inconsistencies regarding test procedures and parameters. In a May 1972 decision, the Administrator applied an EPA methodology to the submitted data, and concluded that ‘‘compliance with the 1975 standards by application of present technology can probably be achieved,’’ and so denied the suspension applications.172 In reviewing the Administrator’s decision, the court found that the applicants had the burden of providing data showing that they could not comply with the standards, and if they did, then EPA had the burden of demonstrating that the methodology it used to predict compliance was sufficiently reliable to permit a finding of technological feasibility. In that case, EPA failed to meet this burden. In NRDC the court pointed out that the court in International Harvester ‘‘probed deeply into the reliability of EPA’s methodology’’ because of the relatively short amount of lead time involved (a May 1972 decision regarding 1975 MY vehicles, which could be produced starting in early 1974), and because ‘‘the hardship resulting if a suspension were mistakenly denied outweigh[s] the risk of a suspension needlessly granted.’’ 173 The NRDC court compared the suspension proceedings with the circumstances concerning the diesel standards before it: ‘‘The present case is quite different; ‘the base hour’ for commencement of production is relatively distant, and until that time the probable effect of a relaxation of the standard would be to mitigate the consequences of any strictness in the final rule, not to create new hardships.’’ 174 The NRDC court further noted that International Harvester did not involve EPA’s predictions of future technological advances, but an evaluation of presently available technology. 2. CARB’s Discussion of the Regulations’ Consistency With Section 202(a) in the Waiver Requests Each of CARB’s waiver requests demonstrated that its standards were based on technologies currently available or reasonably projected to be available in the lead time provided under each regulation, taking into consideration costs and other factors. As such, CARB argued that its standards did not create any issues regarding consistency with section 202(a) requirements. CARB’s waiver requests included the state rulemaking records for each standard, including CARB’s response to any issues raised regarding technological feasibility. In this section III.D.2, we present CARB’s arguments for each of its waiver requests in turn. In the following section III.D.3, we present the commenters arguments. EPA has reviewed the information submitted to the record of this proceeding to determine whether the parties opposing the waiver requests have met their burden to demonstrate that the respective standards (and accompanying enforcement procedures) are not consistent with section 202(a). As explained in subsection III.D.4 below, EPA has evaluated each of the waiver requests under the test historically used and is concluding that the opponents of the waiver requests have not met the burden of proof regarding the third waiver prong. EPA also discusses, in 173 NRDC, 655 F.2d 318, 330. The ‘‘hardships’’ referred to are hardships that would be created for manufacturers able to comply with the more stringent standards being relaxed late in the process. 174 Id. 171 NRDC, 655 F.2d 318, 331 (D.C. Cir. 1981). Harvester v. Ruckelshaus, 478 F 2d. 615, 626 (D.C. Cir. 1979). 172 International VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 PO 00000 Frm 00021 Fmt 4701 Sfmt 4703 20707 subsection III.D.5, why, contrary to the commenters’ arguments, the statutory lead time requirements in section 202(a)(3)(C) do not apply to California. a. 2018 HD Warranty Amendments CARB’s waiver request noted that the elements of the 2018 HD Warranty Amendments that lengthen the warranty periods present no issues regarding technical feasibility or lead time. At the outset, CARB noted that although manufacturers are incentivized to produce and use more durable emission related components and systems in 2022 and beyond, the manufacturers are not compelled to do so. Because manufacturers may elect to use their existing components to comply with the regulations, CARB contended that EPA’s prior findings of adequate technical feasibility and lead time found within EPA’s waiver for California’s 2007 and later model years remains applicable and dispositive. CARB also noted that no commenters raised objections regarding the feasibility and lead time of the extended emission warranty periods during its rulemaking. CARB noted similar findings regarding the new minimum allowable maintenance schedules. CARB also noted its belief that it appropriately considered the costs of the 2018 HD Warranty Amendments and that it is not aware of any test procedure consistency issues.175 b. ACT, ZEAS, and ZEP Certification Regulations CARB’s ACT Regulation waiver request provided information pertaining to consistency with section 202(a)’s feasibility requirements for each of the three regulations covered by the request. CARB noted that the ACT Regulation’s requirements that new 2024 MY medium- and heavy-duty ZEVs be produced and delivered for sale to ultimate purchasers in California are consistent with section 202(a) because the required technology already exists.176 CARB’s waiver request also 175 2018 HD Warranty Amendments Support Document at 20–23. 176 ACT/ZEAS/ZEP Waiver Support Document at 31–32 (‘‘As described in the ACT regulation’s rulemaking record, medium- and heavy-duty ZEVs are currently commercially available . . . This includes vehicles from companies such as BYD, Motiv, Phoenix Motorcars, XOS, and others. Traditional manufacturers of heavy-duty vehicles, including Freightliner, Kenworth, Peterbilt, and Volvo, are currently demonstrating heavy-duty ZEVs in California, with the intent to launch commercial products by 2024. 15 manufacturers are offering more than 50 different ZEV truck and bus configurations, other than transit buses, from Class 3 through Class 8 through the Hybrid and ZeroEmission Truck and Bus Voucher Incentive E:\FR\FM\06APN2.SGM Continued 06APN2 20708 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices noted that the ACT Regulation implements the ZEV sales requirement through a credit and deficit mechanism, whereby manufacturers’ deficits are generated commencing with the 2024 model year based, in part, on their annual sales of onroad vehicles with gross vehicle weight ratings (GVWRs) exceeding 8,501 pounds produced and delivered for sale in California. Manufacturers may earn credits by producing and delivering for sale, to ultimate consumers in California, certain types of ZEV vehicles, and subsequently there is a banking and trading system.177 Similarly, regarding the ZEAS Regulation, CARB noted that the technology needed to produce zeroemission airport shuttle vehicles currently exists.178 Finally, CARB also noted that the ZEP Certification Regulation, requiring manufacturers to conduct energy-capacity testing for batteries used in zero-emission powertrains, presents no issues of technical feasibility because the specified test procedure only requires use of commercially available test equipment.179 In addition to showing that the required technology is already commercially available, CARB noted that it appropriately considered the cost of each of the regulations, including the incremental capital costs as well as total costs of ownership (TCO) to potential vehicle owners.180 CARB noted that its Staff Report for the ACT Regulation included an estimate that the average incremental vehicle price for certain new ZEVs would be 30 percent to 60 percent higher than a comparable combustion-powered vehicle in certain years, with costs for these vehicles declining over time. Further, CARB noted that it had evaluated the TCO for purchasing an ACT compliant vehicle and all other related costs including fuel, maintenance, Low Carbon Fuel Standard revenue, and infrastructure, and noted that ZEVs in appropriate duty cycles can see a positive TCO by 2024 or sooner and reported similar TCO positive results for ZEAS by 2028.181 CARB also noted that neither the ACT, ZEAS, nor ZEP Certification Regulations present any issues of test procedure inconsistency because there are no analogous Federal requirements and, as such, engines manufacturers are not precluded from complying with the California and Federal test requirements with one test engine or vehicle.182 3. Comments on Section 209(b)(1)(C) EPA received a range of comments on each of CARB’s regulations relating to the third criteria. Regarding the ACT Regulation, EPA received a comment that stated that the applicable technological feasibility criteria to apply is found in section 202(a)(3)(A).183 This commenter maintains that CARB must demonstrate that the ACT standards ‘‘are achievable through reasonably available technology, and must similarly consider related costs, energy, and safety factors’’ and that CARB cannot meet this obligation. This commenter notes two separate studies regarding the current availability of electric and hydrogen fuel cell medium and heavyduty trucks, and that one of the studies noted that electric trucks using present lithium battery technology would need levels of energy density and battery storage capacity to support a daily ranger of 600 miles at level that would weigh 6300 kg and cost approximately $180,000. This commenter maintains that CARB did not consider several factors including charging networks as well as safety issues and legal restrictions on commercial activity at rest stops. The commenter maintains that because these factors were not considered by CARB then it does not meet the requirements of section 202(a)(3)(A).184 EPA also received supplemental comment from CARB that was submitted in response to comments submitted in opposition to the waiver for the ACT Regulation. CARB noted that several comments fail to satisfy opponents’ burden of proof because they misunderstand the necessary showing or make no showing at all.185 ddrumheller on DSK120RN23PROD with NOTICES2 181 Id. Program (HVIP). HVIP has provided funding for 2,456 zero-emission trucks and buses and 2,593 hybrid trucks since 2010 to support the long-term transition to zero-emission vehicles in the heavyduty market. These commercially available zeroemission trucks and buses cover a wide variety of vocations and duty cycles; some vehicles available today include delivery vans, school buses, refuse trucks, cutaway shuttles, terminal tractors, and passenger vans.’’). 177 Id. at 7–10 178 Id. at 33. 179 Id. at 34–36. 180 Id. at 36–38 (ACT), at 38–39 (ZEAS), and 39– 40. VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 182 Id. at 39. at 4. This commenter does not discuss the phase ‘‘greatest degree of emission reduction achievable through application of technology’’ in 202(a)(3)(A)(i) and whether and how it is related to its cited language regarding the consideration to ‘‘cost, energy, and safety factors.’’ 184 Id. at 4–6. 185 CARB Supplemental Comments at 11. CARB noted both EMA and WSPA comments that do not provide any elaboration of why the lead time provided is not reasonable. ‘‘[S]ection 209(b) does not give [the Administrator] the latitude to review procedures at the State level, and the EPA hearing is not the proper forum in which to raise these 183 Valero PO 00000 Frm 00022 Fmt 4701 Sfmt 4703 CARB also recognized the challenges to the technical feasibility of the ACT Regulation raised by one commenter but noted that no commenter has disputed CARB’s evidence that the technology need to comply with the ACT Regulation already exists.186 In addition, CARB responded to comments regarding ZEV constraints associated with operating ranges and performance characteristics.187 Finally, CARB noted several commenters’ assertions that CARB failed to account for and accurately assess a number of different costs associated with the ACT Regulation (e.g., costs of manufacturing and maintaining ZEVs, battery replacement costs, reduced operational hours due to needs to recharge, etc.) and pointed to its rulemaking record and submissions to EPA that address such claims. And in any case CARB maintained that these commenters have not introduced evidence that establishes that the compliance costs as so excessive as to make the standards infeasible.188 Many of the comments EPA received on the third prong also focused not on whether the standards under review were actually infeasible under section 202(a)(2), but on whether CARB, to be consistent with section 202(a), must provide the four years of lead time and three years of stability for standards applicable to new heavy-duty vehicles and engines required under section 202(a)(3)(C). Commenters objected to the 2018 HD Emission Warranty Amendments and the ACT Regulation on the grounds that the third waiver criterion requires ‘‘consistency’’ with every provision of section 202(a) and therefore, by the text of the statute, CARB must provide four years of lead time and three years of stability for its new heavy-duty vehicle and engine objections. Similarly, objections pertaining to the wisdom of California’s judgment on various public policy matters are beyond the [Administrator’s] scope of inquiry.’’ 43 FR 32184 citing 42 FR 44209, 44210 (October 7, 1976). 186 Id. at 11–12. 187 Id. at 12. (CARB’s analysis found that although certain market segments presented challenges, a large number of other segments are well suited for electrification across the medium- and heavy-duty truck market, including refuse trucks, yard trucks and box trucks within the Class 8 vocational market. CARB expects that the demand for heavyduty ZEVs will significantly increase as ZEV technology improves, resulting in increased operating ranges and decreased vehicle prices.’’). CARB also provided updated data and noted recently enacted federal action. 188 Id. at 12–13 (Citing the ACT waiver request at 31–39, ACT ISOR at IX–8, ACT FSOR at IX–23–IX– 24, IX–27–IX–28, ACT FSOR at 105, 192, 204–222, 269–274 (respond to comments asserting that CARB did not accurately assess cost impacts of the ACT Regulation). E:\FR\FM\06APN2.SGM 06APN2 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices ddrumheller on DSK120RN23PROD with NOTICES2 standards.189 In response, supporters of the regulations argued that ‘‘consistency’’ does not require identicality with lead time and stability requirements imposed on EPA. Such a strict imposition, they argued, would frustrate Congress’ intent to give California flexibility and deference to create innovative standards that are more stringent than the Federal standards.190 Identicality also cannot be required, they argued, because it would be impossible for certain sub-provisions of section 202(a) to apply to CARB.191 In response, one commenter argued that, even if some provisions of 202(a) are relevant only to EPA and not CARB, ‘‘consistency’’ still requires CARB to abide by relevant provisions, such as 202(a)(3)(C)’s lead time and stability requirements.192 EPA also received comment that four years of lead time is supported by Federal case law and EPA’s prior waiver decisions. In particular, one commenter noted EPA’s 1994 MDV waiver decision 189 EMA Initial Comments at 4–5, 6–7; EMA Supplemental Comments at 1. NADA at 2; WSPA at 2. 190 See, e.g., CARB Initial ACT Comments at 17– 18; CARB Initial Omnibus Low NOx Comments at 9 (submitted as Exhibit 4 of CARB’s Initial ACT Comments); CARB Supplemental Comments at 7– 8; Environmental and Public Health Organizations at 22–24. EPA notes CARB’s contention that section 202(a)(3)(C) was designed with specific purposes by Congress, and that such purposes were, in part, to minimize the burden associated with new standards and the associated new designs of affected vehicles and that in many instances CARB’s regulations do not require a redesign of existing vehicles. (‘‘The clear purpose of Section 202(a)(3)(C) is to protect manufacturers with respect to specific EPA standards, from having to perform redesigns without four years of lead time or more often than every three years.’’ But ‘‘the year-on-year changes in the legal obligations imposed by ACT are different from those imposed by more traditional vehicle emission standards—the kind of standards Congress had in mind when it drafted Section 202(a)(3)(C).’’ See CARB Supplemental Comments, 9–11 and CARB Initial ACT Comments at 19–22. As explained below, EPA finds its textual assessment of 202(a)(3)(C) to be sufficient to determine the inapplicability to California and that it is not necessary to examine the underpinnings of this aspect of CARB’s argument. 191 See, e.g., CARB Initial Omnibus Low NO X Comments at 16–17 (submitted as Exhibit 4 of CARB’s Initial ACT Comments); CARB Supplemental Comments at 7–8; Environmental and Public Health Organizations at 20–21; ACT/ ZEAS/ZEP Waiver Support Document at 31–32 (citing the ACT FSOR at 131). 192 EMA Supplemental Comments at 4 (‘‘Of course, all of the provisions of section 202(a) are directed on their face to EPA, not California, and that is no reason to distinguish one part of section 202(a) from another. Consistency means that CARB must abide by and avoid contradicting those provisions that are relevant. CARB agrees that it must abide by the technology lead-time requirement directed at EPA in section 202(a)(2), and CARB must equally abide by the four-year lead-time requirement in section 202(a)(3)(C) that is directed at EPA in precisely the same way. Neither of those provisions is uniquely applicable to EPA’’). VerDate Sep<11>2014 22:20 Apr 05, 2023 Jkt 259001 document, which found that CARB is subject to 202(a)(3)(C)’s four-year lead time requirement.193 That decision considered the plain text and congressional intent of the CAA as well as the 1979 D.C. Circuit case, American Motors Corporation v. Blum (Blum), which incorporated a specific minimum two-year lead time from CAA section 202(b)(1)(B) into the 202(a)(2) general technological feasibility analysis. The commenter explained that the D.C. Circuit in Blum ‘‘found that the Congressionally-specified lead time requirement was implicitly incorporated into section 202(a)(2)’’ and argues that Blum’s logic applies equally to section 202(a)(3)(C).194 4. California’s Standards Are Consistent With Section 202(a) Under EPA’s Historical Approach As explained above, EPA has historically applied a consistency test under section 202(a) that calls for the Administrator to first review whether adequate technology already exists, and if it does not, whether there is adequate time to develop and apply the technology before the standards go into effect.195 After a review of the record, 193 EMA Initial Comments at 3; EMA Supplemental Comments at 2–3. 194 EMA Initial Comments at 7–9 (‘‘The D.C. Circuit’s reasoning in Blum applies with equal force here: failing to apply the minimum four-year leadtime requirement would frustrate the leadtime that Congress explicitly found to be necessary for [heavy-duty on-highway] standards.’’); EMA Supplemental Comments at 2–3 (‘‘In addition to the general technology-based lead-time required for all vehicles and engines, section 202(a)(3)(C) is aimed specifically at the heavy-duty industry, which is not vertically integrated, involves much lower production volumes, is more capital intensive, requires longer planning and product development timelines, and requires longer time periods to recoup large capital investments. See, e.g., Hearing on S.1630 Before Subcomm. on Env’t Protection, 101st Cong. 312–13 (1989). These considerations make lead-time necessary regardless of whether it is EPA or CARB that adopts the applicable standards with which the industry must make investments to comply. Thus, as EPA rightly concluded in 1994, the section 202(a)(3)(C) leadtime requirement is no different than the lead-time provision at issue in Blum.’’). 195 EPA has previously stated that the determination is limited to whether those opposed to the waiver have met their burden of establishing that California’s standards are technologically infeasible, or that California’s test procedures impose requirements inconsistent with the Federal test procedure. See, e.g., 38 FR 30136 (Nov. 1, 1973); 40 FR 30311 (July 18, 1975); 71 FR 335 (Jan. 4, 2006) (2007 Engine Manufacturers Diagnostic standards); 70 FR 50322 (August 26, 2005) (2007 California Heavy-Duty Diesel Engine Standards); 77 FR 9239 (February 16, 2012) (HD Truck Idling Requirements); 78 FR 2111, 2132 (Jan. 9, 2013); 79 FR 46256 (Aug. 7, 2014) (the first HD GHG emissions standard waiver, relating to certain new 2011 and subsequent model year tractor-trailers); 81 FR 95982 (December 29, 2016) (the second HD GHG emissions standard waiver, relating to CARB’s ‘‘Phase I’’ regulation for 2014 and subsequent model PO 00000 Frm 00023 Fmt 4701 Sfmt 4703 20709 information, and comments received in this proceeding, EPA has determined that the opponents of the waiver request for CARB’s regulations have not demonstrated that these regulations are inconsistent with section 202(a). As noted above, CARB’s waiver requests indicated that control technology either presently exists or is in use, and opponents do not provide information that sufficiently meets their burden of proof. The rationale supporting EPA’s determination is organized as follows. Applying its historical approach of section 209(b)(1)(C) to CARB’s regulations, EPA first examines whether the opponents of the waiver requests at issue have met their burden of proof to demonstrate that the regulations are not technologically feasible, within the lead time provided and giving consideration to cost. We present our analysis for each of the regulations in the two waiver requests (the 2018 HD Warranty Amendments, the ACT, ZEAS, and the ZEP Certification Regulations), in subsections III.D.4.a and b below. We conclude, under EPA’s historical approach to the third waiver criterion, that the opponents of the waiver have not met their burden of proof. a. 2018 HD Warranty Amendments As previously described, the 2018 HD Warranty Amendments lengthen the warranty periods for new heavy-duty vehicles and engines commencing with the 2022 model year. Manufacturers can choose to meet the new warranty periods either through installing more durable emission related components (with an associated increase in cost) or by relying upon existing emission related components designed to meet applicable emission standards and cover any increase in costs associated with additional emission warranty claims and repairs due to the increase in the warranty periods. Opponents of a waiver for the 2018 HD Warranty Amendments do not claim that the regulation is actually infeasible under EPA’s approach. If EPA had received such comments, it would be appropriate to evaluate whether more durable emission related components are technologically feasible (giving consideration to the cost of such components) and to evaluate the costs for manufacturers to choose to use existing components and cover the costs of additional emission warranty related claims. year tractor-trailers); 82 FR 4867 (January 17, 2017) (On-Highway Heavy-Duty Vehicle In-Use Compliance Program). E:\FR\FM\06APN2.SGM 06APN2 20710 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices During the course of EPA’s waiver proceeding, we did not receive any comments or evidence to suggest, let alone meet the burden of proof, that the emission control technology needed for the new extended emission warranty periods and the new minimum allowable maintenance schedules did not meet the consistency with section 202(a) requirement. Likewise, EPA received no comments concerning CARB’s separate point regarding the options within California’s regulation that incentivize manufacturers to produce more durable emission related parts. EPA received no comments that this separate compliance strategy, of using existing emission control parts and covering the costs of any additional emission warranty claims, was infeasible or too costly. In addition, we did not receive any comments or evidence during the waiver proceeding to suggest such concerns were raised during California’s rulemaking. CARB also noted that there are no test procedure consistency issues. EPA has not received comment during the waiver comment period regarding any of these matters.196 Therefore, based on the record before us, EPA cannot find that the opponents of the 2018 HD Warranty Amendments waiver have met their requisite burden of proof to demonstrate that such requirements are inconsistent with section 202(a). Thus, EPA cannot deny CARB’s 2018 HD Warranty Amendments waiver request on this basis.197 ddrumheller on DSK120RN23PROD with NOTICES2 b. ACT, ZEAS, and ZEP Certification Regulations At the outset, EPA notes two key principles among others that guide EPA’s evaluation of technological feasibility within section 209(b)(1)(C). As previously explained, first, EPA considers whether adequate technology is either presently available or already in existence and in-use. If technology is not presently available, EPA will consider whether California has provided adequate lead time for the 196 The record for this waiver proceeding also includes the ISOR and FSOR for CARB’s 2018 HD Warranty Amendments rulemaking (included in the 2018 HD Warranty Amendments Waiver docket at EPA–HQ–OAR–2022–0330–0006 and EPA–HQ– OAR–2022–0330–0014). EPA has received no comment that questions CARB’s findings. 197 EPA evaluates the lead time associated with a CARB’s regulation by in part examining the date of CARB’s adoption of the regulation and when manufacturers are required to meet the regulation. EPA is guided both by the amount of lead time provided and by the principles set forth in cases such as International Harvester and NRDC. EPA finds no evidence in the record that manufacturers were unable to comply with CARB’s requirements that commenced with the 2022 model year. VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 development and application of necessary technology prior to the effective date of the standards for which a waiver is being sought. Second, EPA has thus long believed that California must be given substantial deference when adopting motor vehicle emission standards because such action may require new or improved technology to meet challenging levels of compliance and that California plays a laboratory role. EPA is guided both by the amount of lead time provided by CARB and principles set forth in cases such as International Harvester and NRDC. This is EPA’s historical approach, and it is applied in this decision. As such, the requirements of section 202(a)(3)(A) do not apply to California. Nevertheless, the factors such as energy and safety found in section 202(a)(3)(A) have been addressed by California and are part of the record here. EPA finds that CARB’s assessment of technology, lead time and cost was based on reasonable assumptions and EPA has received no subsequent comment during the waiver proceeding to indicate otherwise. Although EPA received comment suggesting that EPA’s technological feasibility analysis should be performed under the criteria of section 202(a)(3)(A), the Agency explains below that section 202(a)(3)(A) does not apply to California. As also explained, section 202(a)(3)(A) was designed by Congress to explicitly address EPA rulemaking activities. As such, EPA’s historical waiver approach of applying section 202(a)(2), for purposes of assessing technological feasibility, lead time and cost as required by section 209(b)(1)(C), also applies to California’s heavy-duty vehicle and engine emission standards. Nevertheless, EPA has examined the waiver opponents comments regarding the requisite battery technologies (including weight, infrastructure, and safety issues).198 CARB’s ACT Regulation waiver request provided information pertaining to consistency with section 202(a) for each of the three regulations covered by the request. CARB noted that the ACT Regulation’s requirements that new 2024 MY medium- and heavy-duty ZEVs be produced and delivered for sale to ultimate purchasers in California are consistent with section 202(a) because the required technology already exists.199 In addition, although EPA 198 EPA finds that it is beyond the scope of EPA’s review to examine the feasibility of CARB’s standards outside of California, including in states adopting CARB’s standards (section 177 states). See 78 FR 2143, 74 FR 32744. 199 ACT/ZEAS/ZEP Waiver Support Document at 31–32. PO 00000 Frm 00024 Fmt 4701 Sfmt 4703 received limited cost data from a commenter, EPA finds no requisite evidence in the record or comments that suggest that such technology does not exist at reasonable costs (including the costs to consumers), or that ZEV trucks and buses that cover a variety of vocation and duty cycles are not commercially available.200 EPA also notes that the ACT Regulation includes deficit and credit generation provisions whereby manufacturers have the flexibility to phase in differing products over time and mitigate deficits in later model years or through trading. Further, in examining costs where technologies already exist, EPA is also guided by how costs are juxtaposed with lead time. Costs in this context relates to the timing of a particular emission control technology rather than to broader considerations.201 Opponents of the waiver have not met their burden of proof to demonstrate the ACT Regulation is inconsistent with section 202(a). The commenters have not demonstrated, based on EPA’s assessment of the record on the overall feasibility of technology and costs, that a disruption to the heavy-duty vehicle and engine manufacturing industry would occur or that there is an undue burden on this industry as a result of the ACT Regulation. The record includes evidence of the ability of manufacturers to introduce certain service classes of vehicles that may have availability of central charging and lower costs, and in a timeframe and sequence that meets the ZEV phase-in requirements of the ACT Regulation. Further, while the heavyduty vehicles that meet the ACT Regulation includes initial development costs and costs of integrating the technology to the vehicles (the cost of compliance) and other higher upfront costs for certain vehicles and in certain years, than traditional or conventionally fueled vehicles, the opponents of the waiver have not met their burden of proof to demonstrate that such costs of compliance are prohibitive. Beyond the technological feasibility of the emission controls needed to meet the applicable standards, EPA is also sensitive to the costs of the vehicles as well as the TCO of such vehicles. There is no indication that the ZEV vehicles today and projected to meet the ACT Regulation would be experience cost increases close in magnitude to prohibitive levels. Additionally, EPA agrees with CARB 200 Id. at 18. I at 1118. (‘‘Congress wanted to avoid undue economic disruption in the automotive manufacturing industry and also sought to avoid doubling or tripling the cost of motor vehicles to purchasers.’’). 201 MEMA E:\FR\FM\06APN2.SGM 06APN2 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices ddrumheller on DSK120RN23PROD with NOTICES2 that the opponents of the waiver that asserted claims regarding various battery issues such as replacement costs, weight, and inabilities to travel longer distances have not demonstrated that the compliance costs are so excessive to make the standards infeasible. EPA notes that CARB, in adopting the ACT Regulation, performed a market segment analysis for 87 market segments that use Class 2b–8 trucks, and assessed their suitability for electrification based on issues including payload, daily operational ranges, infrastructure access, and space considerations.202 EPA finds that CARB has reasonably identified technologies and vehicle applications that are available in the near term as well as reasonable evidence that the performance and demand for heavy-duty ZEVs will significantly improve as technology evolves. Separately, EPA notes that CARB has submitted extensive information to EPA regarding its assessment of battery technology—including safety, the suitability of the grid and charging infrastructure, and related issues related to the ACT Regulation as a policy choice.203 Therefore, the phase-in of ZEV sales percentages in the ACT Regulation falls within the feasibility tests set forth in International Harvester and NRDC and the opponents of the waiver have not met their burden of proof to refute CARB’s analysis and projections. Similarly, EPA finds no evidence in the record that suggests that technology needed to produce zero emission airport shuttle vehicles to meet the ZEAS Regulation does not exist or that manufacturers would not be able to meet the ZEP Certification Regulation.204 To the extent that 202 CARB Supplemental Comments at 12 (see appendix E to the ACT ISOR). 203 See CARB’s FSOR at 9–10 (discussion of alternative fueled vehicles and regulatory suggestion of ultra-low NOX rather than the ZEV levels on ACT, in context of grid readiness); FSOR at 124–127 (grid resiliency); FSOR at 103 (CARB notes ‘‘The Board approved the regulation without off-ramps to ensure that vehicle manufacturers, suppliers, and infrastructure manufacturers have certainty in making long-term investments needed to ensure large-scale deployment of ZEVs in California. The regulation’s structure gives manufacturers flexibility to bank credits, shift sales between weight classes, and trade credits with other manufacturers. These flexibility provisions give manufacturers assurance that they can comply and does not introduce the uncertainty associated with potential off-ramps.’’); ACT Waiver Request at 31– 39. See also, ACT ISOR at IX–8, IX–23 to IX–24, IX– 27 to IX–28, 10, 192, 204–22, and 269–74. 204 Id. While the ZEAS Regulation regulates fleet operators of airport shuttles, EPA acknowledges that the emission levels expressed in the ZEAS Regulation are emission standards preempted under section 209(a) and require a waiver of preemption under 209(b). See Engine Manuf. Ass’n v South Coast Air Quality Mgmt. Dist., 541 U.S. 246, 255 VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 commenters suggest preferred feasible alternatives but do not argue that the CARB regulations are technologically infeasible themselves, EPA again notes that CARB has significant discretion in the policy choices it makes to address California’s air pollution problems.205 ‘‘The structure and history of the California waiver provision clearly indicate a Congressional intent and an EPA practice of leaving the decision on ambiguous and controversial public policy to California’s judgment.206 Therefore, based on the record before us, EPA cannot find that the opponents of the ACT, ZEAS, and ZEP Certification Regulations waiver request have met their requisite burden of proof to demonstrate that such requirements are inconsistent with section 202(a) under EPA’s historical approach to the third waiver criterion.207 Thus, EPA cannot (2004). Although the ZEAS Regulation does not expressly require operators to purchase cleaner new vehicles because regulated parties may comply by converting existing internal combustion vehicles to zero-emissions vehicles, EPA nevertheless believes it necessary to evaluate the purchasing requirements and options within the ZEAS Regulation and waives preemption of the ZEAS Regulation by this action. 205 See, e.g., Ford Motor, 606 F.2d 1293, 1302 (D.C. Cir. 1979) (‘‘There is no indication in either the statute or the legislative history that Congress intended to permit the Administrator to supplant its emission control regulations with those of California, no matter how sagacious and beneficial the latter may be. Nor is there any evidence that the Administrator is supposed to determine whether California’s standards are in fact sagacious and beneficial.’’). To the extent comments suggest that consistency with 202(a) requirements includes limits on the types of emission standards that may be adopted, these claims do not pertain to the third prong analysis. Rather, the consistency with section 202(a) requirement relates to the technological feasibility of California’s standards as explained in this decision. Further, the Administrator has long explained that ‘‘questions concerning the effectiveness of the available technology are also within the category outside my permissible scope of inquiry,’’ under section 209(b)(1)(C). 41 FR 44209, 44210 (October 7, 1976); 47 FR 7306, 7310 (February 18, 1982) (‘‘I am not empowered under the Act to consider the effectiveness of California’s regulations, since Congress intended that California should be the judge of ‘the best means to protect the health of its citizens and the public welfare.’’’ (Internal citations omitted)). Finally, one commenter (AFPM at 12–13) specifically suggests that consistency with section 202(a), including section 202(a)(3)(A), means California cannot require particular technologies. However, as we explain below, section 202(a)(3)(A) does not apply to California and EPA evaluates the third waiver prong under the technological feasibility, lead time, and costs requirements in section 202(a)(2). Further, with respect to CARB’s ability to set particular technology requirements, see 71 FR 78190 (December 28, 2006) and Decision Document at EPA–HQ–OAR–2004–0437–0173, at 35–46). 206 40 FR 213101, 23103 (May 28, 1975). 207 EPA recognizes that CARB may make different policy choices based on the air quality and other conditions within the State, and that EPA does not play the role of second-guessing such choices. It also follows that, in response to the ACT Regulation, a manufacturer will determine which PO 00000 Frm 00025 Fmt 4701 Sfmt 4703 20711 deny CARB’s ACT, ZEAS, and ZEP Certification Regulations waiver request on this basis.208 5. The Inapplicability of Section 202(a)(3)(C) to the Third Prong Certain commenters asserted that, even if the standards are technologically feasible, EPA should nonetheless deny the waiver based on the lead time and stability requirements found in section 202(a)(3)(C).209 These commenters claim that because the third waiver criterion requires California’s standards to be ‘‘consistent with’’ section 202(a), California must necessarily comply with section 202(a)(3)(C), as that is a subprovision of 202(a). This argument is inconsistent with the plain text of the statute. The statutory phrase ‘‘consistent with’’ indicates that California’s standards should be congruent and compatible with section 202(a), which in turn sets forth requirements for Federal standard-setting. The statute does not, however, obligate California to comply with every single provision of section 202(a). Not only would doing so make little sense given Congress’ intent to set up two motor vehicle programs in title II—with California’s program dedicated to address the state’s air quality problems and serve as a testing ground for motor vehicle emissions policy designs and technologies—but it would also conflict with the text and intent of the waiver provisions in section 209. product offerings to make available in the California marketplace during the transition to and for showing compliance with the new standards. These market choices could include offering for sale a limited set of products. Given the statutory scheme, the EPA Administrator is to give very substantial deference to California’s judgments. See also International Harvester v. Ruckelshaus, 478 F 2d. 615, 640 (D.C. Cir. 1979) (‘‘We are inclined to agree with the Administrator that 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. The driving preferences of hot rodders are not to outweigh the goal of a clean environment.’’). 208 EPA evaluates the lead time associated with CARB’s regulation by examining the date of CARB’s adoption of the regulation and when manufacturers are required to meet the regulation. The CARB Board adopted the ACT Regulation on June 25, 2020. EPA is guided both by the amount of lead time provided and by the principles set forth in cases such as International Harvester and NRDC. The lead time here is between the CARB Board’s adoption of the ACT Regulation in June 2020 and the compliance implementation for the 2024 model year (recognizing that manufacturers may choose to certify earlier in 2023 for the 2024 model year). EPA finds no evidence in the record that manufacturers are unable to comply with CARB’s requirements that commence with the 2024 model year. 209 Formerly contained in section 202(a)(3)(B), the 1990 Amendment renumbered this section as section 202(a)(3)(C). E:\FR\FM\06APN2.SGM 06APN2 ddrumheller on DSK120RN23PROD with NOTICES2 20712 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices The commenters’ argument regarding section 202(a)(3)(C) fails. That provision, which requires at least four years of lead time and three years of stability, is a companion to a specific Federal standard-setting mandate, section 202(a)(3)(A). That mandate is for EPA to promulgate certain heavy-duty standards for hydrocarbons, carbon monoxide, oxides of nitrogen, and particulate matter that reflect the ‘‘greatest degree of emission reduction achievable’’ using technology that EPA determines will be available for a given model year, giving appropriate consideration to cost, energy, and safety factors associated with application of those technologies. In conjunction with this directive to set standards reflecting the ‘‘greatest degree of emission reduction achievable,’’ section 202(a)(3)(C) requires EPA to provide the four years of lead time and three years of stability for the Federal standards. The statute is also explicit that California, by contrast, may adopt state standards that are ‘‘in the aggregate’’ at least as protective as the Federal standards—a starkly different structure than requiring each of the relevant heavy-duty standards to reflect the ‘‘greatest degree of emission reduction achievable.’’ As such, the requirement for EPA to find, in granting a waiver, that California’s standards ‘‘are not [in]consistent with’’ section 202(a) cannot mean that California’s standards comply with every provision of section 202(a). Further, given that California’s standards are not subject to the ‘‘greatest degree of emission reduction achievable’’ mandate, and apply only in a limited market, it would make little sense in the statutory scheme to obligate California to comply with the companion lead time provision in section 202(a)(3)(C) to provide four years of lead time and three years of stability. This plain text reading is wellsupported by the history and purpose of the Act and is also consistent with administrative and judicial precedents. Commenters rely heavily on EPA’s single cursory and contrary decision in a 1994 MDV waiver, even though by 2012 EPA had indicated that it did not believe section 202(a)(3)(C) applied to California’s heavy-duty engines and vehicle standards.210 We acknowledge that the 1994 waiver action took a different position on this issue than we do today. EPA believes that the interpretation of the ‘‘consistency with section 202(a)’’ language that EPA has historically applied—both before and after the 1994 waiver—is permissible 210 77 FR 9239 (February 16, 2012). VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 and is the best view based on all the relevant factors. EPA’s reasoning in the 1994 MDV waiver is unpersuasive, as explained below, especially because this aspect of the 1994 MDV waiver is inconsistent with both prior and subsequent agency decisions,211 and more importantly, it is inconsistent with the plain text of the statute. EPA is therefore taking a different approach from the 1994 MDV waiver.212 Additionally, commenters also mistakenly rely on the D.C. Circuit’s opinion in American Motors Corp. v. Blum, 603 F.2d 978 (D.C. Cir. 1979) (Blum). Blum addressed a different provision of the CAA and is readily distinguishable from the instant waivers. a. EPA’s Historical Practice Is Supported by the Text, Context, and Purpose of the Statute We begin by interpreting the text of section 209(b)(1)(C), which requires EPA to assess whether CARB’s standards are ‘‘consistent with section [202(a)].’’ The mere fact that Congress placed a provision applicable to Federal standards in section 202(a) does not mean California must comply with it in order for its standards to be ‘‘consistent’’ with section 202(a).213 Rather, what the ‘‘consistent with’’ provision requires must ‘‘account for the broader context of the statute as a whole’’ 214 and should be based on analysis of the text, context, purpose, and history of the relevant portions of the Act. The term ‘‘consistent’’ means ‘‘marked by harmony, regularity, or steady continuity: free from variation or contradiction,’’ ‘‘marked by agreement,’’ and ‘‘showing steady conformity to character, profession, belief, or 211 See 77 FR 9239, 9249 (2012); 46 FR 22302, 22304 (1981). 212 FCC v. Fox Television Stations, Inc., 556 U.S. 502 (2009). 213 The D.C. Circuit has noted ‘‘section 202’s pervasive regulation of national motor vehicle emission standards’’ and explained that if the entire provision were applicable to California ‘‘[the Administrator] would be powerless to consider waiving federal preemption for California’s emission standards and certification process. This lack of power would render the waiver provision and indeed, the express preemption provision mere surplusage.’’ MEMA I, 627 F.2d at 1122. 214 Wisconsin v. EPA, 938 F.3d 303, 316 (D.C. Cir. 2019) (‘‘We note that we do not conclude that the phrase ‘consistent with’ in the Good Neighbor Provision necessarily effects an incorporation of the full contours of every provision of Title I in pure, lockstep fashion. As we have observed elsewhere in construing the same words in the context of the same statute, the phrase ‘consistent with’ other statutory sections ‘calls for congruence or compatibility with those sections, not lock-step correspondence.’’’) (Citing Envtl. Def. Fund Inc. v. EPA, 82 F.3d 451, 460 (D.C. Cir. 1996); Nuclear Energy Institute, Inc. v. EPA, 373 F.3d 1251, 1270 (D.C. Cir. 2004)). PO 00000 Frm 00026 Fmt 4701 Sfmt 4703 custom.’’ 215 These definitions support the conclusion that the phrase ‘‘consistent with section 202(a)’’ does not require California’s standards to comply with all sub-provisions in section 202(a), but rather calls for congruence and compatibility. Caselaw from the D.C. Circuit explaining the meaning of the phrase ‘‘consistent with’’ in other parts of the Clean Air Act also supports this understanding that the phrase does not mean lockstep correspondence.216 EPA thus believes that the phase ‘‘consistent with’’ does not require California’s standards to strictly conform or comply with every provision in section 202(a). After all, that would defeat the scheme Congress set up to encourage two sets of standards—the Federal standards and California’s standards. Congress chose the term ‘‘consistent with’’ instead of, for example, ‘‘comply with,’’ or terms connoting identicality such as ‘‘the same as,’’ or ‘‘identical to’’ in section 209(b)(1)(C).217 The use of ‘‘consistent with’’ in section 209, rather than ‘‘identical’’ or the like, makes perfect sense because Congress established two programs for control of emissions from new motor vehicles in Title II—EPA emission standards adopted under the Act and California emission standards adopted under its state law. Motor vehicles are ‘‘either ‘federal cars’ designed to meet the EPA’s standards or ‘California cars’ designed to meet California’s standards.’’ 218 Thus, an interpretation that every portion of section 202(a) must be applicable to California standards would defeat Congress’s plan.219 In contrast, EPA’s 215 Consistent, https://www.merriamwebster.com/dictionary/consistent (last accessed Jan. 30, 2023). 216 See Wisconsin v. EPA, 938 F.3d 303, 316 (D.C. Cir. 2019) (collecting authorities). 217 EPA notes, moreover, that elsewhere in the statute Congress did use the term ‘‘identical,’’ indicating that Congress knew how to clearly express when it wanted identicality as opposed to consistency. For example, under section 177, Congress ‘‘permitted other states to ‘piggyback’ onto California’s standards, if the state’s standards ‘are identical to the California standards for which a waiver has been granted for such model year.’’’ Motor Vehicle Mfrs. Ass’n v. New York State Dep’t of Envtl. Conservation, 17 F.3d 521, 525 (2d Cir. 1994) (Emphasis added); Similarly, in section 211(c)(4)(A)(ii), state fuel controls that are ‘‘identical’’ to controls promulgated under section 211(c)(1) are otherwise not preempted. (Emphasis added). Section 211(c)(4)(A)(ii)(Emphasis added). 218 Engine Mfrs. Ass’n v. EPA, 88 F.3d 1075, 1079–80, 1088 (D.C. Cir. 1996). 219 For example, the requirement in section 202(a)(3)(D) for the Administrator to conduct a study for the practice of rebuilding heavy-duty engines and, on the basis on such study, consider prescribing requirements for rebuilding practices is clearly directed at EPA and not a requirement of California. It would not be a reasonable reading of E:\FR\FM\06APN2.SGM 06APN2 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices ddrumheller on DSK120RN23PROD with NOTICES2 historical practice regarding ‘‘consistent with’’ is in accordance with both Congress’s structure and the case law that guides how the phrase should be interpreted by ensuring that California, in setting its standards, evaluates the same factors that EPA does—e.g., feasibility, lead time, and cost. EPA also ensures that enforcement mechanisms, such as test procedures, are compatible to avoid creating challenges for automakers in complying with both California and federal standards.220 For example, EPA has considered California’s classification scheme for heavy-duty vehicles as consistent with section 202(a), even though it is not identical to the federal classification.221 This understanding of ‘‘consistent with’’ is supported by case law, such as MEMA II: ‘‘Section 209(b)(1) makes clear that section 202(a) does not require, through its cross-referencing, consistency with each federal requirement in the act. . . . California’s consistency [with section 202(a)] is to be evaluated ‘in the aggregate,’ rather than on a one-to-one basis. CAA section 209(b)(1).’’ 222 In sum, section 209(b)(1)(C) does not require California to conform identically to every provision of section 202(a). Having established that California’s standards do not need to be identical to or meet all of the requirements set out in section 202(a) for Federal standards, we now turn to the question whether California’s standards must comply with section 202(a)(3)(C)’s requirements to be ‘‘consistent’’ with section 202(a). To answer this question, EPA further examines the statute’s text and purpose. Based on the plain language, statutory context and legislative history, we conclude that the best view is that compliance with section 202(a)(3)(C) is not necessary for consistency. In particular, section 202(a)(3)(C) is a companion lead time provision that applies to Federal standard-setting under section 202(a)(3)(A) and is therefore not relevant to California’s program. In general, section 202(a)(3), which was first added in the 1977 section 209(b)(1)(C) to require California to complete an identical study in order to be ‘‘consistent with’’ section 202(a). 220 42 FR 2337, 2338 (January 11, 1977). 221 Id. (A medium duty vehicle is defined by the CARB as a subset of the heavy-duty vehicle class, and is any motor vehicle (except a passenger car) with a gross vehicle weight rating (GVWR) of between 6000 and 8500 pounds).); See also, 43 FR 1829, n.2, 1830, n.9 (January 12, 1978); CARB Waiver Request at 3 n.6; 78 FR 2114 n.9 (Mediumduty vehicles (MDVs) are vehicles in California’s regulations between 8,500 and 114,000 lbs GVWR that are also called Class 2b/Class 3 vehicles. These vehicles are generally termed heavy-duty vehicles under EPA’s regulation). 222 MEMA II, 143 F.3d 449, 463–64. VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 Amendments, reflected congressional frustration at EPA’s slow pace of regulating emissions from heavy-duty vehicles and engines and was thus a direct command to EPA.223 By its terms, section 202(a)(3)(A)(i) directs EPA to establish standards for hydrocarbons, carbon monoxide, oxides of nitrogen, and particulate matter emissions from heavy-duty vehicles and engines that ‘‘reflect the greatest degree of emission reduction achievable.’’ 224 Section 202(a)(3)(C) in turn requires that such stringent standards (‘‘those promulgated . . . under this paragraph,’’ section 202(a)(3)(C)) have at least four years of lead time and apply for no less than three model years.225 Congress intended the fixed lead time and stability provisions of section 202(a)(3)(C) as a companion to the requirement in section 202(a)(3)(A) to promulgate national standards which ‘‘reflect the greatest degree of emission reduction achievable,’’ balancing the mandate for the most stringent possible standards with granting regulated manufacturers a 223 NRDC v. Thomas, 805 F.2d 410 (D.C. Cir. 1986) (for the history and treatment of the 1977 Amendments for heavy-duty vehicles and engines particulate matter, oxides of nitrogen, carbon monoxide and hydrocarbons standards). Acting under the 1977 Amendments, EPA first promulgated heavy-duty vehicle and engines standards on May 15, 1985 (50 FR 10606) but by that time California had been granted waivers for heavy-duty vehicles and engines standards (See for example, 34 FR 7348 (May 6, 1969); 36 FR 8172 (April 30, 1971); 40 FR 23102 (May 28, 1975); Section 202(a)(3)(A)(iii) was originally contained in the 1977 Senate bill ‘‘applicable to emissions of carbon monoxide, hydrocarbons, particulates, and oxides of nitrogen from heavy duty trucks, buses, and motorcycles and engines thereof.’’ S. Rep. No. 252, 95th Cong., 1st Sess. at 19 (1977). See S. Rep. No.127, 95th Cong., 1st Sess. 193 (1977), reprinted in 3 Legislative History 1567. The 1977 Amendments added section 202(a)(3) directing EPA to set heavy-duty vehicle emission standards for certain emissions for the 1983 model year and later. (Congress having identified a need for standards in 1970 ‘‘had become impatient with the EPA’s failure to promulgate a particulate standard’’ for heavy duty vehicles.’’ NRDC, 655 F.2d at 325 (citing S. Rep. No.127, 95th Cong., 1st Sess. 67 (1977), reprinted in 3 Legislative History 1441). This language appears in the same legislative history where Congress expressed approval for EPA’s implementation of the waiver provision over the past decade and expanded California’s discretion to adopt standards that were intended to address the state’s severe air quality issues. 224 NRDC v. Thomas, 805 F.2d at 414–16. 225 Formerly contained in section 202(a)(3)(B), the 1990 Amendments renumbered this section as section 202(a)(3)(C) and slightly modified its terms while still retaining the four-year lead time and three-year stability requirement and extending this lead time to standards promulgated by EPA for the control of NOX emissions from heavy-duty vehicles and engines. (‘‘Any standard promulgated or revised under this paragraph and applicable to classes or categories of heavy-duty vehicles or engines shall apply for a period of no less than 3 model years beginning no earlier than the model year commencing 4 years after such revised standard is promulgated.’’ Section 202(a)(3)(C)). PO 00000 Frm 00027 Fmt 4701 Sfmt 4703 20713 minimum amount of lead time and considering costs and other factors.226 Congress chose these prescribed lead time and stability requirements because of industry concerns over the level of stringency expected of EPA’s national standards. According to the D.C. Circuit ‘‘[t]hat requirement was enacted for the benefit of manufacturers to allow time for them to design and develop engines in compliance with newly promulgated standards.’’ 227 Both the four-year lead time and the three-year stability time frames thus provide assurance to the heavy-duty industry of a minimum amount of lead time and stability to meet EPA’s national standards considering the mandate to EPA to promulgate standards which reflect the greatest degree of emission reduction achievable under in section 202(a)(3)(A).228 (‘‘It seems that Congress intended the EPA in promulgating standards with an adequate lead period to engage in reasonable predictions and projections in order to force technology.’’).229 Several factors indicate that section 202(a)(3)(C) is a companion provision to section 202(a)(3)(A). As a general matter, the level of stringency of a standard and its accompanying lead time are intertwined. Notably, a standard does not act in isolation, but rather goes into effect after a certain amount of lead time and in a particular model year (e.g., a 1 gram/mile standard effective beginning model year 2027). The feasibility of a standard, including the availability of technology and its costs, also depends on the lead time provided. Further, the actual impact of a standard, whether on regulated entities or its protectiveness of public 226 NRDC v. Thomas, 805 F.2d 420–23 (Rejecting argument that the terms ‘‘maximum’’ and ‘‘greatest’’ before the phrase ‘‘degree of emission reduction’’ meant that EPA must set standards at the performance level of the best vehicle or engine and upholding instead EPA’s consideration and balancing of all relevant factors in setting applicable standards.). 227 EPA ‘‘cannot cite us to any precedent allowing a court to ignore an explicit leadtime requirement.’’ NRDC v. Thomas, 805 F.2d at 435 (Reversing EPA’s decision to provide less than the statutorily mandated four-year lead time for certain model year heavy-duty vehicles and engines standards.). See also, 805 F.2d 435 n.40. 228 ‘‘[I]n adding section 202(a)(3)(A)(iii) . . . Congress directed the EPA to give priority to establishing particulate emission standards for heavy-duty vehicles and left the agency free to exercise its power under section 202(a)(1) to regulate light-duty automobiles, whether dieselpowered or otherwise.’’ NRDC., at 326; H.R. Conf. Rep. No. 294, 95th Cong., 1st Sess. 542–43 (1977) (‘‘Additional revisions of up to 3 years each could be granted at three-year intervals thereafter;’’ and Congress ‘‘provides four years lead time before temporary or permanent revision of any statutory standard.’’). 229 NRDC v. Thomas, 805 F.2d at 430. E:\FR\FM\06APN2.SGM 06APN2 20714 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices ddrumheller on DSK120RN23PROD with NOTICES2 health and the environment, depends on the lead time provided. The context of the statute also evinces the link between sections 202(a)(3)(A) and (C). EPA’s general authority to establish motor vehicle standards is found in section 202(a)(1), which authorizes the Administrator to prescribe emission standards for motor vehicles upon making an endangerment finding but does not specify the stringency of the standard (i.e., there is no requirement to promulgate standards that reflect the greatest degree of emission reduction achievable).230 Section 202(a)(1) in turn is accompanied by the general lead time provision in section 202(a)(2), which does not set any fixed lead time but rather allows the Administrator to determine the lead time ‘‘necessary to permit the development and application of the requisite technology, giving appropriate consideration to the cost of compliance within such period.’’ By contrast, in enacting section 202(a)(3), Congress was more prescriptive in both the appropriate level of stringency and lead time, requiring both standards that reflect the greatest degree of emission reduction achievable for specific pollutants emitted from heavy-duty vehicles and at least four-year lead time. This contextual contrast between sections 202(a)(1)–(2) and 202(a)(3) further demonstrates the close link between the standard-setting provision in section 202(a)(3)(A) and the lead time provision in section 202(a)(3)(C). That is, Congress departed from EPA’s general authority to set motor vehicle emission standards in sections 202(a)(1)–(2) in two respects by making a very specific legislative compromise in 202(a)(3): (1) By forcing stringent standards that reflect the greatest degree of emission reduction achievable, while (2) also expecting that such standards may be sufficiently difficult to achieve such that manufacturers would be entitled to a minimum of four years of lead time and three years of stability.231 230 And ‘‘[w]hile section 209(b) requires consideration of whether the adoption of standards by California is consistent with section 202(a), nevertheless [the Administrator’s] discretion in determining whether to deny the waiver is considerably narrower than [his] discretion to act or not to act in the context promulgating Federal standards under section 202(a). . . . [The Administrator] would therefore feel compelled to approve a California approach to the regulation of . . . emissions which [he] might choose not to adopt at the Federal level.’’ 41 FR 44210. 231 NRDC v. Thomas, 805 F.2d at 421–24, 430, 435. EPA acknowledges that the lead time requirements in 202(a)(3)(C) apply to ‘‘any standard promulgated or revised under this paragraph’’ and that paragraph (3) also includes other standardsetting provisions. We view these additional provisions as further support for the main argument VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 Legislative history supports this connection.232 Opponents of the waiver, however, contend that California’s standards must ‘‘reflect the greatest degree of emission reduction achievable’’ required for Federal standards in 202(a)(3)(A) and meet the companion lead time and stability requirements in section 202(a)(3)(C). Congress’ direction to EPA in sections 202(a)(3)(A) and (C) stands in stark contrast to its approach to California’s standards. EPA’s practice of providing a highly deferential review of California’s standards in waiver proceedings was already well established by 1977, and Congress recognized and approved of this practice.233 And in the very same 1977 Amendments, Congress instructed California to consider the protectiveness of its standards ‘‘in the aggregate,’’ rather than requiring each California standard being as or more stringent than its Federal counterpart.234 Congress in the text: the lead time requirements in 202(a)(3)(C) accompany specific Federal standardsetting requirements and do not act in isolation. Thus, those lead time requirements were not intended to apply to all Federal standards for heavy-duty vehicles or engines, much less to apply to California standards. See infra footnote 250. Instead, they apply only to standards ‘‘promulgated or revised under this paragraph.’’ 232 H.R. Conf. Rep. No. 564, 95th Cong., 1st Sess. 542–43 (1977) (The conference agreement provides four years lead time before temporary or permanent revision of any statutory standard and requires the Administrator to promulgate particulate standards based on criteria set forth in the House interim standards provision. These standards are to become effective as expeditiously as practicable taking into account the lead time necessary to comply, but in no event later than 1981 model year.). This legislative history from the Conference Report indicates that section 202(a)(3)(C) provides lead time and stability requirements for standards promulgated under section 202(a)(3)(A). 233 In the 1977 Amendments to section 209(b)(1), Congress also approved EPA’s interpretation of the waiver provision as providing appropriate deference to California’s policy goals and consistent with Congress’s intent ‘‘to permit California to proceed with its own regulatory program’’ for new motor vehicle emissions. H.R. Rep. No. 95–294, at 301 (1977); MEMA I, 627 F.2d at 1120–21 (‘‘The language of the statute and its legislative history indicate that California’s regulations, and California’s determination that they comply with the statute, when presented to the Administrator are presumed to satisfy the waiver requirements and that the burden of proving otherwise is on whoever attacks them.’’); Id. at 1110 (‘‘The Committee amendment is intended to ratify and strengthen the California waiver provision and to affirm the underlying intent of that provision, i.e., to afford California the broadest possible discretion in selecting the best means to protect the health of its citizens and the public welfare.’’ Citing H.R. Rep. No. 294, 95th Cong., 1st Sess. 30102 (1977), U.S. Code Cong. Admin. News 1977, p. 1380 (emphasis in original).’’) 234 ‘‘Congress decided in 1977 to allow California to promulgate individual standards that are not as stringent as comparable federal standards, as long as the standards are ‘in the aggregate, at least as protective of public health and welfare as applicable federal standards.’’ Ford Motor, 606 F.2d 1293, 1302 (DC Cir. 1979) (‘‘[T]he 1977 PO 00000 Frm 00028 Fmt 4701 Sfmt 4703 explicitly recognized that California’s mix of standards could ‘‘include some less stringent than the corresponding federal standards.’’ 235 ‘‘[T]here is no question that Congress deliberately chose in 1977 to expand the waiver provision so that California could enforce emission control standards which it determined to be in its own best interest even if those standards were in some respects less stringent than comparable federal ones.’’ 236 The four-year lead time and three-year stability requirement for heavy-duty engines and vehicles standards contained in section 202(a)(3)(C) should thus be properly viewed as applying to EPA’s standard-setting authority under section 202(a)(3)(A), and not California’s authority as applied under the waiver provisions. To give proper effect to the ‘‘in the aggregate’’ language in section 209(b)(1), and for California to retain its ability to set more stringent standards for some pollutants and less stringent for others, California is not explicitly required, nor should it be implicitly required by the cross-reference to section 202(a), to set heavy-duty vehicle emission standards that ‘‘reflect the greatest degree of emission reduction.’’ In other words, the legislative compromise that Congress established in 202(a)(3) for Federal standardsetting—between standards that reflect the greatest degree of emission reduction achievable and at least four years of lead time and three years of stability—does not make sense in the California context: since California can establish differing (and sometimes less stringent) standards than what is required by 202(a)(3)(A), it also follows that it may prescribe differing lead time and stability requirements than what is required by 202(a)(3)(C))—provided those requirements are ‘‘consistent with’’ EPA’s general approach to addressing feasibility, lead time, and cost pursuant to section 202(a)(2). The 1977 Amendment to section 209(b)(1) thus also supports the view that California’s standards should be reviewed under the traditional feasibility test of section 202(a), and that California need only provide lead time it deems sufficient based on its analysis of technology feasibility and cost for standards at issue, and that EPA reviews California’s determinations. As previously noted, the 1977 Amendments removed the stringency requirements for California standards amendments significantly altered the California waiver provision.’’). 235 H.R. Rep. No. 294, 95th Cong., 1st Sess. 302 (1977). 236 MEMA I, 627 F.2d at 1110. E:\FR\FM\06APN2.SGM 06APN2 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices ddrumheller on DSK120RN23PROD with NOTICES2 under review and now allows for granting waivers if standards are ‘‘in the aggregate’’ as protective of health as federal standards in section 209(b)(1). This amendment reflected California’s wish to ‘‘trade off’’ controlling carbon monoxide emissions, which were not as critical of a problem in California, for NOX emissions, which were and continue to present severe air quality challenges in California.237 Therefore, California’s carbon monoxide standards can now be less stringent than federal standards.238 Recognizing that both carbon monoxide and NOX are also listed in section 203(a)(3)(C), and then reading this section as applicable to California’s heavy-duty vehicles standards, however, would entirely undermine the purpose of the 1977 Amendments. Under such a reading, if California identified a need to relax an existing carbon monoxide standard to enable a much more stringent NOX standard, based on the interactions between the control technologies involved, it would be precluded from doing so because the carbon monoxide standard would not meet the ‘‘greatest degree of emission reduction’’ requirement. This result is in direct conflict with Congress amending section 209(b)(1) to enable California to do precisely that, with precisely those pollutants.239 As such, it is not a reasonable reading of the statute. Moreover, the D.C. Circuit has held that not all the 1977 amendments to the Clean Air Act apply in the waiver context. In MEMA I, for instance, the Court held that section 302 was inapplicable to section 209 because ‘‘[s]ection 302(k)’s definition [of standards] was not enacted until ten years after the original waiver provision, and it was developed in the context of regulating emissions from stationary sources.’’ 240 Similarly, Congress 237 58 FR 4166, LEV Waiver Decision Document at 50–51. 238 MEMA II, 142 F.3d at 464 (‘‘EPA has observed, ‘California would not be denied a waiver if its CO standard were slightly higher than the federal . . . standard. . . . This is despite the fact that section 202(g) contains specific standards for CO that EPA must promulgate.’ EPA Air Docket A–90–28, Doc. No. V–B–1 at 47.’’). 239 MEMA II, 142 F.3d at 464 (‘‘California would not be denied a waiver if its CO standard were slightly higher than the federal . . . standard. . . . This is despite the fact that section 202(g) contains specific standards for CO that EPA must promulgate.’’); MEMA I, 627 F.2d at 1110 n.32 (explaining the specific intent of Congress to allow California carbon monoxide standards to be less stringent than federal carbon monoxide standards). 240 MEMA I, 627 F.2d 1095, 1112 n.35 (DC Cir. 1979) (‘‘For this reason we find unpersuasive petitioners’ suggestion that section 302(k) of the Clean Air Act, 42 U.S.C. 7602(k) (Supp. I 1977), which contains a definition of ‘‘emission standards,’’ controls our examination of the VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 developed section 202(a)(3) in the context of the nationwide regulation of emissions from heavy-duty engines and vehicles by EPA, a decade after enactment of the original waiver provision and also after California had been regulating heavy-duty engine emissions with the appropriate waivers that EPA granted applying the traditional consistency test.241 In amending section 202(a) to ensure more effective Federal regulation of certain heavy-duty vehicle emissions, Congress gave no indication that it had any intention of upending the application of the traditional consistency test to California standards. Further, as far back as 1967 Congress in enacting section 209(b) recognized that emissions technology would be introduced and tested first in California before nationwide introduction and use.242 According to the D.C. Circuit: ‘‘The history of congressional consideration of the California waiver provision, from its original enactment up through 1977, indicates that Congress intended the State to continue and expand its pioneering efforts at adopting and enforcing motor vehicle emission standards different from and in large measure more advanced than the corresponding Federal program; in short, to act as a kind of laboratory for innovation.’’ 243 EPA has thus also long recognized Congressional intention that California ‘‘pioneer’’ emissions control.244 EPA’s view is supported by meaning of the word ‘‘standards’’ in section 209); Motor Vehicle Mfrs. Ass’n v. New York State Dep’t of Envtl. Conservation, 17 F.3d 521, 533 (2d Cir. 1994). 241 ‘‘The 1977 Amendment also drew heavily on the California experience in the ten years since enactment of the first waiver provision. See 123 Cong. Rec. H4852 (daily ed. May 21, 1977); id. at H5061 (daily ed. May 25, 1977).’’ MEMA I, 627 F. 2d. 1095, 1111 n.34; For example, EPA granted a waiver for 1972 and later heavy-duty vehicles gasoline standards to California on May 6, 1969 (34 FR 7348). In turn, EPA first promulgated heavyduty vehicle and engine standards pursuant to the 1977 Amendments in 1985. 50 FR 10606 (May 15, 1985). 242 S. Rep. No. 403, 90th Cong., 1st Sess. 33 (1967) (The waiver of preemption is for California’s ‘‘unique problems and pioneering efforts.’’); 113 Cong. Rec. 30950, 32478 (‘‘[T]he State will act as a testing agent for various types of controls and the country as a whole will be the beneficiary of this research.’’) (Statement of Sen. Murphy); MEMA I, 627 F.2d 1095, 1111 (DC Cir. 1979). 243 MEMA I, 627 F.2d 1095, 1110. 244 38 FR 10317, 10324 (April 26, 1973). There is a general pattern that emission control technology have been phased in through use in California before their use nationwide. This pattern grew out of early recognition that auto caused air pollution problems are unusually serious in California. In response to the need to control auto pollution, California led the nation in development of regulations to require control of emissions. This unique leadership was recognized by Congress in enacting Federal air pollution legislation both in PO 00000 Frm 00029 Fmt 4701 Sfmt 4703 20715 legislative history. Congress recognized California’s severe air quality problems and envisioned California’s role as an innovative laboratory for motor vehicle emission standards and control technology. California’s ‘‘unique [air pollution] problems and [its] pioneering efforts justif[ied] a waiver of the preemption section;’’ California ‘‘should serve the Nation as a ‘testing area’ for more protective standards.’’ 245 Similarly, California is to ‘‘blaze its own trail with a minimum of federal oversight.’’ 246 EPA has thus ‘‘[h]istorically granted waivers allowing the introduction of new technology in California prior to its introduction nationwide’’ intending for the phase-in of new control technology in California as a means of successful implementation nationwide.247 The Administrator has explained that allowing California to first introduce technology ‘‘best serves the total public interest and the mandate of the statute. It promotes continued momentum toward installation of control systems meeting the statutory standards while minimizing risks incident to national introduction of new technology.’’ 248 Applying fixed lead time and stability requirements to the California heavyduty vehicle program would thwart California’s ability to serve as a laboratory of vehicle emission reduction technologies and delay the transfer of 1967 and 1970 by providing a special provision to permit California to continue to impose more stringent emission control requirements than applicable to the rest of the nation. In 1973 for example, the Administrator granted a waiver to California that would force the use of emissions catalyst while setting national standards that would not call for such technology. The Administrator explained that ‘‘[i]f the new technology is largely restricted to California vehicles in 1975, it is the testimony of both General Motors and Ford that all the processes needed to mass produce catalyst cars can be tested out on a limited scale that makes tighter quality control possible and allows extra energy to be applied to the cure of any problems that may arise [ ]. Both companies also stated that they would be able to focus their energies to deal more effectively with such in use failures as did occur if the first introduction of catalysts were in a limited geographical area [ ].’’ Notably, the Administrator was acting under a somewhat analogous provision to section 202(a)(3)(A)(ii) by calling for standards that ‘‘reflect the greatest degree of emissions control which is achievable by application of technology which the Administrator determines is available giving appropriate consideration to the cost of applying such technology within the period of time available to manufacturers.’’ Section 202(b)(5)(C). 245 S. Rep. No. 90–403, at 33 (1967); 113 Cong. Rec. 30950, 32478 (‘‘[T]he State will act as a testing agent for various types of controls and the country as a whole will be the beneficiary of this research.’’) (Statement of Sen. Murphy); MEMA I, 627 F.2d 1095, 1111 (D.C. Cir. 1979). 246 Ford Motor Co., v. EPA, 606 F.2d 1293, 1297 (D.C. Cir. 1979). 247 49 FR 18887, 18894 (May 3, 1984). 248 38 FR 10317, 10319 (April 26, 1973). E:\FR\FM\06APN2.SGM 06APN2 ddrumheller on DSK120RN23PROD with NOTICES2 20716 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices those innovations to the country as a whole under federal standards. Given Congress’s desire for California to serve as a laboratory for innovation, the traditional feasibility inquiry under section 209(b)(1)(C) suffices to ensure that manufacturers have sufficient time to deploy technologies to comply within the California market while allowing California to move faster in deploying feasible technologies than the fixed lead time and stability requirements would allow. Additional statutory text and context further supports our historical view. A plain reading of ‘‘under this paragraph’’ in section 202(a)(3)(C) means under paragraph 3.249 Paragraph 3 grants EPA the authority to: (1) Establish heavyduty engine and vehicles standards for four listed pollutants in 202(a)(3)(A)(i), (2) classify or categorize heavy-duty vehicles and engines in 202(a)(3)(A)(ii); (3) revise earlier promulgated heavyduty standards in 202(a)(3)(B); and (4) establish standards for motorcycles in 202(a)(3)(E).250 EPA has thus long read and applied in its regulatory practice ‘‘under this paragraph’’ in section 202(a)(3)(C) as meaning under paragraph 3, i.e., section 202(a)(3).251 In other words, the lead time and stability requirements apply to, and only to, certain regulations authorized under paragraph 3. EPA has thus also long read section 202(a)(3)(C) as the authority to provide the specified lead time and stability requirements for heavy-duty vehicle and engine emissions standards that are promulgated ‘‘under this paragraph’’—under paragraph 3 (‘‘That requirement was enacted for the benefit of manufacturers to allow time for them to design and develop engines in compliance with newly promulgated standards.’’).252 Specifically, this language applies when EPA promulgates heavy-duty vehicle and engine emissions standards for the listed pollutants: hydrocarbons, carbon monoxide, oxides of nitrogen, and particulate matter emissions from heavy-duty vehicles, under section 202(a)(3).253 The 1994 MDV decision 249 In deciding to grant these waiver requests, EPA is relying on its legal interpretation of the statute as explained in this notice. In each case, EPA believes that its interpretation is the best interpretation of the statute, regardless of judicial deference. Guedes v. ATF, 45 F.4th 306, 313 (D.C. Cir. 2022). Moreover, to the extent the statute is ambiguous, EPA’s interpretation is reasonable and entitled to deference. Washington All. of Tech. Workers v. DHS, 50 F.4th 164, 192 (D.C. Cir. 2022). 250 One commenter also mistakenly suggests that 202(a)(3)(B) may also apply to California. EMA Supp. Comment at 6. To begin with, the commenter’s argument is internally inconsistent. Compare id. at 6, with id. at 4 (‘‘certain provisions in section 202(a)(3) are not directly relevant to CARB—for example, because they authorize EPA to revise standards (i.e., section 202(a)(3)(B))’’). Underscoring the point, there are other obligations imposed on EPA by section 202(a) that are not imposed on California. For example, the requirements involving motorcycles under section 202(a)(3)(E) do not apply to California, (EPA has issued waivers for California’s motorcycle standards that include 42 FR 1503 (January 7, 1977); 41 FR 44209 (October 7, 1976); 43 FR 998 (January 5, 1978)), neither does the consultation requirement under section 202(a)(5)(A), nor do certain requirements of section 202(a)(6) addressing onboard vapor recovery. Moreover, applying section 202(a)(3)(B) to California would, as with applying section 202(a)(3)(A), create a conflict with section 209(b). Section 209(b)’s ‘‘in the aggregate’’ language allows California to adopt any standards so long as they are in the aggregate more protective than the federal standards; California is not limited to the fixed numerical NOx standards found in section 202(a)(3)(B)(ii), or to revising standards based on certain air quality information as provided by 202(a)(3)(B)(i). Further, section 202(a)(3)(B)(i) grants the Administrator discretion to revise certain heavy-duty standards that the Administrator previously ‘‘promulgated under, or before the date of, the enactment of the Clean Air Act Amendments of 1990 (or previously revised under this subparagraph).’’ This provision is closely linked with section 202(a)(3)(A). That is, notwithstanding the mandate in section 202(a)(3)(A) for EPA to promulgate heavy-duty standards for the four listed pollutants that reflect the greatest emissions reductions achievable, section 202(a)(3)(B)(ii) allows EPA to revise such standards based on certain air quality information. See section 202(a)(3)(A)(i) (including the proviso ‘‘unless the standard is changed as provided in subparagraph (B)’’). As explained above, section 202(a)(3)(A) does not apply to California, and thus section 202(a)(3)(B)(ii) does not either. Separately, section 202(a)(3)(B)(ii) also does not apply to California because California is not revising standards previously promulgated under the CAA, whether ‘‘under, or before the date of, the enactment of’’ the 1990 CAA Amendments. Finally, to the extent the commenter is specifically concerned with greenhouse gas aspects of California’s regulations, EPA notes that in the federal standard-setting context, the agency has promulgated heavy-duty GHG standards under its general standard-setting authority in section 202(a)(1)–(2) and does not apply the four-year lead time and three-year stability requirements in section 202(a)(3)(C) in such heavy-duty GHG rulemakings. See 87 FR 17436–37 & n.26 (Mar. 28, 2022) (‘‘Section 202(a)(3)(A) and (C) . . . do not apply to regulations applicable to GHGs.’’); 81 FR 73512 (Oct. 25, 2016); Greenhouse Gas Emissions Standards and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles EPA Response to Comments Document for Joint Rulemaking 5–34 to 5–36 (Aug. 2011). 251 ‘‘[I]n adding section 202(a)(3)(A)(iii) . . . Congress directed the EPA to give priority to establishing particulate emission standards for heavy-duty vehicles, and left the agency free to exercise its power under section 202(a)(1) to regulate light-duty automobiles, whether dieselpowered or otherwise.’’ NRDC v. EPA, 655 F.2d 318, 326 (D.C. Cir. 1981); See, e.g., EPA’s statutory authority requires a four-year lead time for any heavy-duty engine or vehicle standard promulgated or revised under CAA section 202(a)(3). See also 81 FR 95982 (December 29, 2016); 79 FR 46256 (August 7, 2014); 77 FR 73459 (December 10, 2012); 73 FR 52042 (September 8, 2008). 252 EPA ‘‘cannot cite us to any precedent allowing a court to ignore an explicit leadtime requirement.’’ NRDC v. Thomas, 805 F.2d at 435. See also, 805 F.2d 435, n.40. 253 NRDC v. Thomas, 805 F.2d at 414–16, 435 (reversing EPA decision to provide less than the VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 PO 00000 Frm 00030 Fmt 4701 Sfmt 4703 that commenters rely on also acknowledged this reading of section 202(a)(3)(C) at the time. By contrast, California’s standards are not promulgated under section 202(a)(3); as a general matter, California adopts standards for which it seeks a waiver as a matter of law under its police powers.254 Additional reasons justify not applying 202(a)(3)(C) to the 2018 HD Warranty Amendments. Specifically, it has been EPA’s long-standing view that section 207, which requires manufacturers to provide an emissions warranty for heavy-duty engines, is the grant of authority to EPA to promulgate heavy-duty vehicles emissions warranty requirements.255 Accordingly, section 202(a)(3) is inapplicable to Federal warranty requirements, and it would not be reasonable to give it force in California’s warranty requirements. Notably, the D.C. Circuit has agreed, holding that ‘‘California is not required to comply with section 207 to get a waiver.256 Further, EPA has also long considered CARB’s warranty amendments as not standards themselves, but rather accompanying enforcement procedures because they constitute criteria designed to better ensure compliance with applicable standards and are accordingly relevant to a manufacturer’s ability to produce vehicles and engines that comply with applicable standards.257 And while ‘‘section 209(b) refers to accompanying procedures only in the context of statutorily mandated four-year lead time for certain model year heavy-duty vehicles and engines standards.); 805 F.2d 435 n.40; See also, e.g., 87 FR 17414, 17420 n.26 (March 28, 2022) (‘‘Section 202(a)(3)(A) and (C) apply only to regulations applicable to emissions of these four pollutants.’’); 87 FR 17435–36. EPA’s statutory authority requires a four-year lead time for any heavy-duty engine or vehicle standard promulgated or revised under CAA section 202(a)(3). 254 Central Valley Chrysler-Jeep, Inc. v. Goldstene, 529 F.Supp.2d 1151, 1174 (‘‘The waiver provision of the Clean Air Act recognizes that California has exercised its police power to regulate pollution emissions from motor vehicles since before March 30, 1966; a date that predates . . . the Clean Air Act.’’). 255 Auto. Parts Rebuilders Ass’n v. EPA, 720 F.2d 142, 149 (D.C. Cir. 1983) (Section 207 ‘‘commands that the Administrator ‘shall prescribe regulations which shall require manufacturers to warrant [their cars].’ ’’ (Alteration in original)). See Decision Document for the Notice of Scope of Preemption for California’s amendments to warranty regulations pertaining to 1983 and later model year passenger cars, light-duty vehicles, medium- and heavy-duty vehicles and motorcycles, V–B–1, at 65, n.132 and 66–67; 51 FR 12391 (Apr. 10, 1986). 256 MEMA II, 142 F.3d at 466–67. 257 MEMA I at 1111–13; Decision Document accompanying 51 FR 12391 (April 10, 1986), at 3; 43 FR 32182, 32184 (July 25, 1978). EPA sets emissions warranty period under section 207(a) and not section 202(a). See, e.g., 48 FR 52170 (November 16, 1983). E:\FR\FM\06APN2.SGM 06APN2 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices consistency with section 202(a),’’ EPA has long reviewed the accompanying procedures under the traditional consistency test.258 In any event, the 2018 HD Warranty Amendments would not be properly considered emission standards for the listed pollutants that would come within the purview of section 202(a)(3)(C). Further, section 202(a)(3)(C) by its terms applies to onroad heavy-duty vehicles and engines, not to nonroad vehicles or engines.259 Considering the nearly identical language in both sections 209(b) and 209(e)(2)(A), EPA has reviewed California’s requests for authorization of nonroad vehicle or engine standards under section 209(e)(2)(A) using the same principles that it has historically applied in reviewing requests for waivers of preemption for new motor vehicle or new motor vehicle engine standards under section 209(b).260 Under the third authorization criterion, EPA historically has interpreted the consistency inquiry to require, at minimum, that California standards and enforcement procedures be consistent with section 209(a), section 209(b)(1)(C), and section 209(e)(1) of the Act. And, in evaluating consistency with section 209(b)(1)(C), for purposes of consistency with section 202(a) EPA has applied the traditional feasibility test where the inquiry is solely whether California standards are feasible within the lead time provided.261 EPA has thus never I, 627 F.2d at 1111–12. 202 of the CAA pertains to new motor vehicles or new motor vehicle engines, and motor vehicles and engines is further defined in section 216 of the CAA. Section 216 also provides the definition of nonroad engine and nonroad vehicle and provides that nonroad engines are not subject to standards promulgated under section 202 of the CAA. 260 See Engine Mfrs. Ass’n v. EPA, 88 F.3d 1075, 1087 (D.C. Cir. 1996) (‘‘. . . EPA was within the bounds of permissible construction in analogizing section 209(e) on nonroad sources to section 209(a) on motor vehicles.’’). 261 On July 20, 1994, EPA promulgated a rule that sets forth, among other things, regulations providing the criteria, as found in section 209(e)(2)(A), which EPA must consider before granting any California authorization request for new nonroad engine or vehicle emission standards. 59 FR 36969 (July 20, 1994). EPA revised these regulations in 1997. These regulations were further slightly modified and moved to 40 CFR part 1074, See 73 FR 53979 (Oct. 8, 2008). As stated in the preamble to the 1994 rule, EPA has historically interpreted the section 209(e)(2)(A)(iii) ‘‘consistency’’ inquiry to require, at minimum, that California standards and enforcement procedures be consistent with section 209(a), section 209(e)(1), and section 209(b)(1)(C) (as EPA has interpreted that subsection in the context of section 209(b) motor vehicle waivers). In order to be consistent with section 209(a), California’s nonroad standards and enforcement procedures must not apply to new motor vehicles or new motor vehicle engines. To be consistent with section 209(e)(1), California’s applied section 202(a)(3)(C) to authorizations for nonroad engines and vehicles, explaining for instance that ‘‘section [202(a)(3)(C)] by its own terms applies only to standards applicable to emissions from new heavy-duty onhighway motor vehicle engines, not the nonroad engines being regulated by California.’’ 262 Considering the 1977 Amendments and subsequent ones, Congress could have explicitly provided that the fouryear lead time and three-year stability requirements in section 202(a)(3)(C) apply to California heavy-duty standards, had that been Congress’s intent. For example, Congress could have changed the text of section 209(b)(1)(C) to say, ‘‘compliant with’’ rather than ‘‘consistent with.’’ It did not. Further demonstrating the point, in section 202(m)(2) regarding certain standards that were determined infeasible by EPA, Congress set out a specific delayed lead time requirement that is ‘‘consistent with corresponding regulations or policies adopted by the California Air Resources Board.’’ 263 Similarly, in section 428 of the 2004 Consolidated Appropriations Act Congress required that EPA specifically address safety implications of any California standard for certain engines prior to granting authorizations under section 209(e).264 Section 202(a)(3)(C), however, is devoid of either any explicit language or exception that would be read as a reference to California’s heavy- 258 MEMA ddrumheller on DSK120RN23PROD with NOTICES2 259 Section VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 nonroad standards and enforcement procedures must not attempt to regulate engine categories that are permanently preempted from state regulation. 262 See, for example, 77 FR 9249, n.73. 263 ‘‘The regulations required under paragraph (1) of this subsection shall take effect in model year 1994, except that the Administrator may waive the application of such regulations for model year 1994 or 1995 (or both) with respect to any class or category of motor vehicles if the Administrator determines that it would be infeasible to apply the regulations to that class or category in such model year or years, consistent with corresponding regulations or policies adopted by the California Air Resources Board for such systems.’’ Section 202(m)(2) (Emphasis added). By the time of this amendment California had been regulating heavyduty vehicle and engine emissions with the appropriate waivers that EPA granted applying the traditional consistency test. See, e.g., 34 FR 7348 (May 6, 1969) (HD gasoline MY 72 and later); 36 FR 8172 (April 30, 1971) (HD diesel MY 72 and later MY); 40 FR 23102, 23105 (May 28, 1975) (extending waiver of April 30, 1971, to MY 1975 HD standards). 264 Codified at 40 CFR 1074.105(c). ‘‘In considering any request from California to authorize the state to adopt or enforce standards or other requirements relating to the control of emissions from new nonroad spark-ignition engines smaller than 50 horsepower, the Administrator will give appropriate consideration to safety factors (including the potential increased risk of burn or fire) associated with compliance with the California standard.’’ PO 00000 Frm 00031 Fmt 4701 Sfmt 4703 20717 duty standards.265 A provision that would require the Administrator to preclude California from revising the state’s heavy-duty standards for a minimum of three model years would appear to be an important enough limitation for Congress to explicitly set out in either section 202 or 209 especially if Congress intended California to be the judge of the ‘‘best means to protect the health of its citizens and the public welfare.’’ 266 EPA thus believes more explicit Congressional directive is needed prior to precluding California from revising standards for heavy-duty vehicles and engines that are to be sold in that state.267 In any event, except for the 1994 MDV waiver, since the 1977 Amendments EPA has granted heavy-duty engine and vehicle waivers where California has provided less than four years of lead time from adoption of its regulations and three years stability also under the traditional consistency test.268 Congress did not add anything to section 202(a)(3) during the 1990 amendments to the Clean Air Act to indicate its applicability to California.269 And, in 265 In contrast, for example, under section 246(f)(4), which sets out a State Implementation Plan provision regarding fleet programs required for certain non-attainment areas, ‘‘standards established by the Administrator under this paragraph . . . shall conform as closely as possible to standards which are established for the State of California for ULEV and ZEV vehicles in the same class.’’ And ‘‘[f]or vehicles of 8,500 lbs. GVWR or more, the Administrator shall promulgate comparable standards for purposes of this subsection.’’ Section 246(f)(4) (Emphasis added). 266 H.R. Rep. No. 95–294, 95th Cong., 1st Sess. 301–302 (1977). 267 Moreover, in 1977, the congressional record indicates that at least one heavy-duty vehicle and engine manufacturer requested that Congress amend section 209(b) by limiting this waiver provision to only light-duty vehicles and engines. According to the engine manufacturer, California’s heavy-duty vehicle standards would be on par with federal standards by 1983. Hearing on S. 251, 252 and 253 Before Subcomm. On Env’t Protection, H.R. Rep. No. 95–294, 95th Cong. 1st Sess. 4221–23 (1977). There was no concurrent testimony from a member of Congress in 1977 or 1990 regarding the intent of section 202(a)(3) and certainly nothing to indicate that it would apply to California. While there was general testimony from a member of industry during the 1990 process, there is no evidence in the record suggesting the applicability of 202(a)(3)(C) to California. Hearing on S.1630 Before Subcomm. on Env’t Protection, 101st Cong. 312–13 (1989). In any event, ‘‘The 1977 Amendment also drew heavily on the California experience in the ten years since enactment of the first waiver provision. See 123 Cong. Rec. H4852 (daily ed. May 21, 1977); id. at H5061 (daily ed. May 25, 1977).’’ MEMA I, 627 F. 2d. 1095, 1111 n.34. 268 For example, 34 FR 7348 (May 6, 1969 (HD gasoline MY 1972 and later); 36 FR 8172 (April 30, 1971) (HD diesel MY 1972 and later MY); 43 FR 1829 (January 12, 1978); 49 FR 18887 (May 3, 1984). 269 The 1990 Amendments did extend the fouryear lead time and three-year stability to standards E:\FR\FM\06APN2.SGM Continued 06APN2 20718 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices ddrumheller on DSK120RN23PROD with NOTICES2 2012, EPA specifically rejected commenters assertions that section 202(a)(3)(C) applied to California, stating that EPA’s lead time inquiry relates to technological feasibility and that there is no additional requirement imposed by the section 209 criteria.270 Turning to section 209(b), in section 209(b)(1) Congress directed that EPA ‘‘shall’’ grant waivers absent one of the three limited bases for a waiver denial.271 Section 209(b)(1) ‘‘contains an imperative to do an act—grant the waiver after a hearing—once California has made the protectiveness determination.’’ 272 Congress did not amend section 209(b)(1)(C) in the 1977 Amendments, rather the ‘‘more stringent’’ standard required for California standards and contained in section 209(b)(1) in the 1967 Act was superseded by amendments to section 209, which established that California’s standards must be, in the aggregate, at least as protective of public health and welfare as applicable Federal standards. Specifically, under section 209(b)(1), California is now required to make a protectiveness finding ‘‘in the aggregate’’ for each waiver request by looking at the summation of the standards within its vehicle program. The protectiveness finding does not call for identicality of the standards under review with Federal standards. Instead, promulgated by EPA for control of NOX emissions from heavy duty engines and vehicles. (‘‘The conference agreement adopts the House provisions, modified to retain the Senate oxides of nitrogen (NOX) standard for heavy-duty engines effective in model year 1998, and to reinstate the four-year lead time and three-year stability provisions in current law.’’ Conference Report on S. 1630 (H. Rept. 101– 952) 103d Cong. 1st Sess. 887). 270 77 FR 9239, 9249 (Feb. 16, 2012) (‘‘However, the lead-time inquiry EPA undertakes relates to technological feasibility. Specifically, consistency with section 202(a) requires the Administrator to first determine whether adequate technology already exists; or if it does not, whether there is adequate time to develop and apply the technology before the standards go into effect . . . EPA then has no further inquiry into lead-time, because no additional requirement is imposed by the section 209 criteria.’’). EPA acknowledges that the regulations at issue in this 2012 waiver decision concerned nonroad engines, not heavy-duty onhighway motor vehicle engines, and that the Agency noted, in that decision, that ‘‘even if the language in [section 202(a)(3)(C)] were relevant to its consistency analysis, that section by its own terms applies only to standards applicable to emissions from new heavy-duty on-highway motor vehicle engines, not the nonroad engines being regulated by California.’’ Id. at 9249, n.73. 271 See, e.g., Ford Motor Co., 606 F.2d 1293, 1302 (‘‘The Administrator is charged with undertaking a single review in which he applies the deferential standards set forth in Section 209(b) to California and either grants or denies a waiver without exploring the consequences of nationwide use of the California standards or otherwise stepping beyond the responsibilities delineated by Congress.’’). 272 MEMA I, 627 F.2d 1095, 1120. VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 the 1977 Amendments to section 209(b)(1), which reflected California’s preference to ‘‘trade off’’ emissions of carbon monoxide, which was not as critical a problem in California, for NOX emissions, which were and continue to present severe air quality challenges in California.273 With this amendment, California was no longer required to design a program where each standard was equally or more stringent than the applicable Federal standards, but rather can prioritize the emission reductions it views as most important for its citizens and to regulate certain pollutants less stringently than the Federal government, as long as the state program standards are in the aggregate at least as protective as the Federal standards.274 CARB may now design motor vehicle emission standards that are not as stringent as Federal standards but when considered collectively with other standards would be best suited to address California air quality problems, as long as the in the aggregate, the protectiveness finding is made and it is not arbitrary and capricious.275 ‘‘[T]here is no question that Congress deliberately chose in 1977 to expand the waiver provision so that California could enforce emission control standards which it determined to be in its own best interest even if those standards were in some respects less stringent than comparable federal ones.’’ 276 273 The House Committee recognized ‘‘California’s longstanding belief that stringent control of oxides of nitrogen emission from motor vehicles may be more essential to public health protection than stringent control of carbon monoxide,’’ and was aware that it might be technologically difficult to meet both the NO[x] standards California desired and the federal CO standard. Accordingly, Section 209(b) was rewritten to permit California to obtain a waiver of federal preemption so long as it determines that its emission control standards would be, ‘‘in the aggregate, at least as protective of public health and welfare as applicable Federal standards.’’ Ford Motor, 606 F.2d 1293, 1297 (D.C. Cir. 1979). 274 H.R. Rep. No. 95–294, 95th Cong., 1st Sess., 301–302 (1977). The amendment is to afford California ‘‘the best means to protect the health of its citizens and the public welfare.’’ (Motor Vehicle Mfrs. Ass’n v. NYS Dep’t of Env’t Conservation, 17 F.3d at 525 (‘‘section 209 (formerly section 208) was amended to require the U.S. Environmental Protection Agency (EPA) to consider California’s standards as a package, so that California could seek a waiver of preemption if its standards ‘in the aggregate’ protected public health at least as well as federal standards.’’)). 275 74 FR at 32761 (‘‘Congress decided in 1977 to allow California to promulgate individual standards that are not as stringent as comparable federal standards, as long as the standards are ‘in the aggregate, at least as protective of public health and welfare as applicable federal standards.’’); Ford Motor, 606 F.2d 1293, 1302 (D.C. Cir. 1979) (‘‘[T]he 1977 amendments significantly altered the California waiver provision.’’). 276 Ford Motor Co., 606 F.2d 1293, 1301; MEMA II, 142 F.3d 464 (‘‘California would not be denied a waiver if its CO standard were slightly higher than PO 00000 Frm 00032 Fmt 4701 Sfmt 4703 It is also this protectiveness determination by California, under section 209(b)(1) that determines EPA’s scope of review for consistency under section 209(b)(1)(C).277 EPA has reasoned that this is appropriate because the phrase ‘‘in the aggregate,’’ which as earlier explained is California’s whole program precedes ‘‘such state standards,’’ which is the relevant language in section 209(b)(1)(C).278 EPA has thus long read both sub-provisions together so that the Agency reviews California’s entire program for both protectiveness and feasibility.279 So, EPA’s historic practice has been to conduct the technology feasibility analysis for CARB’s standard under review as a whole-program assessment, i.e., one that ensures manufacturers have sufficient lead time to comply with the program’s standards as a whole, accounting for the interactions between technologies necessary to meet both new and existing standards.280 And most importantly, because California can ‘‘include some less stringent [standards] than the corresponding federal standards’’ California would logically not be expected to take section 202(a)(3)(C) into account in any protectiveness finding made for a waiver request for California standards with a shorter lead time than specified in section 202(a)(3)(C), and such standards would otherwise be properly considered more stringent than Federal standards.281 ‘‘[T]he agency’s long-standing interpretation that section 209(b) does not require California to establish the federal . . . standard. . . . This is despite the fact that section 202(g) contains specific standards for CO that EPA must promulgate.’’). 277 EPA’s assessment under 209(b)(1)(C) is not in practice a standard-by-standard review. EPA believes it appropriate to read the entirety of 209 together, along with its purposes, in order to properly interpret its components such as 209(b)(1)(C). See e.g., 87 FR 14332. 278 78 FR 2131–45. EPA notes that the term ‘‘such state standards’’ in 209(b)(1)(C) allows the Agency, in appropriate circumstances, to review the consistency of CARB’s suite of standards, for a particular vehicle category, with section 202(a). For example, EPA evaluated all of the standards (LEV III criteria pollutant, ZEV sales mandate, and GHG standards) of the ACC program in recognition of the aggregate costs and lead time associated with CARB’s standards as well as technologies that may be employed to meet more than one standard. 279 49 FR 14353–54, 14358–62. EPA notes there would be an inconsistency if ‘‘State standards’’ meant all California standards when used in section 209(b)(1) but only particular standards when used in 209(b)(1)(B) and 209(b)(1)(C). EPA has historically interpreted the third waiver criterion’s feasibility analysis as a whole-program approach. 87 FR 14361, n.266. 280 38 FR 30136 (November 1, 1973) and 40 FR 30311 (July 18, 1975). 281 See for example, 41 FR 44209, 44212 (October 7, 1976). E:\FR\FM\06APN2.SGM 06APN2 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices perfect compliance with the CAA to obtain a waiver is particularly plausible because section 209(b) explicitly requires only that the state’s standards ‘be, in the aggregate, at least as protective of public health and welfare as applicable Federal standards.’ CAA section 209(b)(1).’’ 282 Section 202(a)(3)(C) also requires that standards for heavy-duty vehicles and engines apply for no less than three model years without revision.283 Under a commenter’s argument, the Administrator would have to ‘‘align’’ or make a finding that precludes California from revising each one of the standards under review for a minimum of three model years, under section 202(a)(3)(C).284 Commenters’ reading of ‘‘consistency’’ would thus require EPA to first conduct ‘‘the narrow[ ] . . . congressionally mandated EPA review’’ under which EPA’s scope of review is delineated by the protectiveness finding California has made, and then a second broader review, beyond the confines of EPA’s historic waiver practice, that would account for the stability requirements for California cars.285 Under this reading, ‘‘[EPA] must come to the rather curious conclusion that Congress intended the Administrator to approach every new set of California standards wearing two hats one expressly provided by statute and the other a product of elusive inference. Under the first he would undertake the cursory review set forth in Section 209(b) for purposes of deciding whether to grant California a waiver of preemption; and under the other he would turn around and, apparently in the course of a full-fledged rulemaking proceeding, plumb the merits of the California standards.’’ 286 EPA disagrees. ‘‘The Administrator has consistently held since first vested with the waiver authority, his inquiry under section 209 is modest in scope. He has no broad and impressive authority to modify California regulations.’’ 287 ‘‘[H]is role with respect to the California program is largely ministerial.’’ 288 And ‘‘[t]he 282 MEMA II, 142 F.3d at 463. standard promulgated or revised under this paragraph and applicable to classes or categories of heavy-duty vehicles or engines shall apply for a period of no less than 3 model years beginning no earlier than the model year commencing 4 years after such revised standard is promulgated.’’ Section 202(a)(3)(C)(Emphasis added). 284 EMA Initial Comments at 5, 11. 285 Ford Motor, 606 F.2d 1293, 1298–99. 286 Id. at 1302. 287 MEMA I, 627 F.2d at 1119 (internal citations omitted). 288 Id. at 1123 n.56 (‘‘[T]he Administrator has no broad mandate to assure that California’s emissions control program conforms to the Administrator’s ddrumheller on DSK120RN23PROD with NOTICES2 283 ‘‘Any VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 statute does not provide for any probing substantive review of the California standards by federal officials.’’ 289 Rather ‘‘[t]he Administrator is charged with undertaking a single review in which he applies the deferential standards set forth in Section 209(b) to California and either grants or denies a waiver without exploring the consequences of nationwide use of the California standards or otherwise stepping beyond the responsibilities delineated by Congress.’’ (Emphasis added).290 As previously discussed, the deference called for in reviewing California’s waiver request led EPA to explain over 50 years ago: Even on this issue of technological feasibility I would feel constrained to approve a California approach to the problem which I might feel unable to adopt at the Federal level in my own capacity as a regulator. The whole approach to the Clean Air Act is to force the development of new types of emission control technology where that is needed by compelling the industry to ‘catch up’ to some degree with newly promulgated standards. Such an approach to automotive emission control might be attended with costs, in the shape of reduced product offering, or price and fuel economy penalties, and by risks that a wider number of vehicle classes may not be able to complete their development work in time. Since a balancing of these risks and costs against the potential benefits from reduced emissions is a central policy decision for any regulatory agency, under the statutory scheme outlined above I believe I am required to give very substantial deference to California’s judgment on that score.291 Commenters’ reading would also introduce two different tests for the evaluation of the consistency of California’s standards under the third prong: one for onroad heavy-duty vehicle and engine standards; and a different one for nonroad heavy-duty vehicle and engine standards. For one set of standards, EPA would continue evaluation of technology feasibility under the traditional test while other standards would have to be evaluated for consistency under the four-year lead time and minimum three-model year stability requirements. This would create a dichotomy, for example, between California’s heavy-duty onroad and nonroad vehicle and engine perceptions of the public interest. Absent the contingency that he is able to make contrary findings, his role with respect to the California program is largely ministerial.’’). 289 Ford Motor, 606 F.2d at 1301. 290 Id. at 1302. 291 36 FR 17158 (August 31, 1971); See also See 78 FR at 2133. (EPA notes that when reviewing California’s standards under the third waiver prong, the Agency may grant a waiver to California for standards that EPA may choose not to adopt at the Federal level due to different considerations). PO 00000 Frm 00033 Fmt 4701 Sfmt 4703 20719 standards that address hydrocarbons, carbon monoxide, oxides of nitrogen, and particulate matter that is neither supported by the statute nor EPA’s waiver practice. It would be particularly confounding, in that as a general matter, the only difference between certain heavy-duty vehicles is the placement in service with some heavy-duty engines being used interchangeably for either onroad or nonroad purposes. Since the inception of the waiver program EPA has reviewed both California’s onroad and nonroad heavy-duty engine standards under the traditional test. This waiver practice predated the 1990 Amendments that provided for authorizations of nonroad engines and vehicles standards by over two decades. Thus, for example, over fifty years ago EPA, in granting a waiver of preemption for California’s 1972 and 1973 MY HD vehicles, also denied the waiver for certain nonroad utility vehicles under the historical technology feasibility test.292 Since the 1990 amendments and considering the identical language in both sections 209(b) and 209(e)(2)(A), EPA has reviewed California’s requests for authorization of nonroad vehicle or engine standards under section 209(e)(2)(A) using the same principles that we have historically applied in reviewing requests for waivers of preemption for new motor vehicle or new motor vehicle engine standards under section 209(b).293 Specifically, EPA’s practice has been to conduct the consistency inquiry called for under section 209(e)(2)(A)(iii) by evaluating, at a minimum, whether California’s standards and enforcement procedures for nonroad engines and vehicles are consistent with section 209(a), section 292 36 FR 8172 (April 30, 1971) (Provided that due to considerations of technological feasibility, this waiver of such standards and procedures (1) shall not become applicable with respect to hydrocarbon and carbon monoxide emissions from nonroad utility vehicles (as defined at 45 CFR 85.1(a), 35 FR 17288); 34 FR 7348 (May 6, 1969) (Due to technological feasibility and lead-time issues, exhaust emission standards and test procedures for 1970 gas-powered light duty vehicles are not applicable to off-road utility vehicles until April 30, 1970, and not at all unless provision is made for calculating emissions of hydrocarbons and carbon monoxide. Due to technological feasibility issues, standards and procedures for 1971 and later gaspowered light-duty vehicles are not applicable to off-road utility vehicles unless provision are made for calculating emissions of hydrocarbons and carbon monoxide. Due to technological feasibility issues, fuel evaporative emission standards and test procedures for 1970 and later gas-powered light duty vehicles are not applicable to off-road utility vehicles until April 30, 1970). 293 See Engine Mfrs. Ass’n v. EPA, 88 F.3d 1075, 1087 (D.C. Cir. 1996) (‘‘. . . EPA was within the bounds of permissible construction in analogizing section 209(e) on nonroad sources to section 209(a) on motor vehicles.’’). E:\FR\FM\06APN2.SGM 06APN2 20720 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices 209(e)(1) and section 209(b)(1)(C).294 In short, ‘‘EPA’s review of California’s regulations under the third statutory criterion is quite deferential, limited to judging whether a regulation is ‘not consistent’ with the terms of section 7543. See 42 U.S.C. 7543(e)(2)(A)(iii).’’ 295 The ‘‘technological feasibility component of section 202(a) [only] obligates California to allow sufficient lead time to permit manufacturers to develop and apply the necessary technology.’’ 296 Under EPA’s historical practice, standards that are technologically feasible because technology is presently in use are ‘‘consistent with section 202(a).’’ So too are standards for which technology is reasonably projected to be available by the relevant model year. For California standards, that ends the inquiry. Otherwise, the Administrator, who has long explained that his role in the waiver context is ‘‘modest in scope’’ and not to ‘‘overturn’’ and ‘‘substitute his judgment’’ for those of California would nevertheless impose a four-year lead time requirement on California despite a showing that necessary emission control technology is available and otherwise well within the bounds of EPA’s historical waiver practice of reviewing feasibility.297 Doing so would be inconsistent with the statutory text and the structure that Congress put in place to enable innovation in California’s market. In sum, ‘‘the import of section 209(b) is not that California and Federal standards be identical, but that the Administrator does not grant a waiver of Federal preemption where compliance with the California standards is not technologically feasible within available lead time.’’ 298 b. Neither AMC v. Blum nor the 1994 MDV Waiver Dictate a Contrary Interpretation ddrumheller on DSK120RN23PROD with NOTICES2 As also noted above, EPA received comment that the D.C. Circuit’s decision in Blum along with EPA’s 1994 MDV waiver constrain EPA and require it to apply the precise requirements of section 202(a)(3)(C) California’s program in reviewing for consistency with 294 40 CFR part 1074, subpart B, 73 FR 59379 (October 8, 2008). 295 American Trucking Assoc. v. EPA, 600 F.3d 624, 629 (D.C. Cir. 2010). 296 MEMA II, 142 F.3d at 463 (Internal citations omitted). 297 H.R. Rep. No. 95–294, at 302 (The Administrator ‘‘is not to overturn California’s judgment lightly. Nor is he to substitute his judgment for that of the State.’’). 298 46 FR 22032, 22034–35 (April 15, 1981). VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 section 202(a).299 But the lead time section at issue in Blum is distinguishable from section 202(a)(3)(C) in several key respects, and Blum thus does not control consideration of that latter section. In Blum, the D.C. Circuit held that a waiver of preemption that denied a small volume manufacturer the statutorily mandated lead time specified as an exception in section 202(b)(1)(B) was incorrectly granted because the relevant California’s standards did not provide two-year lead time and were thus inconsistent with section 202(a) under the third waiver prong.300 According to the court, ‘‘Congress itself finds and mandates that with respect to small manufacturers a lead period two years is necessary. We think the effect of this congressional mandate is to assimilate or incorporate in section 202(a)(2) the proviso of section 202(b)(1)(B).’’ 301 There are several important distinctions between Blum and the present waivers. As an initial matter, Blum is not directly on point because it did not resolve the applicability of section 202(a)(3)(C) in a California waiver proceeding. Nor did Blum suggest that all nationally applicable lead time requirements in section 202 must apply to California. Rather, Blum performed a detailed analysis of the text and history of the specific provision at issue, section 202(b)(1)(B), and found that that provision alone must be strictly applied for California’s standards to be ‘‘consistent’’ with section 202(a). Applying the same kind of detailed textual and historical analysis here, EPA concludes that section 202(a)(3)(C) does not apply in the California waiver context.302 Moreover, the facts surrounding section 202(b)(1)(B) in Blum and section 202(a)(3)(C) here are quite different. Blum dealt with a narrow, time-limited issue: whether a specific group of manufacturers were entitled to relief from certain NOX standards for two 299 59 FR 48625 (September 22, 1994) and associated Decision Document at EPA–HQ–OAR– 2022–0330, (MDV Waiver Decision Document). 300 Waiver of preemption for California to Enforce NOX emissions standards for 1981 and later model years passenger cars. 43 FR 25729 (June 14, 1978). 301 American Motors Corp. v. Blum, 603 F.2d 978, 981 (D.C. Cir. 1979) (‘‘Section 202(b)(1)(B) directs that the regulations prescribed by the Administrator pursuant to section 202(a) shall require that NOX emissions may not exceed 2.0 grams per vehicle mile for vehicles and engines manufactured during model years 1977 through 1980. For those manufactured during model year 1981 and thereafter, NOX emissions may not exceed 1.0 grams per vehicle mile. . . . In establishing these regulations the Administrator is bound by section 202(a)(2) to allow such lead time as he finds necessary.’’) 302 See section III.D.5.a. PO 00000 Frm 00034 Fmt 4701 Sfmt 4703 model years shortly after the enactment of the 1977 Amendments. Congress made findings specific to those standards and that group of manufacturers, including one of the petitioners in the litigation by name. The court of appeals gave substantial weight to the specific findings Congress made and the detailed legislative history. By contrast, section 202(a)(3)(C) deals with a much broader set of standards applying to a broader set of manufacturers over an indefinite period of time—none of which Congress specifically evaluated. Applying section 202(a)(3)(C) to California’s program is not necessary because it was not grounded in manufacturer and model year-specific findings and would, as discussed above, interfere with California’s ability to serve as a laboratory—all in stark contrast to the application of section 202(b)(1)(B). Congress purposely crafted statutory language in section 202(b)(1)(B) to provide practical flexibility that would only apply for a short period of time (the 1981 and 1982 model years) with knowledge of the industry at the time, and the court of appeals in Blum acknowledged the congressional purpose of this language. This shortlived statutory exception no longer applies in EPA rulemakings, nor does it apply to California at this point in time. In contrast, there is no evidence that Congress evaluated questions of lead time and stability with respect to future California heavy-duty standards—or that it had any intent to constrain the form of California’s standards, in contrast to the federal standards tied to the ‘‘greatest degree of emission reduction achievable’’ mandate. And more importantly, there are no similar legislative findings or other legislative history indicating that Congress believed all manufacturers needed at least four years of lead time to meet CARB’s heavy-duty standards generally or the standards that are the subject of these waiver requests specifically. Indeed, as EPA has explained, CARB set forth a detailed explanation of the feasibility of its standards and commenters have failed to meet their burden of proof to show that the standards are infeasible. As noted, there is a critical textual distinction between the issue addressed in Blum and the one here. In Blum, the applicability of section 202(b)(1)(B) to California resulted from an exception to the general lead time of section 202(a)(2) that Congress provided for certain motor vehicle manufacturers for a short period of time and for specified model years. Immediately introducing section 202(a) E:\FR\FM\06APN2.SGM 06APN2 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices is the phrase ‘‘Except as otherwise provided in subsection (b) –),’’ which by its terms means that section 202(b) governs over the more general and potentially conflicting terms in section 202(a). But Congress did not disturb the applicability of section 202(a)(2) for subsequent model years standards and the D.C. Circuit held accordingly: ‘‘In establishing these regulations [for model year 1981 and thereafter] the Administrator is bound by section 202(a)(2) to allow such lead time as he finds necessary.’’ 303 There is also nothing to indicate Congressional intent to override section 202(a)(2). But commenters’ reading would have the Administrator do just that by allowing section 202(a)(3)(C) to govern over section 202(a)(2) even where California has made a showing of technology feasibility for the standards under review. According to relevant legislative history of section 202(b)(1)(B), that language was introduced due to concerns that small volume manufacturers would not be able to comply with the 1.0 gram per mile NOX standard for light-duty vehicles. According to statements made by members of Congress at the time of the amendment’s introduction and debate, the amendment was intended to apply to only American Motors Corporation and one other small manufacturer (Avanti) because the standard required the development of a specific technology that they would have to purchase and adapt from other manufacturers, so these small volume manufacturers would be unavoidably behind in the pollution abatement timetable from the very beginning.304 This legislative history was crucial to the Blum Court’s holding that Congress had ‘‘f[ound] and mandate[d] that with respect to small manufacturers a lead period of two years is necessary.’’ In contrast, there does not appear to be similar legislative history detailing a special or peculiar need for the strict lead time requirements for section 202(a)(3)(C), which was enacted in the same year Amendments as section 209(b)(1)(B), that would indicate 303 American Motors Corp. v. Blum, 603 F.2d 978, ddrumheller on DSK120RN23PROD with NOTICES2 981. 304 123 Cong. Rec. S9233 (daily ed. June 9, 1977). Even the EPA Administrator acknowledged AMC’s specific need for extra lead time in a letter to Congress in support of the amendment. Both the amendment’s sponsor and the Administrator explained that the 1.0 gram/mile standard created a ‘‘peculiar’’ and ‘‘special’’ problem for AMC and other small manufacturers. The two years of lead time was intended to give these small manufacturers adequate time to ‘‘modify and adapt the system [purchased from other manufacturers] to [their] own product line.’’ Id. VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 Congress’s belief that a specific amount of lead time was ‘‘necessary.’’ 305 Moreover, after Blum, the D.C. Circuit also considered a somewhat analogous argument in MEMA II, where petitioners maintained that section 202(m), which calls for promulgation of regulations ‘‘under section 202(a),’’ meant that EPA was to evaluate applicability of section 202(m) to California’s onboard diagnostic regulations for consistency with section 202(a). The court disagreed, held that section 202(m) does not apply, and declined to extend its holding in Blum, holding instead that ‘‘section 209(b)(1) makes clear that section 202(a) does not require, through its cross-referencing, consistency with each federal requirement in the act. California’s consistency is to be evaluated ‘in the aggregate,’ rather than on a one-to-one basis.’’ 306 According to the court ‘‘[a]lthough statutory crossreferencing presents a superficially plausible textual argument linking compliance with subsection (m) to compliance with subsection (a), the agency has long interpreted the statute to give California very broad authority, and the court has held that this interpretation is not unreasonable.’’ 307 EPA also disagrees with commenter’s claim that the 1994 MDV waiver constrains and binds EPA in the current waiver review. EPA is retaining the position it has consistently held with the sole exception of the 1994 MDV waiver for all the reasons discussed herein.308 EPA notes that in MEMA II the court revisited Blum and explained: Petitioners’ reliance on American Motors Corp., [ ] is misplaced. In that case, EPA viewed the petitioner’s complaint about the lead time for a proposed action by CARB to be solely based on section 202(b), not section 202(a), and so was not cognizable in the waiver process. The court disagreed, observing that the lead time for implementation of the NOX standard was governed by section 202(a)(2) and concluding 305 To the extent commenters cite statements in the legislative history regarding the need for three years of stability and four years of lead time, EPA notes that none of the cited statements are from members of Congress themselves and are instead testimony from commenters themselves. See, e.g., EMA Initial Comments at 10. But see, H.R. Rep. No. 95–294 at 542 (1977) (For standards promulgated under section 202(a)(3)(A) ‘‘[a]dditional revisions of up to 3 years ‘each could be granted at three-year intervals thereafter;’ ’’ and Congress ‘‘provides four years lead time before temporary or permanent revision of any statutory standard.’’). 306 MEMA II, 142 F.3d at 463. 307 Id. at 464 (‘‘[I]t would appear virtually impossible for California to exercise broad discretion if it had to comply with every subsection of section 202 that cross-referenced subsection (a). See, e.g., CAA section 202(b), (g), (h), (j), (m)(1), (m)(2), (m)(4).’’). 308 FCC v. Fox Television Stations, Inc., 556 U.S. 502 (2009). PO 00000 Frm 00035 Fmt 4701 Sfmt 4703 20721 that the California regulation, which denies to [petitioner] a lead time of two years, is inconsistent with section 202(a)(2). Id. at 981. Thus, the American Motors decision did not suggest that all of the subsections of section 202 were incorporated into subsection (a) for the purposes of assessing a California waiver application. Instead, it concluded that the EPA had granted a waiver without determining whether California had met the standards of section 202(a).’’ 309 And in the intervening years since the 1994 MDV waiver, EPA has not applied section 202(a)(3)(C) to a number of other waiver decisions for California’s heavyduty standards.310 For instance, in 2012 EPA did not require four years of lead time nor address the stability requirements for California’s heavy-duty truck idling standards under section 202(a)(3)(C) and explicitly disagreed with comments asserting its applicability.311 Similarly, in 2008, 2012, 2014, and 2016, EPA did not require four years of lead time nor address the stability requirements for California’s heavy-duty vehicle and engine greenhouse gas waivers as well as the On-Board Diagnostics requirements under section 202(a)(3)(C).312 So, the 1994 MDV waiver remains the sole waiver decision where EPA reviewed California standards for consistency with section 202(a) under both section 202(a)(3) and the historically-applied technology feasibility test (202(a)(2)). At the time of the 1994 MDV waiver, EPA posited that ‘‘Blum indicates that California would be required to provide the statutory lead time required under section 202(a)(3)(C).’’ 313 But EPA did not 309 142 F.3d at 464, n.14 (internal citations omitted). 310 70 FR 50322 (August 26, 2005) (2007 California Heavy-Duty Diesel Engine Standards); 71 FR 335 (Jan. 4, 2006) (2007 Engine Manufacturers Diagnostic standards); 77 FR 9239 (February 16, 2012) (HD Truck Idling Requirements); 79 FR 46256 (Aug. 7, 2014) (the first HD GHG emissions standard waiver, relating to certain new 2011 and subsequent model year tractor-trailers); 81 FR 95982 (December 29, 2016) (the second HD GHG emissions standard waiver, relating to CARB’s ‘‘Phase I’’ regulation for 2014 and subsequent model year tractor-trailers); 82 FR 4867 (January 17, 2017) (On-Highway HeavyDuty Vehicle In-Use Compliance Program). 311 77 FR 9239, 9249 (Feb. 16, 2012). 312 73 FR 52042 (September 8, 2008); 77 FR 73459 (December 10, 2012); 79 FR 46256 (August 7, 2014); 81 FR 95982 (December 29, 2016). EPA also notes that several waivers have been granted for California’s on-highway motorcycles (See for example, 42 FR 1503 (January 7, 1977); 41 FR 44209 (October 7, 1976); 43 FR 998 (January 5, 1978); 46 FR 36237 (July 14, 1981)). 313 59 FR 48625 (September 22, 1994) and associated Decision Document at EPA–HQ–OAR– 2022–0330, (MDV Waiver Decision Document) at page 26 (‘‘Under section 209, the Administrator has an oversight role to review California lead time decisions associated with their rules. While CARB may well choose to provide a different amount of E:\FR\FM\06APN2.SGM Continued 06APN2 20722 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices ddrumheller on DSK120RN23PROD with NOTICES2 address the stability requirements also contained within section 202(a)(3)(C) that requires standards for heavy-duty vehicles and engines to apply for no less than three model years without revisions. Where section 202(a)(3)(C) applies, standards must allow at least three model years of stability, meaning that no revisions or amendments are allowed until after three model years. The 1994 MDV Waiver was also silent on California’s longstanding practice of amending standards for which a waiver has been granted.314 EPA’s waiver practice has long allowed for such revisions under the rubric of within-thescope amendments, which calls for review of California standards that have been amended under both the protectiveness finding and the technology feasibility requirements of the third waiver prong.315 In other words, there is no prescribed lead time for within-the-scope amendments because EPA reviews them under the traditional consistency test. The 1994 MDV waiver did not wrestle with the implications of applying section 202(a)(3)(C) to waiver decisions for either of these important factors—the constraints on California’s ability to drive innovations in vehicle emission control technologies, as Congress intended, with a four-year lead time and a three-year stability requirement, and the problematic constraint such an interpretation would impose on California’s ability to amend standards for which a waiver has been granted to address any newly emergent issues. As such, the conclusions in the decision are based on insufficient analysis. lead time for light-duty vehicles than EPA has determined is necessary, Blum instructs that the specific lead time requirements of section 202 apply to both agencies with equal force. Again, the Blum court interpreted literally the specific congressional requirement of lead time and stated, ‘[t]he necessity for lead time cannot be obviated by a waiver.’ ’’ Id. at 32; (As Congress intended, EPA has liberally construed the section 209 waiver provision to give California broad discretion with its program. Nonetheless, EPA’s discretion is not unlimited. In light of the plain language and Congressional intent of sections 202 and 209, and applying the rationale of Blum, I find that the opposing parties have provided persuasive arguments that California is subject to the four-year lead time requirement under section 202(a) (3) (b) of the Act and is required to provide four years of lead time for the proposed MDV standards.). 314 See, e.g., 76 FR 61095 (October 3, 2011) (granting California a within-the-scope waiver for its 2008 amendments to its ZEV Standard); 71 FR 78190 (December 28, 2006) (granting California a within-the-scope waiver for its 1993–2003 amendments to its ZEV Regulations). 315 See, e.g., the Notice of Scope of Preemption for California’s amendments to warranty regulations pertaining to 1983 and later model year passenger cars, light-duty vehicles, medium- and heavy-duty vehicles and motorcycles; 51 FR 12391 (Apr. 10, 1986). VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 In the 1994 MDV waiver, EPA also reviewed the standards under the traditional technology feasibility test finding that ‘‘no significant development nor associated lead time is required.’’ 316 Notably, California had provided four-year lead time for the standards at issue. Thus, EPA was not confronted by the situation as in the instant waiver where California had made a feasibility showing of presently available technology. EPA in 1994 also did not discuss an earlier 1981 decision denying the petition for reconsideration that sought reconsideration of a waiver decision on grounds that Blum also required the Administrator to take certain lead time provisions into account when considering California waiver requests at issue.317 In 1981, shortly after Blum, EPA explained in relevant part that: The specific Congressional finding that under prescribed circumstances additional lead time is necessary is unique to the small volume manufacturer provision, and is not present in the other sections of the Act. Moreover, the fact that Congress determined that qualified manufacturers such as AMC are entitled to additional lead time was the critical factor leading to the Court’s decision. AMC v. Blum did not involve or discuss other Federal waiver provisions, which, unlike section 202(b)(1)(B), do not reflect such a Congressional finding.318 EPA further explained that The small-volume manufacturer waiver provision was interpreted by the court as a ‘‘proviso’’ to section 202(a) of the Act, such that the determination of technological feasibility of the 1.0 gpm NOX, standard in question within available lead time is taken out of the hands of the Administrator and is made by the unique Congressional finding of 202(b)(1)(B) (Emphasis added).319 Most significant was EPA’s explanation of the protectiveness finding California makes under section 209(b)(1) on EPA’s consistency determination. EPA explained: California standards need not be identical to their Federal counterparts, even those established in waiver decisions. An argument along those lines would be inconsistent with section 209(b) of the Act. Because California has special air pollution problems, section 209(b) permits the Administrator to waive Federal preemption to permit the State of California to implement its own air pollution 316 1994 MDV Waiver Document at 48–49 (‘‘In view of these facts, I agree with CARB’s assessment that adequate technology exists and may be readily adapted to enable MDVs to meet all of CARB’s standards. Thus, no significant development nor associated lead time is required.’’). 317 Petition for Reconsideration of Waiver of Federal Preemption for California To Enforce Its NOX Emission Standards and Test Procedures: Notice of Denial. 46 FR 22032 (April 15, 1981). 318 46 FR 22034. 319 Id. PO 00000 Frm 00036 Fmt 4701 Sfmt 4703 control programs that are, in the aggregate, at least as protective as nationally applicable standards. The import of section 209(b) is not that California and Federal standards be identical, but that the Administrator not grant a waiver of Federal preemption where compliance with the California standards is not technologically feasible within available lead time, consistent with section 202(a).320 Lastly, EPA has examined the text of section 177 of the CAA, added by Congress in the 1977 Amendments. At the time that Congress was affording California additional programmatic flexibility and policy deference with the addition of the ‘‘in the aggregate’’ language to section 209(b)(1), Congress added section 177 to allow other States (those with plan provisions approved under Part D) to adopt California’s new motor vehicle emission standards if certain criteria are met. Such criteria include that the State standards adopted be identical to the California standards for which a waiver has been granted for such model year, and that ‘‘California and such State adopt such standards at least two years before commencement of such model year (as determined by regulations of the Administrator).’’ 321 EPA notes that Congress understood and acted to specify a number of years of lead time applicable to other States before those States could enforce standards under section 177. In the same 1977 Amendments, Congress did not specify that the lead time and stability requirements in the new section 202(a)(3)(C) were applicable to either California or to states adopting California’s standards under section 177. EPA believes there is no basis to find or infer that the section 202(a)(3)(C) requirements apply to California. And, as importantly, Congress established a structure under which California would receive a waiver for standards that EPA deemed would be feasible (or that opponents had not demonstrated to be infeasible), with the lead time provided within the California market, specifically.322 Other States (section 177 States) could enforce California’s standards but would have to allow two years of lead time. It is assumed that these additional two years would allow manufacturers time to comply with the expanded market for which the California standards apply, which would still not be a fully national market subject to EPA standards.323 320 46 FR 22034–35. U.S.C. 7507(1), 7507(2); Motor Vehicle Mfrs. Ass’n v. New York State Dep’t of Envtl. Conservation, 17 F.3d 527. 322 78 FR at 2143, n.165. 323 Motor Vehicle Mfrs. Ass’n v. New York State Dep’t of Envtl. Conservation, 17 F.3d 527; American Automobile Mfrs. Ass’n, 31 F.3d 18, 26–27 (1st Cir. 1994). 321 42 E:\FR\FM\06APN2.SGM 06APN2 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices ddrumheller on DSK120RN23PROD with NOTICES2 There is no language in section 177 that would require the section 177 states to provide more lead time (an additional two years) in order to be consistent with the four years of lead time that commenters claim apply to California. EPA agrees with the CARB comment that it makes little sense to assume Congress would have provided four years of lead time for vehicle and engine manufacturers to prepare to comply in the California market but only two years to prepare for compliance in a potentially much larger market captured, collectively, in the section 177 States. Further, EPA traditionally applies a ‘‘record-based’’ review to determine the actual technological feasibility of California’s standards, and to the degree requisite technology is not currently available then EPA examines the factual record to determine whether sufficient lead time is provided for the California market, giving consideration to cost. In addition, EPA’s technological feasibility assessment is conducted within the confines of the manufacturers’ ability to meet the California standards within California and the California market.324 It is illogical to couple EPA’s limited role in reviewing the feasibility of CARB’s standards, confined to the manufacturers’ ability to meet the emission standards for new vehicles introduced into commerce in California, with the four-year lead time directive that Congress provided to EPA in setting national new heavy-duty vehicle emission standards which are required to secure the greatest degree of emission reduction achievable. 6. Section 209(b)(1)(C) and 209(e)(2)(A)(iii) Conclusion As previously explained, EPA believes that the historical approach to section 209(b)(1)(C) (and the section 209(e)(2)(A)(iii)) prong reflects the best reading of the statute. The historical approach is to evaluate California’s program including the changes to that program reflected in a waiver request for feasibility, and in doing so to determine whether the opponents of the waiver have met their burden of proof (as a factual matter) to demonstrate that California’s standards are not technologically feasible, giving consideration to lead time and cost. Applying this approach with the reasoning noted above, with due deference to California, I cannot deny the respective waiver requests. CARB has demonstrated that technologies exist today to meet the most imminent standards and has identified 324 Id. at 2143. VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 refinements to emission control technologies and other emission controls reasonably projected to be available to meet the emission standards when needed in later model years. EPA finds that there is no evidence in the record to demonstrate that CARB’s assessments, including those made in the state rulemakings, are unreasonable. In addition to CARB’s demonstration and EPA findings, the Agency also notes that CARB’s regulations include a number of provisions that may provide, if manufacturers choose to use them, additional compliance pathways. Therefore, I determine that I cannot deny either of the two waiver requests under section 209(b)(1)(C). In addition, after a review of the text in sections 209, 202, and section 177, I find that the lead time and stability language Congress added in 1977 in section 202(a)(3)(C) was only directed at EPA and does not apply to California by way of EPA’s review of section 209(b)(1)(C) and section 209(e)(2)(B)(iii). Further, EPA has reviewed the legislative history, EPA’s prior waiver decisions, and applicable case law and concludes that each of these considerations further supports EPA’s textual analysis and conclusion that section 202(a)(3)(C) does not apply to California and thus EPA cannot deny CARB’s waiver requests on this basis. 325 AFPM at 15–16. EPA notes that this commenter cited to 49 U.S.C. 32903(h)(1) and the action taken in 2019 (‘‘The Safer Affordable FuelEfficient Vehicles (SAFE) Rule Part One: One National Program’’). SAFE 1 at 51320–21. NHTSA subsequently repealed all regulatory text and appendices promulgated in the SAFE Part One and made clear that no prior regulations or positions of the Agency reflect ongoing NHTSA views on the scope of preemption of states or local jurisdictions under EPCA. 86 FR 74236 (Dec. 29, 2021). EPA also notes that the ‘‘related to’’ language that was the subject of SAFE Part One and the subsequent repeal is in 49 U.S.C. 32919. 326 AFPM at 15–16. Fmt 4701 I, 627 F.2d at 1119. at 1116 (acknowledging that ‘‘the Administrator must be sensitive to [CAA] section 207 concerns in approaching a waiver decision,’’ but concluding that ‘‘he has no duty beyond that to consider claims of anti-competitiveness in a waiver proceeding’’). 329 MEMA II, 142 F.3d at 464 (rejecting a claim that California’s standards must comply with CAA section 202(m) because ‘‘it would appear virtually impossible for California to exercise broad discretion if it had to comply with every subsection of section 202 that cross-referenced subsection (a).’’). 330 Id. at 462–63. 331 87 FR 14332, 14372 (March 14, 2022) (rescinding the SAFE 1 waiver withdrawal partially premised on EPCA preemption because, in part, ‘‘[c]onsideration of preemption under EPCA is beyond the statutorily prescribed criteria for EPA in section 209(b)(1).’’). The sole instance that EPA considered preemption under EPCA in a waiver proceeding was in SAFE Part One, a jointrulemaking with NHTSA, where EPA simultaneously explained that the Agency ‘‘d[id] not intend in future waiver proceedings concerning submissions of California programs in other subject areas to consider factors outside the statutory criteria in section 209(b)(1)(A)–(C).’’ SAFE 1 at 51338. EPA subsequently rescinded that decision, finding that ‘‘the joint-action context of SAFE 1 [w]as an insufficient justification for deviating from its statutory authority and the Agency’s historical practice’’ of ‘‘limiting its waiver review to the criteria in section 209(b)(1).’’ 87 FR at 14371–73. EPA hereby incorporates by reference the reasoning in this decision. See also, 43 FR 32182, 32184 (July 25, 1978) (rejecting objections to the procedures at state level, objections that section 207(c)(3)(A) establishes field protection, and constitutional 328 Id. 1. Energy Policy and Conservation Act (EPCA) One commenter argued that ZEV mandates are preempted by the Energy Policy and Conservation Act (EPCA) because they are ‘‘related to’’ fuel economy standards.325 The commenter asserted that it would therefore be ‘‘arbitrary and capricious’’ for EPA to grant waivers for the ACT Regulation and the ZEAS Regulation (that each contain a ZEV mandate) because ‘‘California’s ZEV mandate is void ab initio’’ and ‘‘[a]s such, California does not have a valid waiver request.’’ 326 EPA has long construed section 209(b) as limiting the Agency’s authority to deny California’s requests for waivers to Frm 00037 the three listed criteria. This narrow review approach is supported by decades of waiver practice and judicial precedent. In MEMA I, the D.C. Circuit held that the Agency’s inquiry under section 209(b) is ‘‘modest in scope.’’ 327 The D.C. Circuit further noted that ‘‘there is no such thing as a ‘general duty’ on an administrative agency to make decisions based on factors other than those Congress expressly or impliedly intended the agency to consider.’’ 328 In MEMA II, the D.C. Circuit again rejected an argument that EPA must consider a factor outside the 209(b) statutory criteria concluding that doing so would restrict California’s ability to ‘‘exercise broad discretion.’’ 329 EPA’s duty, in the waiver context, is thus to grant California’s waiver request unless one of the three listed criteria is met. ‘‘[S]ection 209(b) sets forth the only waiver standards with which California must comply . . . If EPA concludes that California’s standards pass this test, it is obligated to approve California’s waiver application.’’ 330 EPA has therefore consistently declined to consider factors outside the three statutory criteria listed in section 209(b), including preemption under EPCA, explaining instead that preemption under EPCA is not one of these criteria.331 327 MEMA E. Other Issues PO 00000 20723 Sfmt 4703 E:\FR\FM\06APN2.SGM Continued 06APN2 20724 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices In evaluating CARB’s two waiver requests, including the ACT and ZEAS Regulations, EPA has not considered preemption under EPCA. As in previous waiver evaluations, the decision on whether to grant or deny these waiver requests is based solely on the criteria in section 209(b). Evaluation of whether these regulations are preempted under EPCA is not among the criteria listed under section 209(b). EPA may only deny waiver requests based on the criteria in section 209(b), and preemption under EPCA is not one of those criteria. In considering California’s request for a waiver, I therefore have not considered whether California’s standards are preempted under EPCA. As in previous waiver decisions, the decision on whether to grant the waiver is based solely on criteria in section 209(b) of the Clean Air Act and this decision does not attempt to interpret or apply EPCA.332 2. Equal Sovereignty and Other Constitutional Issues ddrumheller on DSK120RN23PROD with NOTICES2 One commenter objected to both the ACT and ZEAS Regulations because ‘‘[b]y authorizing California, and only California, to set its own motor vehicle emission standards, Section 209(b) violates the constitutional equal sovereignty doctrine.’’ 333 The commenter claimed that Section 209(b) is ‘‘unconstitutional in all its applications’’ or, in the alternative, ‘‘to the extent it is construed to allow California to set emission standards aimed at addressing global climate change, as opposed to California’s local conventional pollution problems.’’ 334 Another commenter objected to the ACT Regulation as it ‘‘calls for measures that may violate other constitutional provisions and principles.’’ 335 336 EPA objections all as beyond the ‘‘narrow’’ scope of the Administrator’s review); 74 FR 32744, 32783 (July 8, 2009) (declining to consider EPCA preemption, stating that ‘‘section 209(b) of the Clean Air Act limits our authority to deny California’s requests for waivers to the three criteria therein.’’); 78 FR 2112, 2145 (Jan. 9, 2013), 79 FR 46256, 46264 (Aug. 7, 2014) (reiterating that EPA can only deny a waiver request based on the 209(b) statutory criteria, dismissing comments on preemption under EPCA, as well as the Constitution and the implications of the Federal Aviation Administration Authorization Act of 1994). 332 EPA notes that both courts that have considered whether EPCA preempts greenhouse-gas emission standards have concluded that it does not. See, e.g., Cent. Valley Chrysler-Jeep, Inc. v. Goldstene, 529 F. Supp. 2d 1151, 1153–54 (E.D. Cal. 2007), as corrected Mar. 26, 2008; Green Mountain Chrysler Plymouth Dodge Jeep v. Crombie, 508 F. Supp. 2d 295, 300–01 (D. Vt. 2007). 333 AFPM at 2. 334 Id. 335 Valero at 8–10. This commenter claimed that EPA’s grant of a waiver represents a major question that was not contemplated by Congress. That claim VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 has previously considered equal sovereignty objections to waiver is addressed above in Section III.C. This commenter also provided a list of other possible constitutional constraints that it believes the ACT Regulation may violate (e.g., Dormant Commerce Clause, dormant foreign affairs preemption doctrine under the Supremacy Clause, the Takings Clause of the Fifth Amendment, and the Equal Sovereignty doctrine). EPA notes that it is unclear whether this commenter requested EPA to not grant the ACT Regulation waiver request based on these latter possible constraints. Nevertheless, EPA notes (as discussed in this section) that EPA’s task in reviewing California’s waiver requests is limited to the criteria in section 209(b) and therefore provides no assessment of these claims. 336 The same commenter (Valero) raises miscellaneous claims not related to constitutional issues that we also address here. Valero claims that granting the ACT waiver exceeds EPA’s statutory authority because the ACT allegedly ‘‘bans internal combustion engines,’’ has ‘‘vast nationwide political and economic significance,’’ would be ‘‘beyond the scope of the type of emission standards the waiver was originally intended to accommodate,’’ and accomplishes what failed Congressional bills would have done. Valero Comment 6, 8. EPA disagrees. The ACT constitutes standards for the control of emissions from motor vehicles, and thus clearly falls within the scope of section 209(a) preemption and EPA’s authority to waive preemption under section 209(b)(1). Moreover, while the ACT increases the stringency of California’s program, the requirements it imposes are not different in kind from earlier California ZEV rules for which EPA has waived preemption. See 71 FR 78190 (December 28, 2006) and Decision Document at EPA–HQ–OAR–2004–0437–0173, at 35–46) (explaining that certain earlier California ZEV requirements constituted emissions standards and waiving preemption for such standards under section 209(b)); 58 FR 4166 (January 13, 1993) (granting a waiver for California’s first Low Emission Vehicle (LEV I) regulation that include the original California ZEV standards that were adopted in 1990). Valero’s reference to failed Congressional bills is inapposite given the clear language of section 209. See also Public Law 117–169, tit. VI, Subtitle A, section 60105(g), 136 Stat. 1818, 2068– 69 (2022) (providing funds for EPA to issue grants specifically to states to support their adoption of California’s greenhouse-gas and zero-emission vehicle standards under Section 177). Moreover, the major questions doctrine, to the extent Valero is invoking it, does not apply to California’s exercise of its police powers, nor to EPA’s waiver of preemption to preserve the State’s exercise of such powers. See supra fn. 135. Valero further claims that EPA must consider wide-ranging impacts of granting the waiver (e.g., on the nationwide distribution of goods, renewable fuels, petroleum refiners, chemical manufacturing, agricultural sector, international and military consequences, etc.). Valero Comment 6–9. However, this is belied by the statutory waiver criteria in section 209(b), which require EPA to grant a waiver unless the agency makes one of the three statutory findings. See MEMA I, 627 F.2d at 1118 (Section 209 does not require EPA to consider the social costs of pollution control, for ‘‘Congress, not the Administrator, made the decision to accept those costs.’’). Finally, Valero suggests that granting the waiver is inconsistent with Congress’s mandates designed to promote renewable fuels under the federal Renewable Fuel Standard. Valero Comment 6. However, nothing in section 209(b) suggests EPA must consider consistency with the Renewable Fuel Standard program in deciding to grant a waiver. See also section 211(o)(12) (‘‘Nothing in this subsection . . . shall affect or be construed . . . to expand or limit regulatory authority regarding carbon dioxide or any other greenhouse gas, for purposes of other provisions . . . of this chapter.’’). PO 00000 Frm 00038 Fmt 4701 Sfmt 4703 requests as outside the scope of EPA’s review and incorporates the reasoning in that prior decision as it pertains to the constitutional claims raised by commenters.337 As EPA has long stated, ‘‘the Agency’s task in reviewing waiver requests is properly limited to evaluating California’s request according to the criteria in section 209(b), and . . . it is appropriate to defer to litigation brought by third parties in other courts, such as state or federal court, for the resolution of constitutionality claims and inconsistency, if any, with other statutes.’’ 338 EPA’s longstanding practice, affirmed by judicial precedent, has been to refrain from considering factors beyond section 209(b)(1) criteria, including constitutional claims, in evaluating California waiver requests.339 For example, in 1978 EPA declined to consider First Amendment and Due Process objections to a waiver request, stating that constitutional arguments ‘‘are beyond the scope of [the Administrator’s] review, and the waiver hearing is not a proper forum in which to raise them.’’ 340 The D.C. Circuit agreed with the Administrator’s position, that there was no obligation to consider these constitutional objections, because ‘‘it is generally considered that the constitutionality of Congressional enactments is beyond the jurisdiction of administrative agencies.’’ 341 Additionally, in 2009, EPA declined to consider comments that California’s transport refrigeration unit (TRU) Rule violated the Dormant Commerce Clause, stating that ‘‘EPA’s review of California’s regulations is limited to the 337 87 FR 14332, 14376–77 (March 14, 2022). See also, 42 FR 2337, 2338 (January 11, 1977); 41 FR 44209, 44212 (October 7, 1976). 338 Id. 339 EPA has declined to consider constitutional challenges to California Waivers since at least 1976. 41 FR 44212 (Oct. 7, 1976) (‘‘An additional argument against granting the waiver was raised by the Motorcycle Industry Council and Yamaha, who contended that the CARB had violated due process when adopting their standards, by not allowing the manufacturers a fair and full opportunity to present their views at a State hearing. If this argument has any validity, the EPA waiver hearing is not the proper forum in which to raise it. Section 209(b) does not require that EPA insist on any particular procedures at the State level. Furthermore, a complete opportunity was provided at the EPA waiver hearing for the presentation of views.’’). See also, e.g., 43 FR 32182, 32184 (July 25, 1978) (rejecting objections to the procedures at state level, objections that section 207(c)(3)(A) establishes field protection, and constitutional objections all as beyond the ‘‘narrow’’ scope of the Administrator’s review). 340 43 FR at 32185. 341 MEMA I, 627 F.2d at 1114–15 (holding that EPA did not need to consider whether California’s standards ‘‘unconstitutionally burden[ed] [petitioners’] right to communicate with vehicle purchasers.’’). E:\FR\FM\06APN2.SGM 06APN2 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices ddrumheller on DSK120RN23PROD with NOTICES2 criteria that Congress directed EPA to review.’’ 342 The D.C. Circuit again concluded that this constitutional claim was outside the scope of EPA’s review, agreeing with EPA that the commenters had sought to ‘‘improperly . . . engraft a type of constitutional Commerce Clause analysis onto EPA’s Section 7543(e) waiver decisions that is neither present in nor authorized by the statute.’’ 343 Such a question, the Court noted, is ‘‘best directed to Congress.’’ 344 EPA notes that Congress struck a deliberate balance in 1967, when it chose to authorize two standards—the Federal standard and California’s standards—rather than one national standard or 51 individual state standards.345 EPA believes this balance reflected Congress’s desire for California to serve as a laboratory of innovation and Congress’s understanding of California’s extraordinary pollution problems on the one hand, and its desire to ensure that automakers were not subjected to too many different standards on the other. Congress reaffirmed this balance in 1977 when it amended the Clean Air Act to allow other states facing similar air quality problems the option of adopting California’s new waived motor vehicle standards.346 Thus Congress has consistently and repeatedly made determinations regarding California’s important role in driving advancements in motor vehicle emissions control (which benefit all Americans when subsequently reflected in federal standards) and the value of providing states with two regulatory pathways to address motor vehicle emissions. In evaluating CARB’s two waiver requests, including the ACT and ZEAS Regulations, EPA has not considered whether section 209(a) and section 209(b) are unconstitutional under the Equal Sovereignty Doctrine. As in previous waiver evaluations, the decision on whether to grant or deny the 342 Decision Document, EPA–HQ–OAR–2005– 0123–0049 at 67. 343 ATA v. EPA, 600 F.3d 624, 628 (D.C. Cir. 2010) (quoting the U.S. brief). In a footnote to this statement, the Court said ATA could attempt to bring a constitutional challenge directly (which would argue that the waiver unconstitutionally burdens interstate commerce) but ‘‘express[ed] no view on that possibility.’’ Id. at n.1. 344 Id. at 628. 345 Motor vehicles are ‘‘either ‘federal cars’ designed to meet the EPA’s standards or ‘California cars’ designed to meet California’s standards.’’ Engine Mfrs. Ass’n v. EPA, 88 F.3d 1075, 1079–80, 1088 (D.C. Cir. 1996) (‘‘Rather than being faced with 51 different standards, as they had feared, or with only one, as they had sought, manufacturers must cope with two regulatory standards.’’). 346 Under section 177, ‘‘any State which has plan provisions approved under this part may adopt and enforce’’ identical California standards and delineates three specific criteria for adoption. VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 waiver is based solely on the criteria in section 209(b) and this decision does not attempt to interpret or apply the Equal Sovereignty Doctrine or any other constitutional provision. IV. Decision After evaluating California’s 2018 HD Warranty Amendments, ACT Regulations, ZEAS Regulations, and the ZEP Certification Regulations, CARB’s submissions, relevant adverse comment, and other comments in the record, EPA is granting a waiver of preemption and authorization, as applicable, for each of these regulations. A. Judicial Review Section 307(b)(1) of the CAA governs judicial review of final actions by the EPA. This section provides, in part, that petitions for review must be filed in the United States Court of Appeals for the District of Columbia Circuit: (i) when the agency action consists of ‘‘nationally applicable regulations promulgated, or final actions taken, by the Administrator,’’ or (ii) when such action is locally or regionally applicable, but ‘‘such action is based on a determination of nationwide scope or effect and if in taking such action the Administrator finds and publishes that such action is based on such a determination.’’ For locally or regionally applicable final actions, the CAA reserves to the EPA complete discretion whether to invoke the exception in (ii). This final action is ‘‘nationally applicable’’ within the meaning of CAA section 307(b)(1). In the alternative, to the extent a court finds this final action to be locally or regionally applicable, the Administrator is exercising the complete discretion afforded to him under the CAA to make and publish a finding that this action is based on a determination of ‘‘nationwide scope or effect’’ within the meaning of CAA section 307(b)(1), for several reasons.347 This final action will not only affect manufacturers of new heavy-duty vehicles and engines sold in California, but also manufacturers that sell their new heavy-duty vehicles and engines in those states that have already adopted or may choose to adopt California’s regulations.348 For example, five states have already adopted California’s ACT 347 In deciding whether to invoke the exception by making and publishing a finding that this final action is based on a determination of nationwide scope or effect, the Administrator has also taken into account a number of policy considerations, including his judgment balancing the benefit of obtaining the D.C. Circuit’s authoritative centralized review versus allowing development of the issue in other contexts and the best use of Agency resources. 348 See CAA section 177. PO 00000 Frm 00039 Fmt 4701 Sfmt 4703 20725 Regulation.349 These jurisdictions represent a wide geographic area that falls within three judicial circuits.350 Furthermore, the regulations that are the subject of today’s action are part of California’s on-highway for which EPA may waive preemption under CAA section 209. As required by statute, in evaluating the waiver criteria in this action, EPA considers not only the HD emissions regulations in isolation, but in the context of the entire California program.351 Moreover, EPA generally applies a consistent statutory interpretation and analytical framework in evaluating and deciding various waivers under CAA section 209. EPA also relies on the extensive body of D.C. Circuit case law developed by that court since 1979 as it has reviewed and decided judicial challenges to these actions. As such, judicial review of any challenge to this action in the D.C. Circuit will centralize review of national issues in that court and advance other Congressional principles underlying CAA section 307(b)(1) of avoiding piecemeal litigation, furthering judicial economy, and eliminating the risk of inconsistent judgments. For these reasons, this final action is nationally applicable or, alternatively, the Administrator is exercising the complete discretion afforded to him by the CAA and hereby finds that this final action is based on a determination of nationwide scope or effect for purposes of CAA section 307(b)(1) and is hereby publishing that finding in the Federal Register. Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the District of Columbia Circuit by June 5, 2023. V. Statutory and Executive Order Reviews As with past authorization and waiver decisions, this action is not a rule as defined by Executive Order 12866. Therefore, it is exempt from review by the Office of Management and Budget as required for rules and regulations by Executive Order 12866. In addition, this action is not a rule as defined in the Regulatory Flexibility Act, 5 U.S.C. 349 Massachusetts, New Jersey, New York, Oregon, and Washington have adopted the ACT Regulation. 350 In the report on the 1977 Amendments that revised CAA section 307(b)(1), Congress noted that the Administrator’s determination that the ‘‘nationwide scope or effect’’ exception applies would be appropriate for any action that has a scope or effect beyond a single judicial circuit. See H.R. Rep. No. 95–294 at 32. 351 See CAA sections 209(b)(1)(B) and 209(e)(2)(A) (requiring that the protectiveness finding be made for California’s standards ‘‘in the aggregate’’). E:\FR\FM\06APN2.SGM 06APN2 20726 Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / Notices ddrumheller on DSK120RN23PROD with NOTICES2 601(2). Therefore, EPA has not prepared a supporting regulatory flexibility analysis addressing the impact of this action on small business entities. Further, the Congressional Review Act, VerDate Sep<11>2014 21:30 Apr 05, 2023 Jkt 259001 5 U.S.C. 801, et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, does not apply because this action is not a rule for purposes of 5 U.S.C. 804(3). PO 00000 Frm 00040 Fmt 4701 Sfmt 9990 Dated: March 30, 2023. Michael S. Regan, Administrator. [FR Doc. 2023–07184 Filed 4–5–23; 8:45 am] BILLING CODE 6560–50–P E:\FR\FM\06APN2.SGM 06APN2

Agencies

ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 88, Number 66 (Thursday, April 6, 2023)]
[Notices]
[Pages 20688-20726]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-07184]



[[Page 20687]]

Vol. 88

Thursday,

No. 66

April 6, 2023

Part III





Environmental Protection Agency





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California State Motor Vehicle and Engine Pollution Control Standards; 
Heavy-Duty Vehicle and Engine Emission Warranty and Maintenance 
Provisions; Advanced Clean Trucks; Zero Emission Airport Shuttle; Zero-
Emission Power Train Certification; Waiver of Preemption; Notice of 
Decision; Notice

Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 / 
Notices

[[Page 20688]]


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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OAR-2022-0330, EPA-HQ-OAR-2022-0331; FRL-9900-02-OAR]


California State Motor Vehicle and Engine Pollution Control 
Standards; Heavy-Duty Vehicle and Engine Emission Warranty and 
Maintenance Provisions; Advanced Clean Trucks; Zero Emission Airport 
Shuttle; Zero-Emission Power Train Certification; Waiver of Preemption; 
Notice of Decision

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of decision.

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SUMMARY: The Environmental Protection Agency (EPA) is granting the 
California Air Resources Board's (CARB's) requests for waivers of Clean 
Air Act (CAA) preemption for the following California regulations: the 
Heavy-Duty Vehicle and Engine Emission Warranty Regulations and 
Maintenance Provisions, the Advanced Clean Trucks Regulation, the Zero 
Emission Airport Shuttle Regulation, and the Zero-Emission Power Train 
Certification Regulation. EPA is issuing these decisions under the 
authority of CAA section 209.

DATES: Petitions for review must be filed by June 5, 2023.

ADDRESSES: EPA has established dockets for these requests under Docket 
ID EPA-HQ-OAR-2022-0330 and EPA-HQ-OAR-2022-0331. All documents relied 
upon in making these decisions, including those submitted to EPA by 
CARB, are contained in the public dockets. Publicly available docket 
materials are available electronically through www.regulations.gov. 
After opening the www.regulations.gov website, enter EPA-HQ-OAR-2022-
0330 or EPA-HQ-OAR-2022-0331 in the ``Enter Keyword or ID'' fill-in box 
to view documents in the record. Although a part of the official 
docket, Confidential Business Information (CBI) or other information 
whose disclosure is restricted by statute is not included in the public 
dockets. EPA's Office of Transportation and Air Quality (OTAQ) 
maintains a web page that contains general information on its review of 
California waiver and authorization requests. Included on that page are 
links to prior waiver and authorization Federal Register notices, some 
of which are cited in this notice; the page can be accessed at https://www.epa.gov/state-and-localtransportation/vehicle-emissionscalifornia-waivers-and-authorizations.

FOR FURTHER INFORMATION CONTACT: David Dickinson, Office of 
Transportation and Air Quality, U.S. Environmental Protection Agency, 
1200 Pennsylvania Ave NW. Telephone: (202) 343-9256. Email: 
[email protected]; or Kayla Steinberg, Office of Transportation 
and Air Quality, U.S. Environmental Protection Agency, 1200 
Pennsylvania Ave. NW. Telephone: (202) 564-7658. Email: 
[email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary
II. Background
    A. EPA's Consideration of CARB's Request
    1. 2018 HD Warranty Amendments
    2. ACT, ZEAS, and ZEP Certification Regulations
    B. Principles Governing This Review
    1. Scope of Preemption and Waiver Criteria Under the Clean Air 
Act
    2. Deference to California
    3. Standard and Burden of Proof
III. Discussion
    A. Evaluation of CARB's 2018 HD Warranty Amendments
    B. First Waiver Criterion: are California's Protectiveness 
Determinations arbitrary and capricious?
    1. EPA's Historical Interpretation of Section 209(b)(1)(A)
    2. CARB's Discussion of California's Protectiveness 
Determinations in the Waiver Requests
    a. 2018 HD Warranty Amendments
    b. ACT, ZEAS, and ZEP Certification Regulations
    3. Comments on California's Protectiveness Determinations
    4. California's Protectiveness Determinations Are Not Arbitrary 
and Capricious
    5. Section 209(b)(1)(A) Conclusion
    C. Second Waiver Criterion: does California need its standards 
to meet compelling and extraordinary conditions?
    1. EPA's Historical Interpretation of Section 209(b)(1)(B)
    2. CARB's Discussion of California's Need for the Standards in 
the Waiver Requests
    a. 2018 HD Warranty Amendments
    b. ACT, ZEAS, and ZEP Certification Regulations
    3. Comments on Section 209(b)(1)(B)
    4. California Needs Its Standards To Meet Compelling and 
Extraordinary Conditions
    5. Section 209(b)(1)(B) Conclusion
    D. Third Waiver Criterion: are California's regulations 
consistent with Section 202(a) of the Clean Air Act?
    1. EPA's Historical Interpretation of Section 209(b)(1)(C)
    2. CARB's Discussion of the Regulations' Consistency with 
Section 202(a) in the Waiver Requests
    a. 2018 HD Warranty Amendments
    b. ACT, ZEAS, and ZEP Certification Regulations
    3. Comments on Section 209(b)(1)(C)
    4. California's Standards Are Consistent With Section 202(a) 
Under EPA's Historical Approach
    a. 2018 HD Warranty Amendments
    b. ACT, ZEAS, and ZEP Certification Regulations
    5. The Inapplicability of Section 202(a)(3)(C) to the Third 
Prong
    a. EPA's Historical Practice Is Supported by the Text, Context, 
and Purpose of the Statute
    b. Neither AMC v. Blum nor the 1994 MDV Waiver Dictate a 
Contrary Interpretation
    6. Section 209(b)(1)(C) Conclusion
    E. Other Issues
    1. Energy Policy and Conservation Act (EPCA)
    2. Equal Sovereignty and Other Constitutional Issues
IV. Decision
    A. Judicial Review
V. Statutory and Executive Order Reviews

I. Executive Summary

    Today, as Administrator of the EPA, I am granting two separate 
requests for waivers of Clean Air Act (CAA) preemption regarding four 
California Air Resources Board (CARB) regulations for heavy-duty 
(``HD'') onroad vehicles and engines. CARB made these requests in two 
separate letters to EPA in October 2021 and December 2021, as described 
below. EPA is not taking action on CARB's January 2022 request 
concerning CARB's Omnibus Low NOX regulation.\1\ EPA will 
announce its decision regarding the Omnibus Low NOX 
Regulation waiver request in the future, by separate notice in the 
Federal Register.
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    \1\ Omnibus Low NOX Waiver Request, Docket No. EPA-
HQ-OAR-2022-0332-0012; Omnibus Low NOX Waiver Support 
Document, Docket No. EPA-HQ-OAR-2022-0332-0009.
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    First, by letter dated October 22, 2021, CARB notified EPA that it 
had finalized amendments to its emission standards and associated test 
procedures for heavy-duty diesel vehicles and engines.\2\ These ``2018 
HD Warranty Amendments,'' adopted by the CARB Board on June 28, 2018, 
extend the emissions warranty periods for 2022 and subsequent model 
year onroad heavy-duty diesel engines and for 2022 and subsequent model 
year diesel vehicles with a gross vehicle weight rating exceeding 
14,000 pounds powered by such engines.\3\ In its letter to the 
Administrator, CARB requested that EPA determine the 2018 HD Warranty 
Amendments to be within the

[[Page 20689]]

scope of a waiver the Administrator previously granted for California's 
emission standards and associated test procedures for 2007 and 
subsequent model year heavy-duty diesel vehicles and engines or, 
alternatively, that EPA grant California a new waiver of preemption for 
the amendments. By today's decision EPA finds that 2018 HD Warranty 
Amendments meet the criteria for a new waiver under section 209(b) of 
the Clean Air Act (CAA), 42 U.S.C. 7543(b).
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    \2\ 2018 HD Warranty Amendments Waiver Request, Docket No. EPA-
HQ-OAR-2022-0330-0007; 2018 HD Warranty Amendments Waiver Support 
Document, Docket No. EPA-HQ-OAR-2022-0330-0004.
    \3\ The 2018 HD Warranty Amendments are comprised of amendments 
to title 13, California Code of Regulations, sections 1956.8, 2035, 
2036, and 2040.
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    Second, CARB's December 20, 2021, letter to the Administrator 
notified EPA that the CARB Board had finalized Advanced Clean Trucks 
(ACT), Zero Emission Airport Shuttle Bus (ZEAS), and Zero Emission 
Powertrain (ZEP) Certification Regulations.\4\ The ACT Regulation, 
adopted by the CARB Board on January 26, 2021, requires that 
manufacturers produce and sell increasing percentages of medium- and 
heavy-duty zero-emission vehicles (ZEVs) and near zero-emission 
vehicles (NZEVs) in California. These quantities of vehicles are based 
on increasingly higher percentages of manufacturers' annual sales of 
onroad heavy-duty vehicles, beginning in the 2024 model year. The ZEAS 
Regulation, adopted by the CARB Board on June 27, 2019, establishes 
steadily increasing zero-emission airport shuttle fleet composition 
requirements for airport shuttle fleet owners who service the thirteen 
largest California airports. The ZEP Certification Regulation, adopted 
by the CARB Board on June 27, 2019, establishes certification 
requirements and optional emission standards for 2021 and subsequent 
model year medium- and heavy-duty ZEVs and the zero-emission 
powertrains installed in such vehicles.\5\ CARB requested that EPA 
grant a new waiver for each of these regulations. By today's decision 
EPA finds that each of these three regulations meets the criteria for a 
new waiver under section 209(b).
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    \4\ ACT/ZEAS/ZEP Waiver Request, Docket No. EPA-HQ-OAR-2022-
0331-0004; ACT/ZEAS/ZEP Waiver Support Document, Docket No. EPA-HQ-
OAR-2022-0331-0003.
    \5\ The ACT Regulation is at title 13, California Code of 
Regulation, sections 1963, and 1963.1 through 1963.5. The ZEAS 
Regulation is at title 17, California Code of Regulation, sections 
95690.1, 95690.2, 95690.3, 95690.4, 95690.5, 95690.6, 95690.7, and 
95690.8. The ZEP Certification Regulation is at title 13, California 
Code of Regulation, sections section 1956.8 and title 17, section 
95663.
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    The legal framework for these decisions stems from the waiver 
provision first adopted by Congress in 1967, and later amended in 1977 
(and amended again, as explained below, in 1990 when preemption of 
nonroad engine and vehicle emissions standards was addressed). In 
sections 209(a) and 209(b) of the Clean Air Act, Congress established 
that there would be only two programs for control of emissions from new 
motor vehicles--EPA emission standards adopted under the Clean Air Act, 
and California emission standards adopted under state law. Congress 
accomplished this by preempting all State and local governments from 
adopting or attempting to enforce emission standards for new motor 
vehicles, while at the same time providing that California could 
receive a waiver of preemption for its emission standards and 
accompanying enforcement procedures. Other states can only adopt 
standards that are identical to California's standards. This statutory 
scheme struck an important balance that protected manufacturers from 
multiple and different state emission standards, while preserving 
California's pivotal role as a laboratory for innovation in the control 
of emissions from new motor vehicles. Congress recognized that 
California could serve as a pioneer and a laboratory for the nation in 
setting new motor vehicle emission standards and the development of new 
emission control technologies.
    Further, Congress intentionally structured this waiver provision to 
restrict and limit EPA's ability to deny a waiver. The provision was 
designed to ensure California's broad discretion to determine the best 
means to protect the health and welfare of its citizens. Section 209(b) 
specifies that EPA must grant California a waiver if California 
determines that its standards are, in the aggregate, at least as 
protective of the public health and welfare as applicable Federal 
standards. EPA may deny a waiver only if it makes at least one of three 
findings specified under the Clean Air Act. The findings that permit 
EPA to deny a waiver (also referred to as the three waiver prongs) are: 
first, a finding that California's determination that its standards 
are, in the aggregate, at least as protective as applicable Federal 
standards is arbitrary and capricious (section 209(b)(1)(A), or the 
first waiver prong); second, a finding that California has no need for 
such standards to meet compelling and extraordinary conditions (section 
209(b)(1)(B), or the second waiver prong); or third, a finding that 
California's standards and accompanying enforcement procedures are 
inconsistent with section 202(a) of the Clean Air Act (section 
209(b)(1)(C), or the third waiver prong).
    Therefore, EPA's role upon receiving a request for waiver of 
preemption from California is narrow and limited to determining whether 
it is appropriate to make any of the three findings specified by the 
Clean Air Act. If the Agency cannot make at least one of the three 
findings, then the waiver must be granted.\6\ The courts have 
emphasized the narrowness of EPA's review. In MEMA II the Court of 
Appeals for the District of Columbia Circuit stated that ``[S]ection 
209(b) sets forth the only waiver standards with which California must 
comply.'' \7\ EPA and the Court of Appeals for the District of Columbia 
Circuit have consistently interpreted section 209(b) as placing the 
burden on the opponents of a waiver to demonstrate that one of the 
criteria for a denial has been met.\8\
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    \6\ Motor and Equipment Manufacturers' Association v. EPA (MEMA 
II), 142 F.3d 449, 462-63 (D.C. Cir. 1998).
    \7\ Id. (``If EPA concludes that California's standards pass 
this test, it is obligated to approve California's waiver 
application.'').
    \8\ Motor and Equipment Manufacturers' Association v. EPA (MEMA 
I), 627 F.2d 1095, 1121 (D.C. Cir. 1979).
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    If California acts to amend a previously waived standard or 
accompanying enforcement procedure, the amendment may be considered 
within the scope of a previously granted waiver provided that it does 
not undermine California's determination that its standards in the 
aggregate are as protective of public health and welfare as applicable 
Federal standards, does not affect the regulation's consistency with 
section 202(a) of the Clean Air Act, and raises no new issues affecting 
EPA's previous waiver decisions.\9\
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    \9\ 45 FR 54130 (Aug. 14, 1980); 46 FR 36742 (July 15, 1981); 75 
FR 44948, 444951 (July 30, 2010).
---------------------------------------------------------------------------

    In 1990, Congress also established that there would be only two 
programs for control of emissions from most nonroad vehicles and 
engines--EPA emission standards adopted under the Clean Air Act, and 
California emission standards adopted under state law.
    In section 209(e)(1) of the Act, Congress preempted all states, or 
political subdivisions thereof, from adopting or attempting to enforce 
any standard or other requirement relating to the control of emissions 
for certain types of new nonroad engines or vehicles.\10\ For all other 
nonroad engines, states, with the exception of California, are 
generally preempted from adopting and enforcing standards and

[[Page 20690]]

other requirements relating to the control of emissions.\11\
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    \10\ States are expressly preempted from adopting or attempting 
to enforce any standard or other requirement relating to the control 
of emissions from new nonroad engines which are used in construction 
equipment or vehicles or used in farm equipment or vehicles, and 
which are smaller than 175 horsepower. Such express preemption under 
section 209(e)(1) of the Act also applies to new locomotives or new 
engines used in locomotives. CAA section 209(e)(1), 42 U.S.C. 
7543(e)(1)(A).
    \11\ Section 209(e)(2)(A) requires the Administrator to 
authorize California to adopt and enforce standards and other 
requirements relating to the control of emissions from such vehicles 
or engines under criteria similar to section 209(b) for new motor 
vehicles and engines. Considering the nearly identical language in 
both sections 209(b) and 209(e)(2)(A), EPA has reviewed California's 
requests for authorization of nonroad vehicle or engine standards 
under section 209(e)(2)(A) using the same principles that it has 
historically applied in reviewing requests for waivers of preemption 
for new motor vehicle or new motor vehicle engine standards under 
section 209(b).This means that CARB's nonroad standards must be 
consistent with the technological feasibility requirements of 
section 202(a)(2). See 80 FR 76169, 76170 (Dec. 9, 2015). See Engine 
Mfrs. Ass'n v. EPA, 88 F.3d 1075, 1087 (D.C. Cir. 1996) (``. . . EPA 
was within the bounds of permissible construction in analogizing 
section 209(e) on nonroad sources to section 209(a) on motor 
vehicles.''). This historical approach to nonroad authorizations is 
not being revisited here.
---------------------------------------------------------------------------

    On June 13, 2022, EPA issued three notices of opportunity for 
hearing and comment for the California regulations at issue here: the 
first notice covered the Heavy-Duty Vehicle and Engine Emission 
Warranty and Maintenance Provisions; the second notice covered the 
Advanced Clean Trucks Regulation, the Zero Emission Airport Shuttle 
Regulation, and the Zero-Emission Power Train Certification Regulation; 
and the third notice covered the ``Omnibus'' Low NOX 
Regulation.\12\ EPA is only taking action on the first two notices in 
this decision.
---------------------------------------------------------------------------

    \12\ 87 FR 35760 (June 13, 2022); 87 FR 35765 (June 13, 2022); 
and 87 FR 35768 (June 13, 2022).
---------------------------------------------------------------------------

    As part of EPA's public comment process for CARB's waiver requests, 
we have received comments from several states and organizations 
representing states, health and environmental organizations, industry, 
and other stakeholders. The vast majority of comments EPA received 
supported granting the waiver requests. Commenters generally supporting 
the waiver requests included CARB,\13\ environmental and public health 
organizations,\14\ state and local governments,\15\ states' 
organizations,\16\ members of Congress,\17\ and some auto 
manufacturers.\18\ Commenters generally opposing the waiver requests 
included the Truck and Engine Manufacturers Association (EMA),\19\ the 
National Automobile Dealers Association (NADA),\20\ the American Fuel & 
Petrochemical Manufacturers (AFPM),\21\ the American Trucking 
Associations (ATA),\22\ the Western States Petroleum Association,\23\ 
and the Texas Public Policy Foundation.\24\ EPA has considered all 
comments including those submitted after the close of the comment 
period. After an evaluation of the record and comments, I have 
determined that the waiver opponents have not met their burden of proof 
in order for EPA to deny either of the two CARB waiver requests under 
any of the three waiver prongs set forth in section 209(b)(1). As such, 
EPA is granting CARB's two waiver requests.\25\
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    \13\ CARB Initial 2018 HD Warranty Amendments Comments, Docket 
No. EPA-HQ-OAR-2022-0330-0063; CARB Initial ACT Comments, Docket No. 
EPA-HQ-OAR-2022-0331-0127; CARB Supplemental Comments, Docket Nos. 
EPA-HQ-OAR-2022-0330-0072, EPA-HQ-OAR-2022-0331-0133.
    \14\ Environmental and Public Health Organizations, Docket Nos. 
EPA-HQ-OAR-2022-0330-0066, EPA-HQ-OAR-2022-0331-0099; Health and 
Medical Organizations, Docket No. EPA-HQ-OAR-2022-0331-0057.
    \15\ See, e.g., State of California et al, Docket No. EPA-HQ-
OAR-2022-0331-0092 (including comments submitted on behalf of the 
States of California, Colorado, Connecticut, Delaware, Hawaii, 
Illinois, Maryland, Minnesota, New Jersey, New York, Oregon, Rhode 
Island, Vermont, Washington, Wisconsin, the Commonwealth of 
Massachusetts, the District of Columbia, and the City of New York); 
New York State Department of Environmental Conservation (NYSDEC), 
Docket Nos. EPA-HQ-OAR-2022-0330-0061, EPA-HQ-OAR-2022-0331-0103; 
Maine Department of Environmental Protection (Maine), Docket Nos. 
EPA-HQ-OAR-2022-0330-0034, EPA-HQ-OAR-2022-0331-0074; Colorado 
Energy Office (Colorado), Docket No. EPA-HQ-OAR-2022-0331-0034; 
Washington State Department of Ecology (Washington), Docket Nos. 
EPA-HQ-OAR-2022-0330-0056, EPA-HQ-OAR-2022-0331-0079; South Coast 
Air Quality Management District (SCAQMD), Docket No. EPA-HQ-OAR-
2022-0331-0075; San Joaquin Valley Unified Air Pollution Control 
District (SJVUAPCD), Docket Nos. EPA-HQ-OAR-2022-0330-0055, EPA-HQ-
OAR-2022-0331-0106.
    \16\ See, e.g., Northeast States for Coordinated Air Use 
Management (NESCAUM), Docket Nos. EPA-HQ-OAR-2022-0330-0017, EPA-HQ-
OAR-2022-0330-0053, EPA-HQ-OAR-2022-0330-0074, EPA-HQ-OAR-2022-0331-
0104, EPA-HQ-OAR-2022-0331-0135, ; National Association of Clean Air 
Agencies (NACAA), Docket Nos. EPA-HQ-OAR-2022-0330-0035, EPA-HQ-OAR-
2022-0330-0019, EPA-HQ-OAR-2022-0331-0067, EPA-HQ-OAR-2022-0331-
0029; Ozone Transport Commission (OTC), Docket Nos. EPA-HQ-OAR-2022-
0330-0062, EPA-HQ-OAR-2022-0330-0021, EPA-HQ-OAR-2022-0330-0075, 
EPA-HQ-OAR-2022-0331-0105, EPA-HQ-OAR-2022-0331-0033, EPA-HQ-OAR-
2022-0331-0136.
    \17\ Padilla et al, Docket Nos. EPA-HQ-OAR-2022-0330-0025, EPA-
HQ-OAR-2022-0331-0038.
    \18\ Tesla, Docket No. EPA-HQ-OAR-2022-0330-0038, EPA-HQ-OAR-
2022-0331-0060; Rivian, Docket No. EPA-HQ-OAR-2022-0331-0066.
    \19\ EMA Testimony, Docket Nos. EPA-HQ-OAR-2022-0330-0016, EPA-
HQ-OAR-2022-0331-0026; EMA Initial Comments, Docket Nos. EPA-HQ-OAR-
2022-0330-0032, EPA-HQ-OAR-2022-0331-0071; EMA Supplemental 
Comments, Docket Nos. EPA-HQ-OAR-2022-0330-0071, EPA-HQ-OAR-2022-
0331-0132,
    \20\ NADA, Docket Nos. EPA-HQ-OAR-2022-0330-0050, EPA-HQ-OAR-
2022-0331-0090.
    \21\ AFPM, Docket No. EPA-HQ-OAR-2022-0331-0088.
    \22\ ATA, Docket No. EPA-HQ-OAR-2022-0331-0091.
    \23\ Western States Petroleum Association, Docket No. EPA-HQ-
OAR-2022-0331-0109.
    \24\ Texas Public Policy Foundation, Docket No. EPA-HQ-OAR-2022-
0330-0036, EPA-HQ-OAR-2022-0331-0059.
    \25\ In deciding to grant these waiver requests, EPA is relying 
on its legal interpretation of the statute as explained in this 
notice. In each case, EPA believes that its interpretation 
constitutes the best interpretation of the statute, applying 
traditional principles of statutory interpretation. Further, to the 
extent there is any genuine ambiguity within the statute related to 
these interpretations, EPA believes it has reasonably resolved such 
ambiguity. See Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837, 866 
(1984) (deference is owed to reasonable agency resolutions of 
statutory ambiguity).
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II. Background

A. EPA's Consideration of CARB's Request

    On June 13, 2022, EPA announced the opportunity for hearing and 
comment on CARB's waiver requests in three Federal Register notices (FR 
Notices).\26\ EPA held one public hearing on June 29 and June 30, 2022, 
covering all three FR Notices.\27\ As noted above, EPA's decision here 
pertains only to the 2018 HD Warranty Amendments, the ACT Regulation, 
the ZEAS Regulation, and the ZEP Certification Regulation. EPA has 
considered all comments submitted pertaining to these regulations, 
including those submitted after the close of the comment period.\28\
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    \26\ 87 FR 35760 (June 13, 2022); 87 FR 35765 (June 13, 2022); 
and 87 FR 35768 (June 13, 2022).
    \27\ A transcript for each day of the hearing (June 29th and 
30th, 2022) can be found in each docket. June 29th Hearing 
Transcript, Docket Nos. EPA-HQ-OAR-2022-0330-0028 and EPA-HQ-OAR-
2022-0331-0045, June 30th Hearing Transcript, Docket Nos. EPA-HQ-
OAR-2022-0330-0029 and EPA-HQ-OAR-2022-0331-0044.
    \28\ EMA Supplemental Comments, Docket Nos. EPA-HQ-OAR-2022-
0330-0071, EPA-HQ-OAR-2022-0331-0132; CARB Supplemental Comments, 
Docket Nos. EPA-HQ-OAR-2022-0330-0072, EPA-HQ-OAR-2022-0331-0133; 
Mass Comment Campaign sponsored by Union of Concerned Scientists, 
Docket Nos. EPA-HQ-OAR-2022-0330-0073, EPA-HQ-OAR-2022-0331-0134; 
NESCAUM, Docket Nos. EPA-HQ-OAR-2022-0330-0074, EPA-HQ-OAR-2022-
0331-0135; OTC, Docket Nos. EPA-HQ-OAR-2022-0330-0075, EPA-HQ-OAR-
2022-0331-0136; Mid-Atlantic/Northeast Visibility Union (MANEVU), 
Docket Nos. EPA-HQ-OAR-2022-0330-0076, EPA-HQ-OAR-2022-0330-0077, 
EPA-HQ-OAR-2022-0331-0138, EPA-HQ-OAR-2022-0331-0137.
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1. 2018 HD Warranty Amendments
    EPA's June 2022 FR Notice on CARB's waiver request regarding the 
2018 HD Warranty Amendments asked for comment on several matters. Since 
CARB had submitted a within-the-scope request, EPA first invited 
comment on whether those amendments meet the criteria for EPA to 
confirm that they are

[[Page 20691]]

within the scope of prior waivers. Specifically, we requested comment 
on whether California's 2018 HD Warranty Amendments: (1) Undermine 
California's previous determination that its standards, in the 
aggregate, are at least as protective of public health and welfare as 
comparable Federal standards, (2) affect the consistency of 
California's requirements with section 202(a) of the Act, and (3) raise 
any other ``new issue'' affecting EPA's previous waiver or 
authorization determinations.\29\
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    \29\ 87 FR at 35762.
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    EPA also solicited comment on whether it should grant a new waiver 
for the 2018 HD Warranty Amendments in the event that EPA cannot 
confirm that some or all of those amendments were within the scope of 
previous waivers. We therefore asked commenters to consider the three 
prongs for the denial of a waiver request under section 209(b)(1) of 
the CAA: whether (A) California's determination that its motor vehicle 
emission standards are, in the aggregate, at least as protective of 
public health and welfare as applicable Federal standards is arbitrary 
and capricious, (B) California does not need such standards to meet 
compelling and extraordinary conditions, and (C) California's standards 
and accompanying enforcement procedures are inconsistent with section 
202(a) of the Clean Air Act.\30\
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    \30\ Id.
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    Regarding section 209(b)(1)'s second prong, EPA must grant a waiver 
request unless the Agency finds that California ``does not need such 
State standards to meet compelling and extraordinary conditions.'' EPA 
has interpreted the phrase ``need[s] such State standards to meet 
compelling and extraordinary conditions'' to mean that California needs 
a separate motor vehicle program as a whole in order to address 
compelling and extraordinary conditions in California (also known as 
the ``traditional'' interpretation). EPA noted its intention to use the 
traditional interpretation and sought comment on whether California 
needs the 2018 HD Warranty Amendments under section 209(b)(1)(B).\31\
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    \31\ Id. at 35762-63.
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    With regard to section 209(b)(1)'s third prong, EPA has 
historically considered consistency with section 202(a) to require that 
California's standards are technologically feasible within the lead 
time provided, giving due consideration to costs, and that California 
and applicable Federal test procedures are consistent. EPA requested 
comment on what provisions from section 202(a) apply to California due 
to the reference to section 202(a) in section 209(b)(1)(C). EPA invited 
comment on how such provisions, to the extent they may apply to 
California's standards or enforcement procedures, should be considered 
in the context of EPA's evaluation of CARB's waiver request under the 
third prong.\32\
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    \32\ Id.
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2. ACT, ZEAS, and ZEP Certification Regulations
    EPA's June 2022 FR Notice on CARB's waiver request regarding the 
Advanced Clean Truck Regulation (ACT), the Zero Emission Airport 
Shuttle (ZEAS) Regulation, and the Zero-Emission Power Train (ZEP) 
Certification Regulation asked for comment on several matters. We 
requested comment on all aspects of a full waiver analysis applicable 
to each of the three regulations. Therefore, we asked commenters to 
consider the three waiver prongs under section 209(b)(1) of the CAA. 
EPA also noted its intention to use the traditional interpretation of 
section 209(b)(1)(B) and sought comment on whether California needs the 
ACT, ZEAS, and ZEP Certification Regulations, as well what provisions 
under section 202(a) should apply (and how such provisions should be 
evaluated) under section 209(b)(1)(C), which requires consistency with 
section 202(a).\33\
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    \33\ 87 FR 35768, 35770 (June 13, 2022).
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B. Principles Governing this Review

    The CAA has been a paradigmatic example of cooperative federalism, 
under which ``States and the Federal Government [are] partners in the 
struggle against air pollution.'' \34\ In Title II, Congress authorized 
EPA to promulgate emission standards for mobile sources and generally 
preempted states from adopting their own standards.\35\ At the same 
time, Congress created an important exception for the State of 
California.
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    \34\ General Motors Corp. v. United States, 496 U.S. 530, 532 
(1990).
    \35\ ``The regulatory difference [between Titles I and II] is 
explained in part by the difficulty of subjecting motor vehicles, 
which readily move across state boundaries, to control by individual 
states.'' Engine Mfrs. Ass'n v. EPA, 88 F.3d 1075, 1079 (D.C. Cir. 
1996). Congress also asserted federal control in this area to avoid 
``the specter of an anarchic patchwork of federal and state 
regulatory programs'' nationwide. See MEMA I, 627 F.2d 1095, 1109 
(D.C. Cir. 1979).
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1. Scope of Preemption and Waiver Criteria Under the Clean Air Act
    The legal framework that governs today's decisions stems from the 
waiver provision first adopted by Congress in 1967 and its subsequent 
amendments.\36\ In title II of the CAA, Congress established only two 
programs for control of emissions from new motor vehicles--EPA emission 
standards adopted under the CAA and California emission standards 
adopted under its state law.\37\ Congress accomplished this by 
preempting all state and local governments from adopting or enforcing 
emission standards for new motor vehicles, while at the same time 
providing that California could receive a waiver of preemption for its 
emission standards and enforcement procedures in keeping with its prior 
experience regulating motor vehicles, its role as a laboratory for 
innovation in emission reduction technologies for vehicles, and its 
serious air quality problems. This framework struck an important 
balance that protected manufacturers from multiple and different state 
emission standards and preserved a pivotal role for California in the 
advancement of control of emissions from new motor vehicles. 
Recognizing both the harsh reality of California's air pollution and 
California's ability to serve as a pioneer and a laboratory for the 
nation in setting new motor vehicle emission standards and developing 
control technology, Congress intentionally structured this waiver 
provision to restrict and limit EPA's ability to deny a waiver to 
ensure that California had broad discretion in selecting the best means 
to protect the health and welfare of its citizens.\38\
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    \36\ Central Valley Chrysler-Jeep, Inc. v. Goldstene, 529 F. 
Supp. 2d 1151, 1174 (``The waiver provision of the Clean Air Act 
recognizes that California has exercised its police power to 
regulate pollution emissions from motor vehicles since before March 
30, 1966; a date that predates . . . the Clean Air Act.'').
    \37\ Motor vehicles are ``either `federal cars' designed to meet 
the EPA's standards or `California cars' designed to meet 
California's standards.'' Engine Mfrs. Ass'n v. EPA, 88 F.3d 1075, 
1079-80, 1088 (D.C. Cir. 1996) (``Rather than being faced with 51 
different standards, as they had feared, or with only one, as they 
had sought, manufacturers must cope with two regulatory 
standards.'').
    \38\ See, e.g., S. Rep. No. 403, 90th Cong., 1st Sess. 33 (1967) 
(The waiver of preemption is for California's ``unique problems and 
pioneering efforts.''); 113 Cong. Rec. 30950, 32478 (``[T]he State 
will act as a testing agent for various types of controls and the 
country as a whole will be the beneficiary of this research.'') 
(Statement of Sen. Murphy); MEMA I, 627 F.2d 1095, 1111 (D.C. Cir. 
1979).
---------------------------------------------------------------------------

    Accordingly, section 209(a) preempts states or political 
subdivisions from adopting or attempting to enforce any standard 
relating to the control of emissions from new motor vehicles or new 
motor vehicle engines.\39\ Under the

[[Page 20692]]

terms of section 209(b)(1), after notice and opportunity for public 
hearing, EPA must waive the application of section 209(a) to California 
unless the Administrator finds that at least one of three criteria to 
deny a waiver in section 209(b)(1)(A)-(C) has been met.\40\ EPA may 
thus deny a waiver, in the context of the Agency's adjudicatory review, 
only if it makes at least one of these three factual findings 
(associated with the three waiver criteria) based on evidence in the 
record, including arguments that opponents of the waiver have provided.
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    \39\ 42 U.S.C. 7543(a)-(a) Prohibition No State or any political 
subdivision thereof shall adopt or attempt to enforce any standard 
relating to the control of emissions from new motor vehicles or new 
motor vehicle engines subject to this part. No State shall require 
certification, inspection, or any other approval relating to the 
control of emissions from any new motor vehicle or new motor vehicle 
engine as condition precedent to the initial retail sale, titling 
(if any), or registration of such motor vehicle, motor vehicle 
engine, or equipment.
    \40\ 42 U.S.C. 7543(b)(1): (1) The Administrator shall, after 
notice and opportunity for public hearing, waive application of this 
section to any State which has adopted standards (other than 
crankcase emission standards) for the control of emissions from new 
motor vehicles or new motor vehicle engines prior to March 30, 1966, 
if the State determines that the State standards will be, in the 
aggregate, at least as protective of public health and welfare as 
applicable Federal standards. No such waiver shall be granted if the 
Administrator finds that--(A) the determination of the State is 
arbitrary and capricious, (B) such State does not need such State 
standards to meet compelling and extraordinary conditions, or (C) 
such State standards and accompanying enforcement procedures are not 
consistent with section 7521(a) of this title.
---------------------------------------------------------------------------

    The 1970 CAA Amendments strengthened EPA's authority to regulate 
vehicular ``emission[s] of any air pollutant,'' while reaffirming the 
corresponding breadth of California's ability to regulate those 
emissions (by amending CAA section 202 and recodifying the waiver 
provision as section 209(b), respectively).\41\ Congress also 
established the National Ambient Air Quality Standards (NAAQS) program, 
under which EPA issues air quality criteria and sets ambient air 
quality standards for so-called ``criteria'' pollutants, and states 
with regions that have levels of pollutants greater than those Federal 
standards must submit state implementation plans, or SIPs, indicating 
how they plan to attain the NAAQS. These attainment SIPs are often 
multi-year, comprehensive plans.
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    \41\ In the 1970 Amendments, section 202(a) was divided into 
section 202(a)(1) and section 202(a)(2). Section 202(a)(1) included 
the directive for the Administrator to ``prescribe standards 
applicable to emissions of any air pollutant . . . which in his 
judgement cause, or contribute to, air pollution which may 
reasonably be anticipated to endanger publish health or welfare.'' 
The previous lead time requirement in section 202(a) was moved to 
section 202(a)(2) and included the directive that any regulation 
prescribed under 202(a)(1) ``shall take effect after 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.'' The 
1970 CAA did not change the cross reference to section 202(a) in 
section 209(b)(1)(C). See CARB Initial ACT/ZEAS/ZEP Comments at 11-
12. As described below, the 1977 Amendments did not change the cross 
reference to section 202(a) in section 209(b)(1)(C) but did expand 
the flexibility afforded to California under section 209(b). The 
1977 Amendments also added section 202(a)(3) directing EPA to set 
heavy-duty vehicle emission standards for certain emissions for the 
1983 model year and later. (Congress having identified a need for 
standards in 1970 ``had become impatient with the EPA's failure to 
promulgate a particulate standard'' for heavy duty vehicles.'' NRDC, 
655 F.2d at 325 (citing S. Rep. No.127, 95th Cong., 1st Sess. 67 
(1977), reprinted in 3 Legislative History 1441)).
---------------------------------------------------------------------------

    With the CAA Amendments of 1977, Congress allowed California to 
consider the protectiveness of its standards ``in the aggregate,'' 
rather than requiring each California standard to be as or more 
stringent than its Federal counterpart, to enable stronger standards 
for a specific pollutant where a weaker standard for a second pollutant 
was necessary due to interactions between control technologies.\42\ 
Congress also approved EPA's interpretation of the waiver provision as 
providing appropriate deference to California's policy goals and 
consistent with Congress's intent ``to permit California to proceed 
with its own regulatory program'' for new motor vehicle emissions.\43\
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    \42\ 42 U.S.C. 7543(b)(1). In further amendments to the Act in 
1977, section 209 (formerly section 208) was amended to require the 
U.S. Environmental Protection Agency (EPA) to consider California's 
standards as a whole, so that California could seek a waiver from 
preemption if its standards ``in the aggregate'' protected public 
health at least as well as Federal standards. See Clean Air Act 
Amendments of 1977, Pub. L. 95-95, section 207, 91 Stat. 685. See 
also Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. New York State Dep't 
of Env't Conservation, 17 F.3d 521, 525 (2d Cir. 1994).
    \43\ H.R. Rep. No. 95-294, at 301 (1977).
---------------------------------------------------------------------------

    In addition, the 1977 Amendments demonstrated the significance of 
California's standards to the Nation as a whole with Congress' adoption 
of a new section 177. Section 177 permits other states addressing their 
own air pollution problems to adopt and enforce California new motor 
vehicle standards ``for which a waiver has been granted'' if certain 
criteria are met.\44\
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    \44\ This provision was intended to continue the balance, 
carefully drawn in 1967, between states' need to meet increasingly 
stringent federal air pollution limits and the burden of compliance 
on auto-manufacturers. See, e.g., H.R. Rep. No. 294, 95th Cong., 1st 
Sess. 309-10 (1977) (``[S]ection 221 of the bill broadens State 
authority, so that a State other than California . . . is authorized 
to adopt and enforce new motor vehicle emission standards which are 
identical to California's standards. Here again, however, strict 
limits are applied . . . . This new State authority should not place 
an undue burden on vehicle manufacturers . . . .''); Motor Vehicle 
Mfrs. Ass'n v. NYS Dep't of Env't Conservation, 17 F.3d 521, 527 (2d 
Cir. 1994) (``Many states, including New York, are in danger of not 
meeting increasingly stringent federal air pollution limits . . . . 
It was in an effort to assist those states struggling to meet 
federal pollution standards that Congress, as noted earlier, 
directed in 1977 that other states could promulgate regulations 
requiring vehicles sold in their state to be in compliance with 
California's emission standards or to `piggyback' onto California's 
preemption exemption. This opt-in authority, set forth in section 
177 of the Act, 42 U.S.C. 7507, is carefully circumscribed to avoid 
placing an undue burden on the automobile manufacturing industry.'')
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    Any state with qualifying SIP provisions may exercise this option 
and become a ``section 177 State,'' without first seeking the approval 
from EPA.\45\ Thus, the 1977 Amendments further recognize California's 
important role in mobile source air pollution control, both by making 
it easier for California to obtain waivers (by allowing the State's 
protectiveness determination to be made ``in the aggregate'') and by 
expanding the opportunity (via section 177) for other states to adopt 
California's standards.
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    \45\ CAA section 177, 42 U.S.C. 7507.
---------------------------------------------------------------------------

    Given the text, legislative history, and judicial precedent, EPA 
has consistently interpreted section 209(b) as requiring EPA to grant a 
waiver unless EPA or opponents of a waiver can demonstrate that one of 
the criteria for a denial has been met.\46\ In this context, since 
inception, EPA has recognized its limited discretion in reviewing 
California waiver requests. Therefore, EPA's role upon receiving a 
request for waiver of preemption from California has consistently been 
limited and remains only to be to determine whether it is appropriate 
to make any of the three factual findings specified by the CAA. If the 
Agency cannot make at least one of the three findings, then the waiver 
must be granted. The three waiver criteria are properly seen as 
criteria for a denial. This reversal of the normal statutory structure 
embodies and is consistent with the congressional intent of providing 
deference to California to maintain and further develop its own new 
motor vehicle emission program.
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    \46\ MEMA I, 627 F.2d at 1120-21 (``The language of the statute 
and its legislative history indicate that California's regulations, 
and California's determination that they comply with the statute, 
when presented to the Administrator are presumed to satisfy the 
waiver requirements and that the burden of proving otherwise is on 
whoever attacks them.''); MEMA II, 142 F.3d 449, 462 (D.C. Cir. 
1998) (``[S]ection 209(b) sets forth the only waiver standards with 
which California must comply. . . . If EPA concludes that 
California's standards pass this test, it is obligated to approve 
California's waiver application.'').
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    Additionally, in previous waiver decisions, EPA has noted that 
section 209(b)(1) specifies particular and limited grounds for 
rejecting a waiver and has therefore limited its review to

[[Page 20693]]

those grounds.\47\ EPA has also noted that the structure Congress 
established for reviewing California's standards is deliberately 
narrow, which further supports this approach. This has led EPA to 
reject arguments that are not specified in the statute as grounds for 
denying a waiver:
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    \47\ See, e.g., 78 FR 2112 (January 9, 2013); 87 FR 14332 (March 
14, 2022) (SAFE 1 Reconsideration Decision).

    The law makes it clear that the waiver requests cannot be denied 
unless the specific findings designated in the statute can properly 
be made. The issue of whether a proposed California requirement is 
likely to result in only marginal improvement in air quality not 
commensurate with its cost or is otherwise an arguably unwise 
exercise of regulatory power is not legally pertinent to my decision 
under section 209, so long as the California requirement is 
consistent with section 202(a) and is more stringent than applicable 
Federal requirements in the sense that it may result in some further 
reduction in air pollution in California. Thus, my consideration of 
all the evidence submitted concerning a waiver decision is 
circumscribed by its relevance to those questions that I may 
consider under section 209(b).\48\
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    \48\ 78 FR at 2115 (footnote omitted).

    EPA's evaluation of accompanying enforcement procedures that are 
identified in section 209(b)(1)(C) is done by assessing the first and 
third waivers prongs at 209(b)(1)(A) and 209(b)(1)(C).\49\
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    \49\ 87 FR 35760, 35762-63 (June 13, 2022).
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2. Deference to California
    EPA has also consistently noted that the text, structure, and 
history of the California waiver provision clearly indicate both 
congressional intent and appropriate EPA practice of leaving decisions 
on ``ambiguous and controversial matters of public policy'' to 
California's judgment.\50\ In waiver decisions, EPA has thus recognized 
that congressional intent in limiting review of California waiver 
requests to the section 209(b)(1) criteria was to ensure that the 
Federal government did not second-guess the wisdom of state policy.\51\ 
In an early waiver decision EPA highlighted this deference:
---------------------------------------------------------------------------

    \50\ 40 FR 23102, 23103-04 (May 28, 1975); see also LEV I, 58 FR 
4166 (January 13, 1993), Decision Document at 64.
    \51\ Ford Motor Co. v. Environmental Protection Agency (Ford 
Motor), 606 F.2d 1293, 1302 (D.C. Cir. 1979) (``The Administrator is 
charged with undertaking a single review in which he applies the 
deferential standards set forth in Section 209(b) to California and 
either grants or denies a waiver without exploring the consequences 
of nationwide use of the California standards or otherwise stepping 
beyond the responsibilities delineated by Congress.'').

    It is worth noting . . . I would feel constrained to approve a 
California approach to the problem which I might also feel unable to 
adopt at the federal level in my own capacity as a regulator. The 
whole approach of the Clean Air Act is to force the development of 
new types of emission control technology where that is needed by 
compelling the industry to ``catch up'' to some degree with newly 
promulgated standards. Such an approach . . . may be attended with 
costs, in the shape of reduced product offering, or price or fuel 
economy penalties, and by risks that a wider number of vehicle 
classes may not be able to complete their development work in time. 
Since a balancing of these risks and costs against the potential 
benefits from reduced emissions is a central policy decision for any 
regulatory agency under the statutory scheme outlined above, I 
believe I am required to give very substantial deference to 
California's judgments on this score.\52\
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    \52\ 40 FR 23102, 23103-04 (May 28, 1975); LEV I, 58 FR 4166 
(January 13, 1993), Decision Document at 64.

    This view is further supported by the House Committee Report 
accompanying the 1977 amendments to the Clean Air Act. The Report 
explained that, although Congress had the opportunity to restrict the 
waiver provision, it instead elected to expand California's flexibility 
to adopt a complete program of motor vehicle emission controls. 
According to the Report, the 1977 Amendments were intended to ratify 
and strengthen the California waiver provision and to affirm the 
underlying intent of that provision, i.e., to afford California the 
broadest possible discretion in selecting the best means to protect the 
health of its citizens and the public welfare.\53\
---------------------------------------------------------------------------

    \53\ H.R. Rep. No 294, 95 Cong., 1st Sess. 301-02 (1977) (cited 
in MEMA I, 627 F.2d at 1110).
---------------------------------------------------------------------------

3. Standard and Burden of Proof
    In Motor and Equipment Manufacturers' Association v. EPA, 627 F.2d 
1095 (D.C. Cir. 1979) (MEMA I), the U.S. Court of Appeals for the 
District of Columbia stated, with regard to the standard and burden of 
proof, that the Administrator's role in a section 209 proceeding is to:

    [C]onsider all evidence that passes the threshold test of 
materiality and . . . thereafter assess such material evidence 
against a standard of proof to determine whether the parties 
favoring a denial of the waiver have shown that the factual 
circumstances exist in which Congress intended a denial of the 
waiver.\54\
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    \54\ MEMA I, 627 F.2d at 1122.

    The court in MEMA I considered the standards of proof under section 
209 for the two findings necessary to grant a waiver for an 
``accompanying enforcement procedure'' (as opposed to the standards 
themselves): (1) Protectiveness in the aggregate and (2) consistency 
with CAA section 202(a) findings. The court instructed that ``the 
standard of proof must take account of the nature of the risk of error 
involved in any given decision, and it therefore varies with the 
finding involved. We need not decide how this standard operates in 
every waiver decision.'' \55\
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    \55\ Id.
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    With respect to California's protectiveness determination, the 
court upheld the Administrator's position that to deny a waiver there 
must be clear and compelling evidence to show that the proposed 
procedures undermine the protectiveness of California's standards.\56\ 
The court noted that this standard of proof also accords with the 
congressional intent to provide California with the broadest possible 
discretion in setting regulations it finds protective of the public 
health and welfare.\57\
---------------------------------------------------------------------------

    \56\ Id.
    \57\ Id.
---------------------------------------------------------------------------

    With respect to the consistency finding, the court did not 
articulate a standard of proof applicable to all proceedings but found 
that the opponents of the waiver were unable to meet their burden of 
proof even if the standard were a mere preponderance of the evidence. 
Although MEMA I did not explicitly consider the standards of proof 
under section 209 concerning a waiver request for ``standards,'' as 
compared to accompanying enforcement procedures, there is nothing in 
the opinion to suggest that the court's analysis would not apply with 
equal force to such determinations. EPA's past waiver decisions have 
consistently made clear that: ``[E]ven in the two areas concededly 
reserved for Federal judgment by this legislation--the existence of 
compelling and extraordinary conditions and whether the standards are 
technologically feasible--Congress intended that the standard of EPA 
review of the State decision to be a narrow one.'' \58\
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    \58\ See, e.g., 40 FR 21102-03 (May 28, 1975).
---------------------------------------------------------------------------

    Although EPA evaluates whether there are compelling and 
extraordinary conditions in California, the Agency nevertheless accords 
deference to California on its choices for how best to address such 
conditions in light of the extensive legislative history of section 
209(b). As noted earlier, the burden of proof in a waiver proceeding is 
on EPA and the opponents of the waiver. This is clear from the 
statutory language stating that EPA ``shall . . . waive'' preemption 
unless one of three statutory factors is met. This reading was upheld 
by the D.C. Circuit in MEMA I, which concluded that this obligation 
rests

[[Page 20694]]

firmly with opponents of the waiver in a section 209 proceeding by 
---------------------------------------------------------------------------
holding that:

    The language of the statute and its legislative history indicate 
that California's regulations, and California's determinations that 
they must comply with the statute, when presented to the 
Administrator are presumed to satisfy the waiver requirements and 
that the burden of proving otherwise is on whoever attacks them. 
California must present its regulations and findings at the hearing 
and thereafter the parties opposing the waiver request bear the 
burden of persuading the Administrator that the waiver request 
should be denied.\59\
---------------------------------------------------------------------------

    \59\ MEMA I, 627 F.2d at 1121.

    The Administrator's burden, on the other hand, is to make a 
reasonable evaluation of the information in the record in coming to the 
waiver decision. As the court in MEMA I stated, ``Here, too, if the 
Administrator ignores evidence demonstrating that the waiver should not 
be granted, or if he seeks to overcome that evidence with unsupported 
assumptions of his own, he runs the risk of having his waiver decision 
set aside as `arbitrary and capricious.'' \60\ Therefore, the 
Administrator's burden is to act ``reasonably.'' \61\
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    \60\ Id. at 1126.
    \61\ Id.
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III. Discussion

    This section evaluates each of the two waiver requests and sets 
forth EPA's rationale for granting each separate request.\62\ First, we 
identify the specific rubric by which we adjudicate each waiver 
request. Because the 2018 HD Warranty Amendments constitute 
``accompanying enforcement procedures,'' as opposed to new standards, 
EPA evaluates this request under the more limited rubric for 
accompanying enforcement procedures, as detailed in section III.A 
below. However, even if EPA were to treat the 2018 HD Warranty 
Amendments as new onroad standards and evaluate them under the full 
waiver criteria applicable to such standards, the opponents of the 
waiver have failed to meet their burden of proof.
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    \62\ EPA intends our grant of the waiver for each of the four 
California regulations at issue (i.e., 2018 HD Warranty Amendments, 
ACT, ZEAS, and ZEP Certification Regulations,) to be severable. Were 
a reviewing court to set aside our waiver action regarding any 
particular regulation, or portion of any particular regulation, EPA 
intends for the actions on the remaining regulations and the 
remaining portion of the affected regulation to remain in effect.
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    We next turn to the three waiver criteria, which we evaluate in 
turn in sections III.B-D. For each waiver criterion, we set forth EPA's 
general approach to evaluating the criterion, summarize the position of 
CARB and the commenters for each of the waiver requests, discuss EPA's 
analysis of the criterion, and finally present our conclusion.\63\ Many 
of the waiver opponents' arguments centered on the third waiver prong 
and, in particular, on an argument that, notwithstanding EPA's 
conclusion that the California standards and accompanying enforcement 
procedures are feasible within the lead time given under the 
regulations, EPA must require California standards to include four 
years' lead time required for certain Federal heavy-duty vehicle 
standards set out in section 202(a)(3)(C). We address this argument in 
detail in section III.D.5. In every case, we conclude that the 
opponents of the waiver have failed to meet their burden of proof.
---------------------------------------------------------------------------

    \63\ Although EPA issued separate Federal Notices that solicited 
comments on each waiver request, EPA is electing to grant waivers 
for all the regulations included in the two requests in this single 
document in which it discusses each of the two waiver criteria only 
once and then evaluates each of CARB's regulations under each 
criterion and makes separate decisions with respect to each 
regulation.
---------------------------------------------------------------------------

    Finally, EPA received comments outside the scope of this action. We 
discuss these comments, relating to preemption under the Energy Policy 
and Conservation Act (EPCA), the Equal Sovereignty Doctrine and other 
constitutional issues, in section III.E. As the scope of EPA's review 
under section 209 is constrained, EPA has declined to consider them in 
granting these waiver requests.

A. Evaluation of CARB's 2018 HD Warranty Amendments

    With respect to the 2018 HD Warranty Amendments, we first address 
the proper rubric by which to evaluate this regulation. To determine 
the proper rubric, EPA first evaluates whether CARB's 2018 HD Warranty 
Amendments should be considered standards or ``accompanying enforcement 
procedures'' because ``section 209(b) refers to accompanying procedures 
only in the context of consistency with section 202(a).'' \64\ 
Specifically, under section 209(b)(1)(C), EPA is to deny a waiver if 
``such state standards and accompanying enforcement procedures are not 
consistent with section 202(a).'' EPA then evaluates whether CARB's 
request relating to its 2018 HD Warranty Amendments should be treated 
as within-the-scope of a prior waiver request or as a request for a new 
waiver. As we explain below, EPA concludes that CARB's 2018 HD Warranty 
Amendments are ``accompanying enforcement procedures'' and that it is 
also appropriate to treat CARB's request as one for a new waiver. Given 
these determinations, EPA applies the first and third waiver prongs 
under 209(b)(1) (relating to California's protectiveness determination 
and consistency with 202(a)) in evaluating CARB's request. However, 
even if EPA were to treat CARB's 2018 HD Warranty Amendment as a new 
standard for which California is seeking a new waiver and apply all 
three waiver prongs, EPA would nonetheless grant the waiver.
---------------------------------------------------------------------------

    \64\ MEMA I, 627 F.2d at 1111-12.
---------------------------------------------------------------------------

    CARB requested that the Administrator confirm that the 2018 HD 
Warranty Amendments fall within the scope of the 2005 waiver of 
preemption that the Administrator granted for California's emission 
standards and associated test procedures for 2007 and subsequent model 
year heavy-duty diesel vehicles and engines, and its waiver request 
includes discussion of how each of the relevant prongs applicable to 
enforcement procedures (i.e., that the enforcement procedure does not 
undermine California's protectiveness determination and that there is 
consistency between the Federal and California enforcement procedures) 
are within the scope of the previously granted waiver. In the 
alternative, CARB requested EPA grant a new waiver of preemption and 
discussed each of the relevant prongs for a new waiver (i.e., 
protectiveness, consistency and, if waiving a standard, the need for 
the program as a whole to meet compelling and extraordinary conditions 
in the state).\65\ CARB noted that the 2018 HD Warranty Amendments 
encompass several elements that individually and collectively establish 
more rigorous emissions warranty and emissions maintenance schedule 
requirements.\66\
---------------------------------------------------------------------------

    \65\ See 2018 HD Warranty Amendments Waiver Support Document at 
18-25. CARB maintained that the 2018 HD Warranty Amendments are 
within the scope of the waiver EPA granted for CARB's 2007 heavy-
duty vehicle emission standards. 70 FR 50322 (August 26, 2005). 
Therefore, CARB's waiver request included information to demonstrate 
that the 2018 HD Warranty Amendments do not undermine the previous 
protectiveness determination associated with the 2007 emission 
standards nor do the Amendments affect the consistency of the heavy-
duty vehicles emission standards with section 202(a) of the CAA. 
CARB also stated that it is not aware of any new issues raised by 
the Amendments. Alternatively, CARB stated that, if EPA must grant 
CARB a new waiver for the Amendments (in addition to the two waiver 
criteria already discussed for the within-the-scope request), 
California continues to need a separate motor vehicle program to 
meet compelling and extraordinary conditions.
    \66\ 2018 HD Warranty Amendments Waiver Support Document at 18-
25.
---------------------------------------------------------------------------

    EPA believes that the 2018 HD Warranty Amendments are properly

[[Page 20695]]

considered accompanying enforcement procedures because they constitute 
criteria designed to determine compliance with applicable standards and 
are accordingly relevant to a manufacturer's ability to produce 
vehicles and engines that comply with applicable standards for their 
useful lives.\67\
---------------------------------------------------------------------------

    \67\ MEMA I at 1111-13 (``In that setting we believe that the 
Administrator correctly classified the in-use maintenance 
regulations as accompanying enforcement procedures' rather than as 
``standards.''); Decision Document accompanying 51 FR 12391 (April 
10, 1986), at 3. EPA sets emissions warranty periods under section 
207(a) and not section 202(a). See, e.g., 48 FR 52170 (November 16, 
1983).
---------------------------------------------------------------------------

    Because accompanying enforcement procedures are only contained in 
section 209(b)(1)(C), or the third waiver prong, EPA's historical 
practice of considering whether to grant waivers for accompanying 
enforcement procedures tied to standards for which a waiver has already 
been granted is to determine only: (1) Whether the enforcement 
procedures threaten the validity of California's determination that its 
standards are as protective of public health and welfare as applicable 
Federal standards, (i.e., the first prong) and (2) whether the Federal 
and California enforcement procedures are consistent (i.e., the third 
prong).\68\ EPA notes that these two criteria are similar to the 
questions EPA reviews for within-the-scope requests for both standards 
and enforcement procedures. However, when reviewing amendments to a 
previously waived standard or accompanying enforcement procedure, for 
which CARB seeks a within-the-scope determination from EPA, EPA also 
reviews whether the amendments raise any ``new issues'' affecting the 
Administrator's previous waiver determination, and if there are new 
issues that trigger a full review of the relevant two prongs.\69\
---------------------------------------------------------------------------

    \68\ MEMA I, 627 F.2d 1095, 1111, 1113; Decision Document 
accompanying 61 FR 53371 (Oct. 11, 1996) at 17; 74 FR 3030, 3032 
(Jan. 16, 2009).
    \69\ 45 FR 54130 (Aug. 14, 1980); 46 FR 36742 (July 15, 1981); 
75 FR 44948, 444951 (July 30, 2010).
---------------------------------------------------------------------------

    In this instance, EPA believes new issues have been raised by the 
amendments and therefore it is appropriate to review the Amendments 
under the complete waiver criteria applicable to accompanying 
enforcement procedures (i.e., the first and third waiver prongs). 
Because under either compliance path the manufacturer is under an 
additional requirement that creates a new burden rather than a 
flexibility, EPA believes this necessarily creates a new question as to 
whether the accompanying enforcement procedure meets the requirements 
of the third waiver prong. EPA notes that there could be some level of 
uncertainty in determining whether ``new issues'' have been raised, 
including whether a compliance path where manufacturers only cover the 
costs of expected additional warranty claims is equivalent to a new, 
more stringent accompanying enforcement procedure. In addition, because 
the criteria for a within-the-scope waiver evaluation and a full waiver 
are similar, EPA believes it is prudent in this instance to review the 
request under the full waiver criteria (i.e., the relevant two prongs 
identified above). The 2018 HD Warranty Amendments encompass several 
elements that individually and collectively establish more rigorous 
emissions warranty and emissions maintenance schedule requirements that 
raise issues regarding the technological feasibility of the aggregate 
requirements applicable to new heavy-duty vehicles and engines. 
Therefore, EPA is evaluating the 2018 HD Warranty Amendments under the 
two waiver criteria below that apply to accompanying enforcement 
procedures.\70\
---------------------------------------------------------------------------

    \70\ EPA believes it is only necessary to review: (1) Whether 
the enforcement procedures are so lax that they threaten the 
validity of California's determination that its standards are as 
protective of public health and welfare as applicable Federal 
standards, and (2) whether the Federal and California enforcement 
procedures are consistent. However, even if EPA were to review the 
enforcement procedures under the second waiver criterion (as EPA 
does in the alternative below, without conceding the second waiver 
criterion applies, which we include in the event that those opposed 
to the waiver believe the 2018 HD Warranty Amendments are equivalent 
to new emission standards rather than accompanying enforcement 
procedures), the opponents of the 2018 HD Warranty Amendments have 
not met their burden of proof regarding section 209(b)(1)(B).
---------------------------------------------------------------------------

B. First Waiver Criterion: Are California's Protectiveness 
Determinations Arbitrary and Capricious?

    We now turn to California's protectiveness determinations for the 
regulations covered under each of its waiver requests. EPA's evaluation 
of this first waiver prong is performed under the construct explained 
here. Section 209(b)(1)(A) of the Clean Air Act requires EPA to grant a 
waiver unless the Administrator finds that California's determination 
that its State standards will be, in the aggregate, at least as 
protective of public health and welfare as applicable Federal 
standards, is arbitrary and capricious. EPA may not disregard 
California's determination unless there is ``clear and compelling 
evidence'' to the contrary.\71\ Moreover, ``[t]he language of the 
statute and its legislative history indicate that California's 
regulations, and California's determination that they comply with the 
statute, when presented to the Administrator are presumed to satisfy 
the waiver requirements.'' \72\ Additionally, it is ``the parties 
opposing the waiver request bear the burden of persuading the 
Administrator that the waiver request should be denied.'' \73\
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    \71\ MEMA I, 627 F.2d 1095, 1121-22 (D.C. Cir. 1979).
    \72\ Id. See also Ford Motor, 606 F.2d 1293, 1297 (D.C. Cir. 
1979).
    \73\ MEMA I, 627 F.2d at 1121.
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1. EPA's Historical Interpretation of Section 209(b)(1)(A)
    EPA's long-standing interpretation (also called the ``traditional 
interpretation'') is that the phrase ``State standards'' in section 
209(b)(1) means the entire California new motor vehicle emissions 
program.\74\ Therefore, as explained below, when evaluating 
California's protectiveness determination, EPA compares the California 
standards as a whole to the Federal standards. That comparison is 
undertaken within the broader context of the previously waived 
California program, which relies upon protectiveness determinations 
that EPA has previously found were not arbitrary and capricious.\75\ 
That evaluation follows the instruction of section 209(b)(2), which 
states: ``If each State standard is at least as stringent as the 
comparable applicable Federal standard, such State standard shall be 
deemed to be at least as protective of health and welfare as such 
Federal standards for purposes of [209(b)(1)].'' \76\
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    \74\ 74 FR 32744, 32749 (July 8, 2009); 70 FR 50322 (Aug. 26, 
2005); 77 FR 9239 (Feb. 16, 2012); 78 FR 2112, 2123 (Jan. 9, 2013).
    \75\ 36 FR 17458 (Aug. 31, 1971). (``The law makes it clear that 
the waiver requests cannot be denied unless the specific finding 
designated in the statute can properly be made. The issue of whether 
a proposed California requirement is likely to result in only 
marginal improvement in air quality not commensurate with its cost 
or is otherwise an arguably unwise exercise of regulatory power is 
not legally pertinent to my decision under section 209, so long as 
the California requirement is consistent with section 202(a) and is 
more stringent than applicable Federal requirements in the sense 
that it may result in some further reduction in air pollution in 
California.''). The ``more stringent'' standard expressed here in 
1971 was superseded by the 1977 Amendments to section 209, which 
established that California's standards must be, in the aggregate, 
at least as protective of public health and welfare as applicable 
Federal standards. The stringency standard remains, though, in 
section 209(b)(2).
    \76\ CAA section 209(b)(2).
---------------------------------------------------------------------------

    To review California's protectiveness determination in light of 
section 209(b)(2), EPA conducts its own analysis of the newly adopted 
California standards to comparable applicable Federal standards. The 
comparison

[[Page 20696]]

quantitatively answers whether the new standards are more or less 
protective than the Federal standards.
    Section 209 provides two paths for finding that California's 
protectiveness determination is reasonable. In addition to a side-by-
side comparison of California and applicable Federal standards 
considering section 209(b)(2), California's program can still be at 
least as protective as EPA's program even if some (or even all) of the 
new or amended standards in a waiver request are less stringent than 
the applicable EPA standards if California's program, as a whole, is at 
least as protective as the Federal standards as a whole.\77\ Thus, EPA 
first examines whether the side-by-side analysis under section 
209(b)(2) resolves the protectiveness inquiry. If there are some EPA 
standards that are numerically more stringent that the California 
standards, then the question that EPA reviews is whether the new or 
amended California standards would cause the State's new motor vehicle 
emissions program as a whole (``in the aggregate'') to become less 
protective than EPA's program. A finding that California's 
protectiveness determination was arbitrary and capricious under section 
209(b)(1)(A) must be based upon ```clear and compelling evidence' to 
show that proposed [standards] undermine the protectiveness of 
California's standards.'' \78\
---------------------------------------------------------------------------

    \77\ Id.
    \78\ MEMA I, 627 F.2d at 1122.
---------------------------------------------------------------------------

    As noted previously, when considering whether to grant waivers for 
accompanying enforcement procedures tied to standards for which a 
waiver has already been granted, EPA has long held that, under section 
209(b)(1)(A)'s first prong, it will only address the question of 
whether the enforcement procedures are so lax that they threaten the 
validity of California's previous determination that its standards are 
as protective of public health and welfare as applicable Federal 
standards.\79\
---------------------------------------------------------------------------

    \79\ MEMA I, 627 F.2d 1095, 1113 n.36 (D.C. Cir. 1979)(The 
Administrator ``explored whether the procedures had a negative 
effect on the protectiveness of the California standards for which a 
waiver had already been granted. See 43 FR 32183 (1978), reprinted 
in J.A. at 56. This inquiry is perfectly consistent with the 
Administrator's past practice and his position in this court.'')
---------------------------------------------------------------------------

2. CARB's Discussion of California's Protectiveness Determinations in 
the Waiver Requests
a. 2018 HD Warranty Amendments
    With regard to the 2018 HD Warranty Amendments, CARB made a 
determination that the Amendments will not cause California's motor 
vehicle emission standards, in the aggregate, to be less protective of 
public health and welfare than applicable Federal standards in 
Resolution 18-24.\80\ CARB noted that the 2018 HD Warranty Amendments 
do not reduce the stringency of the previously waived emission 
standards or the associated test procedures for 2007 and subsequent 
model year heavy-duty diesel engines and vehicles, but instead 
establish emissions warranty requirements for heavy-duty diesel engines 
and heavy-duty diesel vehicles that are more stringent than the 
corresponding Federal emission warranty requirements for such engines 
and vehicles.\81\
---------------------------------------------------------------------------

    \80\ EPA-HQ-OAR-2022-0330-0004.
    \81\ Id. at 19-20. CARB also noted that the newly established 
emission warranty periods for every category of California heavy-
duty diesel engines and heavy-duty diesel vehicles exceed the 
corresponding federal emission warranty period of 5 years or 100,000 
miles during this time frame. CARB also noted that the newly 
established minimum allowable maintenance schedules for emissions-
related parts are more restrictive regarding allowable repairs or 
replacements of emissions-related parts than the corresponding 
federal allowable maintenance schedules, and the Amendments expand 
the scope of California's emissions warranty beyond the federal 
emissions warranty by expressly encompassing components monitored by 
HD OBD systems which, when they fail, cause the HD OBD system's 
malfunction indication light (MIL) to illuminate. Id.
---------------------------------------------------------------------------

b. ACT, ZEAS, and ZEP Certification Regulations
    Regarding CARB's request for a waiver for the ACT Regulation, ZEAS 
Regulation, and ZEP Certification Regulation, CARB noted that it made 
protectiveness determinations for each respective regulation in the 
request.
    First, CARB stated that in Board Resolution 78-10 it determined 
that the requirements related to the control of emissions contained in 
the ACT Regulation will not cause California motor vehicle emission 
standards, in the aggregate, to be less protective of public health and 
welfare than applicable Federal standards, and that no basis exists for 
EPA's Administrator to find that determination arbitrary and 
capricious.\82\ CARB noted that its ACT Regulation is clearly more 
stringent than any applicable Federal requirements because there are no 
comparable Federal requirements.\83\
---------------------------------------------------------------------------

    \82\ EPA-HQ-OAR-2022-0331-0003. See Board Resolution 20-19.
    \83\ Id. CARB further notes that ``because California's pre-
existing motor vehicle emissions program does not require medium- or 
heavy-duty vehicles and engines to meet zero emission standards, it 
is evident that the ACT regulation will, in conjunction with other 
elements of California's motor vehicle emissions program for medium 
and heavy-duty vehicles, render California's motor vehicle emission 
emissions standards, in the aggregate, to be at least as protective 
of public health and welfare as applicable federal standards.''
---------------------------------------------------------------------------

    Second, the ACT, ZEAS, and ZEP waiver request also contained CARB's 
summary of the Board's protectiveness findings regarding its ZEAS 
Regulation and explained that there are no comparable Federal 
requirements.\84\
---------------------------------------------------------------------------

    \84\ Id. at 20. See Board Resolution 19-16.
---------------------------------------------------------------------------

    Finally, in the ACT, ZEAS, and ZEP waiver request, CARB noted that 
the ZEP Certification Regulation was also accompanied by the Board 
approved Resolution 19-15 that contained a determination that these 
regulations will not cause California's motor vehicle emission 
standards, in the aggregate, to be less protective of public health and 
welfare than applicable Federal standards.\85\
---------------------------------------------------------------------------

    \85\ Id. at 20-21.
---------------------------------------------------------------------------

3. Comments on California's Protectiveness Determinations
    EPA did not receive any comment suggesting that CARB's 2018 HD 
Warranty Amendments threaten the validity of California's determination 
that its standards are as protective of public health and welfare as 
applicable Federal standards.\86\
---------------------------------------------------------------------------

    \86\ Although there is no information in the record that would 
support a finding that CARB's protectiveness determination was 
arbitrary and capricious in a section ``209(b)(2) type'' of 
analysis, we note that, because section 209(b)(1)(A) calls for an 
analysis of whether California's motor vehicle emission standards, 
in the aggregate, are as protective of public health and welfare as 
applicable Federal standards, EPA also incorporates the findings 
below regarding the protectiveness of the regulations in CARB's ACT, 
ZEAS, and ZEP waiver request to the finding regarding the HD 
Warranty Amendments.
---------------------------------------------------------------------------

    However, EPA received several comments that claimed that CARB's 
protectiveness determinations in support of the ACT Regulation and the 
ZEAS Regulation were arbitrary and capricious.\87\ One commenter 
claimed that CARB was pursuing a policy directive toward the 
acceleration of ZEVs in the medium- and heavy-duty truck sector by 
glossing over a number of impacts both within and outside the State of 
California that renders the ACT Regulation less protective than 
applicable Federal standards.\88\ Several commenters asserted that CARB 
over-estimated the emission benefits of its standards, even though CARB 
noted that its standards would still enhance the relative 
protectiveness of the California

[[Page 20697]]

program that EPA previously found to be as protective as the Federal 
program.\89\ EPA did not receive any comments related to CARB's 
protectiveness determination for the ZEP Certification Regulation.
---------------------------------------------------------------------------

    \87\ Although EPA discusses these comments as provided (meaning 
that some comments are discussed in the context of multiple 
regulations at once), EPA considered comments separately in its 
evaluation of California's protectiveness determination for each 
regulation.
    \88\ Valero at 2. This commenter asserted that CARB failed to 
conduct a full lifecycle analysis in order to understand the full 
emission impacts of battery electric vehicles and that CARB did not 
consider potential reductions that may be achieved by internal 
combustion engines.
    \89\ CARB Supplemental Comments, Docket Nos. EPA-HQ-OAR-2022-
0330-0072, EPA-HQ-OAR-2022-0331-0133. CARB noted that if there are 
any benefits from the new standards then their adoption cannot 
render the existing California program less protective. CARB stated 
that, since there are no comparable federal requirements for ACT and 
ZEAS, this logic is all the more true.
---------------------------------------------------------------------------

    As noted above, EPA received comments that claimed that the ACT 
Regulation would slow down fleet turnover and that, by requiring zero-
emission vehicles, this regulation would not ``result in lower 
emissions of GHGs and other pollutants than can be achieved by internal 
combustion engine (ICE) vehicles.'' \90\ Another commenter contended 
that ``to the extent a CARB [commercial truck or tractor (CMV)] rule or 
standard is technologically infeasible, or likely result in new CMVs 
that are cost prohibitive'' or that raises reliability concerns then 
``the agency'' would be acting ``arbitrarily and capriciously'' to 
issue such a rule or standard.\91\
---------------------------------------------------------------------------

    \90\ Valero at 2; see also AFPM at 8.
    \91\ NADA at 2-3. We further address these latter comments in 
our analysis of the third waiver criterion below. In general, EPA 
has long explained that ``questions concerning the effectiveness of 
the available technology are also within the category outside my 
permissible scope of inquiry,'' under section 209(b)(1)(C). 41 FR 
44209, 44210 (October 7, 1976).
---------------------------------------------------------------------------

    In response, CARB noted that these commenters cannot establish 
``that delayed purchases or pre-buys or other purchasing choices would 
lead to emissions increases as a result of ACT or ZEAS'' because ``both 
regulations will require displacement of higher-emitting conventional 
vehicles with zero-emission vehicles'' and ``[e]ven if that 
displacement is lower or slower than CARB estimated, these standards 
nonetheless could not make California's motor vehicle program less 
protective than EPA's.'' \92\
---------------------------------------------------------------------------

    \92\ CARB Supplemental Comments at 4.
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    EPA also received comments that questioned the policy of CARB's 
adoption of the ACT and ZEAS Regulations. One commenter claimed that 
maintaining the existing Federal standards would be the best way for 
California to minimize environmental impacts, based on a full lifecycle 
assessment of emissions, instead of California's approach that would 
necessitate expensive battery electric technology that would slow fleet 
turnover.\93\ Regarding the ACT Regulation some commenters also claimed 
that CARB should have adopted different regulatory approaches, such as 
one that incorporates increased introduction of renewable liquid and 
gaseous fuels, which the commenter claimed would be more cost 
effective.\94\ In response, CARB noted that EPA is precluded from 
considering different policy or hypothetical rulemaking options that 
CARB might have considered and rather is properly guided by the 
language at section 209(b)(2) that clearly states that if each state 
standard is at least as stringent as the comparable Federal standard 
that such California standards shall be deemed at least as protective 
of public health and welfare as such Federal standards for purposes of 
section 209(b)(1).\95\
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    \93\ AFPM at 8-12.
    \94\ One commenter suggests that, to the extent the ACT 
Regulation is technologically infeasible or cost prohibitive for 
customers or otherwise raises reliability concerns, then CARB's 
protectiveness determination would be arbitrary and capricious. 
Another commenter stated that California has not conducted any air 
quality analysis per dollar of investment relative to the existing 
Federal standards versus the ACT Regulation. This commenter claimed 
that a full life-cycle analysis would reveal that the existing 
Federal NOX standards are the better approach. AFPM at 
12-15.
    \95\ CARB Supplemental Comments at 2.
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4. California's Protectiveness Determinations Are Not Arbitrary and 
Capricious
    As described above, EPA's traditional analysis has been to evaluate 
California's protectiveness determination by comparing the new 
California standards, or amendments, to applicable EPA emission 
standards for the same pollutants. The comparison of EPA and California 
standards is undertaken within the broader context of the previously 
waived California program, which relies upon protectiveness 
determinations that EPA has previously found were not arbitrary and 
capricious.\96\ The prior statutory requirement that each California 
standard be ``more stringent'' than the Federal standard was superseded 
by the 1977 Amendments to section 209, which established that a waiver 
must be granted where California's standards are, in the aggregate, at 
least as protective of public health and welfare as applicable Federal 
standards. This was intended to afford California the broadest possible 
discretion in designing is motor vehicle emission program.
---------------------------------------------------------------------------

    \96\ 78 FR 2112, 2123 (January 9, 2013).
---------------------------------------------------------------------------

    EPA did not receive any comments or information in the record that 
demonstrated that CARB's new, more stringent 2018 HD Warranty 
Amendments would threaten the validity of CARB's protectiveness 
determination applicable to these enforcement procedures. Based on the 
record EPA cannot make a determination that CARB's protectiveness 
finding regarding the 2018 HD Warranty Amendments was arbitrary and 
capricious.
    EPA has received no comment or other information in the record to 
support an argument that EPA's statutory interpretation of the first 
waiver prong for its analysis of the California emission standards 
(i.e., ACT Regulation, ZEAS Regulation, and ZEP Certification 
Regulation) is unreasonable. In addition, EPA received no comment or 
information that provided any type of numerical comparison of the 
stringency of CARB's standards to applicable Federal standards. 
Specifically, there is no evidence in the record to demonstrate, by way 
of numerical comparison, that CARB's standards are not as stringent, in 
the aggregate, as EPA's requirements.\97\ To the extent that commenters 
stated that CARB over-estimated the emission benefits of its standards, 
on the basis of the record EPA agrees with CARB that, under a numerical 
comparison of the standards, the new standards will still be more 
stringent than the Federal program--especially in the case of the ACT 
and ZEAS Regulations, which have no comparable Federal requirements.
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    \97\ EPA notes that CARB's protectiveness determinations, 
associated with each of the regulations contained in its waiver 
request were not arbitrary and capricious despite subsequent changes 
to the ``applicable Federal standards'' in section 209(b)(1)(A). In 
this case changes in the applicable standards are reflected in EPA's 
recent rule to lower NOX and other air pollutants from 
heavy-duty vehicles and engines starting in the 2027 model year. See 
88 FR 4296 (January 24, 2023). EPA's regulation does not relate to 
emission warranty and other requirements for the same model year 
(2022-2023) heavy-duty vehicles and engines as the 2018 HD Warranty 
Amendments. This is in contrast to EPA's recent rulemaking where the 
extended emission warranty period takes place with the 2027 model 
year. Likewise, the EPA regulation does not relate to or does not 
set zero-emission vehicle requirements related to heavy-duty 
vehicles and engines as do the regulations contained in CARB's ACT, 
ZEAS, and ZEP waiver request. In addition, at the time CARB 
submitted its waiver requests the ``applicable Federal standards'' 
were EPA's regulations adopted in 2002 and applicable to 2007 and 
2010 requirements, and not EPA's most recent rulemaking. As noted, 
no evidence is in the record to demonstrate, by way of numerical 
comparison, that CARB's standards are not as stringent, in the 
aggregate, as the prior EPA standards that commenced in the 2007 
model year.
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    Therefore, we find that the opponents of the waiver have not met 
their burden of proof to demonstrate that any of CARB's protectiveness 
determinations associated with the regulations contained in the two 
waiver requests were arbitrary and capricious and,

[[Page 20698]]

therefore, EPA cannot deny the CARB's waiver requests based on section 
209(b)(1)(A).
    Additionally, in response to comments suggesting that CARB should 
have adopted different policies or different regulations, or that 
CARB's ACT and ZEAS Regulations will not be effective, EPA notes that 
there are no comparable Federal standards mandating, for instance, 
sales of a certain percentage of ZEV and NZEV vehicles, or zero-
emission airport shuttle fleet composition.\98\ As such, any 
enhancement to CARB's motor vehicle emission program--including its 
heavy-duty vehicles standards--cannot render California's program less 
protective than the applicable Federal standards. Likewise, and as we 
further address these latter comments in our analysis of the third 
waiver criterion below, EPA is not permitted in its statutory role to 
assess different, hypothetical CARB regulations that CARB might have 
adopted and then, in turn, compare those regulations to Federal 
standards.\99\ That is, the relevant question before EPA is whether 
California's standards are in the aggregate at least as protective as 
the Federal ones, not whether California hypothetically should have 
adopted a different program that the commenter prefers.
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    \98\ In general, EPA has long explained that ``questions 
concerning the effectiveness of the available technology are also 
within the category outside [the Administrator's] permissible scope 
of inquiry,'' under section 209(b)(1)(C). 41 FR 44209, 44210 
(October 7, 1976).
    \99\ EPA has recognized that the intent of Congress in creating 
a limited review based on the section 209(b)(1) criteria was to 
ensure that the Federal government did not second-guess state policy 
choices. This has led EPA to state, ``It is worth noting . . . I 
would feel constrained to approve a California approach to the 
problem which I might also feel unable to adopt at the federal level 
in my own capacity as a regulator. The whole approach of the Clean 
Air Act is to force the development of new types of emission control 
technology where that is needed by compelling the industry to 
``catch up'' to some degree with newly promulgated standards. Such 
an approach * * * may be attended with costs, in the shaped of 
reduced product offering, or price or fuel economy penalties, and by 
risks that a wider number of vehicle classes may not be able to 
complete their development work in time. Since a balancing of these 
risks and costs against the potential benefits from reduced 
emissions is a central policy decision for any regulatory agency 
under the statutory scheme outlined above, I believe I am required 
to give very substantial deference to California's judgments on this 
score.'' 40 FR 23103-04. See also LEV I, 58 FR 4166 (January 13, 
1993), Decision Document at 64.
---------------------------------------------------------------------------

    EPA also received no comments or evidence to support the view that 
zero-emission vehicles do not result in some degree of lower 
emissions--of either criteria pollutants or GHGs--than conventional 
vehicles do. EPA agrees with CARB that this logically supports a 
conclusion that the ACT and ZEAS Regulations, which require more and 
more of these vehicles, would increase the protectiveness of 
California's program.\100\ Moreover, EPA does not agree with the 
commenters' claims that considering lifecycle emissions renders the 
protectiveness finding arbitrary and capricious. First, the scope of 
EPA's review of CARB's protectiveness determination is narrow and need 
not include far-reaching assessments of the environmental or other 
impacts of CARB's chosen regulations and associated policy decisions. 
Section 209(b)(1) does not require California or EPA to consider 
lifecycle emissions. Nor does it otherwise suggest that EPA must look 
broadly outside motor vehicle emissions to emissions from other 
sources, including those regulated under separate federal and state 
programs. Therefore, EPA is not required to consider potential broader 
environmental impacts in assessing protectiveness. Secondly, to the 
extent such impacts and decisions could be relevant to section 
209(b)(1)(A), commenters failed to adduce sufficient evidence to 
support this argument considering California's technical findings 
relating to this issue.\101\
---------------------------------------------------------------------------

    \100\ CARB Final Statement of Reasons for ACT Regulation at 105-
06, https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2019/act2019/fsor.pdf; CARB Supplemental Comments at 3-4 (``It is, in 
fact, unrefuted that zero-emission vehicles result in lower 
emissions (and not only of GHGs) than conventional vehicles. This 
fact naturally leads to the conclusion that requiring the sale (ACT) 
and use (ZEAS) of more and more of these vehicles increases the 
protectiveness of California's program which has previously been 
found to be at least as protective as EPA's.'').
    \101\ CARB Supplemental Comments at 3 (``[T]he only analysis 
offered--a report by the American Transportation Research 
Institute--does nothing to undermine CARB's determination. That 
report (also prepared after CARB's protectiveness determination) 
focused only on lifecycle GHG emissions from Class 8 trucks engaged 
in long hauls, and, as such, it cannot undermine CARB's 
protectiveness determination which was based on consideration of all 
affected pollutants and all regulated vehicles. In any event, even 
though it focused exclusively on the vehicles that CARB found the 
least promising for near-term electrification, the report 
nonetheless finds that zero-emission Class 8 trucks engaged in long 
hauls would have lower lifecycle GHG emissions than conventional 
Class 8 trucks. In other words, this report, too, supports the 
determination that California's program with ACT is at least as 
protective as EPA's federal program (which has no ACT-like 
standards)'' (original emphasis)).
---------------------------------------------------------------------------

    EPA also finds no evidence in the record, to the extent commenters 
asserted that fleet turnover would be slower, that supports the view 
that an emissions increase would occur because of the ACT or ZEAS 
Regulations. Such claims, without evidence that the regulations result 
in less protective emission standards do not meet the burden of proof 
on the opponents of the waiver.\102\ Similar to commenters' claims that 
the regulations would result in slower fleet turnover, statements that 
these purchasing decisions will result in fewer emission benefits does 
not otherwise demonstrate that CARB's emission standards are less 
protective than applicable Federal standards, or that CARB's 
protectiveness determination was arbitrary and capricious.
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    \102\ As previously mentioned, CARB performed a sensitivity 
analysis of both ``pre-buy'' and ``no-buy'' scenarios regarding both 
the ACT and ZEAS program. For the ACT Regulation, CARB found that it 
would cause no increases in emissions. CARB Supplemental Comments at 
3-4.
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5. Section 202(b)(1)(A) Conclusion
    EPA believes that, given the lack of any comments or information in 
the record that demonstrate that CARB's new more stringent 2018 HD 
Warranty Amendments would threaten the validity of CARB's 
protectiveness determination, it has no basis to conclude that 
California's determination that its standards are at least as 
protective is arbitrary and capricious and therefore deny CARB's waiver 
request for the 2018 HD Warranty Amendments under section 209(b)(1)(A). 
The same conclusion applies were EPA to consider (in the alternative) 
the 2018 HD Warranty Amendments as emission standards as opposed to 
accompanying enforcement procedures.
    Further, based on the record before EPA, we cannot find that CARB 
was arbitrary and capricious in its respective findings that the 
California heavy-duty vehicle and engine standards, including the ACT 
Regulation, the ZEAS Regulation, and the ZEP Certification Regulation) 
are individually, and in the aggregate, at least as protective of 
public health and welfare as applicable Federal standards. CARB has 
provided reasonably detailed information to support its protectiveness 
determination. Commenters have not provided sufficient information and 
analysis that calls CARB's analysis (associated with the California 
protectiveness determination) into question. Therefore, we find that 
the opponents of the waiver have not met their burden of proof to 
demonstrate that any of CARB's protectiveness determinations associated 
with the regulations contained within their waiver requests were 
arbitrary and capricious and, therefore, EPA cannot deny CARB's waiver 
requests based on section 209(b)(1)(A).

[[Page 20699]]

C. Second Waiver Criterion: Does California Need Its Standards To Meet 
Compelling and Extraordinary Conditions?

    Under section 209(b)(1)(B) of the Act, EPA must grant a waiver for 
California vehicle and engines standards and accompanying enforcement 
procedures unless EPA finds that California ``does not need such State 
standards to meet compelling and extraordinary conditions.'' EPA has 
traditionally interpreted this provision as requiring consideration of 
whether California needs a separate motor vehicle program to meet 
compelling and extraordinary conditions.\103\
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    \103\ 87 FR 14332 (March 14, 2022).
---------------------------------------------------------------------------

1. EPA's Historical Interpretation of Section 209(b)(1)(B)
    For nearly the entire history of the waiver program, EPA has read 
the phrase ``such State standards'' in section 209(b)(1)(B) as 
referring back to standards ``in the aggregate,'' in the root paragraph 
of section 209(b)(1), which calls for California to make a 
protectiveness finding for its standards. EPA has interpreted the 
phrase ``in the aggregate'' as referring to California's program as a 
whole, rather than each State standard, and as such the Agency 
evaluates both protectiveness and need with reference to California's 
program as a whole.\104\ EPA has reasoned that both statutory 
provisions must be read together so that the Agency reviews the same 
standards (e.g., new motor vehicle emission standards program) for need 
under 209(b)(1)(B) that California considers in making its 
protectiveness determination, and that under this statutory framework 
EPA is to afford California discretion in assessing its need for its 
motor vehicle emission standards program.\105\ EPA has also explained 
that section 209(b)(1)(C) also supports the ``whole program'' 
interpretation of section 209(b)(1)(B), as EPA's feasibility assessment 
necessarily must evaluate any interactions between the standards in the 
proposed program (as well as other existing compliance obligations) and 
whether those interactions create feasibility problems.\106\ The D.C. 
Circuit has held that ``[t]he expansive statutory language gives 
California (and in turn EPA) a good deal of flexibility in assessing 
California's regulatory needs. We therefore find no basis to disturb 
EPA's reasonable interpretation of the second criterion.'' \107\
---------------------------------------------------------------------------

    \104\ 49 FR 18887, 18890 (May 3, 1984) (``The interpretation 
that my inquiry under section 209(b)(1)(B) goes to California's need 
for its own mobile source program is borne out not only by the 
legislative history, but by the plain meaning of the statue as 
well.'').
    \105\ 74 FR 32744, 32751, n. 44, 32761, n.104 (July 8, 2009). 
See also 78 FR 2112, 2126-27, n.78 (January 9, 2013).
    \106\ EPA notes there would be an inconsistency if ``State 
standards'' meant all California standards when used in section 
209(b)(1) but only particular standards when used in 209(b)(1)(B) 
and 209(b)(1)(C). EPA has traditionally interpreted the third waiver 
criterion's feasibility analysis as a whole-program approach. 87 FR 
14361, n.266. See also 84 FR at 51345.
    \107\ Am. Trucking Ass'n v. EPA, 600 F.3d 624, 627 (D.C. Cir. 
2010) (ATA v. EPA). See also Dalton Trucking v. EPA, No. 13-74019 
(9th Cir. 2021) (``The EPA was not arbitrary and capricious in 
declining to find that `California does not need such California 
standards to meet compelling and extraordinary conditions,' section 
7543(e)(2)(A)(ii), under the alternative version of the needs test, 
which requires `a review of whether the Fleet Requirements are per 
se needed to meet compelling and extraordinary conditions,' 78 FR at 
58,103. The EPA considered `the relevant factors,' Motor Vehicle 
Mfrs. Ass'n of U.S. v. State Farm Mut. Auto. Ins. Co., Inc., 463 
U.S. 29, 42-43 (1983), including statewide air quality, 78 FR 
58,104, the state's compliance with Federal National Ambient Air 
Quality standards for ozone and PM2.5 on a statewide 
basis, id. at 58,103-04, the statewide public health benefits, id. 
at 58,104, and the utility of the Fleet Requirements in assisting 
California to meet its goals, id. at 58,110. Contrary to Dalton's 
argument, the EPA did not limit its review to two of California's 
fourteen air quality regions. The EPA examined the relevant data 
provided by CARB, and it articulated a `satisfactory explanation for 
its action including a rational connection between the facts found 
and the choice made.' See Motor Vehicle Mfrs. Ass'n of U.S., Inc., 
463 U.S. at 43 (cleaned up).'').
---------------------------------------------------------------------------

    In addressing the Agency's reading of section 209(b)(1)(B) as 
addressing California's need for the motor vehicle emission program 
standards program as a whole in the 1983 LEV waiver request, for 
example, EPA explained that:
    This approach to the ``need'' criterion is also consistent with the 
fact that because California standards must be as protective as Federal 
standards in the aggregate, it is permissible for a particular 
California standard or standards to be less protective than the 
corresponding Federal standard. For example, for many years, California 
chose to allow a carbon monoxide standard for passenger cars that was 
less stringent than the corresponding Federal standard as a ``trade-
off'' for California's stringent nitrogen oxide standard. Under a 
standard of review like that proposed by MVMA/AIAM, EPA could not 
approve a waiver request for only a less stringent California standard 
because such a standard, in isolation, necessarily could be found to be 
contributing to rather than helping, California's air pollution 
problems.\108\
---------------------------------------------------------------------------

    \108\ 58 FR 4166, LEV Waiver Decision Document at 50-51.
---------------------------------------------------------------------------

    In 1994, EPA again had cause to explain the Agency's reading of 
section 209(b)(1)(B) in the context of California's particulate matter 
standards waiver request:

    [T]o find that the `compelling and extraordinary conditions' 
test should apply to each pollutant would conflict with the 
amendment to section 209 in 1977 allowing California to select 
standards `in the aggregate' at least as protective as federal 
standards. In enacting that change, Congress explicitly recognized 
that California's mix of standards could `include some less 
stringent than the corresponding federal standards.' See H.R. Rep. 
No. 294, 95th Cong., 1st Sess. 302 (1977). Congress could not have 
given this flexibility to California and simultaneously assigned to 
the state the seemingly impossible task of establishing that 
`extraordinary and compelling conditions' exist for each 
standard.\109\
---------------------------------------------------------------------------

    \109\ 49 FR at 18887, 18890.

    Congress has also not disturbed this reading of section 
209(b)(1)(B) as calling for EPA review of California's whole program. 
With two noted exceptions described below, EPA has consistently 
interpreted this provision as requiring the Agency to consider whether 
California needs a separate motor vehicle emission program rather than 
the specific standards in the waiver request at issue to meet 
compelling and extraordinary conditions. Congress intended to allow 
California to address its extraordinary environmental conditions and 
foster its role as a laboratory for motor vehicle emissions control. 
The Agency's longstanding practice therefore has been to evaluate 
CARB's waiver requests with the broadest possible discretion to allow 
California to select the means it determines best to protect the health 
and welfare of its citizens in recognition of both the harsh reality of 
California's air pollution and the importance of California's ability 
to serve as a pioneer and a laboratory for the nation in setting new 
motor vehicle emission standards and developing control 
technology.\110\ EPA notes that ``the statute does not provide for any 
probing substantive review of the California standards by federal 
officials.'' \111\ As a general matter, EPA has applied the traditional 
interpretation in the same way for all air pollutants, criteria and GHG 
pollutants alike.\112\
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    \110\ See, e.g., S. Rep. No. 403, 90th Cong., 1st Sess. 33 
(1967) (The waiver of preemption is for California's ``unique 
problems and pioneering efforts.''); 113 Cong. Rec. 30950, 32478 
(``[T]he State will act as a testing agent for various types of 
controls and the country as a whole will be the beneficiary of this 
research.'') (Statement of Sen. Murphy).
    \111\ Ford Motor, 606 F.2d 1293, 1300 (D.C. Cir. 1979).
    \112\ 74 FR at 32763-65; 76 FR 34693; 79 FR 46256; 81 FR 95982.
---------------------------------------------------------------------------

    In a departure from its long-standing interpretation, EPA has on 
two separate instances limited its interpretation of this provision to 
California motor

[[Page 20700]]

vehicle standards that are designed to address local or regional air 
pollution problems.\113\ In both instances EPA determined that the 
traditional interpretation was not appropriate for standards designed 
to address a global air pollution problem and its effects and that it 
was appropriate to address such standards separately from the remainder 
of the program (the alternative interpretation).\114\ However, shortly 
after both instances, EPA explained that the reinterpretation of the 
second waiver prong in this manner is flawed and the alternative 
interpretation is inappropriate, finding that the traditional 
interpretation--in which EPA reviews the need for California's motor 
vehicle program--is the best interpretation.\115\ In the SAFE 1 
Reconsideration Decision, for example, the Agency evaluated the 
traditional interpretation and the appropriateness of interpreting 
section 209(b)(1)(B) in the same manner for all pollutants and provided 
a textual analysis of why both section 209(b)(1)(A) and section 
209(b)(1)(C) better support interpreting 209(b)(1)(B) as referring to 
California's need for its mobile source emission program rather than to 
California's need for a specific standard. EPA has not identified any 
reason to revise the interpretation contained in the SAFE 1 
Reconsideration Decision.\116\ Further, EPA's two FR Notices for the HD 
waiver requests noted the intention to use the traditional 
interpretation.\117\
---------------------------------------------------------------------------

    \113\ 73 FR 12156 (March 8, 2008); SAFE 1 at 51310.
    \114\ SAFE 1. In SAFE 1, EPA withdrew a portion of the waiver it 
had previously granted for California's Advanced Clean Cars (ACC) 
program--specifically, the waiver for California's zero emission 
vehicle (ZEV) mandate and the GHG emission standards within 
California's ACC program. EPA based its action, in part, on its 
determination that California did not need these emission standards 
to meet compelling and extraordinary conditions, within the meaning 
of section 209(b)(1)(B) of the CAA. That determination was in turn 
based on EPA's adoption of a new, GHG-pollutant specific 
interpretation of section 209(b)(1)(B). In any event, EPA expressly 
stated that its new interpretation of section 209(b)(1)(B) only 
applies to waiver requests for GHG emission-reducing standards, SAFE 
1 at 51341, n. 263. Therefore, even under the SAFE 1 interpretation 
(which EPA does not agree with for the reasons explained below and 
in the SAFE 1 Reconsideration Decision), EPA's traditional 
interpretation would still apply to this request given all of the 
standards at issue are, in whole or in part, related to the 
reduction of criteria pollutant emissions, or would otherwise meet 
the SAFE 1 alternative interpretation test as it applied to GHG 
emission.
    \115\ 74 FR 32744 (July 8, 2009); SAFE 1 Reconsideration 
Decision at 14333-34, 14352-55, 14358-62.
    \116\ Id.
    \117\ See 87 FR 35765, 3767 (June 13, 2022).
---------------------------------------------------------------------------

2. CARB's Discussion of California's Need for the Standards in the 
Waiver Requests
a. 2018 HD Warranty Amendments
    As noted above, CARB maintained that the 2018 HD Warranty 
Amendments are an accompanying enforcement procedure and, as such, the 
second waiver prong at section 209(b)(1)(B) does not apply to the 
waiver analysis for this regulation. Alternatively, if EPA deems that 
the 2018 HD Warranty Amendments are standards subject to all three 
waiver prongs, then CARB maintained that the regulations meet the 
second waiver prong.\118\ CARB also noted the same conclusion applies 
whether this request involves a new waiver (as EPA has determined) or 
(in the alternative), a within-the-scope determination.
---------------------------------------------------------------------------

    \118\ 2018 HD Warranty Amendments Waiver Support Document at 23-
25. CARB noted that ``[t]he 2018 HD Warranty Amendments are 
projected to reduce statewide NOX and PM emissions by 
0.75 tons per day (tpd) and 0.008 tpd respectively, by 2030. 
NOX emissions are projected to decrease in the South 
Coast Air Basin and in the San Joaquin Valley Air Basins by 0.24 and 
0.18 tpd, respectively, by 2030.'' Waiver Support Document at 2.
---------------------------------------------------------------------------

b. ACT, ZEAS, and ZEP Certification Regulations
    CARB provided similar context in its ACT Regulation, ZEAS 
Regulation, and ZEP Certification Regulation waiver support document. 
CARB noted that ``[t]hese three rulemaking actions individually and 
collectively implement measures in California's State Implementation 
Plan (SIP) that are needed for California to achieve compliance with 
national ambient air quality standards and to reduce emissions of 
greenhouse gases (GHGs).'' \119\ CARB noted that its Executive Officer 
determined that ``California needs a separate motor vehicle emission 
program to meet compelling and extraordinary conditions'' based in part 
on a number of CARB Board findings and statements and information 
contained in Staff Reports for the regulations.\120\ CARB also noted 
that, even if an alternative interpretation of section 209(b)(1)(B) 
requires an assessment of the need for individual emission standards, 
CARB needs the ACT Regulation, ZEAS Regulation, and ZEP Certification 
Regulation to address compelling and extraordinary conditions that 
California faces from both criteria pollution and from climate change--
each regulation expressly requires categories of medium and heavy-duty 
vehicles and their powertrains to emit no criteria or GHG pollutants, 
thereby addressing these conditions in California. CARB further notes 
that EPA has consistently found that California needs emission 
standards to address criteria pollutants, and as each of these 
standards reduces those pollutants EPA has no basis upon which to find 
that California does not need the standards.\121\
---------------------------------------------------------------------------

    \119\ ACT/ZEAS/ZEP Waiver Support Document at 1.
    \120\ ACT/ZEAS/ZEP Waiver Support Document at 22-25 (citing ACT/
ZEAS/ZEP Waiver Request).
    \121\ Id. at 27 (``As discussed in Section I, the ACT regulation 
is projected to reduce emissions of NOX by 6.9 tons per 
day (tpd), and emissions of PM2.5 by 0.24 tpd by 2031, 
and the ZEAS regulation is projected to reduce emissions of 
NOX by 7.60 tons per year (tpy) emissions of 
PM2.5 by 0.15 tpy, and emissions of GHGs by 81 MMT per 
day of CO2e by 2031. By 2040, the ZEAS regulation is 
projected to reduce emissions of NOX by 9.99 tpy, 
emissions of PM2.5 by 1.7 tpy, and emissions of GHGs by 
107 MMT per day of CO2e. These emissions reductions will 
assist California in its efforts to attain the national and state 
ambient air quality standards for particulate matter and ozone, 
reduce individual health risk, and meet climate change goals. EPA 
has consistently found that California `needs' emissions standards 
to address the compelling and extraordinary conditions resulting 
from criteria pollutants, including emissions standards that 
expressly specify limitations of emissions of GHGs, and therefore 
has no basis to find that the regulations do not satisfy the 
`compelling and extraordinary' criterion.'').
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3. Comments on Section 209(b)(1)(B)
    EPA received several comments requesting a denial of the 
regulations under the two HD waiver requests based on section 
209(b)(1)(B) grounds--that ``such State does not need such State 
standards to meet compelling and extraordinary conditions.'' Some 
commenters asserted that the need for California's standards under the 
second waiver prong should be interpreted on a standard-by-standard 
basis. In the context of such an interpretation several commenters 
claimed that one or more of the standards in the waiver requests were 
not needed to meet compelling and extraordinary conditions.
    Regarding the interpretive issue of whether EPA should evaluate a 
need for the motor vehicle emission program versus an evaluation of the 
need for a specific standard, EPA received a comment that raises 
arguments that EPA has previously addressed in other waivers. For 
example, this commenter claimed that EPA continues to incorrectly 
interpret the waiver criteria in a manner that does not allow 
evaluation of each new California emission standard. The commenter 
asserted that EPA conflates the protectiveness criteria with the 
``Needs Test'' in section 209(b)(1)(B).\122\ This

[[Page 20701]]

commenter also asserted that EPA's traditional interpretation of the 
second waiver prong grants California with preferential regulatory 
treatment ``by rubber-stamping every regulatory change CARB makes'' and 
thus violates the equality of the states under the Equal Sovereignty 
doctrine and also raises questions of vast economic and political 
significance.\123\
---------------------------------------------------------------------------

    \122\ Texas Public Policy Foundation at 2-4. This commenter also 
asserted that legislative intent does not justify EPA's 
interpretation and that because California must submit a new waiver 
request each time it alters or adds emission standards that 
California must also demonstrate a need for such standards--a test 
different from whether California continues to need its motor 
vehicle emission program.
    \123\ Id. at 3. See also AFPM at 16 (``[T]he `whole program' 
approach would effectively force EPA to grant a waiver for any later 
standard California proposes once EPA decided initially that 
California `needs' its own motor vehicle program to address criteria 
pollution. EPA decisions made in the 1970s would tie EPA's hands 
more than 50 years later and force approval of whatever new 
regulation CARB proposes for a waiver.'').
---------------------------------------------------------------------------

    EPA also received comments that there cannot be a need for GHG- and 
climate change-related standards (the ACT and ZEAS Regulations) under 
the second waiver prong. One commenter stated that the causes and 
effect of climate change are global, not local in nature, and therefore 
California does not need standards addressing climate change under the 
second waiver prong. Drawing on principles of equal sovereignty, one 
commenter asserted that section 209(b) is ``unconstitutional to the 
extent it is construed to allow California to set emission standards 
aimed at addressing global climate change, as opposed to California's 
local conventional pollution problems.'' \124\ As such, the commenter 
argued that California cannot need GHG standards because, unlike 
criteria pollutant emissions, GHG emissions in California ``bear no 
relation'' to ``California-specific circumstances'' like the local 
conditions identified by Congress in enacting section 209.\125\ The 
commenter also argued that California does not need the ACT or ZEAS 
Regulations because the harms of climate change are not unique to 
California and cannot be alleviated by regulating emissions from 
sources in one state alone. Similarly, another commenter argued that, 
because climate change is a global issue, a single-state standard will 
be less effective and more disruptive to the economy than a Federal 
rule will.\126\ One commenter also asserted that, within the context of 
the alternative interpretation, California only needs to reduce 
criteria air pollution in two air districts and cannot therefore 
``need'' statewide standards.\127\
---------------------------------------------------------------------------

    \124\ AFPM at 2. To the extent that this commenter also argued 
that section 209(b) is ``unconstitutional in all its applications'' 
because it violates the equal sovereignty doctrine, that argument is 
addressed in section III.E.2.
    \125\ Id. at 6-7.
    \126\ ATA at 6-7.
    \127\ Texas Public Policy Foundation at 3.
---------------------------------------------------------------------------

    In its own comments, CARB noted that California needs to reduce 
criteria pollution along major roadways throughout many parts of the 
State and that even if California only needed to reduce criteria 
pollutants in the two districts with the worst overall air quality, 
statewide standards are still needed due to trucks travelling from one 
part of the State to these districts.\128\ CARB noted that EPA has 
consistently found these challenges, and the conditions that give rise 
to them, are ``extraordinary and compelling'' and thus that California 
needs a separate new motor vehicle emissions program.\129\ CARB 
explained that its ZEV requirements (i.e., the ACT Regulation, ZEAS 
Regulation, and ZEP Certification Regulation) will result in no 
tailpipe emissions, reduced brake wear PM emissions, and lower upstream 
emissions. As such, CARB stated that, at a minimum, California 
``needs'' its ZEV requirements to achieve reductions in criteria 
pollution emissions including in extreme nonattainment areas and other 
areas overburdened by unhealthy air quality.\130\
---------------------------------------------------------------------------

    \128\ CARB Supplemental Comments at 5-6, n.36. See also CARB 
Initial ACT/ZEAS/ZEP Comments at 11, 14-15 ((``[B]oth the South 
Coast and San Joaquin Valley air districts--which are home to over 
half of California's population--are classified as `extreme 
nonattainment areas for the 2008 eight-hour federal ozone 
standard.''') (``Indeed, California has the only extreme 
nonattainment regions for ozone in the country, and the San Joaquin 
Valley has the highest PM2.5 levels in the country.'').
    \129\ CARB Initial ACT/ZEAS/ZEP Comments at 14.
    \130\ Id. See also Environmental and Public Health Organizations 
at 31-33 (``California continues to experience some of the worst air 
quality in the nation. The South Coast and San Joaquin Valley Air 
Basins are in non-attainment of the national ambient air quality 
standards for PM2.5 and ozone. The South Coast has never 
met any of the federal ozone standards established pursuant to the 
Clean Air Act. . . California also faces compelling and 
extraordinary climate change impacts. With each passing year, the 
dangers of climate change and health-harming air pollution become 
more and more clear. Climate change worsens the effects of local 
pollutants: in addition to a severe increase in deadly wildfires and 
accompanying particulate pollution, increasing heat favors the 
formation of additional ozone, putting compliance with the ozone 
NAAQS further out of reach.''); SCAQMD at 1 (``The South Coast Air 
Basin continues to face extraordinary air pollution challenges . . . 
The area is nonattainment for fine particulates and classified 
`extreme' for ozone nonattainment. . . . To highlight one aspect of 
one of the regulations, the Zero Emission Airport Shuttle Bus 
regulation will promote the use of zero-emission airport grand 
transportation at California's commercial airports. The South Coast 
Air Basin happens to be home to five commercial airports. Among many 
necessary initiatives for attainment of the NAAQS, Southern 
California simply needs zero-emission airport transportation to 
succeed.'').
---------------------------------------------------------------------------

    EPA also received comments that California does not need the 
individual regulations in the waiver requests (as a factual matter) 
because there are other, more ``robust'' or ``logical'' existing or 
proposed standards and/or because these standards will not be effective 
in reducing criteria emissions. Regarding the 2018 HD Warranty 
Amendments, EPA received comment that California does not need such 
amendments because CARB's Heavy-Duty Inspection & Maintenance Program 
is more effective and because EPA's HD 2027 rule (``a 50-state 
harmonized approach'') would soon be finalized.\131\ EPA also received 
comment that California does not need the ACT Regulation because they 
may actually increase criteria emissions by making new trucks more 
expensive and slowing fleet turnover.\132\
---------------------------------------------------------------------------

    \131\ ATA at 5-6.
    \132\ AFPM at 2-3.
---------------------------------------------------------------------------

4. California Needs Its Standards To Meet Compelling and Extraordinary 
Conditions
    With respect to the need for California's standards to meet 
compelling and extraordinary conditions, EPA continues to apply the 
traditional interpretation of the waiver provision.\133\ Many of the 
adverse comments arguing against the traditional interpretation were 
also made in the SAFE 1 Reconsideration proceeding. EPA's response to 
applicable comments on these arguments remains the same as in the SAFE 
1 Reconsideration decision, and the Agency incorporates the relevant 
reasoning in that action here.\134\
---------------------------------------------------------------------------

    \133\ EPA's two notices for comment on CARB's waiver requests 
noted that the review under the second waiver prong would be done 
under this traditional interpretation. EPA has not reopened this 
interpretive issue by these notices nor by this final decision.
    \134\ 87 FR 14332, 14334, 14352-55, 14358-62 (March 14, 2022).
---------------------------------------------------------------------------

    As stated above and similar to the SAFE 1 Reconsideration decision, 
EPA continues to believe the best way to interpret this provision is to 
determine whether California continues to have compelling and 
extraordinary conditions giving rise to a need for its own new motor 
vehicle emission program.\135\ EPA believes this continues

[[Page 20702]]

to be true for section 209(b)(1)(B), which was at issue in the SAFE 1 
Reconsideration action.\136\ EPA finds that California has demonstrated 
that it needs its program to address compelling and extraordinary 
conditions, those arising from criteria pollution and separately, those 
arising from greenhouse gases. No comments have provided an analytical 
basis for undermining California's need.\137\
---------------------------------------------------------------------------

    \135\ To the extent comments contend that EPA's interpretation 
of the second waiver prong provides preferential treatment to 
California over other States, EPA notes that the review of CARB 
waiver requests is limited to the criteria set forth in section 209 
and that we need not engage in an Equal Sovereignty constitutional 
law analysis. (See SAFE 1 Reconsideration Decision at 14376). In any 
case, for the purposes of reviewing the second waiver prong, EPA 
incorporates the reasoning from the SAFE 1 Reconsideration Decision 
at 14360. As such, EPA evaluates CARB's waiver requests based solely 
on the criteria in section 209(b)(1) and does not consider factors 
outside of those statutory criteria, including constitutional 
claims. EPA continues to note that Congress struck a reasonable 
balance in authorizing two standards (EPA's and California's if 
certain criteria are met) but that that equal sovereignty principle 
simply does not fit in section 209. EPA further addresses the 
commenter's concerns relating to the Equal Sovereignty doctrine in 
the Other Issues section below. Similarly, to the extent that 
commenters contend that EPA's traditional interpretation raises 
questions of vast economic and political significance where Congress 
must speak clearly, EPA believes that this doctrine is inapplicable. 
That doctrine posits that in certain extraordinary cases, Congress 
should not be presumed to delegate its own authority over matters of 
vast economic and political significance to Federal agencies in the 
absence of clear statutory authorization. These concerns have no 
logical connection to provisions that preserve state authority in 
areas that fall within the police powers of states, such as the 
protection of the environment. Further, EPA has consistently 
explained that section 209(b)(1) of the Act limits the Agency's 
authority to deny California's requests for waivers to the three 
criteria contained therein and as such the Agency has consistently 
refrained from reviewing California's requests for waivers based on 
any other criteria. EPA acknowledges that California adopts its 
standards as a matter of law under its state police powers, that the 
Agency's task in reviewing waiver requests is limited to evaluating 
California's request according to the criteria in section 209(b). 
Furthermore, the language of section 209 provides clear statutory 
authorization for the waiver framework, and the history of section 
209(b) and (e) provide additional evidence that Congress intended 
for California to have great deference in designing its own vehicle 
program. MEMA I, 627 F.2d at 1111.
    \136\ EPA notes that if Congress had been concerned with only 
California's smog problems when it enacted section 209(b) in 1967 it 
would have limited California's ability to obtain a waiver to 
standards for only hydrocarbons and NOX, which are the 
known automotive pollutants that contribute to California's smog 
problem. But Congress was aware that California would most likely 
decide to regulate other non-smog forming pollutants. ``[T]he total 
program for control of automotive emissions is expected to include 
[in addition to hydrocarbons and oxides of nitrogen] carbon 
monoxide, lead and particulate matter.'' 123 Cong. Rec. 30951 
(November 2, 1967) (Remarks of Rep. Herlong). Further, Congress 
intended that California would serve as a pioneer and a laboratory 
for the nation in setting new motor vehicle emission standards and 
developing control technology, which extends to ZEVs, BEVs, FCVs and 
PHEVs. ``The waiver of preemption is for California's ``unique 
problems and pioneering efforts.'' S. Rep. No. 403, 90th Cong., 1st 
Sess. 33 (1967); 113 Cong. Rec. 30950, 32478 (``[T]he State will act 
as a testing agent for various types of controls and the country as 
a whole will be the beneficiary of this research.'') (Statement of 
Sen. Murphy). Thus, for example, in the 1990 Amendments Congress 
mandated California's LEV program, which includes the ZEV program, 
in its State Implementation Plan provision regarding fleet programs 
required for certain non-attainment areas relating to issuing 
credits for innovative and cleaner vehicles. Specifically, 
``standards established by the Administrator under this paragraph . 
. . shall conform as closely as possible to standards which are 
established for the State of California for ULEV and ZEV vehicles in 
the same class. Section 246(f)(4). (``[W]hen it amended the Act in 
1990, [Congress recognized] California's LEV program, including the 
ZEV mandate. See e.g., Act sections 241(4), 243(f), 246(f)(4).'' 
MVMA, 17 F.3d at 536.) See also 87 FR at 14360.
    \137\ EPA notes that CARB ACT Regulation is only regulating 
emissions from new motor vehicles and that such standards are the 
types preempted under section 209(a). Section 209(b) requires EPA to 
waive such standards unless one or more of the specified criteria 
are found. CARB's ACT Regulation is focused on emissions of air 
pollutants from this vehicle source and to EPA's knowledge is not 
designed to address a broader set of transportation and energy 
issues nor is the scope of the waiver criteria in section 209 
designed for such a broad and searching review.
---------------------------------------------------------------------------

    Although nothing in the statutory text limits California's program 
or the associated waivers to a certain category of air pollution 
problems, EPA notes that each of the regulations contained in the two 
waiver requests from CARB is clearly designed to address emissions of 
criteria pollutants and will have that effect, regardless of whether 
some also reduce greenhouse gases. As such, these standards are no 
different from all prior standards addressing criteria emissions that 
EPA has found to satisfy the section 209(b)(1)(B) inquiry. In any case, 
there is no statutory basis to suggest that GHG emissions should be 
treated any differently.
    Further, it is inappropriate for EPA to second-guess CARB's policy 
choices and objectives in adopting its heavy-duty vehicle and engine 
standards designed to achieve long term emission benefits for both 
criteria emissions and greenhouse gas emissions. EPA's longstanding 
practice, based on the statutory text, legislative history, and 
precedent, calls for deference to California in its approach to 
addressing the interconnected nature of air pollution within the state. 
Critically, EPA is not to engage in ``probing substantive review'' of 
waiver requests,\138\ but rather to ``afford California the broadest 
possible discretion in selecting the best means to protect the health 
of its citizens and the public welfare.'' \139\
---------------------------------------------------------------------------

    \138\ Ford Motor, 606 F.2d 1293, 1300 (D.C. Cir. 1979).
    \139\ MEMA II, 142 F.3d 449, 453 (D.C. Cir. 1998).
---------------------------------------------------------------------------

    As noted above, the term compelling and extraordinary conditions 
``does not refer to the levels of pollution directly.'' \140\ 
California continues to experience compelling and extraordinary 
conditions that cause it to need a separate motor vehicle emissions 
program. These include geographical and climatic conditions (like 
thermal inversions) that, when combined with large numbers and high 
concentrations of automobiles, create serious air pollution 
problems.\141\ For example, as stated in CARB's waiver request and 
additional written comment, California and particularly the South Coast 
and San Joaquin Valley Air Basins continue to experience some of the 
worst air quality in the nation and continue to be in nonattainment 
with several NAAQS.\142\ In the context of these serious and long-
lasting pollution challenges, California has demonstrated that every 
reduction in ozone precursor and particulate emissions is particularly 
critical.
---------------------------------------------------------------------------

    \140\ 49 FR 18887, 18890 (May 3, 1984).
    \141\ In response to commenters that believe that the 
traditional interpretation is simply a ``rubber-stamp[ ]'' because 
EPA has already once decided that California ``needs'' its own motor 
vehicle program, EPA notes that although California has yet to 
resolve its pollution problems, that does not mean it will never do 
so or that Congress could not aim for that goal. See 87 FR at 14336 
n.22. So long as those problems persist, however, EPA's affirmance 
of California's need for a separate vehicle program allows 
California to continue to serve as a ``laboratory'' for resolving 
its own pollution problems and those of the entire nation. See MEMA 
I, 627 F.2d at 1109-11.
    \142\ See, e.g., CARB Supplemental Comments at 5-6, n.36; CARB 
Initial ACT/ZEAS/ZEP Comments at 11, 14-15; SJVUAPCD at 2 (``Despite 
achieving significant emissions reductions through decades of 
implementing the most stringent stationary and mobile regulatory 
control program in the nation, significant additional reductions in 
nitrogen oxide (NOX) emissions are needed to attain the 
latest health-based National Ambient Air Quality Standards (NAAQS) 
for ozone and PM2.5.''); State of California et al at 12-
13 (``Sixteen of the 8-hour ozone nonattainment areas are located in 
California and the only two extreme nonattainment areas in the 
nation are located in the South Coast Air Basin and San Joaquin 
Valley of California. Indeed, for the South Coast Air Basin to meet 
the federal ozone standards, overall NOX emissions need 
to be reduced by 70 percent from today's levels by 2023, and 
approximately 80 percent by 2031.''); Environmental and Public 
Health Organizations at 32 (``California continues to experience 
some of the worst air quality in the nation. The South Coast and San 
Joaquin Valley Air Basins are in non-attainment of the national 
ambient air quality standards for PM2.5 and ozone. The 
South Coast has never met any of the federal ozone standards 
established pursuant to the Clean Air Act . . . [H]eavy-duty 
vehicles represent the largest source of NOX emissions 
reductions needed to attain the 2015 8-hour ozone National Ambient 
Air Quality Standards (NAAQS), and California's air quality 
regulations, like those at issue here, are central to the state's 
attainment strategy for the South Coast Air Basin.'').
---------------------------------------------------------------------------

    In addition, EPA did not receive any adverse comments suggesting 
that California no longer needs a separate motor vehicle emissions 
program to address the various conditions that lead to serious and 
unique air pollution problems in California. EPA did receive comment 
that contends that California does not have a need for its standards as 
only two areas in the State (the San Joaquin Valley and the South 
Coast)

[[Page 20703]]

have serious air quality issues. EPA believes this commenter misses the 
mark for several reasons. The commenter provided no legal rationale for 
limiting the ``compelling and extraordinary conditions'' to those 
conditions experienced by all of California. In addition, California is 
responsible, in part, for developing State Implementation Plan (SIP) 
measures to address nonattainment and maintenance and EPA sees no basis 
to deny a waiver for regulations designed at the state level and that 
address emission sources that move around the state. Nor has the 
commenter provided sufficient data or analysis to demonstrate that 
other areas of California do not need the motor vehicle standards 
program to address compelling and extraordinary conditions. Based on 
the record, EPA is unable to identify any change in circumstances or 
any evidence to undermine EPA's prior findings that California needs 
its motor vehicle emissions program to address compelling and 
extraordinary conditions. Therefore, using the traditional approach of 
reviewing the need for a separate California program to meet compelling 
and extraordinary conditions, EPA cannot deny any of the waiver 
requests.
    Further, EPA does not believe, to the extent that it is appropriate 
to examine the need for CARB's individual heavy-duty vehicle and engine 
standards to meet compelling and extraordinary conditions, that the 
opponents of the waiver requests have met their burden of proof that 
California does not need these standards. The record demonstrates that 
each regulation in the two waiver requests is designed to produce 
reductions in criteria emissions that continue to be a serious air 
quality concern in California, which is a result of its compelling and 
extraordinary conditions. While EPA believes that CARB has demonstrated 
the criteria emission reductions associated with its ACT, ZEAS, and ZEP 
Certification Regulations and therefore a need for such standards, EPA 
also believes that, to the extent such standards are designed to also 
address climate change conditions in California, such standards are 
needed to meet compelling and extraordinary conditions.\143\ EPA notes 
that the record contains evidence that global warming continues to pose 
an extraordinary threat to the economic well-being, public health, 
natural resources and environment in California. These adverse impacts 
include exacerbation of local air quality problems, severe wildfires, 
extreme drought, acidification threats to marine ecosystems as carbon 
dioxide is absorbed by the ocean along California's coastline, and a 
host of other impacts.\144\ EPA believes the same conditions and 
impacts assessed in the SAFE 1 Reconsideration Decision apply to this 
waiver decision and incorporates that analysis here.\145\
---------------------------------------------------------------------------

    \143\ 87 FR 14332, 14365-66 (March 14, 2022).
    \144\ California Supplemental ACT Comments at 16-17, California 
also noted that the ACT Regulation will ensure the development and 
commercialization of technology required to achieve further emission 
reductions to address climate changes and to attain national ambient 
air quality standards (NAAQS) in California.
    \145\ 87 FR 14332, 14334, 14352-55, 14358-62.
---------------------------------------------------------------------------

    Regarding comments received that the 2018 HD Warranty Amendments 
are not needed because EPA's HD 2027 rule and CARB's Heavy-Duty 
Inspection & Maintenance Program are or will be more effective, EPA 
notes that California is entitled to substantial deference in its 
policy choices regarding the best path to address its air pollution 
problems, including the choice to adopt or retain emission standards 
that overlap with previous California standards and EPA's 
standards.\146\ In the context of these arguments about effectiveness, 
it is important to note that under the statute, California's standards 
in the aggregate must be as protective as EPA's standards--there is no 
requirement that they be more protective. This reinforces the deference 
owed to California in its determination of whether it needs a 
particular configuration of standards as its program to address 
compelling and extraordinary conditions. In response to comments 
received that the specific regulations are not necessary (as a factual 
matter) because they may slow fleet turnover, EPA finds that these 
commenters have not met their burden of proof to demonstrate that such 
a result in fleet turnover will occur and that if it did occur, it 
would cause an increase in emissions. Commenters have also failed to 
demonstrate that California does not continue to need every reduction 
in criteria pollutant emissions it can obtain.\147\ As EPA continues to 
believe California has compelling and extraordinary conditions, it is 
appropriate for EPA to continue giving substantial deference to 
California's policy choices on how it chooses to protect public health 
and welfare and achieve its air quality objectives.
---------------------------------------------------------------------------

    \146\ See, e.g., 78 FR at 2129 (``The Commenter . . . relies on 
the existence of the federal GHG standards and the `deemed to 
comply' language to claim that there is no need for CARB's GHG 
standards . . . EPA believes that the commenter does not 
appropriately appreciate the role that Congress envisioned 
California to play as an innovative laboratory that may set 
standards that EPA may ultimately harmonize with or that California 
or EPA may otherwise accept compliance with the others emission 
program as compliance with their own.''). In addition, given that 
there are a variety of regulatory measures and levels of stringency 
that California may choose to address the durability of emission 
controls on vehicles and engines while in use, and the lack of 
evidence in the record that an inspection and maintenance program is 
more protective than a warranty regulation (or that both may be 
implemented at some point), EPA finds that opponents of the waiver 
have not met their burden of proof with evidence to support their 
policy preference on an inspection and maintenance program.
    \147\ CARB Supplemental Comments at 5-6 (``But AFPM provides no 
evidence that ACT will slow fleet turnover at all, let alone to the 
degree necessary to increase pollution. And none of these comments 
refutes CARB's conclusion that zero-emission vehicles placed into 
well-suited applications will be less expensive, over their 
lifetimes, than conventional ones, or explains why the requirement 
to sell a certain percentage of vehicles that will save owners or 
operators money would slow turnover to the (unspecified) extent 
required to increase emissions. Moreover, the recently passed 
Inflation Reduction Act includes numerous financial incentives that 
will decrease the cost of zero-emission heavy-duty vehicles, further 
undercutting the claim that the high costs of those vehicles will 
slow fleet turnover.'').
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5. Section 209(b)(1)(B) Conclusion
    As previously explained, EPA believes that the traditional 
interpretation of the section 209(b)(1)(B) criterion is the best 
reading of the statute.\148\ The traditional approach is for EPA to 
evaluate California's need for a separate motor vehicle emission 
program to meet compelling and extraordinary conditions. The issue of 
whether any particular standard is needed is not the inquiry directed 
under section 209(b)(1)(B). Applying the traditional approach of 
assessing California's need for a separate motor vehicle emissions 
program to address compelling and extraordinary conditions, with the 
reasoning noted above and with due deference to California, EPA cannot 
deny the respective waiver requests. CARB has repeatedly demonstrated 
the need for its motor vehicle program to address compelling and 
extraordinary conditions in California and opponents of the waiver 
requests have not demonstrated that California does not need its state 
standards to meet compelling and extraordinary conditions. Therefore, I 
determine that I cannot deny either of the waiver requests under 
section 209(b)(1)(B).
---------------------------------------------------------------------------

    \148\ 87 FR 14332, 14334, 14352-55, 14358-62 (March 14, 2022).
---------------------------------------------------------------------------

    In addition, although EPA does not believe an interpretation that 
requires a demonstrated need for a specific standard is appropriate, 
EPA's review of the complete record indicates that opponents of the 
waiver requests have not met the burden of proof necessary to 
demonstrate that California does not

[[Page 20704]]

need its ACT Regulation, ZEAS Regulation, ZEP Certification Regulation, 
and the 2018 HD Warranty Amendments when assessed individually.

D. Third Waiver Criterion: Are California's Regulations Consistent With 
Section 202(a) of the Clean Air Act?

    Under section 209(b)(1)(C), EPA must grant California's waiver 
request unless the Agency finds that California's standards and 
accompanying enforcement procedures are not consistent with section 
202(a) of the Act. EPA's longstanding approach to this third waiver 
criterion is limited to reviewing California's feasibility assessment 
and evaluating whether the opponents of the waiver have met their 
burden of establishing: (1) That California's standards are 
technologically infeasible, or (2) that California's test procedures 
are inconsistent with the Federal test procedures. As with the other 
two criteria, our review is narrow and deferential to California.
    Each of CARB's two waiver requests contained a demonstration that 
its standards in each request were based on technologies currently 
available or reasonably projected to be available in the lead time 
given and giving consideration to costs. As such, CARB argued that its 
standards did not create any issues regarding the consistency with 
section 202(a) requirements. CARB's waiver requests included their 
state rulemaking records for each standard, including CARB's detailed 
responses to any issues raised regarding technological feasibility.
    Commenters opposed to the waiver did not argue that the 2018 HD 
Warranty Amendments were not technologically feasible or that any of 
the waiver requests presented inconsistent test procedures. Further, 
while EPA received comment to suggest that CARB's ACT Regulation and 
ZEAS Regulation were not appropriate policy choices, to the extent 
commenters raised feasibility issues regarding the ACT Regulation and 
ZEAS Regulation, such commenters either failed to meet the burden of 
proof to demonstrate infeasibility in light of California's 
demonstration of feasibility or such comments fell beyond the scope of 
EPA's technological feasibility review. As explained in detail below, 
based on our examination of the record, EPA finds that the commenters 
have failed to meet their burden of proof as to the third prong.
    In addition, certain commenters asserted that, even if the 
standards were actually feasible, EPA should nonetheless deny the 
waiver based on the lead time and stability requirements for certain 
federal heavy-duty vehicle standards found in section 202(a)(3)(C) of 
the Act. These commenters claim that because the third waiver criterion 
requires California's standards to be ``consistent with'' section 
202(a), California must necessarily comply with section 202(a)(3)(C), 
as that is a sub-provision of 202(a). This argument is inconsistent 
with the plain text of the statute. Congress used the phrase 
``consistent with,'' not ``compliant with.'' The statutory phrase 
``consistent with'' indicates that California's standards should be 
congruent and compatible with section 202(a), which requires that 
Federal standards provide adequate lead time and consider cost. Thus, 
EPA interprets this prong of the waiver analysis to require 
California's standards to be feasible. The statute does not, however, 
obligate California to comply with provisions of section 202(a) 
directed solely at the development and design of federal standards. 
This would make little sense given Congress' intent to set up two motor 
vehicle programs in title II--with California's program dedicated to 
address the state's air quality problems and serve as a testing ground 
for motor vehicle emissions policy designs and technologies. If exactly 
the same requirements and conditions apply to both the Federal and the 
California programs, then they would necessarily overlap extensively if 
not completely, and California could not serve as the testing ground 
that Congress intended. Further, applying some of the language in 
202(a) to California standards would directly conflict with the text 
and intent of the waiver provisions in section 209. For those reasons, 
for over five decades, EPA has consistently granted waivers to 
California without assessing compliance with section 202(a)(3)(C), with 
a single exception (in 1994).
    The commenters' argument regarding section 202(a)(3)(C) fails for a 
number of additional reasons. That provision, which requires at least 
four years of lead time and three years of stability, is a companion to 
a specific Federal standard-setting mandate, section 202(a)(3)(A). That 
mandate is for EPA to promulgate certain heavy-duty criteria pollutant 
standards that reflect the greatest degree of emission reduction 
achievable giving appropriate consideration to a number of factors. 
Congress paired the mandated stringency with the lead time and 
stability requirements. By contrast, California may adopt state 
standards that are ``in the aggregate'' at least as protective as the 
Federal standards. As such, California is also not obligated to comply 
with either the maximum stringency requirements or the companion lead 
time provision in section 202(a)(3)(C) to provide the four years of 
lead time and three years of stability that Congress determined was 
needed for the federal market.
    This plain text reading is well-supported by the history and 
purpose of the Act and is also consistent with administrative and 
judicial precedents. Commenters rely heavily on EPA's single contrary 
decision in a 1994 medium-duty vehicle waiver (1994 MDV waiver) even 
though the interpretation contained in that decision was inconsistent 
with EPA's historical practice in waiver decisions both before and 
after 1994.\149\ Indeed, by 2012 EPA had indicated that it did not 
believe section 202(a)(3)(C) applied to California's heavy-duty engines 
and vehicle standards and issued a decision consistent with its 
historical practice.\150\ We acknowledge that the 1994 MDV waiver took 
a different position on this issue than we do today, but as explained 
below, we believe that our practice, both before and after the 1994 MDV 
waiver, represents the best understanding of the statute. Importantly, 
the interpretation in the 1994 MDV waiver is inconsistent with the 
plain text of the statute, as discussed below. In this action, EPA is 
therefore taking an approach similar to its approach both before and 
after the 1994 MDV waiver, and different from the 1994 MDV waiver.\151\ 
EPA believes that its historical practice and application of the 
``consistency with section 202(a)'' language is permissible and is the 
best interpretation of the statute based on all the relevant factors. 
Additionally, commenters also mistakenly rely on the D.C. Circuit's 
opinion in American Motors Corp. v. Blum, 603 F.2d 978 (D.C. Cir. 1979) 
(Blum). Blum addressed a different provision of the CAA and is 
distinguishable from the instant waivers.
---------------------------------------------------------------------------

    \149\ See 77 FR 9239, 9249 (February 16, 2012); 46 FR 22302, 
22304 (1981).
    \150\ 77 FR at 9239. Moreover, in October 2000, EPA informed 
California of the intent to ``conduct a new evaluation of . . . 
arguments . . . in regard to whether the lead time provisions of the 
Act apply to California. . . . [As well as] evaluate the 
applicability of the stability requirement in Section 
202(a)(3)(C).'' Letter from Margo Oge, Director, Office of 
Transportation and Air Quality, to Michael Kenny, CARB Executive 
Officer (Oct. 24, 2000).
    \151\ FCC v. Fox Television Stations, Inc., 556 U.S. 502 (2009).
---------------------------------------------------------------------------

    The balance of this section begins with a discussion of EPA's 
longstanding approach to the third waiver criterion and relevant case 
law (III.D.1). We then

[[Page 20705]]

summarize the positions of CARB and the commenters (III.D.2 and III.D.3 
respectively). Subsequently, we evaluate the waiver requests under the 
historical approach, finding that those opposed to the waiver have 
failed to meet their burden of proof (III.D.4). We then explain why, 
contrary to the commenters' arguments, the statutory lead time 
requirements in section 202(a)(3)(C) do not apply to California 
(III.D.5). A brief conclusion follows (III.D.6).
1. Historical Interpretation of Section 209(b)(1)(C)
    Under section 209(b)(1)(C), EPA must grant California's waiver 
request unless the Agency finds that California standards and 
accompanying enforcement procedures are ``not consistent'' with section 
202(a) of the Act.\152\ Section 202(a)(1) grants EPA authority to 
regulate motor vehicle emissions generally and the accompanying section 
202(a)(2) specifies that those standards are to ``take effect after 
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.'' \153\ Thus, no specific lead time requirement applies to 
standards promulgated under section 202(a)(1). EPA has long limited its 
evaluation of whether California's standards are consistent with 
section 202(a) to determining if: (1) There is inadequate lead time to 
permit the development of the necessary technology giving appropriate 
consideration to the cost of compliance within that time period; \154\ 
or whether (2) California and Federal test procedures are incompatible 
so that a single vehicle could not be subjected to both tests.\155\ EPA 
has also explained that ``the import of section 209(b) is not that 
California and Federal standards be identical, but that the 
Administrator not grant a waiver of Federal preemption where compliance 
with the California standards is not technologically feasible within 
available lead time.'' \156\ Further, EPA's review is limited to the 
record on feasibility of the technology. Therefore, EPA's review is 
narrow and does not extend to whether the regulations under review are 
the most effective or whether the technology incentivized by 
California's regulations are the best policy choice or better choices 
should be evaluated. The Administrator has thus long explained that 
``questions concerning the effectiveness of the available technology 
are also within the category outside my permissible scope of inquiry,'' 
under section 209(b)(1)(C).\157\ California's accompanying enforcement 
procedures would also be inconsistent with section 202(a) if the 
Federal and California test procedures conflicted, i.e., if 
manufacturers would be unable to meet both the California and Federal 
test requirements with the same test vehicle.
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    \152\ EPA must grant a waiver request unless it finds that there 
is: ``[i]nadequate time to permit the development of the necessary 
technology given the cost of compliance within that time period.'' 
H. Rep. No. 728, 90th Cong., 1st Sess. 21 (1967). ``That California 
standards are not consistent with the intent of section 202(a) of 
the Act, including economic practicability and technological 
feasibility.'' S. Rep. No. 403, 90th Cong. 1st Sess. 32 (1967).
    \153\ CAA section 202(a)(2); H.R. Rep. No. 95-294, 95th Cong., 
1st Sess. 301 (1977) (``Also preemption could not be waived if 
California standards and enforcement procedures were found not to be 
`consistent with section 202(a)' (relating to the technological 
feasibility of complying with these standards).'').
    \154\ Previous waivers of Federal preemption have thus stated 
that California's standards are not consistent with section 202(a) 
if there is inadequate lead time to permit the development of 
technology necessary to meet those requirements, giving appropriate 
consideration to the cost of compliance within that time. See e.g., 
36 FR 8172 (April 30, 1971) (HD MY 1972 and later MY); 38 FR 30136 
(Nov. 1, 1973); 40 FR 23102, 23105 (May 28, 1975) (extending waiver 
of April 30, 1971, to MY 1975 HD standards); 40 FR 30311 (July 18, 
1975); 70 FR 50322 (August 26, 2005) (2007 California Heavy-Duty 
Diesel Engine Standards); 71 FR 335 (Jan. 4, 2006) (2007 Engine 
Manufacturers Diagnostic standards); 77 FR 9239 (February 16, 2012) 
(HD Truck Idling Requirements); 79 FR 46256 (Aug. 7, 2014) (the 
first HD GHG emissions standard waiver, relating to certain new 2011 
and subsequent model year tractor-trailers); 81 FR 95982 (December 
29, 2016) (the second HD GHG emissions standard waiver, relating to 
CARB's ``Phase I'' regulation for 2014 and subsequent model year 
tractor-trailers); 82 FR 4867 (January 17, 2017) (On-Highway Heavy-
Duty Vehicle In-Use Compliance Program).
    \155\ To be consistent, the California certification procedures 
need not be identical to the Federal certification procedures. 
California procedures would be inconsistent, however, if 
manufacturers would be unable to meet the state and the Federal 
requirements with the same test vehicle in the course of the same 
test. See, e.g., 43 FR 32182 (July 25, 1978).
    \156\ 46 FR 22032, 22034-35 (April 15, 1981).
    \157\ 41 FR 44209, 44210 (October 7, 1976); 47 FR 7306, 7310 
(February 18, 1982) (``I am not empowered under the Act to consider 
the effectiveness of California's regulations, since Congress 
intended that California should be the judge of `the best means to 
protect the health of its citizens and the public welfare.''' 
(Internal citations omitted)).
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    In determining whether California standards are inconsistent with 
section 202(a), EPA makes a finding as to whether there is inadequate 
lead time to permit the development of technology that is necessary to 
meet the standards for which a waiver is sought. For this finding, EPA 
considers whether adequate technology is presently available or already 
in existence and in-use. If technology is not presently available, EPA 
will consider whether California has provided adequate lead time for 
the development and application of necessary technology prior to the 
effective date of the standards for which a waiver is being sought. 
Additionally, the D.C. Circuit has held that ``[i]n the waiver context, 
section 202(a) relates in relevant part to technological feasibility 
and to federal certification requirements. The technological 
feasibility component of section 202(a) obligates California to allow 
sufficient lead time to permit manufacturers to develop and apply the 
necessary technology. The federal certification component ensures that 
the Federal and California test procedures do not impose inconsistent 
certification requirements. Neither the court nor the agency has ever 
interpreted compliance with section 202(a) to require more.'' \158\
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    \158\ MEMA II, 142 F.3d 449, 463 (Emphasis added) (internal 
citations omitted).
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    Regarding the technology costs portion of the technology 
feasibility analysis, when cost is at issue EPA evaluates the cost of 
developing and implementing control technology in the actual time 
provided by the applicable California regulations. The D.C. Circuit has 
stated that compliance cost ``relates to the timing of a particular 
emission control regulation.'' \159\ In MEMA I, the court addressed the 
cost of compliance issue at some length in reviewing a waiver decision. 
According to the court:
---------------------------------------------------------------------------

    \159\ MEMA v. EPA, 637 F.2d. 1118 (D.C. Cir. 1979).

    Section 202's cost of compliance concern, juxtaposed as it is 
with the requirement that the Administrator provide the requisite 
lead time to allow technological developments, refers to the 
economic costs of motor vehicle emission standards and accompanying 
enforcement procedures. See S. Rep. No. 192, 89th Cong., 1st Sess. 
5-8 (1965); H.R. Rep. No. 728 90th Cong., 1st Sess. 23 (1967), 
reprinted in U.S. Code Cong. & Admin. News 1967, p. 1938. It relates 
to the timing of a particular emission control regulation rather 
than to its social implications. Congress wanted to avoid undue 
economic disruption in the automotive manufacturing industry and 
also sought to avoid doubling or tripling the cost of motor vehicles 
to purchasers. It, therefore, requires that the emission control 
regulations be technologically feasible within economic parameters. 
Therein lies the intent of the cost of compliance requirement 
(emphasis added).\160\
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    \160\ MEMA I 627 F.2d at 1118 (emphasis added). See also id. at 
1114, n.40 (``[T]he `cost of compliance' criterion relates to the 
timing of standards and procedures.'').

    Previous waiver decisions are fully consistent with MEMA I, which 
indicates that the cost of compliance must reach a very high level 
before the EPA can deny a waiver. Therefore, past decisions indicate 
that the costs must be

[[Page 20706]]

excessive to find that California's standards are infeasible and 
therefore inconsistent with section 202(a).\161\
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    \161\ See, e.g., 47 FR 7306, 7309 (Feb. 18, 1982); 43 FR 25735 
(Jun. 14, 1978); 46 FR 26371, 26373 (May 12, 1981).
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    Regarding the burden of proof under the third prong, EPA has 
previously stated that the third prong's feasibility determination is 
limited to: (1) Whether those opposed to the waiver have met their 
burden of establishing that California's standards are technologically 
infeasible, including whether they include adequate lead time or (2) 
that California's test procedures impose requirements inconsistent with 
the Federal test procedure. Additionally, the burden of proof regarding 
the cost component of feasibility also falls upon the waiver opponents.
    The scope of EPA's review under this criterion is also narrow.\162\ 
This is consistent with the motivation behind section 209(b) to foster 
California's role as a laboratory for motor vehicle emission control, 
in order ``to continue the national benefits that might flow from 
allowing California to continue to act as a pioneer in this field.'' 
\163\ According to the D.C. Circuit, ``The history of congressional 
consideration of the California waiver provision, from its original 
enactment up through 1977, indicates that Congress intended the State 
to continue and expand its pioneering efforts at adopting and enforcing 
motor vehicle emission standards different from and in large measure 
more advanced than the corresponding federal program; in short, to act 
as a kind of laboratory for innovation.'' \164\ EPA has thus long 
believed that California must be given substantial deference when 
adopting motor vehicle emission standards because such action may 
require new or improved technology to meet challenging levels of 
compliance. Over 50 years ago, EPA's Administrator discussed this 
deference in an early waiver decision that approved a waiver request 
for California:
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    \162\ 41 FR 44208, 44210 (October 7, 1976)(``While section 
209(b) requires consideration of whether the adoption of standards 
by California is consistent with section 202(a), nevertheless [the 
Administrator's] discretion in determining whether to deny the 
waiver is considerably narrower than [his] discretion to act or not 
to act in the context promulgating Federal standards under section 
202(a).'').
    \163\ 40 FR 23102, 23103 (May 28, 1975) (waiver decision citing 
views of Congressman Moss and Senator Murphy).
    \164\ MEMA I, 627 F.2d 1095, 1110.

    There is a well-established pattern that emission control 
technology have been phased in through use in California before 
their use nationwide. This pattern grew out of early recognition 
that auto caused air pollution problems are unusually serious in 
California. In response to the need to control auto pollution, 
California led the nation in development of regulations to require 
control of emissions. This unique leadership was recognized by 
Congress in enacting federal air pollution legislation both in 1967 
and 1970 by providing a special provision to permit California to 
continue to impose more stringent emission control requirements than 
applicable to the rest of the nation.\165\
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    \165\ 38 FR 10317, 10324 (April 26, 1973) (``[T]he experience of 
Federal and State officials as well as the industry itself in 
meeting such standards for California will facilitate an orderly 
implementation of the more stringent, catalyst-forcing standards for 
California.'').

    In a subsequent waiver decision approving a waiver request for 
---------------------------------------------------------------------------
California, the Administrator stated:

    It is worth noting . . . I would feel constrained to approve a 
California approach to the problem which I might also feel unable to 
adopt at the federal level in my own capacity as a regulator. The 
whole approach of the Clean Air Act is to force the development of 
new types of emission control technology where that is needed by 
compelling the industry to ``catch up'' to some degree with newly 
promulgated standards. Such an approach * * * may be attended with 
costs, in the shape of a reduced product offering, or price or fuel 
economy penalties, and by risks that a wider number of vehicle 
classes may not be able to complete their development work in time. 
Since a balancing of these risks and costs against the potential 
benefits from reduced emissions is a central policy decision for any 
regulatory agency under the statutory scheme outlined above, I 
believe I am required to give very substantial deference to 
California's judgments on this score.'' \166\
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    \166\ 40 FR 23102, 23104 (May 28, 1975). See also 78 FR 2111, 
2115-16 (Jan. 9, 2013); 79 FR 46256, 46258 (Aug. 7, 2014); 81 FR 
95982, 95984 (Dec. 29, 2016).

    In keeping with this deferential posture, as noted earlier, EPA's 
historical interpretation of section 209(b) has also been to assess 
whether California's program of motor vehicle emission standards as a 
whole provides for adequate lead time consistent with section 202(a). 
This is because EPA's long-standing interpretation is that the phrase 
``State standards'' in section 209(b)(1) means the entire California 
new motor vehicle emissions program.\167\ Similar to the second waiver 
criterion, EPA has also historically viewed the third waiver 
criterion's feasibility analysis as a whole-program assessment, i.e., 
one that ensures manufacturers have sufficient lead time to comply with 
the program's standards as a whole, accounting for the interactions 
between technologies necessary to meet both new and existing standards, 
and any interactions between those technologies that would affect 
feasibility.\168\ EPA's assessment under section 209(b)(1)(C) is thus 
not in practice a standard-by-standard review. Rather it involves an 
analysis of feasibility that builds on prior analyses of feasibility 
and any impacts of the new standards on the feasibility of the 
remainder of the program.\169\
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    \167\ 74 FR 32744, 32749 (July 8, 2009); 70 FR 50322 (Aug. 26, 
2005); 77 FR 9239 (Feb. 16, 2012); 78 FR 2112, 2123 (Jan. 9, 2013).
    \168\ As a practical matter, EPA's consideration of the third 
waiver prong, like the first waiver prong, does not necessitate in 
every case that EPA re-review previously-approved aspects of 
California's program--for example, where it is evident that new 
standards will not interact with existing ones. But where a new 
waiver request might affect one of EPA's previous assessments under 
any of the waiver criteria, EPA reviews the program as a whole--or 
any aspect necessary to confirm alignment with the statutory text. 
87 FR at 14361 and n.266.
    \169\ Id. at 14361. The feasibility assessment conducted for a 
new waiver request focuses on the standards in that request but 
builds on the previous feasibility assessments made for the 
standards already in the program and assesses any new feasibility 
risks created by the interaction between the standards in the 
petition and the existing standards.
---------------------------------------------------------------------------

    EPA has also long recognized that the laboratory role and nature of 
California's standards may result in California amending or revising 
requirements after the grant of a waiver, or otherwise adjusting the 
implementation of the waived standards as circumstances dictate.\170\ 
EPA's waiver practice when California amends a previously waived 
standard or accompanying enforcement procedure is to consider whether 
such an amendment is within the scope of a previously granted waiver or 
requires a new waiver. If EPA considers the amendment as within the 
scope of a prior waived standard, then the Agency reviews the amendment 
to determine that it does not undermine California's determination that 
its standards in the aggregate are as protective of public health and 
welfare as applicable Federal standards, does not affect the 
regulation's consistency with section 202(a), and raises no new issues 
affecting EPA's previous waiver decisions.
---------------------------------------------------------------------------

    \170\ See e.g., 68 FR 19811 (April 22, 2003), 71 FR 78190 
(December 28, 2006), 75 FR 44948 (July 30, 2006).
---------------------------------------------------------------------------

    Decisions from the D.C. Circuit provide guidance regarding the lead 
time requirements of section 202(a). Section 202(a)(2) states that 
``any regulation prescribed under paragraph (1) of this subsection (and 
any revision thereof) shall take effect after such period as the 
Administrator finds necessary to permit the development and application 
of the requisite technology, giving appropriate

[[Page 20707]]

consideration to the cost of compliance within such period.'' For 
example, in Natural Resources Defense Council v. EPA (NRDC), the court 
reviewed claims that EPA's PM standards for diesel cars and light 
trucks were both too stringent and not stringent enough. In upholding 
---------------------------------------------------------------------------
the EPA standards, the court concluded:

    Given this time frame [a 1980 decision on 1985 model year 
standards]; we feel that there is substantial room for deference to 
the EPA's expertise in projecting the likely course of development. 
The essential question in this case is the pace of that development, 
and absent a revolution in the study of industry, defense of such a 
projection can never possess the inescapable logic of a mathematical 
deduction. We think that the EPA will have demonstrated the 
reasonableness of its basis for projection if it answers any 
theoretical objections to the [projected control technology], 
identifies the major steps necessary in refinement of the 
technology, and offers plausible reasons for believing that each of 
those steps can be completed in the time available.\171\
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    \171\ NRDC, 655 F.2d 318, 331 (D.C. Cir. 1981).

    Another key case addressing the lead time requirements of section 
202(a) is International Harvester v. Ruckelshaus (International 
Harvester). In International Harvester, the court reviewed EPA's 
decision to deny applications by several automobile and truck 
manufacturers for a one-year suspension of the 1975 emission standards 
for light-duty vehicles. In the suspension proceeding, the 
manufacturers presented data which, on its face, showed little chance 
of compliance with the 1975 standards, but which, at the same time, 
contained many uncertainties and inconsistencies regarding test 
procedures and parameters. In a May 1972 decision, the Administrator 
applied an EPA methodology to the submitted data, and concluded that 
``compliance with the 1975 standards by application of present 
technology can probably be achieved,'' and so denied the suspension 
applications.\172\ In reviewing the Administrator's decision, the court 
found that the applicants had the burden of providing data showing that 
they could not comply with the standards, and if they did, then EPA had 
the burden of demonstrating that the methodology it used to predict 
compliance was sufficiently reliable to permit a finding of 
technological feasibility. In that case, EPA failed to meet this 
burden.
---------------------------------------------------------------------------

    \172\ International Harvester v. Ruckelshaus, 478 F 2d. 615, 626 
(D.C. Cir. 1979).
---------------------------------------------------------------------------

    In NRDC the court pointed out that the court in International 
Harvester ``probed deeply into the reliability of EPA's methodology'' 
because of the relatively short amount of lead time involved (a May 
1972 decision regarding 1975 MY vehicles, which could be produced 
starting in early 1974), and because ``the hardship resulting if a 
suspension were mistakenly denied outweigh[s] the risk of a suspension 
needlessly granted.'' \173\ The NRDC court compared the suspension 
proceedings with the circumstances concerning the diesel standards 
before it: ``The present case is quite different; `the base hour' for 
commencement of production is relatively distant, and until that time 
the probable effect of a relaxation of the standard would be to 
mitigate the consequences of any strictness in the final rule, not to 
create new hardships.'' \174\ The NRDC court further noted that 
International Harvester did not involve EPA's predictions of future 
technological advances, but an evaluation of presently available 
technology.
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    \173\ NRDC, 655 F.2d 318, 330.
    \174\ Id. The ``hardships'' referred to are hardships that would 
be created for manufacturers able to comply with the more stringent 
standards being relaxed late in the process.
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2. CARB's Discussion of the Regulations' Consistency With Section 
202(a) in the Waiver Requests
    Each of CARB's waiver requests demonstrated that its standards were 
based on technologies currently available or reasonably projected to be 
available in the lead time provided under each regulation, taking into 
consideration costs and other factors. As such, CARB argued that its 
standards did not create any issues regarding consistency with section 
202(a) requirements. CARB's waiver requests included the state 
rulemaking records for each standard, including CARB's response to any 
issues raised regarding technological feasibility. In this section 
III.D.2, we present CARB's arguments for each of its waiver requests in 
turn. In the following section III.D.3, we present the commenters 
arguments. EPA has reviewed the information submitted to the record of 
this proceeding to determine whether the parties opposing the waiver 
requests have met their burden to demonstrate that the respective 
standards (and accompanying enforcement procedures) are not consistent 
with section 202(a). As explained in subsection III.D.4 below, EPA has 
evaluated each of the waiver requests under the test historically used 
and is concluding that the opponents of the waiver requests have not 
met the burden of proof regarding the third waiver prong. EPA also 
discusses, in subsection III.D.5, why, contrary to the commenters' 
arguments, the statutory lead time requirements in section 202(a)(3)(C) 
do not apply to California.
a. 2018 HD Warranty Amendments
    CARB's waiver request noted that the elements of the 2018 HD 
Warranty Amendments that lengthen the warranty periods present no 
issues regarding technical feasibility or lead time. At the outset, 
CARB noted that although manufacturers are incentivized to produce and 
use more durable emission related components and systems in 2022 and 
beyond, the manufacturers are not compelled to do so. Because 
manufacturers may elect to use their existing components to comply with 
the regulations, CARB contended that EPA's prior findings of adequate 
technical feasibility and lead time found within EPA's waiver for 
California's 2007 and later model years remains applicable and 
dispositive. CARB also noted that no commenters raised objections 
regarding the feasibility and lead time of the extended emission 
warranty periods during its rulemaking. CARB noted similar findings 
regarding the new minimum allowable maintenance schedules. CARB also 
noted its belief that it appropriately considered the costs of the 2018 
HD Warranty Amendments and that it is not aware of any test procedure 
consistency issues.\175\
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    \175\ 2018 HD Warranty Amendments Support Document at 20-23.
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b. ACT, ZEAS, and ZEP Certification Regulations
    CARB's ACT Regulation waiver request provided information 
pertaining to consistency with section 202(a)'s feasibility 
requirements for each of the three regulations covered by the request. 
CARB noted that the ACT Regulation's requirements that new 2024 MY 
medium- and heavy-duty ZEVs be produced and delivered for sale to 
ultimate purchasers in California are consistent with section 202(a) 
because the required technology already exists.\176\ CARB's waiver 
request also

[[Page 20708]]

noted that the ACT Regulation implements the ZEV sales requirement 
through a credit and deficit mechanism, whereby manufacturers' deficits 
are generated commencing with the 2024 model year based, in part, on 
their annual sales of onroad vehicles with gross vehicle weight ratings 
(GVWRs) exceeding 8,501 pounds produced and delivered for sale in 
California. Manufacturers may earn credits by producing and delivering 
for sale, to ultimate consumers in California, certain types of ZEV 
vehicles, and subsequently there is a banking and trading system.\177\
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    \176\ ACT/ZEAS/ZEP Waiver Support Document at 31-32 (``As 
described in the ACT regulation's rulemaking record, medium- and 
heavy-duty ZEVs are currently commercially available . . . This 
includes vehicles from companies such as BYD, Motiv, Phoenix 
Motorcars, XOS, and others. Traditional manufacturers of heavy-duty 
vehicles, including Freightliner, Kenworth, Peterbilt, and Volvo, 
are currently demonstrating heavy-duty ZEVs in California, with the 
intent to launch commercial products by 2024. 15 manufacturers are 
offering more than 50 different ZEV truck and bus configurations, 
other than transit buses, from Class 3 through Class 8 through the 
Hybrid and Zero-Emission Truck and Bus Voucher Incentive Program 
(HVIP). HVIP has provided funding for 2,456 zero-emission trucks and 
buses and 2,593 hybrid trucks since 2010 to support the long-term 
transition to zero-emission vehicles in the heavy-duty market. These 
commercially available zero-emission trucks and buses cover a wide 
variety of vocations and duty cycles; some vehicles available today 
include delivery vans, school buses, refuse trucks, cutaway 
shuttles, terminal tractors, and passenger vans.'').
    \177\ Id. at 7-10
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    Similarly, regarding the ZEAS Regulation, CARB noted that the 
technology needed to produce zero-emission airport shuttle vehicles 
currently exists.\178\ Finally, CARB also noted that the ZEP 
Certification Regulation, requiring manufacturers to conduct energy-
capacity testing for batteries used in zero-emission powertrains, 
presents no issues of technical feasibility because the specified test 
procedure only requires use of commercially available test 
equipment.\179\
---------------------------------------------------------------------------

    \178\ Id. at 33.
    \179\ Id. at 34-36.
---------------------------------------------------------------------------

    In addition to showing that the required technology is already 
commercially available, CARB noted that it appropriately considered the 
cost of each of the regulations, including the incremental capital 
costs as well as total costs of ownership (TCO) to potential vehicle 
owners.\180\ CARB noted that its Staff Report for the ACT Regulation 
included an estimate that the average incremental vehicle price for 
certain new ZEVs would be 30 percent to 60 percent higher than a 
comparable combustion-powered vehicle in certain years, with costs for 
these vehicles declining over time. Further, CARB noted that it had 
evaluated the TCO for purchasing an ACT compliant vehicle and all other 
related costs including fuel, maintenance, Low Carbon Fuel Standard 
revenue, and infrastructure, and noted that ZEVs in appropriate duty 
cycles can see a positive TCO by 2024 or sooner and reported similar 
TCO positive results for ZEAS by 2028.\181\ CARB also noted that 
neither the ACT, ZEAS, nor ZEP Certification Regulations present any 
issues of test procedure inconsistency because there are no analogous 
Federal requirements and, as such, engines manufacturers are not 
precluded from complying with the California and Federal test 
requirements with one test engine or vehicle.\182\
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    \180\ Id. at 36-38 (ACT), at 38-39 (ZEAS), and 39-40.
    \181\ Id.
    \182\ Id. at 39.
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3. Comments on Section 209(b)(1)(C)
    EPA received a range of comments on each of CARB's regulations 
relating to the third criteria. Regarding the ACT Regulation, EPA 
received a comment that stated that the applicable technological 
feasibility criteria to apply is found in section 202(a)(3)(A).\183\ 
This commenter maintains that CARB must demonstrate that the ACT 
standards ``are achievable through reasonably available technology, and 
must similarly consider related costs, energy, and safety factors'' and 
that CARB cannot meet this obligation. This commenter notes two 
separate studies regarding the current availability of electric and 
hydrogen fuel cell medium and heavy-duty trucks, and that one of the 
studies noted that electric trucks using present lithium battery 
technology would need levels of energy density and battery storage 
capacity to support a daily ranger of 600 miles at level that would 
weigh 6300 kg and cost approximately $180,000. This commenter maintains 
that CARB did not consider several factors including charging networks 
as well as safety issues and legal restrictions on commercial activity 
at rest stops. The commenter maintains that because these factors were 
not considered by CARB then it does not meet the requirements of 
section 202(a)(3)(A).\184\ EPA also received supplemental comment from 
CARB that was submitted in response to comments submitted in opposition 
to the waiver for the ACT Regulation. CARB noted that several comments 
fail to satisfy opponents' burden of proof because they misunderstand 
the necessary showing or make no showing at all.\185\ CARB also 
recognized the challenges to the technical feasibility of the ACT 
Regulation raised by one commenter but noted that no commenter has 
disputed CARB's evidence that the technology need to comply with the 
ACT Regulation already exists.\186\ In addition, CARB responded to 
comments regarding ZEV constraints associated with operating ranges and 
performance characteristics.\187\ Finally, CARB noted several 
commenters' assertions that CARB failed to account for and accurately 
assess a number of different costs associated with the ACT Regulation 
(e.g., costs of manufacturing and maintaining ZEVs, battery replacement 
costs, reduced operational hours due to needs to recharge, etc.) and 
pointed to its rulemaking record and submissions to EPA that address 
such claims. And in any case CARB maintained that these commenters have 
not introduced evidence that establishes that the compliance costs as 
so excessive as to make the standards infeasible.\188\
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    \183\ Valero at 4. This commenter does not discuss the phase 
``greatest degree of emission reduction achievable through 
application of technology'' in 202(a)(3)(A)(i) and whether and how 
it is related to its cited language regarding the consideration to 
``cost, energy, and safety factors.''
    \184\ Id. at 4-6.
    \185\ CARB Supplemental Comments at 11. CARB noted both EMA and 
WSPA comments that do not provide any elaboration of why the lead 
time provided is not reasonable. ``[S]ection 209(b) does not give 
[the Administrator] the latitude to review procedures at the State 
level, and the EPA hearing is not the proper forum in which to raise 
these objections. Similarly, objections pertaining to the wisdom of 
California's judgment on various public policy matters are beyond 
the [Administrator's] scope of inquiry.'' 43 FR 32184 citing 42 FR 
44209, 44210 (October 7, 1976).
    \186\ Id. at 11-12.
    \187\ Id. at 12. (CARB's analysis found that although certain 
market segments presented challenges, a large number of other 
segments are well suited for electrification across the medium- and 
heavy-duty truck market, including refuse trucks, yard trucks and 
box trucks within the Class 8 vocational market. CARB expects that 
the demand for heavy-duty ZEVs will significantly increase as ZEV 
technology improves, resulting in increased operating ranges and 
decreased vehicle prices.''). CARB also provided updated data and 
noted recently enacted federal action.
    \188\ Id. at 12-13 (Citing the ACT waiver request at 31-39, ACT 
ISOR at IX-8, ACT FSOR at IX-23-IX-24, IX-27-IX-28, ACT FSOR at 105, 
192, 204-222, 269-274 (respond to comments asserting that CARB did 
not accurately assess cost impacts of the ACT Regulation).
---------------------------------------------------------------------------

    Many of the comments EPA received on the third prong also focused 
not on whether the standards under review were actually infeasible 
under section 202(a)(2), but on whether CARB, to be consistent with 
section 202(a), must provide the four years of lead time and three 
years of stability for standards applicable to new heavy-duty vehicles 
and engines required under section 202(a)(3)(C). Commenters objected to 
the 2018 HD Emission Warranty Amendments and the ACT Regulation on the 
grounds that the third waiver criterion requires ``consistency'' with 
every provision of section 202(a) and therefore, by the text of the 
statute, CARB must provide four years of lead time and three years of 
stability for its new heavy-duty vehicle and engine

[[Page 20709]]

standards.\189\ In response, supporters of the regulations argued that 
``consistency'' does not require identicality with lead time and 
stability requirements imposed on EPA. Such a strict imposition, they 
argued, would frustrate Congress' intent to give California flexibility 
and deference to create innovative standards that are more stringent 
than the Federal standards.\190\ Identicality also cannot be required, 
they argued, because it would be impossible for certain sub-provisions 
of section 202(a) to apply to CARB.\191\ In response, one commenter 
argued that, even if some provisions of 202(a) are relevant only to EPA 
and not CARB, ``consistency'' still requires CARB to abide by relevant 
provisions, such as 202(a)(3)(C)'s lead time and stability 
requirements.\192\
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    \189\ EMA Initial Comments at 4-5, 6-7; EMA Supplemental 
Comments at 1. NADA at 2; WSPA at 2.
    \190\ See, e.g., CARB Initial ACT Comments at 17-18; CARB 
Initial Omnibus Low NOx Comments at 9 (submitted as Exhibit 4 of 
CARB's Initial ACT Comments); CARB Supplemental Comments at 7-8; 
Environmental and Public Health Organizations at 22-24. EPA notes 
CARB's contention that section 202(a)(3)(C) was designed with 
specific purposes by Congress, and that such purposes were, in part, 
to minimize the burden associated with new standards and the 
associated new designs of affected vehicles and that in many 
instances CARB's regulations do not require a redesign of existing 
vehicles. (``The clear purpose of Section 202(a)(3)(C) is to protect 
manufacturers with respect to specific EPA standards, from having to 
perform redesigns without four years of lead time or more often than 
every three years.'' But ``the year-on-year changes in the legal 
obligations imposed by ACT are different from those imposed by more 
traditional vehicle emission standards--the kind of standards 
Congress had in mind when it drafted Section 202(a)(3)(C).'' See 
CARB Supplemental Comments, 9-11 and CARB Initial ACT Comments at 
19-22. As explained below, EPA finds its textual assessment of 
202(a)(3)(C) to be sufficient to determine the inapplicability to 
California and that it is not necessary to examine the underpinnings 
of this aspect of CARB's argument.
    \191\ See, e.g., CARB Initial Omnibus Low NOX 
Comments at 16-17 (submitted as Exhibit 4 of CARB's Initial ACT 
Comments); CARB Supplemental Comments at 7-8; Environmental and 
Public Health Organizations at 20-21; ACT/ZEAS/ZEP Waiver Support 
Document at 31-32 (citing the ACT FSOR at 131).
    \192\ EMA Supplemental Comments at 4 (``Of course, all of the 
provisions of section 202(a) are directed on their face to EPA, not 
California, and that is no reason to distinguish one part of section 
202(a) from another. Consistency means that CARB must abide by and 
avoid contradicting those provisions that are relevant. CARB agrees 
that it must abide by the technology lead-time requirement directed 
at EPA in section 202(a)(2), and CARB must equally abide by the 
four-year lead-time requirement in section 202(a)(3)(C) that is 
directed at EPA in precisely the same way. Neither of those 
provisions is uniquely applicable to EPA'').
---------------------------------------------------------------------------

    EPA also received comment that four years of lead time is supported 
by Federal case law and EPA's prior waiver decisions. In particular, 
one commenter noted EPA's 1994 MDV waiver decision document, which 
found that CARB is subject to 202(a)(3)(C)'s four-year lead time 
requirement.\193\ That decision considered the plain text and 
congressional intent of the CAA as well as the 1979 D.C. Circuit case, 
American Motors Corporation v. Blum (Blum), which incorporated a 
specific minimum two-year lead time from CAA section 202(b)(1)(B) into 
the 202(a)(2) general technological feasibility analysis. The commenter 
explained that the D.C. Circuit in Blum ``found that the 
Congressionally-specified lead time requirement was implicitly 
incorporated into section 202(a)(2)'' and argues that Blum's logic 
applies equally to section 202(a)(3)(C).\194\
---------------------------------------------------------------------------

    \193\ EMA Initial Comments at 3; EMA Supplemental Comments at 2-
3.
    \194\ EMA Initial Comments at 7-9 (``The D.C. Circuit's 
reasoning in Blum applies with equal force here: failing to apply 
the minimum four-year leadtime requirement would frustrate the 
leadtime that Congress explicitly found to be necessary for [heavy-
duty on-highway] standards.''); EMA Supplemental Comments at 2-3 
(``In addition to the general technology-based lead-time required 
for all vehicles and engines, section 202(a)(3)(C) is aimed 
specifically at the heavy-duty industry, which is not vertically 
integrated, involves much lower production volumes, is more capital 
intensive, requires longer planning and product development 
timelines, and requires longer time periods to recoup large capital 
investments. See, e.g., Hearing on S.1630 Before Subcomm. on Env't 
Protection, 101st Cong. 312-13 (1989). These considerations make 
lead-time necessary regardless of whether it is EPA or CARB that 
adopts the applicable standards with which the industry must make 
investments to comply. Thus, as EPA rightly concluded in 1994, the 
section 202(a)(3)(C) lead-time requirement is no different than the 
lead-time provision at issue in Blum.'').
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4. California's Standards Are Consistent With Section 202(a) Under 
EPA's Historical Approach
    As explained above, EPA has historically applied a consistency test 
under section 202(a) that calls for the Administrator to first review 
whether adequate technology already exists, and if it does not, whether 
there is adequate time to develop and apply the technology before the 
standards go into effect.\195\ After a review of the record, 
information, and comments received in this proceeding, EPA has 
determined that the opponents of the waiver request for CARB's 
regulations have not demonstrated that these regulations are 
inconsistent with section 202(a). As noted above, CARB's waiver 
requests indicated that control technology either presently exists or 
is in use, and opponents do not provide information that sufficiently 
meets their burden of proof.
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    \195\ EPA has previously stated that the determination is 
limited to whether those opposed to the waiver have met their burden 
of establishing that California's standards are technologically 
infeasible, or that California's test procedures impose requirements 
inconsistent with the Federal test procedure. See, e.g., 38 FR 30136 
(Nov. 1, 1973); 40 FR 30311 (July 18, 1975); 71 FR 335 (Jan. 4, 
2006) (2007 Engine Manufacturers Diagnostic standards); 70 FR 50322 
(August 26, 2005) (2007 California Heavy-Duty Diesel Engine 
Standards); 77 FR 9239 (February 16, 2012) (HD Truck Idling 
Requirements); 78 FR 2111, 2132 (Jan. 9, 2013); 79 FR 46256 (Aug. 7, 
2014) (the first HD GHG emissions standard waiver, relating to 
certain new 2011 and subsequent model year tractor-trailers); 81 FR 
95982 (December 29, 2016) (the second HD GHG emissions standard 
waiver, relating to CARB's ``Phase I'' regulation for 2014 and 
subsequent model year tractor-trailers); 82 FR 4867 (January 17, 
2017) (On-Highway Heavy-Duty Vehicle In-Use Compliance Program).
---------------------------------------------------------------------------

    The rationale supporting EPA's determination is organized as 
follows. Applying its historical approach of section 209(b)(1)(C) to 
CARB's regulations, EPA first examines whether the opponents of the 
waiver requests at issue have met their burden of proof to demonstrate 
that the regulations are not technologically feasible, within the lead 
time provided and giving consideration to cost. We present our analysis 
for each of the regulations in the two waiver requests (the 2018 HD 
Warranty Amendments, the ACT, ZEAS, and the ZEP Certification 
Regulations), in subsections III.D.4.a and b below. We conclude, under 
EPA's historical approach to the third waiver criterion, that the 
opponents of the waiver have not met their burden of proof.
a. 2018 HD Warranty Amendments
    As previously described, the 2018 HD Warranty Amendments lengthen 
the warranty periods for new heavy-duty vehicles and engines commencing 
with the 2022 model year. Manufacturers can choose to meet the new 
warranty periods either through installing more durable emission 
related components (with an associated increase in cost) or by relying 
upon existing emission related components designed to meet applicable 
emission standards and cover any increase in costs associated with 
additional emission warranty claims and repairs due to the increase in 
the warranty periods. Opponents of a waiver for the 2018 HD Warranty 
Amendments do not claim that the regulation is actually infeasible 
under EPA's approach. If EPA had received such comments, it would be 
appropriate to evaluate whether more durable emission related 
components are technologically feasible (giving consideration to the 
cost of such components) and to evaluate the costs for manufacturers to 
choose to use existing components and cover the costs of additional 
emission warranty related claims.

[[Page 20710]]

    During the course of EPA's waiver proceeding, we did not receive 
any comments or evidence to suggest, let alone meet the burden of 
proof, that the emission control technology needed for the new extended 
emission warranty periods and the new minimum allowable maintenance 
schedules did not meet the consistency with section 202(a) requirement.
    Likewise, EPA received no comments concerning CARB's separate point 
regarding the options within California's regulation that incentivize 
manufacturers to produce more durable emission related parts. EPA 
received no comments that this separate compliance strategy, of using 
existing emission control parts and covering the costs of any 
additional emission warranty claims, was infeasible or too costly. In 
addition, we did not receive any comments or evidence during the waiver 
proceeding to suggest such concerns were raised during California's 
rulemaking. CARB also noted that there are no test procedure 
consistency issues. EPA has not received comment during the waiver 
comment period regarding any of these matters.\196\
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    \196\ The record for this waiver proceeding also includes the 
ISOR and FSOR for CARB's 2018 HD Warranty Amendments rulemaking 
(included in the 2018 HD Warranty Amendments Waiver docket at EPA-
HQ-OAR-2022-0330-0006 and EPA-HQ-OAR-2022-0330-0014). EPA has 
received no comment that questions CARB's findings.
---------------------------------------------------------------------------

    Therefore, based on the record before us, EPA cannot find that the 
opponents of the 2018 HD Warranty Amendments waiver have met their 
requisite burden of proof to demonstrate that such requirements are 
inconsistent with section 202(a). Thus, EPA cannot deny CARB's 2018 HD 
Warranty Amendments waiver request on this basis.\197\
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    \197\ EPA evaluates the lead time associated with a CARB's 
regulation by in part examining the date of CARB's adoption of the 
regulation and when manufacturers are required to meet the 
regulation. EPA is guided both by the amount of lead time provided 
and by the principles set forth in cases such as International 
Harvester and NRDC. EPA finds no evidence in the record that 
manufacturers were unable to comply with CARB's requirements that 
commenced with the 2022 model year.
---------------------------------------------------------------------------

b. ACT, ZEAS, and ZEP Certification Regulations
    At the outset, EPA notes two key principles among others that guide 
EPA's evaluation of technological feasibility within section 
209(b)(1)(C). As previously explained, first, EPA considers whether 
adequate technology is either presently available or already in 
existence and in-use. If technology is not presently available, EPA 
will consider whether California has provided adequate lead time for 
the development and application of necessary technology prior to the 
effective date of the standards for which a waiver is being sought. 
Second, EPA has thus long believed that California must be given 
substantial deference when adopting motor vehicle emission standards 
because such action may require new or improved technology to meet 
challenging levels of compliance and that California plays a laboratory 
role. EPA is guided both by the amount of lead time provided by CARB 
and principles set forth in cases such as International Harvester and 
NRDC. This is EPA's historical approach, and it is applied in this 
decision. As such, the requirements of section 202(a)(3)(A) do not 
apply to California. Nevertheless, the factors such as energy and 
safety found in section 202(a)(3)(A) have been addressed by California 
and are part of the record here.
    EPA finds that CARB's assessment of technology, lead time and cost 
was based on reasonable assumptions and EPA has received no subsequent 
comment during the waiver proceeding to indicate otherwise. Although 
EPA received comment suggesting that EPA's technological feasibility 
analysis should be performed under the criteria of section 
202(a)(3)(A), the Agency explains below that section 202(a)(3)(A) does 
not apply to California. As also explained, section 202(a)(3)(A) was 
designed by Congress to explicitly address EPA rulemaking activities. 
As such, EPA's historical waiver approach of applying section 
202(a)(2), for purposes of assessing technological feasibility, lead 
time and cost as required by section 209(b)(1)(C), also applies to 
California's heavy-duty vehicle and engine emission standards. 
Nevertheless, EPA has examined the waiver opponents comments regarding 
the requisite battery technologies (including weight, infrastructure, 
and safety issues).\198\
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    \198\ EPA finds that it is beyond the scope of EPA's review to 
examine the feasibility of CARB's standards outside of California, 
including in states adopting CARB's standards (section 177 states). 
See 78 FR 2143, 74 FR 32744.
---------------------------------------------------------------------------

    CARB's ACT Regulation waiver request provided information 
pertaining to consistency with section 202(a) for each of the three 
regulations covered by the request. CARB noted that the ACT 
Regulation's requirements that new 2024 MY medium- and heavy-duty ZEVs 
be produced and delivered for sale to ultimate purchasers in California 
are consistent with section 202(a) because the required technology 
already exists.\199\ In addition, although EPA received limited cost 
data from a commenter, EPA finds no requisite evidence in the record or 
comments that suggest that such technology does not exist at reasonable 
costs (including the costs to consumers), or that ZEV trucks and buses 
that cover a variety of vocation and duty cycles are not commercially 
available.\200\ EPA also notes that the ACT Regulation includes deficit 
and credit generation provisions whereby manufacturers have the 
flexibility to phase in differing products over time and mitigate 
deficits in later model years or through trading. Further, in examining 
costs where technologies already exist, EPA is also guided by how costs 
are juxtaposed with lead time. Costs in this context relates to the 
timing of a particular emission control technology rather than to 
broader considerations.\201\ Opponents of the waiver have not met their 
burden of proof to demonstrate the ACT Regulation is inconsistent with 
section 202(a). The commenters have not demonstrated, based on EPA's 
assessment of the record on the overall feasibility of technology and 
costs, that a disruption to the heavy-duty vehicle and engine 
manufacturing industry would occur or that there is an undue burden on 
this industry as a result of the ACT Regulation. The record includes 
evidence of the ability of manufacturers to introduce certain service 
classes of vehicles that may have availability of central charging and 
lower costs, and in a timeframe and sequence that meets the ZEV phase-
in requirements of the ACT Regulation. Further, while the heavy-duty 
vehicles that meet the ACT Regulation includes initial development 
costs and costs of integrating the technology to the vehicles (the cost 
of compliance) and other higher upfront costs for certain vehicles and 
in certain years, than traditional or conventionally fueled vehicles, 
the opponents of the waiver have not met their burden of proof to 
demonstrate that such costs of compliance are prohibitive. Beyond the 
technological feasibility of the emission controls needed to meet the 
applicable standards, EPA is also sensitive to the costs of the 
vehicles as well as the TCO of such vehicles. There is no indication 
that the ZEV vehicles today and projected to meet the ACT Regulation 
would be experience cost increases close in magnitude to prohibitive 
levels. Additionally, EPA agrees with CARB

[[Page 20711]]

that the opponents of the waiver that asserted claims regarding various 
battery issues such as replacement costs, weight, and inabilities to 
travel longer distances have not demonstrated that the compliance costs 
are so excessive to make the standards infeasible. EPA notes that CARB, 
in adopting the ACT Regulation, performed a market segment analysis for 
87 market segments that use Class 2b-8 trucks, and assessed their 
suitability for electrification based on issues including payload, 
daily operational ranges, infrastructure access, and space 
considerations.\202\ EPA finds that CARB has reasonably identified 
technologies and vehicle applications that are available in the near 
term as well as reasonable evidence that the performance and demand for 
heavy-duty ZEVs will significantly improve as technology evolves. 
Separately, EPA notes that CARB has submitted extensive information to 
EPA regarding its assessment of battery technology--including safety, 
the suitability of the grid and charging infrastructure, and related 
issues related to the ACT Regulation as a policy choice.\203\
---------------------------------------------------------------------------

    \199\ ACT/ZEAS/ZEP Waiver Support Document at 31-32.
    \200\ Id. at 18.
    \201\ MEMA I at 1118. (``Congress wanted to avoid undue economic 
disruption in the automotive manufacturing industry and also sought 
to avoid doubling or tripling the cost of motor vehicles to 
purchasers.'').
    \202\ CARB Supplemental Comments at 12 (see appendix E to the 
ACT ISOR).
    \203\ See CARB's FSOR at 9-10 (discussion of alternative fueled 
vehicles and regulatory suggestion of ultra-low NOX 
rather than the ZEV levels on ACT, in context of grid readiness); 
FSOR at 124-127 (grid resiliency); FSOR at 103 (CARB notes ``The 
Board approved the regulation without off-ramps to ensure that 
vehicle manufacturers, suppliers, and infrastructure manufacturers 
have certainty in making long-term investments needed to ensure 
large-scale deployment of ZEVs in California. The regulation's 
structure gives manufacturers flexibility to bank credits, shift 
sales between weight classes, and trade credits with other 
manufacturers. These flexibility provisions give manufacturers 
assurance that they can comply and does not introduce the 
uncertainty associated with potential off-ramps.''); ACT Waiver 
Request at 31-39. See also, ACT ISOR at IX-8, IX-23 to IX-24, IX-27 
to IX-28, 10, 192, 204-22, and 269-74.
---------------------------------------------------------------------------

    Therefore, the phase-in of ZEV sales percentages in the ACT 
Regulation falls within the feasibility tests set forth in 
International Harvester and NRDC and the opponents of the waiver have 
not met their burden of proof to refute CARB's analysis and 
projections. Similarly, EPA finds no evidence in the record that 
suggests that technology needed to produce zero emission airport 
shuttle vehicles to meet the ZEAS Regulation does not exist or that 
manufacturers would not be able to meet the ZEP Certification 
Regulation.\204\ To the extent that commenters suggest preferred 
feasible alternatives but do not argue that the CARB regulations are 
technologically infeasible themselves, EPA again notes that CARB has 
significant discretion in the policy choices it makes to address 
California's air pollution problems.\205\ ``The structure and history 
of the California waiver provision clearly indicate a Congressional 
intent and an EPA practice of leaving the decision on ambiguous and 
controversial public policy to California's judgment.\206\
---------------------------------------------------------------------------

    \204\ Id. While the ZEAS Regulation regulates fleet operators of 
airport shuttles, EPA acknowledges that the emission levels 
expressed in the ZEAS Regulation are emission standards preempted 
under section 209(a) and require a waiver of preemption under 
209(b). See Engine Manuf. Ass'n v South Coast Air Quality Mgmt. 
Dist., 541 U.S. 246, 255 (2004). Although the ZEAS Regulation does 
not expressly require operators to purchase cleaner new vehicles 
because regulated parties may comply by converting existing internal 
combustion vehicles to zero-emissions vehicles, EPA nevertheless 
believes it necessary to evaluate the purchasing requirements and 
options within the ZEAS Regulation and waives preemption of the ZEAS 
Regulation by this action.
    \205\ See, e.g., Ford Motor, 606 F.2d 1293, 1302 (D.C. Cir. 
1979) (``There is no indication in either the statute or the 
legislative history that Congress intended to permit the 
Administrator to supplant its emission control regulations with 
those of California, no matter how sagacious and beneficial the 
latter may be. Nor is there any evidence that the Administrator is 
supposed to determine whether California's standards are in fact 
sagacious and beneficial.''). To the extent comments suggest that 
consistency with 202(a) requirements includes limits on the types of 
emission standards that may be adopted, these claims do not pertain 
to the third prong analysis. Rather, the consistency with section 
202(a) requirement relates to the technological feasibility of 
California's standards as explained in this decision. Further, the 
Administrator has long explained that ``questions concerning the 
effectiveness of the available technology are also within the 
category outside my permissible scope of inquiry,'' under section 
209(b)(1)(C). 41 FR 44209, 44210 (October 7, 1976); 47 FR 7306, 7310 
(February 18, 1982) (``I am not empowered under the Act to consider 
the effectiveness of California's regulations, since Congress 
intended that California should be the judge of `the best means to 
protect the health of its citizens and the public welfare.''' 
(Internal citations omitted)). Finally, one commenter (AFPM at 12-
13) specifically suggests that consistency with section 202(a), 
including section 202(a)(3)(A), means California cannot require 
particular technologies. However, as we explain below, section 
202(a)(3)(A) does not apply to California and EPA evaluates the 
third waiver prong under the technological feasibility, lead time, 
and costs requirements in section 202(a)(2). Further, with respect 
to CARB's ability to set particular technology requirements, see 71 
FR 78190 (December 28, 2006) and Decision Document at EPA-HQ-OAR-
2004-0437-0173, at 35-46).
    \206\ 40 FR 213101, 23103 (May 28, 1975).
---------------------------------------------------------------------------

    Therefore, based on the record before us, EPA cannot find that the 
opponents of the ACT, ZEAS, and ZEP Certification Regulations waiver 
request have met their requisite burden of proof to demonstrate that 
such requirements are inconsistent with section 202(a) under EPA's 
historical approach to the third waiver criterion.\207\ Thus, EPA 
cannot deny CARB's ACT, ZEAS, and ZEP Certification Regulations waiver 
request on this basis.\208\
---------------------------------------------------------------------------

    \207\ EPA recognizes that CARB may make different policy choices 
based on the air quality and other conditions within the State, and 
that EPA does not play the role of second-guessing such choices. It 
also follows that, in response to the ACT Regulation, a manufacturer 
will determine which product offerings to make available in the 
California marketplace during the transition to and for showing 
compliance with the new standards. These market choices could 
include offering for sale a limited set of products. Given the 
statutory scheme, the EPA Administrator is to give very substantial 
deference to California's judgments. See also International 
Harvester v. Ruckelshaus, 478 F 2d. 615, 640 (D.C. Cir. 1979) (``We 
are inclined to agree with the Administrator that 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. The driving preferences of hot 
rodders are not to outweigh the goal of a clean environment.'').
    \208\ EPA evaluates the lead time associated with CARB's 
regulation by examining the date of CARB's adoption of the 
regulation and when manufacturers are required to meet the 
regulation. The CARB Board adopted the ACT Regulation on June 25, 
2020. EPA is guided both by the amount of lead time provided and by 
the principles set forth in cases such as International Harvester 
and NRDC. The lead time here is between the CARB Board's adoption of 
the ACT Regulation in June 2020 and the compliance implementation 
for the 2024 model year (recognizing that manufacturers may choose 
to certify earlier in 2023 for the 2024 model year). EPA finds no 
evidence in the record that manufacturers are unable to comply with 
CARB's requirements that commence with the 2024 model year.
---------------------------------------------------------------------------

5. The Inapplicability of Section 202(a)(3)(C) to the Third Prong
    Certain commenters asserted that, even if the standards are 
technologically feasible, EPA should nonetheless deny the waiver based 
on the lead time and stability requirements found in section 
202(a)(3)(C).\209\ These commenters claim that because the third waiver 
criterion requires California's standards to be ``consistent with'' 
section 202(a), California must necessarily comply with section 
202(a)(3)(C), as that is a sub-provision of 202(a). This argument is 
inconsistent with the plain text of the statute. The statutory phrase 
``consistent with'' indicates that California's standards should be 
congruent and compatible with section 202(a), which in turn sets forth 
requirements for Federal standard-setting. The statute does not, 
however, obligate California to comply with every single provision of 
section 202(a). Not only would doing so make little sense given 
Congress' intent to set up two motor vehicle programs in title II--with 
California's program dedicated to address the state's air quality 
problems and serve as a testing ground for motor vehicle emissions 
policy designs and technologies--but it would also conflict with the 
text and intent of the waiver provisions in section 209.
---------------------------------------------------------------------------

    \209\ Formerly contained in section 202(a)(3)(B), the 1990 
Amendment renumbered this section as section 202(a)(3)(C).

---------------------------------------------------------------------------

[[Page 20712]]

    The commenters' argument regarding section 202(a)(3)(C) fails. That 
provision, which requires at least four years of lead time and three 
years of stability, is a companion to a specific Federal standard-
setting mandate, section 202(a)(3)(A). That mandate is for EPA to 
promulgate certain heavy-duty standards for hydrocarbons, carbon 
monoxide, oxides of nitrogen, and particulate matter that reflect the 
``greatest degree of emission reduction achievable'' using technology 
that EPA determines will be available for a given model year, giving 
appropriate consideration to cost, energy, and safety factors 
associated with application of those technologies. In conjunction with 
this directive to set standards reflecting the ``greatest degree of 
emission reduction achievable,'' section 202(a)(3)(C) requires EPA to 
provide the four years of lead time and three years of stability for 
the Federal standards.
    The statute is also explicit that California, by contrast, may 
adopt state standards that are ``in the aggregate'' at least as 
protective as the Federal standards--a starkly different structure than 
requiring each of the relevant heavy-duty standards to reflect the 
``greatest degree of emission reduction achievable.'' As such, the 
requirement for EPA to find, in granting a waiver, that California's 
standards ``are not [in]consistent with'' section 202(a) cannot mean 
that California's standards comply with every provision of section 
202(a). Further, given that California's standards are not subject to 
the ``greatest degree of emission reduction achievable'' mandate, and 
apply only in a limited market, it would make little sense in the 
statutory scheme to obligate California to comply with the companion 
lead time provision in section 202(a)(3)(C) to provide four years of 
lead time and three years of stability.
    This plain text reading is well-supported by the history and 
purpose of the Act and is also consistent with administrative and 
judicial precedents. Commenters rely heavily on EPA's single cursory 
and contrary decision in a 1994 MDV waiver, even though by 2012 EPA had 
indicated that it did not believe section 202(a)(3)(C) applied to 
California's heavy-duty engines and vehicle standards.\210\ We 
acknowledge that the 1994 waiver action took a different position on 
this issue than we do today. EPA believes that the interpretation of 
the ``consistency with section 202(a)'' language that EPA has 
historically applied--both before and after the 1994 waiver--is 
permissible and is the best view based on all the relevant factors. 
EPA's reasoning in the 1994 MDV waiver is unpersuasive, as explained 
below, especially because this aspect of the 1994 MDV waiver is 
inconsistent with both prior and subsequent agency decisions,\211\ and 
more importantly, it is inconsistent with the plain text of the 
statute. EPA is therefore taking a different approach from the 1994 MDV 
waiver.\212\ Additionally, commenters also mistakenly rely on the D.C. 
Circuit's opinion in American Motors Corp. v. Blum, 603 F.2d 978 (D.C. 
Cir. 1979) (Blum). Blum addressed a different provision of the CAA and 
is readily distinguishable from the instant waivers.
---------------------------------------------------------------------------

    \210\ 77 FR 9239 (February 16, 2012).
    \211\ See 77 FR 9239, 9249 (2012); 46 FR 22302, 22304 (1981).
    \212\ FCC v. Fox Television Stations, Inc., 556 U.S. 502 (2009).
---------------------------------------------------------------------------

a. EPA's Historical Practice Is Supported by the Text, Context, and 
Purpose of the Statute
    We begin by interpreting the text of section 209(b)(1)(C), which 
requires EPA to assess whether CARB's standards are ``consistent with 
section [202(a)].'' The mere fact that Congress placed a provision 
applicable to Federal standards in section 202(a) does not mean 
California must comply with it in order for its standards to be 
``consistent'' with section 202(a).\213\ Rather, what the ``consistent 
with'' provision requires must ``account for the broader context of the 
statute as a whole'' \214\ and should be based on analysis of the text, 
context, purpose, and history of the relevant portions of the Act. The 
term ``consistent'' means ``marked by harmony, regularity, or steady 
continuity: free from variation or contradiction,'' ``marked by 
agreement,'' and ``showing steady conformity to character, profession, 
belief, or custom.'' \215\ These definitions support the conclusion 
that the phrase ``consistent with section 202(a)'' does not require 
California's standards to comply with all sub-provisions in section 
202(a), but rather calls for congruence and compatibility. Caselaw from 
the D.C. Circuit explaining the meaning of the phrase ``consistent 
with'' in other parts of the Clean Air Act also supports this 
understanding that the phrase does not mean lockstep 
correspondence.\216\
---------------------------------------------------------------------------

    \213\ The D.C. Circuit has noted ``section 202's pervasive 
regulation of national motor vehicle emission standards'' and 
explained that if the entire provision were applicable to California 
``[the Administrator] would be powerless to consider waiving federal 
preemption for California's emission standards and certification 
process. This lack of power would render the waiver provision and 
indeed, the express preemption provision mere surplusage.'' MEMA I, 
627 F.2d at 1122.
    \214\ Wisconsin v. EPA, 938 F.3d 303, 316 (D.C. Cir. 2019) (``We 
note that we do not conclude that the phrase `consistent with' in 
the Good Neighbor Provision necessarily effects an incorporation of 
the full contours of every provision of Title I in pure, lockstep 
fashion. As we have observed elsewhere in construing the same words 
in the context of the same statute, the phrase `consistent with' 
other statutory sections `calls for congruence or compatibility with 
those sections, not lock-step correspondence.''') (Citing Envtl. 
Def. Fund Inc. v. EPA, 82 F.3d 451, 460 (D.C. Cir. 1996); Nuclear 
Energy Institute, Inc. v. EPA, 373 F.3d 1251, 1270 (D.C. Cir. 
2004)).
    \215\ Consistent, https://www.merriam-webster.com/dictionary/consistent (last accessed Jan. 30, 2023).
    \216\ See Wisconsin v. EPA, 938 F.3d 303, 316 (D.C. Cir. 2019) 
(collecting authorities).
---------------------------------------------------------------------------

    EPA thus believes that the phase ``consistent with'' does not 
require California's standards to strictly conform or comply with every 
provision in section 202(a). After all, that would defeat the scheme 
Congress set up to encourage two sets of standards--the Federal 
standards and California's standards. Congress chose the term 
``consistent with'' instead of, for example, ``comply with,'' or terms 
connoting identicality such as ``the same as,'' or ``identical to'' in 
section 209(b)(1)(C).\217\ The use of ``consistent with'' in section 
209, rather than ``identical'' or the like, makes perfect sense because 
Congress established two programs for control of emissions from new 
motor vehicles in Title II--EPA emission standards adopted under the 
Act and California emission standards adopted under its state law. 
Motor vehicles are ``either `federal cars' designed to meet the EPA's 
standards or `California cars' designed to meet California's 
standards.'' \218\ Thus, an interpretation that every portion of 
section 202(a) must be applicable to California standards would defeat 
Congress's plan.\219\ In contrast, EPA's

[[Page 20713]]

historical practice regarding ``consistent with'' is in accordance with 
both Congress's structure and the case law that guides how the phrase 
should be interpreted by ensuring that California, in setting its 
standards, evaluates the same factors that EPA does--e.g., feasibility, 
lead time, and cost. EPA also ensures that enforcement mechanisms, such 
as test procedures, are compatible to avoid creating challenges for 
automakers in complying with both California and federal 
standards.\220\ For example, EPA has considered California's 
classification scheme for heavy-duty vehicles as consistent with 
section 202(a), even though it is not identical to the federal 
classification.\221\ This understanding of ``consistent with'' is 
supported by case law, such as MEMA II: ``Section 209(b)(1) makes clear 
that section 202(a) does not require, through its cross-referencing, 
consistency with each federal requirement in the act. . . . 
California's consistency [with section 202(a)] is to be evaluated `in 
the aggregate,' rather than on a one-to-one basis. CAA section 
209(b)(1).'' \222\ In sum, section 209(b)(1)(C) does not require 
California to conform identically to every provision of section 202(a).
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    \217\ EPA notes, moreover, that elsewhere in the statute 
Congress did use the term ``identical,'' indicating that Congress 
knew how to clearly express when it wanted identicality as opposed 
to consistency. For example, under section 177, Congress ``permitted 
other states to `piggyback' onto California's standards, if the 
state's standards `are identical to the California standards for 
which a waiver has been granted for such model year.''' Motor 
Vehicle Mfrs. Ass'n v. New York State Dep't of Envtl. Conservation, 
17 F.3d 521, 525 (2d Cir. 1994) (Emphasis added); Similarly, in 
section 211(c)(4)(A)(ii), state fuel controls that are ``identical'' 
to controls promulgated under section 211(c)(1) are otherwise not 
preempted. (Emphasis added). Section 211(c)(4)(A)(ii)(Emphasis 
added).
    \218\ Engine Mfrs. Ass'n v. EPA, 88 F.3d 1075, 1079-80, 1088 
(D.C. Cir. 1996).
    \219\ For example, the requirement in section 202(a)(3)(D) for 
the Administrator to conduct a study for the practice of rebuilding 
heavy-duty engines and, on the basis on such study, consider 
prescribing requirements for rebuilding practices is clearly 
directed at EPA and not a requirement of California. It would not be 
a reasonable reading of section 209(b)(1)(C) to require California 
to complete an identical study in order to be ``consistent with'' 
section 202(a).
    \220\ 42 FR 2337, 2338 (January 11, 1977).
    \221\ Id. (A medium duty vehicle is defined by the CARB as a 
subset of the heavy-duty vehicle class, and is any motor vehicle 
(except a passenger car) with a gross vehicle weight rating (GVWR) 
of between 6000 and 8500 pounds).); See also, 43 FR 1829, n.2, 1830, 
n.9 (January 12, 1978); CARB Waiver Request at 3 n.6; 78 FR 2114 n.9 
(Medium-duty vehicles (MDVs) are vehicles in California's 
regulations between 8,500 and 114,000 lbs GVWR that are also called 
Class 2b/Class 3 vehicles. These vehicles are generally termed 
heavy-duty vehicles under EPA's regulation).
    \222\ MEMA II, 143 F.3d 449, 463-64.
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    Having established that California's standards do not need to be 
identical to or meet all of the requirements set out in section 202(a) 
for Federal standards, we now turn to the question whether California's 
standards must comply with section 202(a)(3)(C)'s requirements to be 
``consistent'' with section 202(a). To answer this question, EPA 
further examines the statute's text and purpose. Based on the plain 
language, statutory context and legislative history, we conclude that 
the best view is that compliance with section 202(a)(3)(C) is not 
necessary for consistency. In particular, section 202(a)(3)(C) is a 
companion lead time provision that applies to Federal standard-setting 
under section 202(a)(3)(A) and is therefore not relevant to 
California's program.
    In general, section 202(a)(3), which was first added in the 1977 
Amendments, reflected congressional frustration at EPA's slow pace of 
regulating emissions from heavy-duty vehicles and engines and was thus 
a direct command to EPA.\223\ By its terms, section 202(a)(3)(A)(i) 
directs EPA to establish standards for hydrocarbons, carbon monoxide, 
oxides of nitrogen, and particulate matter emissions from heavy-duty 
vehicles and engines that ``reflect the greatest degree of emission 
reduction achievable.'' \224\ Section 202(a)(3)(C) in turn requires 
that such stringent standards (``those promulgated . . . under this 
paragraph,'' section 202(a)(3)(C)) have at least four years of lead 
time and apply for no less than three model years.\225\ Congress 
intended the fixed lead time and stability provisions of section 
202(a)(3)(C) as a companion to the requirement in section 202(a)(3)(A) 
to promulgate national standards which ``reflect the greatest degree of 
emission reduction achievable,'' balancing the mandate for the most 
stringent possible standards with granting regulated manufacturers a 
minimum amount of lead time and considering costs and other 
factors.\226\ Congress chose these prescribed lead time and stability 
requirements because of industry concerns over the level of stringency 
expected of EPA's national standards. According to the D.C. Circuit 
``[t]hat requirement was enacted for the benefit of manufacturers to 
allow time for them to design and develop engines in compliance with 
newly promulgated standards.'' \227\ Both the four-year lead time and 
the three-year stability time frames thus provide assurance to the 
heavy-duty industry of a minimum amount of lead time and stability to 
meet EPA's national standards considering the mandate to EPA to 
promulgate standards which reflect the greatest degree of emission 
reduction achievable under in section 202(a)(3)(A).\228\ (``It seems 
that Congress intended the EPA in promulgating standards with an 
adequate lead period to engage in reasonable predictions and 
projections in order to force technology.'').\229\
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    \223\ NRDC v. Thomas, 805 F.2d 410 (D.C. Cir. 1986) (for the 
history and treatment of the 1977 Amendments for heavy-duty vehicles 
and engines particulate matter, oxides of nitrogen, carbon monoxide 
and hydrocarbons standards). Acting under the 1977 Amendments, EPA 
first promulgated heavy-duty vehicle and engines standards on May 
15, 1985 (50 FR 10606) but by that time California had been granted 
waivers for heavy-duty vehicles and engines standards (See for 
example, 34 FR 7348 (May 6, 1969); 36 FR 8172 (April 30, 1971); 40 
FR 23102 (May 28, 1975); Section 202(a)(3)(A)(iii) was originally 
contained in the 1977 Senate bill ``applicable to emissions of 
carbon monoxide, hydrocarbons, particulates, and oxides of nitrogen 
from heavy duty trucks, buses, and motorcycles and engines 
thereof.'' S. Rep. No. 252, 95th Cong., 1st Sess. at 19 (1977). See 
S. Rep. No.127, 95th Cong., 1st Sess. 193 (1977), reprinted in 3 
Legislative History 1567. The 1977 Amendments added section 
202(a)(3) directing EPA to set heavy-duty vehicle emission standards 
for certain emissions for the 1983 model year and later. (Congress 
having identified a need for standards in 1970 ``had become 
impatient with the EPA's failure to promulgate a particulate 
standard'' for heavy duty vehicles.'' NRDC, 655 F.2d at 325 (citing 
S. Rep. No.127, 95th Cong., 1st Sess. 67 (1977), reprinted in 3 
Legislative History 1441). This language appears in the same 
legislative history where Congress expressed approval for EPA's 
implementation of the waiver provision over the past decade and 
expanded California's discretion to adopt standards that were 
intended to address the state's severe air quality issues.
    \224\ NRDC v. Thomas, 805 F.2d at 414-16.
    \225\ Formerly contained in section 202(a)(3)(B), the 1990 
Amendments renumbered this section as section 202(a)(3)(C) and 
slightly modified its terms while still retaining the four-year lead 
time and three-year stability requirement and extending this lead 
time to standards promulgated by EPA for the control of 
NOX emissions from heavy-duty vehicles and engines. 
(``Any standard promulgated or revised under this paragraph and 
applicable to classes or categories of heavy-duty vehicles or 
engines shall apply for a period of no less than 3 model years 
beginning no earlier than the model year commencing 4 years after 
such revised standard is promulgated.'' Section 202(a)(3)(C)).
    \226\ NRDC v. Thomas, 805 F.2d 420-23 (Rejecting argument that 
the terms ``maximum'' and ``greatest'' before the phrase ``degree of 
emission reduction'' meant that EPA must set standards at the 
performance level of the best vehicle or engine and upholding 
instead EPA's consideration and balancing of all relevant factors in 
setting applicable standards.).
    \227\ EPA ``cannot cite us to any precedent allowing a court to 
ignore an explicit leadtime requirement.'' NRDC v. Thomas, 805 F.2d 
at 435 (Reversing EPA's decision to provide less than the 
statutorily mandated four-year lead time for certain model year 
heavy-duty vehicles and engines standards.). See also, 805 F.2d 435 
n.40.
    \228\ ``[I]n adding section 202(a)(3)(A)(iii) . . . Congress 
directed the EPA to give priority to establishing particulate 
emission standards for heavy-duty vehicles and left the agency free 
to exercise its power under section 202(a)(1) to regulate light-duty 
automobiles, whether diesel-powered or otherwise.'' NRDC., at 326; 
H.R. Conf. Rep. No. 294, 95th Cong., 1st Sess. 542-43 (1977) 
(``Additional revisions of up to 3 years each could be granted at 
three-year intervals thereafter;'' and Congress ``provides four 
years lead time before temporary or permanent revision of any 
statutory standard.'').
    \229\ NRDC v. Thomas, 805 F.2d at 430.
---------------------------------------------------------------------------

    Several factors indicate that section 202(a)(3)(C) is a companion 
provision to section 202(a)(3)(A). As a general matter, the level of 
stringency of a standard and its accompanying lead time are 
intertwined. Notably, a standard does not act in isolation, but rather 
goes into effect after a certain amount of lead time and in a 
particular model year (e.g., a 1 gram/mile standard effective beginning 
model year 2027). The feasibility of a standard, including the 
availability of technology and its costs, also depends on the lead time 
provided. Further, the actual impact of a standard, whether on 
regulated entities or its protectiveness of public

[[Page 20714]]

health and the environment, depends on the lead time provided.
    The context of the statute also evinces the link between sections 
202(a)(3)(A) and (C). EPA's general authority to establish motor 
vehicle standards is found in section 202(a)(1), which authorizes the 
Administrator to prescribe emission standards for motor vehicles upon 
making an endangerment finding but does not specify the stringency of 
the standard (i.e., there is no requirement to promulgate standards 
that reflect the greatest degree of emission reduction 
achievable).\230\ Section 202(a)(1) in turn is accompanied by the 
general lead time provision in section 202(a)(2), which does not set 
any fixed lead time but rather allows the Administrator to determine 
the lead time ``necessary to permit the development and application of 
the requisite technology, giving appropriate consideration to the cost 
of compliance within such period.'' By contrast, in enacting section 
202(a)(3), Congress was more prescriptive in both the appropriate level 
of stringency and lead time, requiring both standards that reflect the 
greatest degree of emission reduction achievable for specific 
pollutants emitted from heavy-duty vehicles and at least four-year lead 
time. This contextual contrast between sections 202(a)(1)-(2) and 
202(a)(3) further demonstrates the close link between the standard-
setting provision in section 202(a)(3)(A) and the lead time provision 
in section 202(a)(3)(C). That is, Congress departed from EPA's general 
authority to set motor vehicle emission standards in sections 
202(a)(1)-(2) in two respects by making a very specific legislative 
compromise in 202(a)(3): (1) By forcing stringent standards that 
reflect the greatest degree of emission reduction achievable, while (2) 
also expecting that such standards may be sufficiently difficult to 
achieve such that manufacturers would be entitled to a minimum of four 
years of lead time and three years of stability.\231\ Legislative 
history supports this connection.\232\ Opponents of the waiver, 
however, contend that California's standards must ``reflect the 
greatest degree of emission reduction achievable'' required for Federal 
standards in 202(a)(3)(A) and meet the companion lead time and 
stability requirements in section 202(a)(3)(C).
---------------------------------------------------------------------------

    \230\ And ``[w]hile section 209(b) requires consideration of 
whether the adoption of standards by California is consistent with 
section 202(a), nevertheless [the Administrator's] discretion in 
determining whether to deny the waiver is considerably narrower than 
[his] discretion to act or not to act in the context promulgating 
Federal standards under section 202(a). . . . [The Administrator] 
would therefore feel compelled to approve a California approach to 
the regulation of . . . emissions which [he] might choose not to 
adopt at the Federal level.'' 41 FR 44210.
    \231\ NRDC v. Thomas, 805 F.2d at 421-24, 430, 435. EPA 
acknowledges that the lead time requirements in 202(a)(3)(C) apply 
to ``any standard promulgated or revised under this paragraph'' and 
that paragraph (3) also includes other standard-setting provisions. 
We view these additional provisions as further support for the main 
argument in the text: the lead time requirements in 202(a)(3)(C) 
accompany specific Federal standard-setting requirements and do not 
act in isolation. Thus, those lead time requirements were not 
intended to apply to all Federal standards for heavy-duty vehicles 
or engines, much less to apply to California standards. See infra 
footnote 250. Instead, they apply only to standards ``promulgated or 
revised under this paragraph.''
    \232\ H.R. Conf. Rep. No. 564, 95th Cong., 1st Sess. 542-43 
(1977) (The conference agreement provides four years lead time 
before temporary or permanent revision of any statutory standard and 
requires the Administrator to promulgate particulate standards based 
on criteria set forth in the House interim standards provision. 
These standards are to become effective as expeditiously as 
practicable taking into account the lead time necessary to comply, 
but in no event later than 1981 model year.). This legislative 
history from the Conference Report indicates that section 
202(a)(3)(C) provides lead time and stability requirements for 
standards promulgated under section 202(a)(3)(A).
---------------------------------------------------------------------------

    Congress' direction to EPA in sections 202(a)(3)(A) and (C) stands 
in stark contrast to its approach to California's standards. EPA's 
practice of providing a highly deferential review of California's 
standards in waiver proceedings was already well established by 1977, 
and Congress recognized and approved of this practice.\233\ And in the 
very same 1977 Amendments, Congress instructed California to consider 
the protectiveness of its standards ``in the aggregate,'' rather than 
requiring each California standard being as or more stringent than its 
Federal counterpart.\234\ Congress explicitly recognized that 
California's mix of standards could ``include some less stringent than 
the corresponding federal standards.'' \235\ ``[T]here is no question 
that Congress deliberately chose in 1977 to expand the waiver provision 
so that California could enforce emission control standards which it 
determined to be in its own best interest even if those standards were 
in some respects less stringent than comparable federal ones.'' \236\ 
The four-year lead time and three-year stability requirement for heavy-
duty engines and vehicles standards contained in section 202(a)(3)(C) 
should thus be properly viewed as applying to EPA's standard-setting 
authority under section 202(a)(3)(A), and not California's authority as 
applied under the waiver provisions. To give proper effect to the ``in 
the aggregate'' language in section 209(b)(1), and for California to 
retain its ability to set more stringent standards for some pollutants 
and less stringent for others, California is not explicitly required, 
nor should it be implicitly required by the cross-reference to section 
202(a), to set heavy-duty vehicle emission standards that ``reflect the 
greatest degree of emission reduction.'' In other words, the 
legislative compromise that Congress established in 202(a)(3) for 
Federal standard-setting--between standards that reflect the greatest 
degree of emission reduction achievable and at least four years of lead 
time and three years of stability--does not make sense in the 
California context: since California can establish differing (and 
sometimes less stringent) standards than what is required by 
202(a)(3)(A), it also follows that it may prescribe differing lead time 
and stability requirements than what is required by 202(a)(3)(C))--
provided those requirements are ``consistent with'' EPA's general 
approach to addressing feasibility, lead time, and cost pursuant to 
section 202(a)(2). The 1977 Amendment to section 209(b)(1) thus also 
supports the view that California's standards should be reviewed under 
the traditional feasibility test of section 202(a), and that California 
need only provide lead time it deems sufficient based on its analysis 
of technology feasibility and cost for standards at issue, and that EPA 
reviews California's determinations.
---------------------------------------------------------------------------

    \233\ In the 1977 Amendments to section 209(b)(1), Congress also 
approved EPA's interpretation of the waiver provision as providing 
appropriate deference to California's policy goals and consistent 
with Congress's intent ``to permit California to proceed with its 
own regulatory program'' for new motor vehicle emissions. H.R. Rep. 
No. 95-294, at 301 (1977); MEMA I, 627 F.2d at 1120-21 (``The 
language of the statute and its legislative history indicate that 
California's regulations, and California's determination that they 
comply with the statute, when presented to the Administrator are 
presumed to satisfy the waiver requirements and that the burden of 
proving otherwise is on whoever attacks them.''); Id. at 1110 (``The 
Committee amendment is intended to ratify and strengthen the 
California waiver provision and to affirm the underlying intent of 
that provision, i.e., to afford California the broadest possible 
discretion in selecting the best means to protect the health of its 
citizens and the public welfare.'' Citing H.R. Rep. No. 294, 95th 
Cong., 1st Sess. 30102 (1977), U.S. Code Cong. Admin. News 1977, p. 
1380 (emphasis in original).'')
    \234\ ``Congress decided in 1977 to allow California to 
promulgate individual standards that are not as stringent as 
comparable federal standards, as long as the standards are `in the 
aggregate, at least as protective of public health and welfare as 
applicable federal standards.'' Ford Motor, 606 F.2d 1293, 1302 (DC 
Cir. 1979) (``[T]he 1977 amendments significantly altered the 
California waiver provision.'').
    \235\ H.R. Rep. No. 294, 95th Cong., 1st Sess. 302 (1977).
    \236\ MEMA I, 627 F.2d at 1110.
---------------------------------------------------------------------------

    As previously noted, the 1977 Amendments removed the stringency 
requirements for California standards

[[Page 20715]]

under review and now allows for granting waivers if standards are ``in 
the aggregate'' as protective of health as federal standards in section 
209(b)(1). This amendment reflected California's wish to ``trade off'' 
controlling carbon monoxide emissions, which were not as critical of a 
problem in California, for NOX emissions, which were and 
continue to present severe air quality challenges in California.\237\ 
Therefore, California's carbon monoxide standards can now be less 
stringent than federal standards.\238\ Recognizing that both carbon 
monoxide and NOX are also listed in section 203(a)(3)(C), 
and then reading this section as applicable to California's heavy-duty 
vehicles standards, however, would entirely undermine the purpose of 
the 1977 Amendments. Under such a reading, if California identified a 
need to relax an existing carbon monoxide standard to enable a much 
more stringent NOX standard, based on the interactions 
between the control technologies involved, it would be precluded from 
doing so because the carbon monoxide standard would not meet the 
``greatest degree of emission reduction'' requirement. This result is 
in direct conflict with Congress amending section 209(b)(1) to enable 
California to do precisely that, with precisely those pollutants.\239\ 
As such, it is not a reasonable reading of the statute.
---------------------------------------------------------------------------

    \237\ 58 FR 4166, LEV Waiver Decision Document at 50-51.
    \238\ MEMA II, 142 F.3d at 464 (``EPA has observed, `California 
would not be denied a waiver if its CO standard were slightly higher 
than the federal . . . standard. . . . This is despite the fact that 
section 202(g) contains specific standards for CO that EPA must 
promulgate.' EPA Air Docket A-90-28, Doc. No. V-B-1 at 47.'').
    \239\ MEMA II, 142 F.3d at 464 (``California would not be denied 
a waiver if its CO standard were slightly higher than the federal . 
. . standard. . . . This is despite the fact that section 202(g) 
contains specific standards for CO that EPA must promulgate.''); 
MEMA I, 627 F.2d at 1110 n.32 (explaining the specific intent of 
Congress to allow California carbon monoxide standards to be less 
stringent than federal carbon monoxide standards).
---------------------------------------------------------------------------

    Moreover, the D.C. Circuit has held that not all the 1977 
amendments to the Clean Air Act apply in the waiver context. In MEMA I, 
for instance, the Court held that section 302 was inapplicable to 
section 209 because ``[s]ection 302(k)'s definition [of standards] was 
not enacted until ten years after the original waiver provision, and it 
was developed in the context of regulating emissions from stationary 
sources.'' \240\ Similarly, Congress developed section 202(a)(3) in the 
context of the nationwide regulation of emissions from heavy-duty 
engines and vehicles by EPA, a decade after enactment of the original 
waiver provision and also after California had been regulating heavy-
duty engine emissions with the appropriate waivers that EPA granted 
applying the traditional consistency test.\241\ In amending section 
202(a) to ensure more effective Federal regulation of certain heavy-
duty vehicle emissions, Congress gave no indication that it had any 
intention of upending the application of the traditional consistency 
test to California standards.
---------------------------------------------------------------------------

    \240\ MEMA I, 627 F.2d 1095, 1112 n.35 (DC Cir. 1979) (``For 
this reason we find unpersuasive petitioners' suggestion that 
section 302(k) of the Clean Air Act, 42 U.S.C. 7602(k) (Supp. I 
1977), which contains a definition of ``emission standards,'' 
controls our examination of the meaning of the word ``standards'' in 
section 209); Motor Vehicle Mfrs. Ass'n v. New York State Dep't of 
Envtl. Conservation, 17 F.3d 521, 533 (2d Cir. 1994).
    \241\ ``The 1977 Amendment also drew heavily on the California 
experience in the ten years since enactment of the first waiver 
provision. See 123 Cong. Rec. H4852 (daily ed. May 21, 1977); id. at 
H5061 (daily ed. May 25, 1977).'' MEMA I, 627 F. 2d. 1095, 1111 
n.34; For example, EPA granted a waiver for 1972 and later heavy-
duty vehicles gasoline standards to California on May 6, 1969 (34 FR 
7348). In turn, EPA first promulgated heavy-duty vehicle and engine 
standards pursuant to the 1977 Amendments in 1985. 50 FR 10606 (May 
15, 1985).
---------------------------------------------------------------------------

    Further, as far back as 1967 Congress in enacting section 209(b) 
recognized that emissions technology would be introduced and tested 
first in California before nationwide introduction and use.\242\ 
According to the D.C. Circuit: ``The history of congressional 
consideration of the California waiver provision, from its original 
enactment up through 1977, indicates that Congress intended the State 
to continue and expand its pioneering efforts at adopting and enforcing 
motor vehicle emission standards different from and in large measure 
more advanced than the corresponding Federal program; in short, to act 
as a kind of laboratory for innovation.'' \243\ EPA has thus also long 
recognized Congressional intention that California ``pioneer'' 
emissions control.\244\ EPA's view is supported by legislative history. 
Congress recognized California's severe air quality problems and 
envisioned California's role as an innovative laboratory for motor 
vehicle emission standards and control technology. California's 
``unique [air pollution] problems and [its] pioneering efforts 
justif[ied] a waiver of the preemption section;'' California ``should 
serve the Nation as a `testing area' for more protective standards.'' 
\245\ Similarly, California is to ``blaze its own trail with a minimum 
of federal oversight.'' \246\ EPA has thus ``[h]istorically granted 
waivers allowing the introduction of new technology in California prior 
to its introduction nationwide'' intending for the phase-in of new 
control technology in California as a means of successful 
implementation nationwide.\247\ The Administrator has explained that 
allowing California to first introduce technology ``best serves the 
total public interest and the mandate of the statute. It promotes 
continued momentum toward installation of control systems meeting the 
statutory standards while minimizing risks incident to national 
introduction of new technology.'' \248\ Applying fixed lead time and 
stability requirements to the California heavy-duty vehicle program 
would thwart California's ability to serve as a laboratory of vehicle 
emission reduction technologies and delay the transfer of

[[Page 20716]]

those innovations to the country as a whole under federal standards. 
Given Congress's desire for California to serve as a laboratory for 
innovation, the traditional feasibility inquiry under section 
209(b)(1)(C) suffices to ensure that manufacturers have sufficient time 
to deploy technologies to comply within the California market while 
allowing California to move faster in deploying feasible technologies 
than the fixed lead time and stability requirements would allow.
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    \242\ S. Rep. No. 403, 90th Cong., 1st Sess. 33 (1967) (The 
waiver of preemption is for California's ``unique problems and 
pioneering efforts.''); 113 Cong. Rec. 30950, 32478 (``[T]he State 
will act as a testing agent for various types of controls and the 
country as a whole will be the beneficiary of this research.'') 
(Statement of Sen. Murphy); MEMA I, 627 F.2d 1095, 1111 (DC Cir. 
1979).
    \243\ MEMA I, 627 F.2d 1095, 1110.
    \244\ 38 FR 10317, 10324 (April 26, 1973). There is a general 
pattern that emission control technology have been phased in through 
use in California before their use nationwide. This pattern grew out 
of early recognition that auto caused air pollution problems are 
unusually serious in California. In response to the need to control 
auto pollution, California led the nation in development of 
regulations to require control of emissions. This unique leadership 
was recognized by Congress in enacting Federal air pollution 
legislation both in 1967 and 1970 by providing a special provision 
to permit California to continue to impose more stringent emission 
control requirements than applicable to the rest of the nation. In 
1973 for example, the Administrator granted a waiver to California 
that would force the use of emissions catalyst while setting 
national standards that would not call for such technology. The 
Administrator explained that ``[i]f the new technology is largely 
restricted to California vehicles in 1975, it is the testimony of 
both General Motors and Ford that all the processes needed to mass 
produce catalyst cars can be tested out on a limited scale that 
makes tighter quality control possible and allows extra energy to be 
applied to the cure of any problems that may arise [ ]. Both 
companies also stated that they would be able to focus their 
energies to deal more effectively with such in use failures as did 
occur if the first introduction of catalysts were in a limited 
geographical area [ ].'' Notably, the Administrator was acting under 
a somewhat analogous provision to section 202(a)(3)(A)(ii) by 
calling for standards that ``reflect the greatest degree of 
emissions control which is achievable by application of technology 
which the Administrator determines is available giving appropriate 
consideration to the cost of applying such technology within the 
period of time available to manufacturers.'' Section 202(b)(5)(C).
    \245\ S. Rep. No. 90-403, at 33 (1967); 113 Cong. Rec. 30950, 
32478 (``[T]he State will act as a testing agent for various types 
of controls and the country as a whole will be the beneficiary of 
this research.'') (Statement of Sen. Murphy); MEMA I, 627 F.2d 1095, 
1111 (D.C. Cir. 1979).
    \246\ Ford Motor Co., v. EPA, 606 F.2d 1293, 1297 (D.C. Cir. 
1979).
    \247\ 49 FR 18887, 18894 (May 3, 1984).
    \248\ 38 FR 10317, 10319 (April 26, 1973).
---------------------------------------------------------------------------

    Additional statutory text and context further supports our 
historical view. A plain reading of ``under this paragraph'' in section 
202(a)(3)(C) means under paragraph 3.\249\ Paragraph 3 grants EPA the 
authority to: (1) Establish heavy-duty engine and vehicles standards 
for four listed pollutants in 202(a)(3)(A)(i), (2) classify or 
categorize heavy-duty vehicles and engines in 202(a)(3)(A)(ii); (3) 
revise earlier promulgated heavy-duty standards in 202(a)(3)(B); and 
(4) establish standards for motorcycles in 202(a)(3)(E).\250\ EPA has 
thus long read and applied in its regulatory practice ``under this 
paragraph'' in section 202(a)(3)(C) as meaning under paragraph 3, i.e., 
section 202(a)(3).\251\ In other words, the lead time and stability 
requirements apply to, and only to, certain regulations authorized 
under paragraph 3. EPA has thus also long read section 202(a)(3)(C) as 
the authority to provide the specified lead time and stability 
requirements for heavy-duty vehicle and engine emissions standards that 
are promulgated ``under this paragraph''--under paragraph 3 (``That 
requirement was enacted for the benefit of manufacturers to allow time 
for them to design and develop engines in compliance with newly 
promulgated standards.'').\252\ Specifically, this language applies 
when EPA promulgates heavy-duty vehicle and engine emissions standards 
for the listed pollutants: hydrocarbons, carbon monoxide, oxides of 
nitrogen, and particulate matter emissions from heavy-duty vehicles, 
under section 202(a)(3).\253\ The 1994 MDV decision that commenters 
rely on also acknowledged this reading of section 202(a)(3)(C) at the 
time. By contrast, California's standards are not promulgated under 
section 202(a)(3); as a general matter, California adopts standards for 
which it seeks a waiver as a matter of law under its police 
powers.\254\
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    \249\ In deciding to grant these waiver requests, EPA is relying 
on its legal interpretation of the statute as explained in this 
notice. In each case, EPA believes that its interpretation is the 
best interpretation of the statute, regardless of judicial 
deference. Guedes v. ATF, 45 F.4th 306, 313 (D.C. Cir. 2022). 
Moreover, to the extent the statute is ambiguous, EPA's 
interpretation is reasonable and entitled to deference. Washington 
All. of Tech. Workers v. DHS, 50 F.4th 164, 192 (D.C. Cir. 2022).
    \250\ One commenter also mistakenly suggests that 202(a)(3)(B) 
may also apply to California. EMA Supp. Comment at 6. To begin with, 
the commenter's argument is internally inconsistent. Compare id. at 
6, with id. at 4 (``certain provisions in section 202(a)(3) are not 
directly relevant to CARB--for example, because they authorize EPA 
to revise standards (i.e., section 202(a)(3)(B))''). Underscoring 
the point, there are other obligations imposed on EPA by section 
202(a) that are not imposed on California. For example, the 
requirements involving motorcycles under section 202(a)(3)(E) do not 
apply to California, (EPA has issued waivers for California's 
motorcycle standards that include 42 FR 1503 (January 7, 1977); 41 
FR 44209 (October 7, 1976); 43 FR 998 (January 5, 1978)), neither 
does the consultation requirement under section 202(a)(5)(A), nor do 
certain requirements of section 202(a)(6) addressing onboard vapor 
recovery. Moreover, applying section 202(a)(3)(B) to California 
would, as with applying section 202(a)(3)(A), create a conflict with 
section 209(b). Section 209(b)'s ``in the aggregate'' language 
allows California to adopt any standards so long as they are in the 
aggregate more protective than the federal standards; California is 
not limited to the fixed numerical NOx standards found in section 
202(a)(3)(B)(ii), or to revising standards based on certain air 
quality information as provided by 202(a)(3)(B)(i). Further, section 
202(a)(3)(B)(i) grants the Administrator discretion to revise 
certain heavy-duty standards that the Administrator previously 
``promulgated under, or before the date of, the enactment of the 
Clean Air Act Amendments of 1990 (or previously revised under this 
subparagraph).'' This provision is closely linked with section 
202(a)(3)(A). That is, notwithstanding the mandate in section 
202(a)(3)(A) for EPA to promulgate heavy-duty standards for the four 
listed pollutants that reflect the greatest emissions reductions 
achievable, section 202(a)(3)(B)(ii) allows EPA to revise such 
standards based on certain air quality information. See section 
202(a)(3)(A)(i) (including the proviso ``unless the standard is 
changed as provided in subparagraph (B)''). As explained above, 
section 202(a)(3)(A) does not apply to California, and thus section 
202(a)(3)(B)(ii) does not either. Separately, section 
202(a)(3)(B)(ii) also does not apply to California because 
California is not revising standards previously promulgated under 
the CAA, whether ``under, or before the date of, the enactment of'' 
the 1990 CAA Amendments. Finally, to the extent the commenter is 
specifically concerned with greenhouse gas aspects of California's 
regulations, EPA notes that in the federal standard-setting context, 
the agency has promulgated heavy-duty GHG standards under its 
general standard-setting authority in section 202(a)(1)-(2) and does 
not apply the four-year lead time and three-year stability 
requirements in section 202(a)(3)(C) in such heavy-duty GHG 
rulemakings. See 87 FR 17436-37 & n.26 (Mar. 28, 2022) (``Section 
202(a)(3)(A) and (C) . . . do not apply to regulations applicable to 
GHGs.''); 81 FR 73512 (Oct. 25, 2016); Greenhouse Gas Emissions 
Standards and Fuel Efficiency Standards for Medium- and Heavy-Duty 
Engines and Vehicles EPA Response to Comments Document for Joint 
Rulemaking 5-34 to 5-36 (Aug. 2011).
    \251\ ``[I]n adding section 202(a)(3)(A)(iii) . . . Congress 
directed the EPA to give priority to establishing particulate 
emission standards for heavy-duty vehicles, and left the agency free 
to exercise its power under section 202(a)(1) to regulate light-duty 
automobiles, whether diesel-powered or otherwise.'' NRDC v. EPA, 655 
F.2d 318, 326 (D.C. Cir. 1981); See, e.g., EPA's statutory authority 
requires a four-year lead time for any heavy-duty engine or vehicle 
standard promulgated or revised under CAA section 202(a)(3). See 
also 81 FR 95982 (December 29, 2016); 79 FR 46256 (August 7, 2014); 
77 FR 73459 (December 10, 2012); 73 FR 52042 (September 8, 2008).
    \252\ EPA ``cannot cite us to any precedent allowing a court to 
ignore an explicit leadtime requirement.'' NRDC v. Thomas, 805 F.2d 
at 435. See also, 805 F.2d 435, n.40.
    \253\ NRDC v. Thomas, 805 F.2d at 414-16, 435 (reversing EPA 
decision to provide less than the statutorily mandated four-year 
lead time for certain model year heavy-duty vehicles and engines 
standards.); 805 F.2d 435 n.40; See also, e.g., 87 FR 17414, 17420 
n.26 (March 28, 2022) (``Section 202(a)(3)(A) and (C) apply only to 
regulations applicable to emissions of these four pollutants.''); 87 
FR 17435-36. EPA's statutory authority requires a four-year lead 
time for any heavy-duty engine or vehicle standard promulgated or 
revised under CAA section 202(a)(3).
    \254\ Central Valley Chrysler-Jeep, Inc. v. Goldstene, 529 
F.Supp.2d 1151, 1174 (``The waiver provision of the Clean Air Act 
recognizes that California has exercised its police power to 
regulate pollution emissions from motor vehicles since before March 
30, 1966; a date that predates . . . the Clean Air Act.'').
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    Additional reasons justify not applying 202(a)(3)(C) to the 2018 HD 
Warranty Amendments. Specifically, it has been EPA's long-standing view 
that section 207, which requires manufacturers to provide an emissions 
warranty for heavy-duty engines, is the grant of authority to EPA to 
promulgate heavy-duty vehicles emissions warranty requirements.\255\ 
Accordingly, section 202(a)(3) is inapplicable to Federal warranty 
requirements, and it would not be reasonable to give it force in 
California's warranty requirements. Notably, the D.C. Circuit has 
agreed, holding that ``California is not required to comply with 
section 207 to get a waiver.\256\ Further, EPA has also long considered 
CARB's warranty amendments as not standards themselves, but rather 
accompanying enforcement procedures because they constitute criteria 
designed to better ensure compliance with applicable standards and are 
accordingly relevant to a manufacturer's ability to produce vehicles 
and engines that comply with applicable standards.\257\ And while 
``section 209(b) refers to accompanying procedures only in the context 
of

[[Page 20717]]

consistency with section 202(a),'' EPA has long reviewed the 
accompanying procedures under the traditional consistency test.\258\ In 
any event, the 2018 HD Warranty Amendments would not be properly 
considered emission standards for the listed pollutants that would come 
within the purview of section 202(a)(3)(C).
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    \255\ Auto. Parts Rebuilders Ass'n v. EPA, 720 F.2d 142, 149 
(D.C. Cir. 1983) (Section 207 ``commands that the Administrator 
`shall prescribe regulations which shall require manufacturers to 
warrant [their cars].' '' (Alteration in original)). See Decision 
Document for the Notice of Scope of Preemption for California's 
amendments to warranty regulations pertaining to 1983 and later 
model year passenger cars, light-duty vehicles, medium- and heavy-
duty vehicles and motorcycles, V-B-1, at 65, n.132 and 66-67; 51 FR 
12391 (Apr. 10, 1986).
    \256\ MEMA II, 142 F.3d at 466-67.
    \257\ MEMA I at 1111-13; Decision Document accompanying 51 FR 
12391 (April 10, 1986), at 3; 43 FR 32182, 32184 (July 25, 1978). 
EPA sets emissions warranty period under section 207(a) and not 
section 202(a). See, e.g., 48 FR 52170 (November 16, 1983).
    \258\ MEMA I, 627 F.2d at 1111-12.
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    Further, section 202(a)(3)(C) by its terms applies to onroad heavy-
duty vehicles and engines, not to nonroad vehicles or engines.\259\ 
Considering the nearly identical language in both sections 209(b) and 
209(e)(2)(A), EPA has reviewed California's requests for authorization 
of nonroad vehicle or engine standards under section 209(e)(2)(A) using 
the same principles that it has historically applied in reviewing 
requests for waivers of preemption for new motor vehicle or new motor 
vehicle engine standards under section 209(b).\260\ Under the third 
authorization criterion, EPA historically has interpreted the 
consistency inquiry to require, at minimum, that California standards 
and enforcement procedures be consistent with section 209(a), section 
209(b)(1)(C), and section 209(e)(1) of the Act. And, in evaluating 
consistency with section 209(b)(1)(C), for purposes of consistency with 
section 202(a) EPA has applied the traditional feasibility test where 
the inquiry is solely whether California standards are feasible within 
the lead time provided.\261\ EPA has thus never applied section 
202(a)(3)(C) to authorizations for nonroad engines and vehicles, 
explaining for instance that ``section [202(a)(3)(C)] by its own terms 
applies only to standards applicable to emissions from new heavy-duty 
on-highway motor vehicle engines, not the nonroad engines being 
regulated by California.'' \262\
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    \259\ Section 202 of the CAA pertains to new motor vehicles or 
new motor vehicle engines, and motor vehicles and engines is further 
defined in section 216 of the CAA. Section 216 also provides the 
definition of nonroad engine and nonroad vehicle and provides that 
nonroad engines are not subject to standards promulgated under 
section 202 of the CAA.
    \260\ See Engine Mfrs. Ass'n v. EPA, 88 F.3d 1075, 1087 (D.C. 
Cir. 1996) (``. . . EPA was within the bounds of permissible 
construction in analogizing section 209(e) on nonroad sources to 
section 209(a) on motor vehicles.'').
    \261\ On July 20, 1994, EPA promulgated a rule that sets forth, 
among other things, regulations providing the criteria, as found in 
section 209(e)(2)(A), which EPA must consider before granting any 
California authorization request for new nonroad engine or vehicle 
emission standards. 59 FR 36969 (July 20, 1994). EPA revised these 
regulations in 1997. These regulations were further slightly 
modified and moved to 40 CFR part 1074, See 73 FR 53979 (Oct. 8, 
2008). As stated in the preamble to the 1994 rule, EPA has 
historically interpreted the section 209(e)(2)(A)(iii) 
``consistency'' inquiry to require, at minimum, that California 
standards and enforcement procedures be consistent with section 
209(a), section 209(e)(1), and section 209(b)(1)(C) (as EPA has 
interpreted that subsection in the context of section 209(b) motor 
vehicle waivers). In order to be consistent with section 209(a), 
California's nonroad standards and enforcement procedures must not 
apply to new motor vehicles or new motor vehicle engines. To be 
consistent with section 209(e)(1), California's nonroad standards 
and enforcement procedures must not attempt to regulate engine 
categories that are permanently preempted from state regulation.
    \262\ See, for example, 77 FR 9249, n.73.
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    Considering the 1977 Amendments and subsequent ones, Congress could 
have explicitly provided that the four-year lead time and three-year 
stability requirements in section 202(a)(3)(C) apply to California 
heavy-duty standards, had that been Congress's intent. For example, 
Congress could have changed the text of section 209(b)(1)(C) to say, 
``compliant with'' rather than ``consistent with.'' It did not. Further 
demonstrating the point, in section 202(m)(2) regarding certain 
standards that were determined infeasible by EPA, Congress set out a 
specific delayed lead time requirement that is ``consistent with 
corresponding regulations or policies adopted by the California Air 
Resources Board.'' \263\ Similarly, in section 428 of the 2004 
Consolidated Appropriations Act Congress required that EPA specifically 
address safety implications of any California standard for certain 
engines prior to granting authorizations under section 209(e).\264\ 
Section 202(a)(3)(C), however, is devoid of either any explicit 
language or exception that would be read as a reference to California's 
heavy-duty standards.\265\ A provision that would require the 
Administrator to preclude California from revising the state's heavy-
duty standards for a minimum of three model years would appear to be an 
important enough limitation for Congress to explicitly set out in 
either section 202 or 209 especially if Congress intended California to 
be the judge of the ``best means to protect the health of its citizens 
and the public welfare.'' \266\ EPA thus believes more explicit 
Congressional directive is needed prior to precluding California from 
revising standards for heavy-duty vehicles and engines that are to be 
sold in that state.\267\
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    \263\ ``The regulations required under paragraph (1) of this 
subsection shall take effect in model year 1994, except that the 
Administrator may waive the application of such regulations for 
model year 1994 or 1995 (or both) with respect to any class or 
category of motor vehicles if the Administrator determines that it 
would be infeasible to apply the regulations to that class or 
category in such model year or years, consistent with corresponding 
regulations or policies adopted by the California Air Resources 
Board for such systems.'' Section 202(m)(2) (Emphasis added). By the 
time of this amendment California had been regulating heavy-duty 
vehicle and engine emissions with the appropriate waivers that EPA 
granted applying the traditional consistency test. See, e.g., 34 FR 
7348 (May 6, 1969) (HD gasoline MY 72 and later); 36 FR 8172 (April 
30, 1971) (HD diesel MY 72 and later MY); 40 FR 23102, 23105 (May 
28, 1975) (extending waiver of April 30, 1971, to MY 1975 HD 
standards).
    \264\ Codified at 40 CFR 1074.105(c). ``In considering any 
request from California to authorize the state to adopt or enforce 
standards or other requirements relating to the control of emissions 
from new nonroad spark-ignition engines smaller than 50 horsepower, 
the Administrator will give appropriate consideration to safety 
factors (including the potential increased risk of burn or fire) 
associated with compliance with the California standard.''
    \265\ In contrast, for example, under section 246(f)(4), which 
sets out a State Implementation Plan provision regarding fleet 
programs required for certain non-attainment areas, ``standards 
established by the Administrator under this paragraph . . . shall 
conform as closely as possible to standards which are established 
for the State of California for ULEV and ZEV vehicles in the same 
class.'' And ``[f]or vehicles of 8,500 lbs. GVWR or more, the 
Administrator shall promulgate comparable standards for purposes of 
this subsection.'' Section 246(f)(4) (Emphasis added).
    \266\ H.R. Rep. No. 95-294, 95th Cong., 1st Sess. 301-302 
(1977).
    \267\ Moreover, in 1977, the congressional record indicates that 
at least one heavy-duty vehicle and engine manufacturer requested 
that Congress amend section 209(b) by limiting this waiver provision 
to only light-duty vehicles and engines. According to the engine 
manufacturer, California's heavy-duty vehicle standards would be on 
par with federal standards by 1983. Hearing on S. 251, 252 and 253 
Before Subcomm. On Env't Protection, H.R. Rep. No. 95-294, 95th 
Cong. 1st Sess. 4221-23 (1977). There was no concurrent testimony 
from a member of Congress in 1977 or 1990 regarding the intent of 
section 202(a)(3) and certainly nothing to indicate that it would 
apply to California. While there was general testimony from a member 
of industry during the 1990 process, there is no evidence in the 
record suggesting the applicability of 202(a)(3)(C) to California. 
Hearing on S.1630 Before Subcomm. on Env't Protection, 101st Cong. 
312-13 (1989). In any event, ``The 1977 Amendment also drew heavily 
on the California experience in the ten years since enactment of the 
first waiver provision. See 123 Cong. Rec. H4852 (daily ed. May 21, 
1977); id. at H5061 (daily ed. May 25, 1977).'' MEMA I, 627 F. 2d. 
1095, 1111 n.34.
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    In any event, except for the 1994 MDV waiver, since the 1977 
Amendments EPA has granted heavy-duty engine and vehicle waivers where 
California has provided less than four years of lead time from adoption 
of its regulations and three years stability also under the traditional 
consistency test.\268\ Congress did not add anything to section 
202(a)(3) during the 1990 amendments to the Clean Air Act to indicate 
its applicability to California.\269\ And, in

[[Page 20718]]

2012, EPA specifically rejected commenters assertions that section 
202(a)(3)(C) applied to California, stating that EPA's lead time 
inquiry relates to technological feasibility and that there is no 
additional requirement imposed by the section 209 criteria.\270\
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    \268\ For example, 34 FR 7348 (May 6, 1969 (HD gasoline MY 1972 
and later); 36 FR 8172 (April 30, 1971) (HD diesel MY 1972 and later 
MY); 43 FR 1829 (January 12, 1978); 49 FR 18887 (May 3, 1984).
    \269\ The 1990 Amendments did extend the four-year lead time and 
three-year stability to standards promulgated by EPA for control of 
NOX emissions from heavy duty engines and vehicles. 
(``The conference agreement adopts the House provisions, modified to 
retain the Senate oxides of nitrogen (NOX) standard for 
heavy-duty engines effective in model year 1998, and to reinstate 
the four-year lead time and three-year stability provisions in 
current law.'' Conference Report on S. 1630 (H. Rept. 101-952) 103d 
Cong. 1st Sess. 887).
    \270\ 77 FR 9239, 9249 (Feb. 16, 2012) (``However, the lead-time 
inquiry EPA undertakes relates to technological feasibility. 
Specifically, consistency with section 202(a) requires the 
Administrator to first determine whether adequate technology already 
exists; or if it does not, whether there is adequate time to develop 
and apply the technology before the standards go into effect . . . 
EPA then has no further inquiry into lead-time, because no 
additional requirement is imposed by the section 209 criteria.''). 
EPA acknowledges that the regulations at issue in this 2012 waiver 
decision concerned nonroad engines, not heavy-duty on-highway motor 
vehicle engines, and that the Agency noted, in that decision, that 
``even if the language in [section 202(a)(3)(C)] were relevant to 
its consistency analysis, that section by its own terms applies only 
to standards applicable to emissions from new heavy-duty on-highway 
motor vehicle engines, not the nonroad engines being regulated by 
California.'' Id. at 9249, n.73.
---------------------------------------------------------------------------

    Turning to section 209(b), in section 209(b)(1) Congress directed 
that EPA ``shall'' grant waivers absent one of the three limited bases 
for a waiver denial.\271\ Section 209(b)(1) ``contains an imperative to 
do an act--grant the waiver after a hearing--once California has made 
the protectiveness determination.'' \272\ Congress did not amend 
section 209(b)(1)(C) in the 1977 Amendments, rather the ``more 
stringent'' standard required for California standards and contained in 
section 209(b)(1) in the 1967 Act was superseded by amendments to 
section 209, which established that California's standards must be, in 
the aggregate, at least as protective of public health and welfare as 
applicable Federal standards. Specifically, under section 209(b)(1), 
California is now required to make a protectiveness finding ``in the 
aggregate'' for each waiver request by looking at the summation of the 
standards within its vehicle program. The protectiveness finding does 
not call for identicality of the standards under review with Federal 
standards. Instead, the 1977 Amendments to section 209(b)(1), which 
reflected California's preference to ``trade off'' emissions of carbon 
monoxide, which was not as critical a problem in California, for 
NOX emissions, which were and continue to present severe air 
quality challenges in California.\273\ With this amendment, California 
was no longer required to design a program where each standard was 
equally or more stringent than the applicable Federal standards, but 
rather can prioritize the emission reductions it views as most 
important for its citizens and to regulate certain pollutants less 
stringently than the Federal government, as long as the state program 
standards are in the aggregate at least as protective as the Federal 
standards.\274\ CARB may now design motor vehicle emission standards 
that are not as stringent as Federal standards but when considered 
collectively with other standards would be best suited to address 
California air quality problems, as long as the in the aggregate, the 
protectiveness finding is made and it is not arbitrary and 
capricious.\275\ ``[T]here is no question that Congress deliberately 
chose in 1977 to expand the waiver provision so that California could 
enforce emission control standards which it determined to be in its own 
best interest even if those standards were in some respects less 
stringent than comparable federal ones.'' \276\
---------------------------------------------------------------------------

    \271\ See, e.g., Ford Motor Co., 606 F.2d 1293, 1302 (``The 
Administrator is charged with undertaking a single review in which 
he applies the deferential standards set forth in Section 209(b) to 
California and either grants or denies a waiver without exploring 
the consequences of nationwide use of the California standards or 
otherwise stepping beyond the responsibilities delineated by 
Congress.'').
    \272\ MEMA I, 627 F.2d 1095, 1120.
    \273\ The House Committee recognized ``California's longstanding 
belief that stringent control of oxides of nitrogen emission from 
motor vehicles may be more essential to public health protection 
than stringent control of carbon monoxide,'' and was aware that it 
might be technologically difficult to meet both the NO[x] standards 
California desired and the federal CO standard. Accordingly, Section 
209(b) was rewritten to permit California to obtain a waiver of 
federal preemption so long as it determines that its emission 
control standards would be, ``in the aggregate, at least as 
protective of public health and welfare as applicable Federal 
standards.'' Ford Motor, 606 F.2d 1293, 1297 (D.C. Cir. 1979).
    \274\ H.R. Rep. No. 95-294, 95th Cong., 1st Sess., 301-302 
(1977). The amendment is to afford California ``the best means to 
protect the health of its citizens and the public welfare.'' (Motor 
Vehicle Mfrs. Ass'n v. NYS Dep't of Env't Conservation, 17 F.3d at 
525 (``section 209 (formerly section 208) was amended to require the 
U.S. Environmental Protection Agency (EPA) to consider California's 
standards as a package, so that California could seek a waiver of 
preemption if its standards `in the aggregate' protected public 
health at least as well as federal standards.'')).
    \275\ 74 FR at 32761 (``Congress decided in 1977 to allow 
California to promulgate individual standards that are not as 
stringent as comparable federal standards, as long as the standards 
are `in the aggregate, at least as protective of public health and 
welfare as applicable federal standards.''); Ford Motor, 606 F.2d 
1293, 1302 (D.C. Cir. 1979) (``[T]he 1977 amendments significantly 
altered the California waiver provision.'').
    \276\ Ford Motor Co., 606 F.2d 1293, 1301; MEMA II, 142 F.3d 464 
(``California would not be denied a waiver if its CO standard were 
slightly higher than the federal . . . standard. . . . This is 
despite the fact that section 202(g) contains specific standards for 
CO that EPA must promulgate.'').
---------------------------------------------------------------------------

    It is also this protectiveness determination by California, under 
section 209(b)(1) that determines EPA's scope of review for consistency 
under section 209(b)(1)(C).\277\ EPA has reasoned that this is 
appropriate because the phrase ``in the aggregate,'' which as earlier 
explained is California's whole program precedes ``such state 
standards,'' which is the relevant language in section 
209(b)(1)(C).\278\ EPA has thus long read both sub-provisions together 
so that the Agency reviews California's entire program for both 
protectiveness and feasibility.\279\ So, EPA's historic practice has 
been to conduct the technology feasibility analysis for CARB's standard 
under review as a whole-program assessment, i.e., one that ensures 
manufacturers have sufficient lead time to comply with the program's 
standards as a whole, accounting for the interactions between 
technologies necessary to meet both new and existing standards.\280\ 
And most importantly, because California can ``include some less 
stringent [standards] than the corresponding federal standards'' 
California would logically not be expected to take section 202(a)(3)(C) 
into account in any protectiveness finding made for a waiver request 
for California standards with a shorter lead time than specified in 
section 202(a)(3)(C), and such standards would otherwise be properly 
considered more stringent than Federal standards.\281\ ``[T]he agency's 
long-standing interpretation that section 209(b) does not require 
California to establish

[[Page 20719]]

perfect compliance with the CAA to obtain a waiver is particularly 
plausible because section 209(b) explicitly requires only that the 
state's standards `be, in the aggregate, at least as protective of 
public health and welfare as applicable Federal standards.' CAA section 
209(b)(1).'' \282\
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    \277\ EPA's assessment under 209(b)(1)(C) is not in practice a 
standard-by-standard review. EPA believes it appropriate to read the 
entirety of 209 together, along with its purposes, in order to 
properly interpret its components such as 209(b)(1)(C). See e.g., 87 
FR 14332.
    \278\ 78 FR 2131-45. EPA notes that the term ``such state 
standards'' in 209(b)(1)(C) allows the Agency, in appropriate 
circumstances, to review the consistency of CARB's suite of 
standards, for a particular vehicle category, with section 202(a). 
For example, EPA evaluated all of the standards (LEV III criteria 
pollutant, ZEV sales mandate, and GHG standards) of the ACC program 
in recognition of the aggregate costs and lead time associated with 
CARB's standards as well as technologies that may be employed to 
meet more than one standard.
    \279\ 49 FR 14353-54, 14358-62. EPA notes there would be an 
inconsistency if ``State standards'' meant all California standards 
when used in section 209(b)(1) but only particular standards when 
used in 209(b)(1)(B) and 209(b)(1)(C). EPA has historically 
interpreted the third waiver criterion's feasibility analysis as a 
whole-program approach. 87 FR 14361, n.266.
    \280\ 38 FR 30136 (November 1, 1973) and 40 FR 30311 (July 18, 
1975).
    \281\ See for example, 41 FR 44209, 44212 (October 7, 1976).
    \282\ MEMA II, 142 F.3d at 463.
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    Section 202(a)(3)(C) also requires that standards for heavy-duty 
vehicles and engines apply for no less than three model years without 
revision.\283\ Under a commenter's argument, the Administrator would 
have to ``align'' or make a finding that precludes California from 
revising each one of the standards under review for a minimum of three 
model years, under section 202(a)(3)(C).\284\ Commenters' reading of 
``consistency'' would thus require EPA to first conduct ``the narrow[ ] 
. . . congressionally mandated EPA review'' under which EPA's scope of 
review is delineated by the protectiveness finding California has made, 
and then a second broader review, beyond the confines of EPA's historic 
waiver practice, that would account for the stability requirements for 
California cars.\285\ Under this reading, ``[EPA] must come to the 
rather curious conclusion that Congress intended the Administrator to 
approach every new set of California standards wearing two hats one 
expressly provided by statute and the other a product of elusive 
inference. Under the first he would undertake the cursory review set 
forth in Section 209(b) for purposes of deciding whether to grant 
California a waiver of preemption; and under the other he would turn 
around and, apparently in the course of a full-fledged rulemaking 
proceeding, plumb the merits of the California standards.'' \286\ EPA 
disagrees. ``The Administrator has consistently held since first vested 
with the waiver authority, his inquiry under section 209 is modest in 
scope. He has no broad and impressive authority to modify California 
regulations.'' \287\ ``[H]is role with respect to the California 
program is largely ministerial.'' \288\ And ``[t]he statute does not 
provide for any probing substantive review of the California standards 
by federal officials.'' \289\ Rather ``[t]he Administrator is charged 
with undertaking a single review in which he applies the deferential 
standards set forth in Section 209(b) to California and either grants 
or denies a waiver without exploring the consequences of nationwide use 
of the California standards or otherwise stepping beyond the 
responsibilities delineated by Congress.'' (Emphasis added).\290\ As 
previously discussed, the deference called for in reviewing 
California's waiver request led EPA to explain over 50 years ago:
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    \283\ ``Any standard promulgated or revised under this paragraph 
and applicable to classes or categories of heavy-duty vehicles or 
engines shall apply for a period of no less than 3 model years 
beginning no earlier than the model year commencing 4 years after 
such revised standard is promulgated.'' Section 
202(a)(3)(C)(Emphasis added).
    \284\ EMA Initial Comments at 5, 11.
    \285\ Ford Motor, 606 F.2d 1293, 1298-99.
    \286\ Id. at 1302.
    \287\ MEMA I, 627 F.2d at 1119 (internal citations omitted).
    \288\ Id. at 1123 n.56 (``[T]he Administrator has no broad 
mandate to assure that California's emissions control program 
conforms to the Administrator's perceptions of the public interest. 
Absent the contingency that he is able to make contrary findings, 
his role with respect to the California program is largely 
ministerial.'').
    \289\ Ford Motor, 606 F.2d at 1301.
    \290\ Id. at 1302.

    Even on this issue of technological feasibility I would feel 
constrained to approve a California approach to the problem which I 
might feel unable to adopt at the Federal level in my own capacity 
as a regulator. The whole approach to the Clean Air Act is to force 
the development of new types of emission control technology where 
that is needed by compelling the industry to `catch up' to some 
degree with newly promulgated standards. Such an approach to 
automotive emission control might be attended with costs, in the 
shape of reduced product offering, or price and fuel economy 
penalties, and by risks that a wider number of vehicle classes may 
not be able to complete their development work in time. Since a 
balancing of these risks and costs against the potential benefits 
from reduced emissions is a central policy decision for any 
regulatory agency, under the statutory scheme outlined above I 
believe I am required to give very substantial deference to 
California's judgment on that score.\291\
---------------------------------------------------------------------------

    \291\ 36 FR 17158 (August 31, 1971); See also See 78 FR at 2133. 
(EPA notes that when reviewing California's standards under the 
third waiver prong, the Agency may grant a waiver to California for 
standards that EPA may choose not to adopt at the Federal level due 
to different considerations).

    Commenters' reading would also introduce two different tests for 
the evaluation of the consistency of California's standards under the 
third prong: one for onroad heavy-duty vehicle and engine standards; 
and a different one for nonroad heavy-duty vehicle and engine 
standards. For one set of standards, EPA would continue evaluation of 
technology feasibility under the traditional test while other standards 
would have to be evaluated for consistency under the four-year lead 
time and minimum three-model year stability requirements. This would 
create a dichotomy, for example, between California's heavy-duty onroad 
and nonroad vehicle and engine standards that address hydrocarbons, 
carbon monoxide, oxides of nitrogen, and particulate matter that is 
neither supported by the statute nor EPA's waiver practice. It would be 
particularly confounding, in that as a general matter, the only 
difference between certain heavy-duty vehicles is the placement in 
service with some heavy-duty engines being used interchangeably for 
either onroad or nonroad purposes. Since the inception of the waiver 
program EPA has reviewed both California's onroad and nonroad heavy-
duty engine standards under the traditional test. This waiver practice 
predated the 1990 Amendments that provided for authorizations of 
nonroad engines and vehicles standards by over two decades. Thus, for 
example, over fifty years ago EPA, in granting a waiver of preemption 
for California's 1972 and 1973 MY HD vehicles, also denied the waiver 
for certain nonroad utility vehicles under the historical technology 
feasibility test.\292\ Since the 1990 amendments and considering the 
identical language in both sections 209(b) and 209(e)(2)(A), EPA has 
reviewed California's requests for authorization of nonroad vehicle or 
engine standards under section 209(e)(2)(A) using the same principles 
that we have historically applied in reviewing requests for waivers of 
preemption for new motor vehicle or new motor vehicle engine standards 
under section 209(b).\293\ Specifically, EPA's practice has been to 
conduct the consistency inquiry called for under section 
209(e)(2)(A)(iii) by evaluating, at a minimum, whether California's 
standards and enforcement procedures for nonroad engines and vehicles 
are consistent with section 209(a), section

[[Page 20720]]

209(e)(1) and section 209(b)(1)(C).\294\ In short, ``EPA's review of 
California's regulations under the third statutory criterion is quite 
deferential, limited to judging whether a regulation is `not 
consistent' with the terms of section 7543. See 42 U.S.C. 
7543(e)(2)(A)(iii).'' \295\
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    \292\ 36 FR 8172 (April 30, 1971) (Provided that due to 
considerations of technological feasibility, this waiver of such 
standards and procedures (1) shall not become applicable with 
respect to hydrocarbon and carbon monoxide emissions from nonroad 
utility vehicles (as defined at 45 CFR 85.1(a), 35 FR 17288); 34 FR 
7348 (May 6, 1969) (Due to technological feasibility and lead-time 
issues, exhaust emission standards and test procedures for 1970 gas-
powered light duty vehicles are not applicable to off-road utility 
vehicles until April 30, 1970, and not at all unless provision is 
made for calculating emissions of hydrocarbons and carbon monoxide. 
Due to technological feasibility issues, standards and procedures 
for 1971 and later gas-powered light-duty vehicles are not 
applicable to off-road utility vehicles unless provision are made 
for calculating emissions of hydrocarbons and carbon monoxide. Due 
to technological feasibility issues, fuel evaporative emission 
standards and test procedures for 1970 and later gas-powered light 
duty vehicles are not applicable to off-road utility vehicles until 
April 30, 1970).
    \293\ See Engine Mfrs. Ass'n v. EPA, 88 F.3d 1075, 1087 (D.C. 
Cir. 1996) (``. . . EPA was within the bounds of permissible 
construction in analogizing section 209(e) on nonroad sources to 
section 209(a) on motor vehicles.'').
    \294\ 40 CFR part 1074, subpart B, 73 FR 59379 (October 8, 
2008).
    \295\ American Trucking Assoc. v. EPA, 600 F.3d 624, 629 (D.C. 
Cir. 2010).
---------------------------------------------------------------------------

    The ``technological feasibility component of section 202(a) [only] 
obligates California to allow sufficient lead time to permit 
manufacturers to develop and apply the necessary technology.'' \296\ 
Under EPA's historical practice, standards that are technologically 
feasible because technology is presently in use are ``consistent with 
section 202(a).'' So too are standards for which technology is 
reasonably projected to be available by the relevant model year. For 
California standards, that ends the inquiry. Otherwise, the 
Administrator, who has long explained that his role in the waiver 
context is ``modest in scope'' and not to ``overturn'' and ``substitute 
his judgment'' for those of California would nevertheless impose a 
four-year lead time requirement on California despite a showing that 
necessary emission control technology is available and otherwise well 
within the bounds of EPA's historical waiver practice of reviewing 
feasibility.\297\ Doing so would be inconsistent with the statutory 
text and the structure that Congress put in place to enable innovation 
in California's market. In sum, ``the import of section 209(b) is not 
that California and Federal standards be identical, but that the 
Administrator does not grant a waiver of Federal preemption where 
compliance with the California standards is not technologically 
feasible within available lead time.'' \298\
---------------------------------------------------------------------------

    \296\ MEMA II, 142 F.3d at 463 (Internal citations omitted).
    \297\ H.R. Rep. No. 95-294, at 302 (The Administrator ``is not 
to overturn California's judgment lightly. Nor is he to substitute 
his judgment for that of the State.'').
    \298\ 46 FR 22032, 22034-35 (April 15, 1981).
---------------------------------------------------------------------------

b. Neither AMC v. Blum nor the 1994 MDV Waiver Dictate a Contrary 
Interpretation
    As also noted above, EPA received comment that the D.C. Circuit's 
decision in Blum along with EPA's 1994 MDV waiver constrain EPA and 
require it to apply the precise requirements of section 202(a)(3)(C) 
California's program in reviewing for consistency with section 
202(a).\299\ But the lead time section at issue in Blum is 
distinguishable from section 202(a)(3)(C) in several key respects, and 
Blum thus does not control consideration of that latter section. In 
Blum, the D.C. Circuit held that a waiver of preemption that denied a 
small volume manufacturer the statutorily mandated lead time specified 
as an exception in section 202(b)(1)(B) was incorrectly granted because 
the relevant California's standards did not provide two-year lead time 
and were thus inconsistent with section 202(a) under the third waiver 
prong.\300\ According to the court, ``Congress itself finds and 
mandates that with respect to small manufacturers a lead period two 
years is necessary. We think the effect of this congressional mandate 
is to assimilate or incorporate in section 202(a)(2) the proviso of 
section 202(b)(1)(B).'' \301\
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    \299\ 59 FR 48625 (September 22, 1994) and associated Decision 
Document at EPA-HQ-OAR-2022-0330, (MDV Waiver Decision Document).
    \300\ Waiver of preemption for California to Enforce 
NOX emissions standards for 1981 and later model years 
passenger cars. 43 FR 25729 (June 14, 1978).
    \301\ American Motors Corp. v. Blum, 603 F.2d 978, 981 (D.C. 
Cir. 1979) (``Section 202(b)(1)(B) directs that the regulations 
prescribed by the Administrator pursuant to section 202(a) shall 
require that NOX emissions may not exceed 2.0 grams per 
vehicle mile for vehicles and engines manufactured during model 
years 1977 through 1980. For those manufactured during model year 
1981 and thereafter, NOX emissions may not exceed 1.0 
grams per vehicle mile. . . . In establishing these regulations the 
Administrator is bound by section 202(a)(2) to allow such lead time 
as he finds necessary.'')
---------------------------------------------------------------------------

    There are several important distinctions between Blum and the 
present waivers. As an initial matter, Blum is not directly on point 
because it did not resolve the applicability of section 202(a)(3)(C) in 
a California waiver proceeding. Nor did Blum suggest that all 
nationally applicable lead time requirements in section 202 must apply 
to California. Rather, Blum performed a detailed analysis of the text 
and history of the specific provision at issue, section 202(b)(1)(B), 
and found that that provision alone must be strictly applied for 
California's standards to be ``consistent'' with section 202(a). 
Applying the same kind of detailed textual and historical analysis 
here, EPA concludes that section 202(a)(3)(C) does not apply in the 
California waiver context.\302\
---------------------------------------------------------------------------

    \302\ See section III.D.5.a.
---------------------------------------------------------------------------

    Moreover, the facts surrounding section 202(b)(1)(B) in Blum and 
section 202(a)(3)(C) here are quite different. Blum dealt with a 
narrow, time-limited issue: whether a specific group of manufacturers 
were entitled to relief from certain NOX standards for two 
model years shortly after the enactment of the 1977 Amendments. 
Congress made findings specific to those standards and that group of 
manufacturers, including one of the petitioners in the litigation by 
name. The court of appeals gave substantial weight to the specific 
findings Congress made and the detailed legislative history. By 
contrast, section 202(a)(3)(C) deals with a much broader set of 
standards applying to a broader set of manufacturers over an indefinite 
period of time--none of which Congress specifically evaluated. Applying 
section 202(a)(3)(C) to California's program is not necessary because 
it was not grounded in manufacturer and model year-specific findings 
and would, as discussed above, interfere with California's ability to 
serve as a laboratory--all in stark contrast to the application of 
section 202(b)(1)(B). Congress purposely crafted statutory language in 
section 202(b)(1)(B) to provide practical flexibility that would only 
apply for a short period of time (the 1981 and 1982 model years) with 
knowledge of the industry at the time, and the court of appeals in Blum 
acknowledged the congressional purpose of this language. This short-
lived statutory exception no longer applies in EPA rulemakings, nor 
does it apply to California at this point in time. In contrast, there 
is no evidence that Congress evaluated questions of lead time and 
stability with respect to future California heavy-duty standards--or 
that it had any intent to constrain the form of California's standards, 
in contrast to the federal standards tied to the ``greatest degree of 
emission reduction achievable'' mandate. And more importantly, there 
are no similar legislative findings or other legislative history 
indicating that Congress believed all manufacturers needed at least 
four years of lead time to meet CARB's heavy-duty standards generally 
or the standards that are the subject of these waiver requests 
specifically. Indeed, as EPA has explained, CARB set forth a detailed 
explanation of the feasibility of its standards and commenters have 
failed to meet their burden of proof to show that the standards are 
infeasible.
    As noted, there is a critical textual distinction between the issue 
addressed in Blum and the one here. In Blum, the applicability of 
section 202(b)(1)(B) to California resulted from an exception to the 
general lead time of section 202(a)(2) that Congress provided for 
certain motor vehicle manufacturers for a short period of time and for 
specified model years. Immediately introducing section 202(a)

[[Page 20721]]

is the phrase ``Except as otherwise provided in subsection (b) -),'' 
which by its terms means that section 202(b) governs over the more 
general and potentially conflicting terms in section 202(a). But 
Congress did not disturb the applicability of section 202(a)(2) for 
subsequent model years standards and the D.C. Circuit held accordingly: 
``In establishing these regulations [for model year 1981 and 
thereafter] the Administrator is bound by section 202(a)(2) to allow 
such lead time as he finds necessary.'' \303\ There is also nothing to 
indicate Congressional intent to override section 202(a)(2). But 
commenters' reading would have the Administrator do just that by 
allowing section 202(a)(3)(C) to govern over section 202(a)(2) even 
where California has made a showing of technology feasibility for the 
standards under review.
---------------------------------------------------------------------------

    \303\ American Motors Corp. v. Blum, 603 F.2d 978, 981.
---------------------------------------------------------------------------

    According to relevant legislative history of section 202(b)(1)(B), 
that language was introduced due to concerns that small volume 
manufacturers would not be able to comply with the 1.0 gram per mile 
NOX standard for light-duty vehicles. According to 
statements made by members of Congress at the time of the amendment's 
introduction and debate, the amendment was intended to apply to only 
American Motors Corporation and one other small manufacturer (Avanti) 
because the standard required the development of a specific technology 
that they would have to purchase and adapt from other manufacturers, so 
these small volume manufacturers would be unavoidably behind in the 
pollution abatement timetable from the very beginning.\304\ This 
legislative history was crucial to the Blum Court's holding that 
Congress had ``f[ound] and mandate[d] that with respect to small 
manufacturers a lead period of two years is necessary.'' In contrast, 
there does not appear to be similar legislative history detailing a 
special or peculiar need for the strict lead time requirements for 
section 202(a)(3)(C), which was enacted in the same year Amendments as 
section 209(b)(1)(B), that would indicate Congress's belief that a 
specific amount of lead time was ``necessary.'' \305\
---------------------------------------------------------------------------

    \304\ 123 Cong. Rec. S9233 (daily ed. June 9, 1977). Even the 
EPA Administrator acknowledged AMC's specific need for extra lead 
time in a letter to Congress in support of the amendment. Both the 
amendment's sponsor and the Administrator explained that the 1.0 
gram/mile standard created a ``peculiar'' and ``special'' problem 
for AMC and other small manufacturers. The two years of lead time 
was intended to give these small manufacturers adequate time to 
``modify and adapt the system [purchased from other manufacturers] 
to [their] own product line.'' Id.
    \305\ To the extent commenters cite statements in the 
legislative history regarding the need for three years of stability 
and four years of lead time, EPA notes that none of the cited 
statements are from members of Congress themselves and are instead 
testimony from commenters themselves. See, e.g., EMA Initial 
Comments at 10. But see, H.R. Rep. No. 95-294 at 542 (1977) (For 
standards promulgated under section 202(a)(3)(A) ``[a]dditional 
revisions of up to 3 years `each could be granted at three-year 
intervals thereafter;' '' and Congress ``provides four years lead 
time before temporary or permanent revision of any statutory 
standard.'').
---------------------------------------------------------------------------

    Moreover, after Blum, the D.C. Circuit also considered a somewhat 
analogous argument in MEMA II, where petitioners maintained that 
section 202(m), which calls for promulgation of regulations ``under 
section 202(a),'' meant that EPA was to evaluate applicability of 
section 202(m) to California's onboard diagnostic regulations for 
consistency with section 202(a). The court disagreed, held that section 
202(m) does not apply, and declined to extend its holding in Blum, 
holding instead that ``section 209(b)(1) makes clear that section 
202(a) does not require, through its cross-referencing, consistency 
with each federal requirement in the act. California's consistency is 
to be evaluated `in the aggregate,' rather than on a one-to-one 
basis.'' \306\ According to the court ``[a]lthough statutory cross-
referencing presents a superficially plausible textual argument linking 
compliance with subsection (m) to compliance with subsection (a), the 
agency has long interpreted the statute to give California very broad 
authority, and the court has held that this interpretation is not 
unreasonable.'' \307\
---------------------------------------------------------------------------

    \306\ MEMA II, 142 F.3d at 463.
    \307\ Id. at 464 (``[I]t would appear virtually impossible for 
California to exercise broad discretion if it had to comply with 
every subsection of section 202 that cross-referenced subsection 
(a). See, e.g., CAA section 202(b), (g), (h), (j), (m)(1), (m)(2), 
(m)(4).'').
---------------------------------------------------------------------------

    EPA also disagrees with commenter's claim that the 1994 MDV waiver 
constrains and binds EPA in the current waiver review. EPA is retaining 
the position it has consistently held with the sole exception of the 
1994 MDV waiver for all the reasons discussed herein.\308\ EPA notes 
that in MEMA II the court revisited Blum and explained:
---------------------------------------------------------------------------

    \308\ FCC v. Fox Television Stations, Inc., 556 U.S. 502 (2009).

    Petitioners' reliance on American Motors Corp., [ ] is 
misplaced. In that case, EPA viewed the petitioner's complaint about 
the lead time for a proposed action by CARB to be solely based on 
section 202(b), not section 202(a), and so was not cognizable in the 
waiver process. The court disagreed, observing that the lead time 
for implementation of the NOX standard was governed by 
section 202(a)(2) and concluding that the California regulation, 
which denies to [petitioner] a lead time of two years, is 
inconsistent with section 202(a)(2). Id. at 981. Thus, the American 
Motors decision did not suggest that all of the subsections of 
section 202 were incorporated into subsection (a) for the purposes 
of assessing a California waiver application. Instead, it concluded 
that the EPA had granted a waiver without determining whether 
California had met the standards of section 202(a).'' \309\
---------------------------------------------------------------------------

    \309\ 142 F.3d at 464, n.14 (internal citations omitted).

    And in the intervening years since the 1994 MDV waiver, EPA has not 
applied section 202(a)(3)(C) to a number of other waiver decisions for 
California's heavy-duty standards.\310\ For instance, in 2012 EPA did 
not require four years of lead time nor address the stability 
requirements for California's heavy-duty truck idling standards under 
section 202(a)(3)(C) and explicitly disagreed with comments asserting 
its applicability.\311\ Similarly, in 2008, 2012, 2014, and 2016, EPA 
did not require four years of lead time nor address the stability 
requirements for California's heavy-duty vehicle and engine greenhouse 
gas waivers as well as the On-Board Diagnostics requirements under 
section 202(a)(3)(C).\312\ So, the 1994 MDV waiver remains the sole 
waiver decision where EPA reviewed California standards for consistency 
with section 202(a) under both section 202(a)(3) and the historically-
applied technology feasibility test (202(a)(2)). At the time of the 
1994 MDV waiver, EPA posited that ``Blum indicates that California 
would be required to provide the statutory lead time required under 
section 202(a)(3)(C).'' \313\ But EPA did not

[[Page 20722]]

address the stability requirements also contained within section 
202(a)(3)(C) that requires standards for heavy-duty vehicles and 
engines to apply for no less than three model years without revisions. 
Where section 202(a)(3)(C) applies, standards must allow at least three 
model years of stability, meaning that no revisions or amendments are 
allowed until after three model years. The 1994 MDV Waiver was also 
silent on California's longstanding practice of amending standards for 
which a waiver has been granted.\314\ EPA's waiver practice has long 
allowed for such revisions under the rubric of within-the-scope 
amendments, which calls for review of California standards that have 
been amended under both the protectiveness finding and the technology 
feasibility requirements of the third waiver prong.\315\ In other 
words, there is no prescribed lead time for within-the-scope amendments 
because EPA reviews them under the traditional consistency test. The 
1994 MDV waiver did not wrestle with the implications of applying 
section 202(a)(3)(C) to waiver decisions for either of these important 
factors--the constraints on California's ability to drive innovations 
in vehicle emission control technologies, as Congress intended, with a 
four-year lead time and a three-year stability requirement, and the 
problematic constraint such an interpretation would impose on 
California's ability to amend standards for which a waiver has been 
granted to address any newly emergent issues. As such, the conclusions 
in the decision are based on insufficient analysis.
---------------------------------------------------------------------------

    \310\ 70 FR 50322 (August 26, 2005) (2007 California Heavy-Duty 
Diesel Engine Standards); 71 FR 335 (Jan. 4, 2006) (2007 Engine 
Manufacturers Diagnostic standards); 77 FR 9239 (February 16, 2012) 
(HD Truck Idling Requirements); 79 FR 46256 (Aug. 7, 2014) (the 
first HD GHG emissions standard waiver, relating to certain new 2011 
and subsequent model year tractor-trailers); 81 FR 95982 (December 
29, 2016) (the second HD GHG emissions standard waiver, relating to 
CARB's ``Phase I'' regulation for 2014 and subsequent model year 
tractor-trailers); 82 FR 4867 (January 17, 2017) (On-Highway Heavy-
Duty Vehicle In-Use Compliance Program).
    \311\ 77 FR 9239, 9249 (Feb. 16, 2012).
    \312\ 73 FR 52042 (September 8, 2008); 77 FR 73459 (December 10, 
2012); 79 FR 46256 (August 7, 2014); 81 FR 95982 (December 29, 
2016). EPA also notes that several waivers have been granted for 
California's on-highway motorcycles (See for example, 42 FR 1503 
(January 7, 1977); 41 FR 44209 (October 7, 1976); 43 FR 998 (January 
5, 1978); 46 FR 36237 (July 14, 1981)).
    \313\ 59 FR 48625 (September 22, 1994) and associated Decision 
Document at EPA-HQ-OAR-2022-0330, (MDV Waiver Decision Document) at 
page 26 (``Under section 209, the Administrator has an oversight 
role to review California lead time decisions associated with their 
rules. While CARB may well choose to provide a different amount of 
lead time for light-duty vehicles than EPA has determined is 
necessary, Blum instructs that the specific lead time requirements 
of section 202 apply to both agencies with equal force. Again, the 
Blum court interpreted literally the specific congressional 
requirement of lead time and stated, `[t]he necessity for lead time 
cannot be obviated by a waiver.' '' Id. at 32; (As Congress 
intended, EPA has liberally construed the section 209 waiver 
provision to give California broad discretion with its program. 
Nonetheless, EPA's discretion is not unlimited. In light of the 
plain language and Congressional intent of sections 202 and 209, and 
applying the rationale of Blum, I find that the opposing parties 
have provided persuasive arguments that California is subject to the 
four-year lead time requirement under section 202(a) (3) (b) of the 
Act and is required to provide four years of lead time for the 
proposed MDV standards.).
    \314\ See, e.g., 76 FR 61095 (October 3, 2011) (granting 
California a within-the-scope waiver for its 2008 amendments to its 
ZEV Standard); 71 FR 78190 (December 28, 2006) (granting California 
a within-the-scope waiver for its 1993-2003 amendments to its ZEV 
Regulations).
    \315\ See, e.g., the Notice of Scope of Preemption for 
California's amendments to warranty regulations pertaining to 1983 
and later model year passenger cars, light-duty vehicles, medium- 
and heavy-duty vehicles and motorcycles; 51 FR 12391 (Apr. 10, 
1986).
---------------------------------------------------------------------------

    In the 1994 MDV waiver, EPA also reviewed the standards under the 
traditional technology feasibility test finding that ``no significant 
development nor associated lead time is required.'' \316\ Notably, 
California had provided four-year lead time for the standards at issue. 
Thus, EPA was not confronted by the situation as in the instant waiver 
where California had made a feasibility showing of presently available 
technology.
---------------------------------------------------------------------------

    \316\ 1994 MDV Waiver Document at 48-49 (``In view of these 
facts, I agree with CARB's assessment that adequate technology 
exists and may be readily adapted to enable MDVs to meet all of 
CARB's standards. Thus, no significant development nor associated 
lead time is required.'').
---------------------------------------------------------------------------

    EPA in 1994 also did not discuss an earlier 1981 decision denying 
the petition for reconsideration that sought reconsideration of a 
waiver decision on grounds that Blum also required the Administrator to 
take certain lead time provisions into account when considering 
California waiver requests at issue.\317\ In 1981, shortly after Blum, 
EPA explained in relevant part that:
---------------------------------------------------------------------------

    \317\ Petition for Reconsideration of Waiver of Federal 
Preemption for California To Enforce Its NOX Emission 
Standards and Test Procedures: Notice of Denial. 46 FR 22032 (April 
15, 1981).

    The specific Congressional finding that under prescribed 
circumstances additional lead time is necessary is unique to the 
small volume manufacturer provision, and is not present in the other 
sections of the Act. Moreover, the fact that Congress determined 
that qualified manufacturers such as AMC are entitled to additional 
lead time was the critical factor leading to the Court's decision. 
AMC v. Blum did not involve or discuss other Federal waiver 
provisions, which, unlike section 202(b)(1)(B), do not reflect such 
a Congressional finding.\318\
---------------------------------------------------------------------------

    \318\ 46 FR 22034.

---------------------------------------------------------------------------
    EPA further explained that

    The small-volume manufacturer waiver provision was interpreted 
by the court as a ``proviso'' to section 202(a) of the Act, such 
that the determination of technological feasibility of the 1.0 gpm 
NOX, standard in question within available lead time is 
taken out of the hands of the Administrator and is made by the 
unique Congressional finding of 202(b)(1)(B) (Emphasis added).\319\
---------------------------------------------------------------------------

    \319\ Id.

    Most significant was EPA's explanation of the protectiveness 
finding California makes under section 209(b)(1) on EPA's consistency 
---------------------------------------------------------------------------
determination. EPA explained:

    California standards need not be identical to their Federal 
counterparts, even those established in waiver decisions. An 
argument along those lines would be inconsistent with section 209(b) 
of the Act. Because California has special air pollution problems, 
section 209(b) permits the Administrator to waive Federal preemption 
to permit the State of California to implement its own air pollution 
control programs that are, in the aggregate, at least as protective 
as nationally applicable standards. The import of section 209(b) is 
not that California and Federal standards be identical, but that the 
Administrator not grant a waiver of Federal preemption where 
compliance with the California standards is not technologically 
feasible within available lead time, consistent with section 
202(a).\320\
---------------------------------------------------------------------------

    \320\ 46 FR 22034-35.

    Lastly, EPA has examined the text of section 177 of the CAA, added 
by Congress in the 1977 Amendments. At the time that Congress was 
affording California additional programmatic flexibility and policy 
deference with the addition of the ``in the aggregate'' language to 
section 209(b)(1), Congress added section 177 to allow other States 
(those with plan provisions approved under Part D) to adopt 
California's new motor vehicle emission standards if certain criteria 
are met. Such criteria include that the State standards adopted be 
identical to the California standards for which a waiver has been 
granted for such model year, and that ``California and such State adopt 
such standards at least two years before commencement of such model 
year (as determined by regulations of the Administrator).'' \321\ EPA 
notes that Congress understood and acted to specify a number of years 
of lead time applicable to other States before those States could 
enforce standards under section 177. In the same 1977 Amendments, 
Congress did not specify that the lead time and stability requirements 
in the new section 202(a)(3)(C) were applicable to either California or 
to states adopting California's standards under section 177. EPA 
believes there is no basis to find or infer that the section 
202(a)(3)(C) requirements apply to California. And, as importantly, 
Congress established a structure under which California would receive a 
waiver for standards that EPA deemed would be feasible (or that 
opponents had not demonstrated to be infeasible), with the lead time 
provided within the California market, specifically.\322\ Other States 
(section 177 States) could enforce California's standards but would 
have to allow two years of lead time. It is assumed that these 
additional two years would allow manufacturers time to comply with the 
expanded market for which the California standards apply, which would 
still not be a fully national market subject to EPA standards.\323\

[[Page 20723]]

There is no language in section 177 that would require the section 177 
states to provide more lead time (an additional two years) in order to 
be consistent with the four years of lead time that commenters claim 
apply to California. EPA agrees with the CARB comment that it makes 
little sense to assume Congress would have provided four years of lead 
time for vehicle and engine manufacturers to prepare to comply in the 
California market but only two years to prepare for compliance in a 
potentially much larger market captured, collectively, in the section 
177 States.
---------------------------------------------------------------------------

    \321\ 42 U.S.C. 7507(1), 7507(2); Motor Vehicle Mfrs. Ass'n v. 
New York State Dep't of Envtl. Conservation, 17 F.3d 527.
    \322\ 78 FR at 2143, n.165.
    \323\ Motor Vehicle Mfrs. Ass'n v. New York State Dep't of 
Envtl. Conservation, 17 F.3d 527; American Automobile Mfrs. Ass'n, 
31 F.3d 18, 26-27 (1st Cir. 1994).
---------------------------------------------------------------------------

    Further, EPA traditionally applies a ``record-based'' review to 
determine the actual technological feasibility of California's 
standards, and to the degree requisite technology is not currently 
available then EPA examines the factual record to determine whether 
sufficient lead time is provided for the California market, giving 
consideration to cost. In addition, EPA's technological feasibility 
assessment is conducted within the confines of the manufacturers' 
ability to meet the California standards within California and the 
California market.\324\ It is illogical to couple EPA's limited role in 
reviewing the feasibility of CARB's standards, confined to the 
manufacturers' ability to meet the emission standards for new vehicles 
introduced into commerce in California, with the four-year lead time 
directive that Congress provided to EPA in setting national new heavy-
duty vehicle emission standards which are required to secure the 
greatest degree of emission reduction achievable.
---------------------------------------------------------------------------

    \324\ Id. at 2143.
---------------------------------------------------------------------------

6. Section 209(b)(1)(C) and 209(e)(2)(A)(iii) Conclusion
    As previously explained, EPA believes that the historical approach 
to section 209(b)(1)(C) (and the section 209(e)(2)(A)(iii)) prong 
reflects the best reading of the statute. The historical approach is to 
evaluate California's program including the changes to that program 
reflected in a waiver request for feasibility, and in doing so to 
determine whether the opponents of the waiver have met their burden of 
proof (as a factual matter) to demonstrate that California's standards 
are not technologically feasible, giving consideration to lead time and 
cost. Applying this approach with the reasoning noted above, with due 
deference to California, I cannot deny the respective waiver requests. 
CARB has demonstrated that technologies exist today to meet the most 
imminent standards and has identified refinements to emission control 
technologies and other emission controls reasonably projected to be 
available to meet the emission standards when needed in later model 
years. EPA finds that there is no evidence in the record to demonstrate 
that CARB's assessments, including those made in the state rulemakings, 
are unreasonable. In addition to CARB's demonstration and EPA findings, 
the Agency also notes that CARB's regulations include a number of 
provisions that may provide, if manufacturers choose to use them, 
additional compliance pathways. Therefore, I determine that I cannot 
deny either of the two waiver requests under section 209(b)(1)(C).
    In addition, after a review of the text in sections 209, 202, and 
section 177, I find that the lead time and stability language Congress 
added in 1977 in section 202(a)(3)(C) was only directed at EPA and does 
not apply to California by way of EPA's review of section 209(b)(1)(C) 
and section 209(e)(2)(B)(iii). Further, EPA has reviewed the 
legislative history, EPA's prior waiver decisions, and applicable case 
law and concludes that each of these considerations further supports 
EPA's textual analysis and conclusion that section 202(a)(3)(C) does 
not apply to California and thus EPA cannot deny CARB's waiver requests 
on this basis.

E. Other Issues

1. Energy Policy and Conservation Act (EPCA)
    One commenter argued that ZEV mandates are preempted by the Energy 
Policy and Conservation Act (EPCA) because they are ``related to'' fuel 
economy standards.\325\ The commenter asserted that it would therefore 
be ``arbitrary and capricious'' for EPA to grant waivers for the ACT 
Regulation and the ZEAS Regulation (that each contain a ZEV mandate) 
because ``California's ZEV mandate is void ab initio'' and ``[a]s such, 
California does not have a valid waiver request.'' \326\ EPA has long 
construed section 209(b) as limiting the Agency's authority to deny 
California's requests for waivers to the three listed criteria. This 
narrow review approach is supported by decades of waiver practice and 
judicial precedent. In MEMA I, the D.C. Circuit held that the Agency's 
inquiry under section 209(b) is ``modest in scope.'' \327\ The D.C. 
Circuit further noted that ``there is no such thing as a `general duty' 
on an administrative agency to make decisions based on factors other 
than those Congress expressly or impliedly intended the agency to 
consider.'' \328\ In MEMA II, the D.C. Circuit again rejected an 
argument that EPA must consider a factor outside the 209(b) statutory 
criteria concluding that doing so would restrict California's ability 
to ``exercise broad discretion.'' \329\ EPA's duty, in the waiver 
context, is thus to grant California's waiver request unless one of the 
three listed criteria is met. ``[S]ection 209(b) sets forth the only 
waiver standards with which California must comply . . . If EPA 
concludes that California's standards pass this test, it is obligated 
to approve California's waiver application.'' \330\ EPA has therefore 
consistently declined to consider factors outside the three statutory 
criteria listed in section 209(b), including preemption under EPCA, 
explaining instead that preemption under EPCA is not one of these 
criteria.\331\
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    \325\ AFPM at 15-16. EPA notes that this commenter cited to 49 
U.S.C. 32903(h)(1) and the action taken in 2019 (``The Safer 
Affordable Fuel-Efficient Vehicles (SAFE) Rule Part One: One 
National Program''). SAFE 1 at 51320-21. NHTSA subsequently repealed 
all regulatory text and appendices promulgated in the SAFE Part One 
and made clear that no prior regulations or positions of the Agency 
reflect ongoing NHTSA views on the scope of preemption of states or 
local jurisdictions under EPCA. 86 FR 74236 (Dec. 29, 2021). EPA 
also notes that the ``related to'' language that was the subject of 
SAFE Part One and the subsequent repeal is in 49 U.S.C. 32919.
    \326\ AFPM at 15-16.
    \327\ MEMA I, 627 F.2d at 1119.
    \328\ Id. at 1116 (acknowledging that ``the Administrator must 
be sensitive to [CAA] section 207 concerns in approaching a waiver 
decision,'' but concluding that ``he has no duty beyond that to 
consider claims of anti-competitiveness in a waiver proceeding'').
    \329\ MEMA II, 142 F.3d at 464 (rejecting a claim that 
California's standards must comply with CAA section 202(m) because 
``it would appear virtually impossible for California to exercise 
broad discretion if it had to comply with every subsection of 
section 202 that cross-referenced subsection (a).'').
    \330\ Id. at 462-63.
    \331\ 87 FR 14332, 14372 (March 14, 2022) (rescinding the SAFE 1 
waiver withdrawal partially premised on EPCA preemption because, in 
part, ``[c]onsideration of preemption under EPCA is beyond the 
statutorily prescribed criteria for EPA in section 209(b)(1).''). 
The sole instance that EPA considered preemption under EPCA in a 
waiver proceeding was in SAFE Part One, a joint-rulemaking with 
NHTSA, where EPA simultaneously explained that the Agency ``d[id] 
not intend in future waiver proceedings concerning submissions of 
California programs in other subject areas to consider factors 
outside the statutory criteria in section 209(b)(1)(A)-(C).'' SAFE 1 
at 51338. EPA subsequently rescinded that decision, finding that 
``the joint-action context of SAFE 1 [w]as an insufficient 
justification for deviating from its statutory authority and the 
Agency's historical practice'' of ``limiting its waiver review to 
the criteria in section 209(b)(1).'' 87 FR at 14371-73. EPA hereby 
incorporates by reference the reasoning in this decision. See also, 
43 FR 32182, 32184 (July 25, 1978) (rejecting objections to the 
procedures at state level, objections that section 207(c)(3)(A) 
establishes field protection, and constitutional objections all as 
beyond the ``narrow'' scope of the Administrator's review); 74 FR 
32744, 32783 (July 8, 2009) (declining to consider EPCA preemption, 
stating that ``section 209(b) of the Clean Air Act limits our 
authority to deny California's requests for waivers to the three 
criteria therein.''); 78 FR 2112, 2145 (Jan. 9, 2013), 79 FR 46256, 
46264 (Aug. 7, 2014) (reiterating that EPA can only deny a waiver 
request based on the 209(b) statutory criteria, dismissing comments 
on preemption under EPCA, as well as the Constitution and the 
implications of the Federal Aviation Administration Authorization 
Act of 1994).

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[[Page 20724]]

    In evaluating CARB's two waiver requests, including the ACT and 
ZEAS Regulations, EPA has not considered preemption under EPCA. As in 
previous waiver evaluations, the decision on whether to grant or deny 
these waiver requests is based solely on the criteria in section 
209(b). Evaluation of whether these regulations are preempted under 
EPCA is not among the criteria listed under section 209(b). EPA may 
only deny waiver requests based on the criteria in section 209(b), and 
preemption under EPCA is not one of those criteria. In considering 
California's request for a waiver, I therefore have not considered 
whether California's standards are preempted under EPCA. As in previous 
waiver decisions, the decision on whether to grant the waiver is based 
solely on criteria in section 209(b) of the Clean Air Act and this 
decision does not attempt to interpret or apply EPCA.\332\
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    \332\ EPA notes that both courts that have considered whether 
EPCA preempts greenhouse-gas emission standards have concluded that 
it does not. See, e.g., Cent. Valley Chrysler-Jeep, Inc. v. 
Goldstene, 529 F. Supp. 2d 1151, 1153-54 (E.D. Cal. 2007), as 
corrected Mar. 26, 2008; Green Mountain Chrysler Plymouth Dodge Jeep 
v. Crombie, 508 F. Supp. 2d 295, 300-01 (D. Vt. 2007).
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2. Equal Sovereignty and Other Constitutional Issues

    One commenter objected to both the ACT and ZEAS Regulations because 
``[b]y authorizing California, and only California, to set its own 
motor vehicle emission standards, Section 209(b) violates the 
constitutional equal sovereignty doctrine.'' \333\ The commenter 
claimed that Section 209(b) is ``unconstitutional in all its 
applications'' or, in the alternative, ``to the extent it is construed 
to allow California to set emission standards aimed at addressing 
global climate change, as opposed to California's local conventional 
pollution problems.'' \334\ Another commenter objected to the ACT 
Regulation as it ``calls for measures that may violate other 
constitutional provisions and principles.'' ^{335 336} EPA has 
previously considered equal sovereignty objections to waiver requests 
as outside the scope of EPA's review and incorporates the reasoning in 
that prior decision as it pertains to the constitutional claims raised 
by commenters.\337\
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    \333\ AFPM at 2.
    \334\ Id.
    \335\ Valero at 8-10. This commenter claimed that EPA's grant of 
a waiver represents a major question that was not contemplated by 
Congress. That claim is addressed above in Section III.C. This 
commenter also provided a list of other possible constitutional 
constraints that it believes the ACT Regulation may violate (e.g., 
Dormant Commerce Clause, dormant foreign affairs preemption doctrine 
under the Supremacy Clause, the Takings Clause of the Fifth 
Amendment, and the Equal Sovereignty doctrine). EPA notes that it is 
unclear whether this commenter requested EPA to not grant the ACT 
Regulation waiver request based on these latter possible 
constraints. Nevertheless, EPA notes (as discussed in this section) 
that EPA's task in reviewing California's waiver requests is limited 
to the criteria in section 209(b) and therefore provides no 
assessment of these claims.
    \336\ The same commenter (Valero) raises miscellaneous claims 
not related to constitutional issues that we also address here. 
Valero claims that granting the ACT waiver exceeds EPA's statutory 
authority because the ACT allegedly ``bans internal combustion 
engines,'' has ``vast nationwide political and economic 
significance,'' would be ``beyond the scope of the type of emission 
standards the waiver was originally intended to accommodate,'' and 
accomplishes what failed Congressional bills would have done. Valero 
Comment 6, 8. EPA disagrees. The ACT constitutes standards for the 
control of emissions from motor vehicles, and thus clearly falls 
within the scope of section 209(a) preemption and EPA's authority to 
waive preemption under section 209(b)(1). Moreover, while the ACT 
increases the stringency of California's program, the requirements 
it imposes are not different in kind from earlier California ZEV 
rules for which EPA has waived preemption. See 71 FR 78190 (December 
28, 2006) and Decision Document at EPA-HQ-OAR-2004-0437-0173, at 35-
46) (explaining that certain earlier California ZEV requirements 
constituted emissions standards and waiving preemption for such 
standards under section 209(b)); 58 FR 4166 (January 13, 1993) 
(granting a waiver for California's first Low Emission Vehicle (LEV 
I) regulation that include the original California ZEV standards 
that were adopted in 1990). Valero's reference to failed 
Congressional bills is inapposite given the clear language of 
section 209. See also Public Law 117-169, tit. VI, Subtitle A, 
section 60105(g), 136 Stat. 1818, 2068-69 (2022) (providing funds 
for EPA to issue grants specifically to states to support their 
adoption of California's greenhouse-gas and zero-emission vehicle 
standards under Section 177). Moreover, the major questions 
doctrine, to the extent Valero is invoking it, does not apply to 
California's exercise of its police powers, nor to EPA's waiver of 
preemption to preserve the State's exercise of such powers. See 
supra fn. 135. Valero further claims that EPA must consider wide-
ranging impacts of granting the waiver (e.g., on the nationwide 
distribution of goods, renewable fuels, petroleum refiners, chemical 
manufacturing, agricultural sector, international and military 
consequences, etc.). Valero Comment 6-9. However, this is belied by 
the statutory waiver criteria in section 209(b), which require EPA 
to grant a waiver unless the agency makes one of the three statutory 
findings. See MEMA I, 627 F.2d at 1118 (Section 209 does not require 
EPA to consider the social costs of pollution control, for 
``Congress, not the Administrator, made the decision to accept those 
costs.''). Finally, Valero suggests that granting the waiver is 
inconsistent with Congress's mandates designed to promote renewable 
fuels under the federal Renewable Fuel Standard. Valero Comment 6. 
However, nothing in section 209(b) suggests EPA must consider 
consistency with the Renewable Fuel Standard program in deciding to 
grant a waiver. See also section 211(o)(12) (``Nothing in this 
subsection . . . shall affect or be construed . . . to expand or 
limit regulatory authority regarding carbon dioxide or any other 
greenhouse gas, for purposes of other provisions . . . of this 
chapter.'').
    \337\ 87 FR 14332, 14376-77 (March 14, 2022). See also, 42 FR 
2337, 2338 (January 11, 1977); 41 FR 44209, 44212 (October 7, 1976).
---------------------------------------------------------------------------

    As EPA has long stated, ``the Agency's task in reviewing waiver 
requests is properly limited to evaluating California's request 
according to the criteria in section 209(b), and . . . it is 
appropriate to defer to litigation brought by third parties in other 
courts, such as state or federal court, for the resolution of 
constitutionality claims and inconsistency, if any, with other 
statutes.'' \338\ EPA's longstanding practice, affirmed by judicial 
precedent, has been to refrain from considering factors beyond section 
209(b)(1) criteria, including constitutional claims, in evaluating 
California waiver requests.\339\ For example, in 1978 EPA declined to 
consider First Amendment and Due Process objections to a waiver 
request, stating that constitutional arguments ``are beyond the scope 
of [the Administrator's] review, and the waiver hearing is not a proper 
forum in which to raise them.'' \340\ The D.C. Circuit agreed with the 
Administrator's position, that there was no obligation to consider 
these constitutional objections, because ``it is generally considered 
that the constitutionality of Congressional enactments is beyond the 
jurisdiction of administrative agencies.'' \341\ Additionally, in 2009, 
EPA declined to consider comments that California's transport 
refrigeration unit (TRU) Rule violated the Dormant Commerce Clause, 
stating that ``EPA's review of California's regulations is limited to 
the

[[Page 20725]]

criteria that Congress directed EPA to review.'' \342\ The D.C. Circuit 
again concluded that this constitutional claim was outside the scope of 
EPA's review, agreeing with EPA that the commenters had sought to 
``improperly . . . engraft a type of constitutional Commerce Clause 
analysis onto EPA's Section 7543(e) waiver decisions that is neither 
present in nor authorized by the statute.'' \343\ Such a question, the 
Court noted, is ``best directed to Congress.'' \344\
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    \338\ Id.
    \339\ EPA has declined to consider constitutional challenges to 
California Waivers since at least 1976. 41 FR 44212 (Oct. 7, 1976) 
(``An additional argument against granting the waiver was raised by 
the Motorcycle Industry Council and Yamaha, who contended that the 
CARB had violated due process when adopting their standards, by not 
allowing the manufacturers a fair and full opportunity to present 
their views at a State hearing. If this argument has any validity, 
the EPA waiver hearing is not the proper forum in which to raise it. 
Section 209(b) does not require that EPA insist on any particular 
procedures at the State level. Furthermore, a complete opportunity 
was provided at the EPA waiver hearing for the presentation of 
views.''). See also, e.g., 43 FR 32182, 32184 (July 25, 1978) 
(rejecting objections to the procedures at state level, objections 
that section 207(c)(3)(A) establishes field protection, and 
constitutional objections all as beyond the ``narrow'' scope of the 
Administrator's review).
    \340\ 43 FR at 32185.
    \341\ MEMA I, 627 F.2d at 1114-15 (holding that EPA did not need 
to consider whether California's standards ``unconstitutionally 
burden[ed] [petitioners'] right to communicate with vehicle 
purchasers.'').
    \342\ Decision Document, EPA-HQ-OAR-2005-0123-0049 at 67.
    \343\ ATA v. EPA, 600 F.3d 624, 628 (D.C. Cir. 2010) (quoting 
the U.S. brief). In a footnote to this statement, the Court said ATA 
could attempt to bring a constitutional challenge directly (which 
would argue that the waiver unconstitutionally burdens interstate 
commerce) but ``express[ed] no view on that possibility.'' Id. at 
n.1.
    \344\ Id. at 628.
---------------------------------------------------------------------------

    EPA notes that Congress struck a deliberate balance in 1967, when 
it chose to authorize two standards--the Federal standard and 
California's standards--rather than one national standard or 51 
individual state standards.\345\ EPA believes this balance reflected 
Congress's desire for California to serve as a laboratory of innovation 
and Congress's understanding of California's extraordinary pollution 
problems on the one hand, and its desire to ensure that automakers were 
not subjected to too many different standards on the other. Congress 
reaffirmed this balance in 1977 when it amended the Clean Air Act to 
allow other states facing similar air quality problems the option of 
adopting California's new waived motor vehicle standards.\346\ Thus 
Congress has consistently and repeatedly made determinations regarding 
California's important role in driving advancements in motor vehicle 
emissions control (which benefit all Americans when subsequently 
reflected in federal standards) and the value of providing states with 
two regulatory pathways to address motor vehicle emissions.
---------------------------------------------------------------------------

    \345\ Motor vehicles are ``either `federal cars' designed to 
meet the EPA's standards or `California cars' designed to meet 
California's standards.'' Engine Mfrs. Ass'n v. EPA, 88 F.3d 1075, 
1079-80, 1088 (D.C. Cir. 1996) (``Rather than being faced with 51 
different standards, as they had feared, or with only one, as they 
had sought, manufacturers must cope with two regulatory 
standards.'').
    \346\ Under section 177, ``any State which has plan provisions 
approved under this part may adopt and enforce'' identical 
California standards and delineates three specific criteria for 
adoption.
---------------------------------------------------------------------------

    In evaluating CARB's two waiver requests, including the ACT and 
ZEAS Regulations, EPA has not considered whether section 209(a) and 
section 209(b) are unconstitutional under the Equal Sovereignty 
Doctrine. As in previous waiver evaluations, the decision on whether to 
grant or deny the waiver is based solely on the criteria in section 
209(b) and this decision does not attempt to interpret or apply the 
Equal Sovereignty Doctrine or any other constitutional provision.

IV. Decision

    After evaluating California's 2018 HD Warranty Amendments, ACT 
Regulations, ZEAS Regulations, and the ZEP Certification Regulations, 
CARB's submissions, relevant adverse comment, and other comments in the 
record, EPA is granting a waiver of preemption and authorization, as 
applicable, for each of these regulations.

A. Judicial Review

    Section 307(b)(1) of the CAA governs judicial review of final 
actions by the EPA. This section provides, in part, that petitions for 
review must be filed in the United States Court of Appeals for the 
District of Columbia Circuit: (i) when the agency action consists of 
``nationally applicable regulations promulgated, or final actions 
taken, by the Administrator,'' or (ii) when such action is locally or 
regionally applicable, but ``such action is based on a determination of 
nationwide scope or effect and if in taking such action the 
Administrator finds and publishes that such action is based on such a 
determination.'' For locally or regionally applicable final actions, 
the CAA reserves to the EPA complete discretion whether to invoke the 
exception in (ii).
    This final action is ``nationally applicable'' within the meaning 
of CAA section 307(b)(1). In the alternative, to the extent a court 
finds this final action to be locally or regionally applicable, the 
Administrator is exercising the complete discretion afforded to him 
under the CAA to make and publish a finding that this action is based 
on a determination of ``nationwide scope or effect'' within the meaning 
of CAA section 307(b)(1), for several reasons.\347\ This final action 
will not only affect manufacturers of new heavy-duty vehicles and 
engines sold in California, but also manufacturers that sell their new 
heavy-duty vehicles and engines in those states that have already 
adopted or may choose to adopt California's regulations.\348\ For 
example, five states have already adopted California's ACT 
Regulation.\349\ These jurisdictions represent a wide geographic area 
that falls within three judicial circuits.\350\
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    \347\ In deciding whether to invoke the exception by making and 
publishing a finding that this final action is based on a 
determination of nationwide scope or effect, the Administrator has 
also taken into account a number of policy considerations, including 
his judgment balancing the benefit of obtaining the D.C. Circuit's 
authoritative centralized review versus allowing development of the 
issue in other contexts and the best use of Agency resources.
    \348\ See CAA section 177.
    \349\ Massachusetts, New Jersey, New York, Oregon, and 
Washington have adopted the ACT Regulation.
    \350\ In the report on the 1977 Amendments that revised CAA 
section 307(b)(1), Congress noted that the Administrator's 
determination that the ``nationwide scope or effect'' exception 
applies would be appropriate for any action that has a scope or 
effect beyond a single judicial circuit. See H.R. Rep. No. 95-294 at 
32.
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    Furthermore, the regulations that are the subject of today's action 
are part of California's on-highway for which EPA may waive preemption 
under CAA section 209. As required by statute, in evaluating the waiver 
criteria in this action, EPA considers not only the HD emissions 
regulations in isolation, but in the context of the entire California 
program.\351\ Moreover, EPA generally applies a consistent statutory 
interpretation and analytical framework in evaluating and deciding 
various waivers under CAA section 209. EPA also relies on the extensive 
body of D.C. Circuit case law developed by that court since 1979 as it 
has reviewed and decided judicial challenges to these actions. As such, 
judicial review of any challenge to this action in the D.C. Circuit 
will centralize review of national issues in that court and advance 
other Congressional principles underlying CAA section 307(b)(1) of 
avoiding piecemeal litigation, furthering judicial economy, and 
eliminating the risk of inconsistent judgments.
---------------------------------------------------------------------------

    \351\ See CAA sections 209(b)(1)(B) and 209(e)(2)(A) (requiring 
that the protectiveness finding be made for California's standards 
``in the aggregate'').
---------------------------------------------------------------------------

    For these reasons, this final action is nationally applicable or, 
alternatively, the Administrator is exercising the complete discretion 
afforded to him by the CAA and hereby finds that this final action is 
based on a determination of nationwide scope or effect for purposes of 
CAA section 307(b)(1) and is hereby publishing that finding in the 
Federal Register. Under section 307(b)(1) of the CAA, petitions for 
judicial review of this action must be filed in the United States Court 
of Appeals for the District of Columbia Circuit by June 5, 2023.

V. Statutory and Executive Order Reviews

    As with past authorization and waiver decisions, this action is not 
a rule as defined by Executive Order 12866. Therefore, it is exempt 
from review by the Office of Management and Budget as required for 
rules and regulations by Executive Order 12866. In addition, this 
action is not a rule as defined in the Regulatory Flexibility Act, 5 
U.S.C.

[[Page 20726]]

601(2). Therefore, EPA has not prepared a supporting regulatory 
flexibility analysis addressing the impact of this action on small 
business entities. Further, the Congressional Review Act, 5 U.S.C. 801, 
et seq., as added by the Small Business Regulatory Enforcement Fairness 
Act of 1996, does not apply because this action is not a rule for 
purposes of 5 U.S.C. 804(3).

    Dated: March 30, 2023.
Michael S. Regan,
Administrator.
[FR Doc. 2023-07184 Filed 4-5-23; 8:45 am]
BILLING CODE 6560-50-P

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