Fuel Economy Labeling of Motor Vehicles: Revisions To Improve Calculation of Fuel Economy Estimates

Federal RegisterDec 27, 2006

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 86 and 600

[EPA-HQ-OAR-2005-0169; FRL-8257-5]

RIN 2060-AN14

Fuel Economy Labeling of Motor Vehicles: Revisions To Improve Calculation of Fuel Economy Estimates

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Final rule.

SUMMARY:

The Environmental Protection Agency (EPA) is finalizing changes to the methods used to calculate the fuel economy estimates that are posted on window stickers of all new cars and light trucks sold in the United States. This final rule will greatly improve the EPA fuel economy estimates to more accurately inform consumers about the fuel economy they can expect to achieve in the real world. The new test methods take into account several important factors that affect fuel economy in the real world, but are missing from the existing fuel economy tests. Key among these factors are high speeds, aggressive accelerations and decelerations, the use of air conditioning, and operation in cold temperatures. Under the new methods, the city miles per gallon (mpg) estimates for the manufacturers of most vehicles will drop by about 12 percent on average relative to today's estimates, and city mpg estimates for some vehicles will drop by as much as 30 percent. The highway mpg estimates for most vehicles will drop on average by about 8 percent, with some estimates dropping by as much as 25 percent relative to today's estimates. These changes will take effect starting with 2008 model year vehicles, available at dealers in 2007. We also are adopting a new fuel economy label design with a new look and updated information that should be more useful to prospective car buyers. The new label features more prominent fuel cost information, an easy-to-use graphic for comparing the fuel economy of different vehicles, clearer text, and a Web site address for more information. Manufacturers will be phasing in the new design during the 2008 model year. Finally, for the first time we are requiring fuel economy labeling of certain passenger vehicles between 8,500 and 10,000 lbs gross vehicle weight rating. Because of the Department of Transportation's recent regulation that brings medium-duty passenger vehicles into the Corporate Average Fuel Economy program starting in 2011, EPA is now statutorily obligated to include these vehicles in the fuel economy labeling program. Medium-duty passenger vehicles are a subset of vehicles between 8,500 and 10,000 lbs gross vehicle weight that includes large sport utility vehicles and vans, but not pickup trucks. Vehicle manufacturers are required to post fuel economy labels on medium-duty passenger vehicles beginning with the 2011 model year.

DATES:

This final rule is effective on January 26, 2007. The incorporation by reference of certain publications listed in the rule is approved by the Director of the Federal Register as of January 26, 2007.

ADDRESSES:

EPA has established a docket for this action under Docket ID No. EPA-HQ-OAR-2005-0169. All documents in the docket are listed on the

www.regulations.gov

Web site. Although listed in the index, some information is not publicly available, e.g., Confidential Business Information or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically through

www.regulations.gov

or in hard copy at the Air and Radiation Docket, EPA/DC, EPA West, Room B102, 1301 Constitution Ave., NW., Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the Air and Radiation Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT:

Rob French, U.S. EPA, Voice-mail (734) 214-4636; E-mail:

french.roberts@epa.gov.

SUPPLEMENTARY INFORMATION:

Does This Action Apply to Me?

This action affects companies that manufacture or sell new light-duty vehicles, light-duty trucks, and medium-duty passenger vehicles.

Regulated categories and entities include:

“Light-duty vehicle,” “light-duty truck,” and “medium-duty passenger vehicle” are defined in 40 CFR 86.1803-01. Generally, the term “light-duty vehicle” means a passenger car, the term “light-duty truck” means a pick-up truck, sport-utility vehicle, or minivan of up to 8,500 lbs gross vehicle weight rating, and “medium-duty passenger vehicle” means a sport-utility vehicle or passenger van from 8,500 to 10,000 lbs gross vehicle weight rating. Medium-duty passenger vehicles do not include pick-up trucks.

Category

NAICS Codes

Examples of potentially regulated entities

Industry

336111, 336112

Motor vehicle manufacturers.

Industry

81112, 811198, 54154

Commercial importers of vehicles and vehicle components.

North American Industry Classification System (NAICS)

This list is not intended to be exhaustive, but rather provides a guide regarding entities likely to be regulated by this action. To determine whether particular activities may be regulated by this action, you should carefully examine the regulations. You may direct questions regarding the applicability of this action to the person listed in

FOR FURTHER INFORMATION CONTACT.

Table of Contents

I. Introduction

A. Background

B. What Requirements Are We Adopting?

1. Revised Methods for Calculating City and Highway Fuel Economy Estimates

2. New Labeling Requirement for Medium-Duty Passenger Vehicles

3. Improved Fuel Economy Label Design

4. New Vehicle Class Categories and Definitions

5. Test Procedure Modifications

C. Why is EPA Taking This Action?

1. Energy Policy Act of 2005

2. Comparing EPA Estimates to Actual Driving Experience

3. Representing Real-World Conditions on the Fuel Economy Tests

D. When Will the New Requirements Take Effect?

1. New City and Highway Fuel Economy Estimates

2. Implementation of New Label Design

3. Fuel Economy Labeling of Medium-Duty Passenger Vehicles

E. Periodic Evaluation of Fuel Economy Labeling Methods

F. This Final Rule Does Not Impact CAFE Standards or Test Procedures

G. Public Participation

II. New Test Methods and Calculation Procedures for Fuel Economy Labels

A. Derivation of the Vehicle-Specific 5-Cycle Methodology

1. Overview of Public Comments on the 5-Cycle Methodology

2. Changes to the 5-Cycle Methodology From Proposal

B. Derivation of the MPG-Based Methodology

C. Effect of the New Methods on Fuel Economy Label Values

D. Comparison to Other Onroad Fuel Economy Estimates

E. Implementation of the New Fuel Economy Methods

1. 5-Cycle Vehicle Selection Criteria for 2011 and Later Model Years

2. Medium-Duty Passenger Vehicle Label Estimates

3. Analytically Derived Fuel Economy

III. Revisions to the Fuel Economy Label Format and Content

A. Background

B. Label Size and Orientation

C. Fuel Economy of Comparable Vehicles

D. Estimated Annual Fuel Cost

E. “Your Mileage Will Vary” Statement

F. Environmental Information Statement

G. Government Logos and Web site Link

H. Temporary Transitional Statement

I. Combined Fuel Economy Basis

J. Labeling Requirements for Dual Fueled Vehicles

K. Addition of Final Regulatory Specifications for Label Content and Design

IV. Testing Provisions

A. Testing Requirements for Vehicles Currently Exempt From Certain Emission Tests

1. Diesel Vehicles

2. Alternative-Fueled Vehicles

B. Modifications to Existing Test Procedures

1. Splitting the US06 Test Into City and Highway Segments

2. Heater/Defroster Usage During the Cold FTP

3. Hybrid Electric Vehicle Testing Provisions

V. Projected Cost Impacts

A. Incorporation of New Test Cycles Into Fuel Economy Label Calculations

1. Testing Burden for 2008 Through 2010 Model Years (MY)

2. Testing Burden for 2011 and Later Model Years

3. Cost Analysis of the Testing Burden

B. Revised Label Format and New Information Included

C. Reporting of Fuel Economy Data for SC03, US06, and Cold FTP Tests

D. Impact on Confirmatory Testing

E. Fees

F. Summary of Final Cost Estimate

VI. Implementation and Other Provisions

A. Revisions to Classes of Comparable Vehicles

B. Fuel Economy Ranges for Comparable Fuel Economy Graphic

C. Temporary Option To Add “Old Method” City and Highway Estimates on Early Introduction Model Year Vehicle Labels

D. Consideration of Fuel Consumption vs. Fuel Economy as a Metric

E. Web-Based Driver-Specific Fuel Economy Calculator

F. Fuel Basis for Estimated Annual Fuel Costs

G. Electronic Distribution of Dealer-Supplied Fuel Economy Booklet

VII. Relevant Statutes and Regulations

A. Energy Policy and Conservation Act

B. Energy Policy Act of 2005

C. Other Statutes and Regulations

1. Automobile Disclosure Act

2. Internal Revenue Code

3. Clean Air Act

4. Additional Provisions in the Energy Policy Act of 2005 and Transportation Equity Act of 2005

5. Federal Trade Commission Guide Concerning Fuel Economy Advertising for New Vehicles

VIII. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

B. Paperwork Reduction Act

C. Regulatory Flexibility Act

D. Unfunded Mandates Reform Act

E. Executive Order 13132: Federalism

F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments

G. Executive Order 13045: Protection of Children from Environmental Health and Safety Risks

H. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution or Use

I. National Technology Transfer Advancement Act

J. Congressional Review Act

IX. Statutory Provisions and Legal Authority

I. Introduction

This final rule has three key elements. First, we are finalizing changes to the Environmental Protection Agency's (EPA) fuel economy testing and calculation procedures so that the miles per gallon (mpg) estimates for passenger cars and light-duty trucks will better reflect what consumers achieve in the real-world. Second, we are updating the fuel economy window sticker that appears on all new cars and light trucks sold in the U.S., which will make the window sticker more useful and understandable to consumers. Third, for the first time we are requiring fuel economy labeling of certain passenger vehicles between 8,500 and 10,000 lbs gross vehicle weight rating (GVWR), such as the largest sport-utility vehicles (SUVs) and passenger vans.

This final rule follows a Notice of Proposed Rulemaking (NPRM) published on February 1, 2006.

In the NPRM, we proposed changes to the testing and calculation procedures used to calculate the fuel economy estimates that appear on window stickers that are posted on all new cars and light trucks sold in the United States. The NPRM also proposed changes to the fuel economy label design and content. We received comments on the NPRM from a wide variety of stakeholders, including the automobile manufacturing industry, environmental groups, consumer organizations, state governments, and the general public. These comments are available for public viewing in Docket EPA-HQ-OAR-2005-0169. Docket content can be viewed and/or downloaded at

http://www.regulations.gov.

Our responses to these comments are detailed in the Response to Comments document, which is available in the public docket and on our Web site.

In this section of the final rule we describe some background information and provide a brief description of the content, timing, and rationale for the final program. For additional background and details regarding the proposal, readers should consult the NPRM and related documents.

See 71 FR 5426 (Feb. 1, 2006), Available in the public docket and on our Web site at

http://www.epa.gov/fueleconomy/regulations.htm.

Enter the docket i.d. number (EPA-HQ-OAR-2005-0169) in the Keyword field and choose “All Documents (Open and Closed for Comment).”

See

http://www.epa.gov/fueleconomy/regulations.htm

http://www.regulations.gov.

A. Background

With this final rule, EPA is helping car buyers make more informed decisions when considering a vehicle's fuel economy. Fuel economy, or gas mileage, continues to be a major area of public interest for several reasons. Passenger vehicles account for approximately 40 percent of all U.S. oil consumption. Finally, the more miles a car gets per gallon of gasoline, the more money the owner saves on fuel costs. With consumers' renewed interest in fuel savings due to higher gasoline prices, providing mileage estimates that more closely reflect real-world driving has once again become important for consumers who comparison-shop.

The EPA fuel economy estimates have appeared on the window stickers of all new cars and light trucks since the late 1970's and are well-recognized by consumers. The window sticker displays two fuel economy estimates: One for city driving and one for highway driving. These estimates, in units of miles per gallon, essentially serve two purposes: (1) To provide consumers with a basis on which to compare the fuel economy of different vehicles, and (2) to provide consumers with a reasonable estimate of the fuel economy they can expect to achieve. While the EPA fuel economy estimates have generally been a useful tool for comparing the relative fuel economy of different vehicles, they have been less useful for predicting the fuel economy that consumers can reasonably expect to achieve in the real world. Consumers need to be provided with accurate,

easily understandable, and relevant information regarding the fuel economy of new vehicles. This final rule improves the information provided to consumers regarding the fuel economy of new vehicles.

The city fuel economy estimate is currently based on the Federal Test Procedure (FTP), which was designed to measure a vehicle's tailpipe emissions under urban driving conditions. The driving cycle used for the FTP was developed in the mid-1960's to represent home-to-work commuting in Los Angeles. The FTP is also one of the tests used to determine emissions compliance today. The FTP includes a series of accelerations, decelerations, and idling (such as at stop lights). It also includes starting the vehicle after it has been parked for an extended period of time (called a “cold start”), as well as a start on a warmed-up engine (called a “hot start”). The total distance covered by the FTP is about 11 miles and the average speed is about 21 mph, with a maximum speed of about 56 mph.

The highway fuel economy estimate is currently based on the Highway Fuel Economy Test (HFET), which was developed by EPA in 1974 and was designed to represent a mix of interstate highway and rural driving. It consists of relatively constant higher-speed driving, with no engine starts or idling time. The HFET covers a distance of about 10 miles, at an average speed of 49 mph and a top speed of about 60 mph.

A fundamental issue with today's fuel economy estimates is that the underlying test and calculation procedures do not fully represent current real-world driving conditions. Some of the key limitations are that the highway test has a top speed of only 60 miles per hour, both the city and highway tests are run at mild climatic conditions (75 °F), both tests have mild acceleration rates, and neither test is run with the use of fuel-consuming accessories, such as air conditioning. Over the past few years, there have been several independent studies comparing EPA's fuel economy estimates to the real-world experience of consumers. These studies confirm that there is considerable variation in real-world fuel economy, and provide substantial evidence that EPA's mileage ratings often overestimate real-world fuel economy. Although these studies differ in a number of variables, including their test methods, driving conditions, and fuel economy measurement techniques, they indicate that EPA's approach to estimating fuel economy needs to be improved to better represent some key real-world fuel economy impacts.

The methods used today for calculating the city and highway mpg estimates have been in place since the 1970's, and the results of these methods were adjusted only once in the mid-1980's to bring them closer to consumer's expectations.

Since that time, there have been many changes affecting the way Americans drive—speed limits are higher, road congestion has increased, vehicle performance has increased, vehicle technologies have changed markedly, and more vehicles are equipped with energy-consuming accessories like air conditioning. Our analysis shows that these changes, along with several other factors, again indicate a need to revise the testing and calculation procedures underlying the fuel economy window sticker estimates.

In 1984, EPA published new fuel economy labeling procedures that were applicable to 1985 and alter model year vehicles. Based on in-use fuel economy data collected at the time, it was evident that the fuel economy estimates needed to be adjusted downward in order to more accurately reflect consumers' average fuel economy experience. The city values (based on the raw FTP test data) were adjusted downward by 10 percent and the highway values (likewise based on the raw highway test data) were adjusted downward by 22 percent. See 49 FR 13832 (April 6, 1984).

See the Technical Support Document and “Vehicle Fuel Economy Labeling and the Effect of Cold Temperature, Air-Conditioning Usage and Aggressive Driving on Fuel Economy,” by Eldert Bontekoe and Richard A. Rykowski, 2005. These are available in the public docket for review.

We believe the new fuel economy estimates will provide car buyers with useful information when comparing the fuel economy of different vehicles. It is important to emphasize that fuel economy varies from driver to driver for a wide variety of reasons, such as different driving styles, climates, traffic patterns, use of accessories, loads, weather, and vehicle maintenance. Even different drivers of the same vehicle will experience different fuel economy as these and other factors vary. Therefore, it is impossible to design a “perfect” fuel economy test that will provide accurate real-world fuel economy estimates for every consumer. With any estimate, there will always be consumers that get better or worse actual fuel economy. The EPA estimates are meant to be a general guideline for consumers, particularly to compare the relative fuel economy of one vehicle to another. Nevertheless, we do believe that the new fuel economy test methods will do a better job of giving consumers a more accurate estimate of the fuel economy they can achieve in the real-world. Under the new methods, the city mpg estimates for the manufacturers of most vehicles will drop by about 12 percent on average relative to today's estimates. City estimates for some of the most fuel-efficient vehicles, including gasoline-electric hybrid vehicles, will decrease by 20 to 30 percent. The highway mpg estimates for most vehicles will drop on average by about 8 percent, with some estimates dropping by as much as 25 percent relative to today's estimates.

While the inputs to our estimates are based on data from actual real-world driving behavior and conditions, it is essential that our fuel economy estimates continue to be derived primarily from controlled, repeatable, laboratory tests. Because the test is controlled and repeatable, an EPA fuel economy estimate can be used for comparison of different vehicle models and types. In other words, when consumers are shopping for a car, they can be sure that the fuel economy estimates were measured using a “common yardstick”—that is the same test run under the exact same set of conditions, making the fuel economy estimates a fair comparison from vehicle-to-vehicle. While some organizations have issued their own fuel economy estimates based on real-world driving, such an approach introduces a wide number of often uncontrollable variables—different drivers, driving patterns, weather conditions, temperatures, etc.—that make repeatable tests impossible. Our new fuel economy test methods are more representative of real-world conditions than the current fuel economy tests—yet we retain our practice of relying on controlled, repeatable, laboratory tests. EPA and manufacturers test over 1,250 vehicle models annually and every test is run under an identical range of conditions and under a precise driver's trace, which assures that the result will be the same for an individual vehicle model no matter when and where the laboratory test is performed. Variations in temperature, road grade, driving patterns, and other variables do not impact the result of the test. While such external conditions impact fuel economy on a trip-to-trip basis, they do not change the laboratory test result. Therefore, a repeatable test provides a level playing field for all vehicles, which is essential for comparing the fuel economy of one vehicle to another. Finally, EPA must preserve the ability to confirm the values achieved by the manufacturers' testing, and this can only be achieved with a highly repeatable test or set of tests.

In the Energy Policy Act of 2005, Congress required EPA to revise the fuel economy labeling methods to better reflect a variety of real-world factors that affect fuel economy. Section 774 of

the 2005 Energy Policy Act directs EPA to “* * * update or revise the adjustment factors in [certain sections of the fuel economy labeling regulations] to take into consideration higher speed limits, faster acceleration rates, variations in temperature, use of air conditioning, shorter city test cycle lengths, current reference fuels, and the use of other fuel depleting features.” This final rule fully addresses this statutory requirement. Section VII contains a detailed analysis of the statute and regulations.

B. What Requirements Are We Adopting?

This final rule establishes new methods for determining the city and highway fuel economy estimates for the sole purpose of fuel economy labeling by incorporating fuel economy results over a broader range of driving conditions. The new methodology will result in EPA fuel economy estimates that better approximate the miles per gallon that consumers achieve in real-world driving. These changes include some revisions to existing test procedures. In addition, we are revising the format and content of the fuel economy label to make the information more useful and easily understandable to consumers. The new rule also requires that medium-duty passenger vehicles (a subset of vehicles 8,500 to 10,000 lbs gross vehicle weight) have fuel economy labels. We also are finalizing minor changes related to the fuel economy information program, including revising the comparable vehicle classes and adding a new provision for the electronic distribution of the annual Fuel Economy Guide. An overview of each of these requirements follows, with additional detail provided in subsequent sections of this final rule.

1. Revised Methods for Calculating City and Highway Fuel Economy Estimates

This final rule revises the test methods by which the city and highway fuel economy estimates are calculated. We are replacing the current method, established in 1984, of adjusting the city (FTP) test result downward by 10 percent and the highway (HFET) test result downward by 22 percent. Instead, we are finalizing the proposed approach that incorporates additional test methods that address factors that impact fuel economy but that are missing from today's tests—specifically, higher speeds, more aggressive driving (e.g., higher acceleration rates), the use of air conditioning, and the effect of cold temperature and other factors.

Since 1984 when we last updated the fuel economy estimate methodology, EPA has established several new test cycles for emissions certification. EPA had become concerned that the FTP omitted many critical driving modes and conditions that existed in actual use, and that emissions could be substantially higher during these driving modes compared to the FTP.

Manufacturers frequently designed their vehicles' emission control systems to meet the specified FTP test conditions, often neglecting emissions control over other driving conditions, resulting in higher real-world emissions.

Emissions from driving modes not reflected on EPA test procedures became known as “off-cycle” emissions, meaning that they occurred during driving conditions not typically encountered over EPA's emission test cycle.

The need for action to address off-cycle emissions was recognized by Congress in the passage of Sections 206(h) and 202(j) of the Clean Air Act Amendments of 1990 (CAAA). Section 206(h) required EPA to study and revise as necessary the test procedures used to measure emissions, taking into consideration the actual current driving conditions under which motor vehicles are used, including conditions relating to fuel, temperature, acceleration, and altitude. Section 202(j) of the CAAA required EPA to establish emission standards for carbon monoxide under cold (20°F) temperature conditions.

In 1992, EPA published rules implementing the 202(j) cold temperature testing requirement, acknowledging that the ambient temperature conditions of the FTP test (run between 68 and 86 °F) did not represent the full range of ambient temperature conditions that exist across the United States and that cold temperature had different emissions effects on different vehicle designs.

EPA's cold temperature emission regulations required manufacturers to conduct FTP testing at 20 °F. By promulgating this new test procedure and associated carbon monoxide emission standard, EPA sought to encourage manufacturers to employ better emission control strategies that would improve ambient air quality across a wider range of in-use temperature conditions.

See

57 FR 31888 (July 17, 1992).

In fulfillment of the 206(h) CAAA requirement, EPA published a report in 1993 which concluded that the FTP cycle did not represent the full range of urban driving conditions that could impact the in-use driving emission levels.

Consequently, EPA promulgated a rule in 1996 that established two new test procedures, with associated emission standards, that addressed certain shortcomings with the current FTP. Known as the “Supplemental FTP,” or “SFTP,” these procedures, similar to the cold temperature FTP, encouraged the use of the better emission controls across a wider range of in-use driving conditions in order to improve ambient air quality.

U.S. Environmental Protection Agency. Federal Test Procedure Review Project: Preliminary Technical Report. U.S. Environmental Protection Agency, No. EPA420-R-93-007, May 1993.

See

61 FR 54852 (October 22, 1996).

One of the SFTP test cycles, the US06, was designed to address high speed, aggressive driving behavior (with more severe acceleration rates) and rapid and frequent speed fluctuations. The US06 test contains both lower-speed city driving and higher-speed highway driving modes. Its top speed is 80 mph, and average speed is 48 mph. The top acceleration rate exceeds 8 mph per second. The other SFTP test, the SC03, was designed to address air-conditioner operation under a full simulation of high temperature (95 °F), high sun-load, and high humidity. The SC03 drive cycle was designed to represent driving immediately following a vehicle startup, and rapid and frequent speed fluctuations. Its top speed is about 55 mph and average speed is 22 mph. The top acceleration rate is about 5 mph per second.

The basis for the SFTP rulemaking was a study of real-world driving in four cities, Baltimore, Spokane, Atlanta and Los Angeles, where driving activity was measured on instrumented vehicles as well as by chase cars.

At that time, it was found that 18 percent of the driving (in Baltimore) occurred outside of the speed/acceleration distribution of the FTP drive schedule. More recent real-world driving activity data indicates that driving has become even more aggressive than it was in 1992. Recent real-world activity data collected in California and Kansas City found that about 28 percent of driving (vehicle miles traveled) is at speeds greater than 60 mph. Further, about 33 percent of recent real-world driving falls outside of the FTP/HFET speed and acceleration activity region. This is based on extensive chase car studies in California and instrumented vehicle studies in Kansas City.

Our assessment of these

recent real-world driving activity studies is described in detail in the Technical Support Document.

These studies were not designed to produce results that would be representative of driving behaviors throughout the U.S. Nonetheless, they were the best and most current data upon which to base design of the new test cycles.

A “chase car” study is a study in which driving behavior is recorded by an instrumented vehicle that follows vehicles on the road to record the behavior of the followed vehicle. In some cases the chase car is equipped with a laser rangefinder to enable the data collection systems to accurately

determine the speed of the chased vehicle relative to the chase car. An instrumented vehicle study is a study in which data is collected from customer vehicles where the customer has agreed to allow their vehicle to be equipped with data collection instrumentation.

Clearly, the FTP and HFET tests alone do not fully capture the broad range of real-world driving conditions; indeed, this has already been conclusively demonstrated by the research that led to the revision of the FTP for emission test purposes. In order for EPA's fuel economy tests to be more representative of key aspects of real-world driving, it is critical that we consider the test conditions represented by these additional emission tests. The additional test methods will bring into the fuel economy estimates the test results from the five emissions tests in place today: FTP, HFET, US06, SC03, and Cold FTP. Thus, we refer to this as the “5-cycle” method. The five test procedures that make up the 5-cycle method and some of their key characteristics are summarized in the table below.

Table I-1.—Characteristics of the Fuel Economy and Emission Tests of the 5-Cycle Methodology

Test

Designed to represent

Avg speed

(mph)

Max speed

(mph)

Max accel

(mph/sec)

Ambient conditions

Primary use

Federal Test Procedure (FTP)

Urban stop-and-go driving from 1970's

3.3

75 °F

Emissions & fuel economy testing.

Highway Fuel Economy Test (HFET)

Rural driving

3.3

75 °F

Fuel economy testing.

US06

High speeds and aggressive driving

8.5

75 °F

Emissions testing.

SC03

Air conditioner operation

5.1

95 °F & 40% relative humidity

Emissions testing.

Cold FTP

Cold temperature operation

3.3

20 °F

Emissions testing.

Under the new requirements, rather than basing the city mpg estimate solely on the adjusted FTP test result, and the highway mpg estimate solely on the adjusted HFET test result, each estimate will be based on a “composite” calculation of all five tests, weighting each appropriately to arrive at new city and highway mpg estimates. The new city and highway estimates will each be calculated according to separate city and highway “5-cycle” formulae that are based on fuel economy results over these five tests. The conditions represented by each test will be “weighted” according to how frequently those conditions occur over average real-world city or highway driving. For example, we have derived weightings to represent driving cycle effects, trip length, air conditioner compressor-on usage (it is the activity of the compressor that most significantly affects emissions and fuel economy), and operation over various temperatures. This methodology is described in detail in Section II and in the Technical Support Document.

We also are finalizing a downward adjustment to account for effects that are not reflected in our existing five test cycles. There are many factors that impact fuel economy, but are difficult to account for in the test cell on the dynamometer. These include roadway roughness, road grade (hills), wind, low tire pressure, heavier loads, hills, snow/ice, effects of ethanol in gasoline, larger vehicle loads (e.g., trailers, cargo, multiple passengers), and others. We need to account for these factors in our new fuel economy calculation methods, as they will lower a driver's fuel economy beyond those factors represented by our existing test cycles. We are finalizing a 9.5 percent downward adjustment to account for these non-dynamometer effects, based on detailed analyses of the impacts of each of these factors using the most recent technical information and studies available. Additional detail regarding this factor can be found in Section II and in the Technical Support Document.

Because the 5-cycle method is inherently vehicle-specific, the difference between today's label values and the new fuel economy estimates may vary significantly from vehicle to vehicle. In general, however, the new approach will result in city fuel economy estimates that are about 8 to 15 percent lower than today's labels for the majority of conventional vehicles. The city mpg estimates for the manufacturers of most vehicles will drop by about 12 percent on average relative to today's estimates. For vehicles that achieve generally better fuel economy, such as gasoline-electric hybrid vehicles, new city estimates will be about 20 to 30 percent lower than today's labels. The new highway fuel economy estimates will be about 5 to 15 percent lower for the majority of vehicles, including most hybrids. The highway mpg estimates for the manufacturers of most vehicles will drop on average by about 8 percent, with estimates for most hybrid vehicles dropping by 10 to 20 percent relative to today's estimates.

This final rule will greatly improve the EPA fuel economy estimates, so that they come closer to the fuel economy that consumers achieve in the real world. However, these are still estimates, and even with the improved fuel economy test methods we are finalizing today, some consumers will continue to get fuel economy that is higher or lower than the new estimates. No single test or set of tests can ever account for the wide variety of conditions experienced by every driver.

2. New Labeling Requirement for Medium-Duty Passenger Vehicles

Based on the public comments and on specific events that have transpired since the NPRM was published, we are finalizing in this rule a fuel economy labeling program for Medium-Duty Passenger Vehicles (MDPVs), a subset of vehicles between 8,500 and 10,000 lbs GVWR.

MDPVs were first defined in the regulation that put in place the “Tier 2” emission standards and gasoline sulfur controls.

This newly-defined class of vehicles includes SUVs and passenger vans between 8,500 and 10,000 lbs GVWR, but excludes large pick-up trucks. The specific regulatory definition was designed to capture in the light-duty vehicle emissions

program some of the heavy-duty vehicles that are designed and used predominantly for passenger use.

See 65 FR 6698 (Feb. 10, 2000).

Under the Energy Policy and Conservation Act (EPCA), EPA is required to establish regulations that require a manufacturer to attach a label to each “automobile” manufactured in a model year.

“Automobile” is defined as a vehicle not more than 6,000 lbs GVWR, and those vehicles between 6,000 and 10,000 lbs GVWR that DOT determines are appropriate for inclusion in the Corporate Average Fuel Economy (CAFE) program.

“Automobile” for the purposes of labeling also includes vehicles at no more than 8,500 lbs GVWR whether or not the Department of Transportation (DOT) has included those vehicles in the CAFE program.

EPA has no authority to require labels on vehicles that are not automobiles, therefore EPA has no authority to require labeling of either vehicles above 10,000 lbs GVWR, or vehicles between 8,500 and 10,000 lbs GVWR that are not included by DOT in the CAFE program.

See 49 U.S.C. 32908(b).

See 49 U.S.C. 32901(a)(3).

See 49 U.S.C. 32908(a).

Since the time of EPA's proposal, DOT has included some vehicles above 8,500 lbs GVWR and below 10,000 lbs in its CAFE program, beginning in model year 2011.

Since these vehicles now meet the definition of automobile, EPA is authorized to include these vehicles in labeling program. This final rule requires fuel economy labels on these MDPVs beginning in model year 2011.

See 71 FR 17565 (April 6, 2006).

3. Improved Fuel Economy Label Design

We are adopting a new fuel economy label format that is easier to read, has improved graphic design, and contains information that should be more useful to prospective car buyers. The final label design reflects input from the public comments received and from market testing of prototype label designs conducted via a series of focus groups. In addition to displaying revised city and highway mpg estimates, the new label features the following items:

• A new layout featuring an updated fuel pump graphic, a prominent heading, and prominent government logos;

• More prominent estimated annual fuel cost information, including the addition of the basis for the estimated annual fuel cost (dollars per gallon and miles driven per year);

• An easy-to-use graphic that allows quick comparison of the labeled vehicle with other vehicles in its class;

• A simplified statement noting that “Your mileage will vary”;

• A link to the EPA/DOE Web site

www.fueleconomy.gov

; and,

• A transition statement noting that the mpg estimates are the result of new EPA methods beginning with the 2008 models (for inclusion on labels of model year 2008 and 2009 vehicles only).

Details about the label design and content are found in Section III. An example label is shown below (actual size of the label is required by statute to be 4.5 inches tall by 7 inches wide).

ER27DE06.017

4. New Vehicle Class Categories and Definitions

EPCA requires that the label contain “the range of fuel economy of comparable automobiles of all manufacturers.”

EPA regulations define what constitutes “comparable automobiles.” We proposed and are finalizing changes to the vehicle class categories to better reflect the current vehicle market and to allow consumers to make more appropriate fuel economy comparisons. Specifically, we are finalizing our proposal to add the vehicle class categories of “Sport Utility Vehicle” and “Minivan,” with appropriate definitions, to the list of categories used to classify vehicles for fuel economy comparison purposes. We are also redefining the “Small Pickup Truck” class by increasing the weight limit criteria. Section VI contains additional detail on these changes.

See 49 U.S.C. 32908(b)(1)(C).

5. Test Procedure Modifications

We are finalizing several changes to existing test procedures to allow the collection of appropriate fuel economy data and to ensure that existing test procedures better represent real-world conditions. Specifically, we are finalizing the following test procedure changes:

• A revised US06 test protocol that will collect the US06 exhaust emissions in two emissions samples (bags) in order to separately assess city and highway fuel economy over this test, with several alternative methods of determining a two-bag result allowed);

• Mandatory operation of the heater/defroster during the cold temperature FTP for emissions and fuel economy testing;

• Testing diesel vehicles on the cold temperature FTP; and

• Requiring hybrid vehicles to perform all four phases/bags of the FTP.

Details regarding these changes are described in Section IV.

C. Why Is EPA Taking This Action?

1. Energy Policy Act of 2005

In the Energy Policy Act of 2005, Congress required EPA to update or revise adjustment factors to better reflect a variety of real-world factors that affect fuel economy. Section 774 of the Energy Policy Act directs EPA to “ * * * update or revise the adjustment factors in [certain sections of the fuel economy labeling regulations] to take into consideration higher speed limits, faster acceleration rates, variations in temperature, use of air conditioning, shorter city test cycle lengths, current reference fuels, and the use of other fuel depleting features.” This final rule does take into account these conditions and will address this statutory requirement. The Energy Policy Act of 2005 and other relevant statutes are discussed in greater detail in Section VII.

2. Comparing EPA Estimates to Actual Driving Experience

First, it is important to stress that the EPA city and highway mpg numbers are

estimates—they cannot give consumers an exact indication of the fuel economy they will achieve. The complete range of consumer fuel economy experience can not be represented perfectly by any one number. Fuel economy varies based on a wide range of factors, some of which we have discussed above. There will always be consumers that achieve real-world fuel economy both better and worse than a given estimate.

In recent years, there have been a number of studies, conducted by a variety of sources, suggesting that there is often a shortfall between the EPA estimates and real-world fuel economy. Several organizations have provided consumers with their own fuel economy estimates, which in some cases vary significantly from EPA's estimates. Each of these studies differs in its test methods, driving cycles, sampling of vehicles, and methods of measuring fuel economy. There are strengths and weaknesses of each study, which we discuss further in the Technical Support Document. Collectively, these studies indicate there are many cases where real-world fuel economy falls below the EPA estimates. The studies also indicate that real-world fuel economy varies significantly depending on the conditions under which it is evaluated. Nevertheless, taken as a whole, these studies reflect a wide range of real-world driving conditions, and show that typical fuel economy can be much lower than EPA's current estimates.

3. Representing Real-World Conditions on the Fuel Economy Tests

The current city and highway fuel economy tests do not represent the full range of real-world driving conditions. The 1985 adjustment factors were designed to ensure that the fuel economy estimates across the vehicle fleet reflected the average impacts of a number of conditions not represented on the tests. However, as we noted earlier, many changes have occurred since then that make it once again desirable to reevaluate the fuel economy test methods and adjustment factors. Given the significant degree of variation that is apparent across vehicles, we believe it is important to reconsider the approach of “one-size-fits-all” adjustment factors and instead move to an approach that more directly reflects the impacts of fuel economy on individual vehicle models.

There are several key limitations in the FTP and HFET tests that cause them to not adequately reflect real-world driving today. First, most consumers understandably think “highway” fuel economy means the fuel economy you can expect under freeway driving conditions. In fact, the highway test has a top speed of 60 mph, since the test was developed more than 20 years ago to represent rural driving conditions at a time when the national speed limit was 55 miles per hour. The national speed limit has since been eliminated, many states have established speed limits of 65 to 70 miles per hour, and much driving is at even higher speeds. Recent real-world driving studies indicate that about 28 percent of driving (vehicle miles traveled, or VMT) is at speeds of greater than 60 mph. (This analysis is detailed in the Technical Support Document.) These studies also show that 33 percent of real-world driving VMT falls outside the FTP/HFET speed and acceleration activity region. Thus, a substantial amount of high speed driving behavior is not captured in today's FTP or HFET tests. This is a weakness in our current fuel economy test procedures. Since higher speed driving has a negative impact on fuel economy, incorporating these higher speed driving conditions into the fuel economy tests would lower the fuel economy estimates.

Second, the maximum acceleration rates of both the FTP and HFET tests are a relatively mild 3.3 miles-per-hour per second (mph/sec), considerably lower than the maximum acceleration rates seen in real-world driving. Recent real-world driving studies indicate that maximum acceleration rates are as high as 11 to 12 mph/sec and significant activity occurs beyond 3.3 mph/sec. (This analysis is detailed in the Technical Support Document.) At the time these tests were first developed, the real-world accelerations were higher than 3.3 mph/sec, but the test cycle's acceleration rates were limited to accommodate the mechanical limitation of the dynamometer test equipment. These constraints no longer exist with today's dynamometers, so we now have the ability to incorporate higher maximum acceleration rates that more closely reflect those of actual driving. As with high speed driving, higher acceleration rates have a negative impact on fuel economy; thus, if these higher accelerations were factored into our fuel economy methods, the estimates would be lower.

The maximum deceleration rate of the FTP and HFET tests is important to consider as well, because it relates to the regenerative breaking effect of hybrid electric vehicles. The FTP and HFET tests include a mild maximum deceleration rate of −3.3 mph/sec; yet in recent real-world driving rates as high as −11 to −17 mph/sec were recorded. (This analysis is detailed in the Technical Support Document.) Under higher deceleration rates, the effects of regenerative breaking for hybrid electric vehicles are diminished, thereby lowering fuel economy. In this regard, today's FTP and HFET tests result in a higher fuel economy for hybrid vehicles than is achieved under typical driving conditions.

Third, both the FTP and HFET tests are run at mild ambient conditions (approximately 75 °F), while real-world driving occurs at a wide range of ambient temperatures. Moderate conditions tend to be optimal for achieving good fuel economy, and fuel economy is lower at temperatures colder or warmer than the 75 °F test temperature. Only about 20 percent of VMT occurs between 70 and 80 °F, approximately 15 percent of VMT occurs at temperatures above 80 °F, and 65 percent occurs below 70 °F. (This analysis is detailed in the Technical Support Document.) Moreover, neither the FTP nor HFET tests are run with accessories operating, such as air conditioners, heaters, or defrosters. These accessories, most notably air conditioning, can have a significant impact on a vehicle's fuel economy.

Finally, there are many factors that affect fuel economy that cannot be replicated on dynamometer test cycles in a laboratory. These include road grade, wind, vehicle maintenance (e.g., tire pressure), snow/ice, precipitation, fuel effects, and others. It is not possible to develop a test cycle that captures the full range of factors impacting fuel economy. However, it is clear that the FTP and HFET tests alone are missing some important elements of real-world driving. All of these factors can reduce fuel economy. This largely explains why our current estimates often do not reflect consumers' real-world fuel economy experience.

D. When Will the New Requirements Take Effect?

1. New City and Highway Fuel Economy Estimates

We want the public to benefit from the improved information provided by the new fuel economy estimates as soon as possible. Therefore, these new regulations take effect with the 2008 model year vehicles, which will be available for sale at dealers in 2007. We believe this is the earliest possible date for implementation. Manufacturers can legally begin selling 2008 models as early as January 2, 2007. However, we are phasing in the new test methods in order to provide manufacturers with sufficient lead time to plan for increased fuel economy testing necessitated by the 5-cycle approach.

For the first three model years (2008 through 2010), we provide manufacturers with the option of deriving the 5-cycle fuel economy using a scale of adjustments based on an analysis of data developed from the 5-cycle method. This approach, called the “mpg-based” method, incorporates the effects of higher speed/aggressive driving, air conditioning use, and colder temperatures, but less directly than the 5-cycle vehicle-specific method.

The mpg-based adjustments were derived by applying the 5-cycle formulae to a data set of recent fuel economy test data, and developing a regression line through the data. (See Section II for a full description of this approach). These adjustments differ based on the mpg a vehicle obtains over the FTP (City) or HFET (Highway) tests. In other words, every vehicle with the same mpg on the FTP test receives the same adjustment for its city fuel economy label. Likewise, every vehicle with the same mpg on the HFET test will receive the same adjustment for its highway fuel economy label. This method of adjustment would not require any testing beyond the FTP/HFET tests already performed today, thus, it can be implemented sooner than the 5-cycle approach as an interim improvement to our fuel economy test methods. However, during this time frame, manufacturers may optionally choose to run full 5-cycle testing for any of their vehicle models.

The phase-in will provide consumers with more accurate estimates as soon as possible, while allowing the industry the necessary lead time to prepare for the necessary testing under the 5-cycle approach.

The “mpg-based” method is termed the “derived 5-cycle” approach in the regulatory text.

Any manufacturer that chooses to optionally use the 5-cycle approach prior to the 2011 model year must use that approach to determine both city and highway label estimates.

Starting with the 2011 model year, the 5-cycle approach will be required. Under this approach, the manufacturers will be required to implement vehicle-specific 5-cycle testing across some portion of their fleet. The manufacturers will use the emission certification test results over the five test procedures to calculate 5-cycle city and highway fuel economy values. However, we are finalizing criteria as proposed that will allow continued use of the mpg-based adjustments in cases where we can predict with reasonable certainty that the fuel economy results under the mpg-based approach will not differ significantly from the results achieved by the 5-cycle method. These criteria and the methodology by which vehicles are selected for 5-cycle testing in the 2011 and later model years are described in detail in Section II.

2. Implementation of New Label Design

In order to allow manufacturers to transition to the new label format, we are allowing use of the new label format to be optional until September 1, 2007. This date aligns with the date manufacturers must place National Highway Traffic Safety Administration (NHTSA) crash test ratings on the vehicle pricing labels of all vehicles manufactured as of that date. The September 1, 2007 date allows manufacturers to redesign their vehicle pricing labels only once to incorporate two new federal labeling requirements. However, we encourage manufacturers to implement the new label format as quickly as possible such that the majority of 2008 vehicles on dealer lots exhibit the new label format. All 2008 model year vehicles must use the new methods to calculate fuel economy estimates. Labels on all 2008 models will have a statement indicating that the fuel economy estimates are based on new methods.

3. Fuel Economy Labeling of Medium-Duty Passenger Vehicles

The requirement for MDPVs to be labeled with city and highway fuel economy estimates begins with the 2011 model year. EPA does not have the authority to require labeling of MDPVs sooner because of our authority is linked to NHTSA's determination of CAFE standards for vehicles over 8,500 lbs GVWR.

However, we encourage manufacturers to voluntarily label these vehicles sooner, if at all possible. Many vehicles in the MDPV category have counterpart models below 8,500 lbs GVWR, and these vehicles receive fuel economy labels today.

See 49 U.S.C. 32908, 32901(a)(3)(B), and Section VII for a detailed explanation of EPA's legal authority.

E. Periodic Evaluation of Fuel Economy Labeling Methods

In the proposal, we expressed an interest in ensuring that the new methods continue to reflect real-world fuel economy into the future, and we encouraged stakeholders to submit data that would inform future analysis and potential changes to the methodology. We believe it is critical to ensure that the fuel economy methods are periodically evaluated. We are committed to evaluating the 5-cycle method every several years (e.g., five years) to ensure that it appropriately accounts for advancements in vehicle technology, changes in driving patterns, and any new data collected on in-use fuel economy. We also remain open to reviewing any valid test data indicating that any of our assumptions were inappropriate for a specific vehicle and considering modifications to the 5-cycle formulae overall to account for these differences. In the public comments, some stakeholders expressed an interest in conducting studies of in-use fuel economy. We welcome stakeholders to submit any such future data for use in our periodic evaluation of the fuel economy test methods.

We are also committed to offering technical guidance to any stakeholder interested in undertaking an in-use testing and data-collection program. By seeking our technical input up front, stakeholders can better ensure that the data is collected in a way that is ultimately best-suited to evaluate potential changes to the methodology. However, we note that collecting in-use fuel economy data alone can only indicate whether or not the 5-cycle estimates are accurate; it would not provide the information needed to actually improve the 5-cycle equations. The 5-cycle approach is based on emission test results over the five test cycles and on the weighting of a number of factors based on their average impact across all U.S. driving. Data on in-use fuel economy alone, without complementary driving behavior and activity data representative of the fleet, is insufficient to initiate changes that may be appropriate to the 5-cycle weighting factors.

Finally, several commenters suggested that EPA conduct an evaluation of the 5-cycle method prior to model year 2011, when the 5-cycle method becomes required. If appropriate data is submitted prior to the end of 2008, we would plan to review it in a timely manner. If such data suggests that changes to the 5-cycle approach are necessary, we would plan to issue a separate rulemaking to address changes to the methodology, providing adequate lead time to the industry to comply.

F. This Final Rule Does Not Impact CAFE Standards or Test Procedures

This final rule does not alter the FTP and HFET driving cycles, the measurement techniques, or the calculation methods used to determine CAFE. EPCA requires that CAFE for passenger automobiles be determined from the EPA test procedures in place as of 1975 (or procedures that give comparable results), which are the city and highway tests of today, with a few small adjustments for minor procedural changes that have occurred since

1975.

This final rule will not impact the CAFE calculations.

See 49 U.S.C. 32904(c).

G. Public Participation

A wide variety of interested parties participated in the rulemaking process that culminates with this final rule. This process provided opportunity for public comment following the proposal published on February 1, 2006.

We held a public hearing on the proposal in Romulus, Michigan on March 3, 2006. At that hearing, oral comments on the proposal were received and recorded. A written comment period remained open until April 3, 2006. Comments and hearing testimony have been placed in the docket for this rule. We considered these comments in developing the final rule.

See 71 FR 5426 (Feb. 1, 2006).

We have prepared a detailed Response to Comments document, which describes the comments we received on the proposal and our response to each of these comments. The Response to Comments is available in the docket for this rule and on the EPA Web site.

See

http://www.epa.gov/fueleconomy/

http://www.regulations.gov.

II. New Test Methods and Calculation Procedures for Fuel Economy Labels

The current fuel economy label values are based on measured fuel economy over city and highway driving cycles, which are then adjusted downward by 10 and 22 percent, respectively, to account for a variety of factors not addressed in EPA's vehicle test procedures. These adjustments are intended to account for differences between the way vehicles are driven on the road and over the test cycles. Such differences include air conditioning use, higher speeds, more aggressive accelerations and decelerations, widely varying ambient temperature and humidity, varying trip lengths, wind, precipitation, rough road conditions, hills, etc. The purpose of the new methods is to expand the basis for the fuel economy labels to include actual vehicle testing over a wider range of driving patterns and ambient conditions than is currently covered by the city (FTP) and highway (HFET) fuel economy tests.

For example, vehicles in the real world are often driven more aggressively and at higher speeds than is represented in the FTP and HFET tests. The incorporation of measured fuel economy over the US06 test cycle into the fuel economy label values will make the label values more realistic. Drivers often use air conditioning in warm, humid conditions, while the air conditioner is turned off during the FTP and HFET tests. The incorporation of measured fuel economy over the SC03 test cycle into the fuel economy label values will reflect the added fuel needed to operate the air conditioning system. Vehicles also often are driven at temperatures below 75°F, at which the FTP and HFET tests are performed. The incorporation of measured fuel economy over the cold temperature FTP test into the fuel economy label values will reflect the additional fuel needed to start up a cold engine at colder temperatures.

The new vehicle-specific, 5-cycle approach to calculating fuel economy labels will incorporate estimates of the fuel efficiency of each vehicle during high speed, aggressive driving, air conditioning operation and cold temperatures into each vehicle's fuel economy label. It will combine measured fuel economy over the two current fuel economy tests, the FTP and HFET, as well as that over the US06, SC03 and cold FTP tests into estimates of city and highway fuel economy for labeling purposes. The test results from each cycle (and in some cases, portions of cycles or emission “bags”)

will be weighted to represent the contribution of each cycle's attributes to onroad driving and fuel consumption. The vehicle-specific, 5-cycle approach will eliminate the need to account for the effect of aggressive driving, air conditioning use and colder temperatures on fuel economy through generic factors (as done today) which may not appropriately reflect that particular vehicle's sensitivity to these factors. A generic adjustment is still necessary to account for factors not addressed by any of the five dynamometer tests (e.g., road grade, wind, low tire pressure, gasoline quality, etc.). The derivation of this adjustment factor is discussed further below and in Chapter III of the Technical Support Document.

The FTP consists of two parts, referred to in the regulations as the “cold start” test and the “hot start” test. Each of these parts is divided into two periods, or “phases”: a “transient” phase and a “stabilized” phase. Because the stabilized phase of the hot start test is assumed to be identical to the stabilized phase of the cold start test, only the cold start stabilized phase is typically run. These “phases” are often called “bags,” terminology that results from the sample bags in which the exhaust samples are collected. The phases are run in the following order: Cold start transient (Bag 1), cold start stabilized (Bag 2), and hot start transient (Bag 3).

Currently, the US06, SC03 and cold FTP tests are only performed on a sub-set of new vehicle configurations, and only for emissions compliance purposes. In contrast, for fuel economy purposes, FTP and HFET tests are performed on many more vehicle configurations. In order to minimize the number of additional US06, SC03 and cold FTP tests resulting from the new testing and calculation procedures, we are allowing manufacturers to estimate the fuel economy over these three tests for vehicle configurations that are not normally tested for emissions compliance purposes, using the fuel economy measurements that are normally available. This is currently done on a more limited basis for both the FTP and HFET, and is referred to as analytically derived fuel economy (ADFE).

This method uses test data to determine the sensitivity of fuel economy to various vehicle parameters, and once these relationships are well established, we will issue guidance that provides manufacturers with the appropriate equations to use. We believe that these provisions are designed to represent a reasonable balance between the need for accurate fuel economy data and the need to contain the cost of testing for both industry and EPA, where we reasonably believe that actual testing would not produce a significantly different result. We always retain the right to order actual confirmatory testing where appropriate.

EPA's current policy for analytically derived fuel economy estimates for the FTP and HFET tests is contained in the EPA memorandum entitled, “Updated Analytically Derived Fuel Economy (ADFE) Policy for 2005 Model Year,” March 11, 2004, CCD-04-06 (LDV/LDT). This memorandum is issued under 40 CFR 600.006-89(e), which allows manufacturers to use analytical methods to determine fuel economy.

We also are finalizing the proposed provisions that allow manufacturers to use the interim approach to fuel economy label estimation, the “mpg-based” approach described below, when the available 5-cycle fuel economy data indicate that a vehicle test group's 5-cycle fuel economy is very close to that estimated by the mpg-based curve. The mpg-based method will also be used to determine label values for MDPVs that become mandatory with the 2011 model year, as discussed further in Section II.E.2.

Even with these provisions, we expect that some manufacturers will have to perform some additional US06, SC03, or cold FTP tests to address differences in vehicle designs which are not covered by the analytical derivation methodology. Other manufacturers may voluntarily choose to perform additional tests voluntarily to improve accuracy over the analytical derivation methodology, especially in cases where

manufacturers have worked to improve fuel efficiency over the new test cycle conditions (e.g., during cold temperatures or with air conditioning on). Depending on how manufacturers choose to apply this method, this additional testing could prompt the construction or modification of test facilities. (Test burden and cost issues are discussed further in Section V of this preamble.) Therefore, in order to allow sufficient lead-time for the construction of these facilities, we are finalizing the proposed provisions that allow manufacturers the option of using an interim set of adjustments through the 2010 model year. These interim adjustments are not vehicle-specific, but instead reflect the effects of high speeds, hard accelerations, air conditioning use, and cold temperatures, etc., on the average vehicle. The vehicle-specific 5-cycle approach becomes mandatory with the 2011 model year. However, a manufacturer can voluntarily use the 5-cycle method prior to the 2011 model year for any vehicle model.

Any manufacturer that chooses to optionally use the 5-cycle approach prior to the 2011 model year must use that approach to determine both city and highway label estimates.

The interim set of adjustments is termed the “mpg-based” approach. (See Figure II-1 for a graphical depiction of these adjustments.) The mpg-based approach is a sliding scale of adjustments which varies according to a vehicle's measured fuel economy over the FTP and HFET tests. The mpg-based adjustments were developed from applying the 5-cycle formulae to 615 recent model year vehicles and determining the average difference between the 5-cycle and current city and highway fuel economies.

Thus, because the data used to develop the mpg-based adjustments were derived from 5-cycle fuel economies, the mpg-based adjustments include the effects of high speeds, aggressive driving, air conditioning, and colder temperatures. However, they do so based on the impact of these factors on the average vehicle, not the individual vehicle, which is the case with the 5-cycle formulae. For example, for vehicles with fuel economy of 20-30 mpg over the FTP (i.e., city) test, the mpg-based approach would adjust the city fuel economy downward by 20-22 percent (or 4 to 7 mpg), versus today's single 10 percent downward adjustment. Thus, city fuel economy label values under the mpg-based approach tend to be about 11 percent lower on average than today's label values. For vehicles with fuel economy of 25-35 mpg over the HFET (i.e., highway) test, the mpg-based approach would adjust the highway fuel economy downward by about 28 percent (or 7 to 10 mpg), versus today's 22 percent downward adjustment. Thus, highway fuel economy label values under the mpg-based approach would tend to be about 8 percent lower than today's label values.

Our database consists of 615 vehicles spanning the 2003 to 2006 model years. For these vehicles we have emission and/or fuel economy test data on all five test procedures. Additionally, manufacturers assisted with the development of this database by submitting detailed fuel economy data for the three phases (or “bags”) of the FTP and the Cold FTP (EPA requires that they submit only the composite emissions and fuel economy data for certification or fuel economy labeling). The database includes data from 14 hybrid vehicles and one diesel vehicle, and represents all types of vehicles from all major manufacturers and most smaller manufacturers.

Given that both approaches utilize the 5-cycle fuel economy formulae in some fashion, it is useful to begin this section with a description of how the fuel economy measured over the 5 test cycles are combined to represent city and highway fuel economy. Then we will describe how the fleet-average formulae for the mpg-based approach were derived from these 5-cycle fuel economy estimates. Finally, we compare fuel economy label results from both the 5-cycle and mpg-based methods to onroad fuel economy data from a variety of sources.

Under the new methods, we are replacing the 0.90 and 0.78 adjustment factors for city and highway fuel economy, respectively, with new factors which are not simply constants. For model years 2008-2010, a manufacturer has the option of using two distinct methodologies to calculate the city and highway fuel economy values for any specific vehicle. One approach is called the mpg-based method, since the city and highway label values are based on the fuel economy (or mpg) measured over the FTP and HFET, respectively. The other approach is called the vehicle-specific 5-cycle approach, since the city and highway label values are based on the test results of five test cycles, the FTP, HFET, US06, SC03 and cold FTP. Both approaches also include an additional downward adjustment to represent effects not reflected in our existing laboratory dynamometer testing. Beginning with the 2011 model year, manufacturers are required to use the vehicle-specific 5-cycle method, but may still use the mpg-based approach on vehicles most sensitive to the new test conditions. Under the vehicle-specific 5-cycle approach, the fuel economy measurements over the 5 dynamometer test cycles will all be performed on (or estimated for) a specific vehicle in the current model year. The mpg-based approach uses historic fuel economy data over the 5 test cycles to estimate a fleet-wide average relationship between (1) FTP fuel economy and 5-cycle city fuel economy, and (2) HFET fuel economy and 5-cycle highway fuel economy. Under the mpg-based approach, a specific vehicle's city and highway fuel economy labels are based on this fleet-wide average relationship, as opposed to that vehicle's own results over the 5 test cycles. In other words, under the mpg-based approach every vehicle with the same fuel economy over the FTP test will receive the same city fuel economy label value. Likewise, every vehicle with the same fuel economy over the HFET test will receive the same highway fuel economy label value. This is illustrated further in Section II.B below. Below we present the specific equations under the two approaches which would be used to convert fuel economies measured over the dynamometer cycles into city and highway fuel economy values.

A. Derivation of the Vehicle-Specific 5-Cycle Methodology

The vehicle-specific, 5-cycle approach bases a vehicle's fuel economy label values on fuel economy measurements over five test cycles: FTP, HFET, US06, SC03 and cold FTP. These measurements are combined based on detailed estimates, or “weightings,” of how and when vehicles are driven, as well as under what ambient conditions. The 5-cycle formulae are derived from extensive data on real-world driving conditions, such as driving activity, temperatures, air conditioner operation, trip length, and other factors. We refer readers to the Technical Support Document for a detailed description of the development of the 5-cycle fuel economy formulae.

1. Overview of Public Comments on the 5-Cycle Methodology

Of those commenters addressing the 5-cycle formulae, most commented on the thoroughness of the analyses which supported the various cycle weighting factors (also called coefficients) included in the formulae. However, Honda, and to some extent Environmental Defense, criticized several aspects of the 5-cycle formulae. These comments are addressed in detail in the Response to Comments document. Overall, the key criticisms included:

(1) The 5-cycle formulae had not been validated for individual vehicles. In particular, these commenters claimed that the 5-cycle coefficients assume that all vehicles respond the same to various

changes in driving pattern and ambient conditions;

(2) The three new test cycles represent extreme conditions, and;

(3) The 5-cycle method could penalize advanced fuel efficient technologies.

We present a summary of our responses to these three concerns below. Additional detail can be found in the Response to Comments Document.

First, all of the approaches to calculating label values involve relationships between driving activity or ambient conditions and fuel consumption. These relationships are never exact for each and every vehicle. The 5-cycle formulae utilize more vehicle-specific fuel consumption data than the mpg-based and current label approaches. Therefore, the 5-cycle approach is based on fewer assumptions regarding how individual vehicles react to temperature, soak time, low and high speed driving, aggressive driving, idling, air conditioning, etc. The 5-cycle method, by incorporating additional data from the three newer test cycles, improves our ability to estimate fuel economy outside of the conditions evaluated by the FTP and HFET tests. We provide examples and a detailed description of this analysis in the Technical Support Document.

Second, Honda states that the three new tests address vehicle conditions that are so extreme that their use in the above types of interpolations is actually worse than simply assuming that all vehicles have the same response to the conditions being addressed by the three tests. However, none of the available data indicates that this is the case, and Honda did not provide data to support their claim. All of the driving conditions addressed by the three tests clearly occur in-use. Our detailed analysis of recent real-world driving activity studies is contained in the Technical Support Document and Response to Comments document. In particular, use of fuel economy data over the cold FTP at 20 °F improves our ability to estimate fuel economy at 50 °F, compared to projecting fuel economy at 50 °F solely using the FTP test data at 75 °F. This analysis is detailed in the Technical Support Document as well.

Third, Honda states that these aspects of the 5-cycle formulae might actually penalize advanced fuel-efficient technology relative to conventional technology vehicles. Our comparisons of 5-cycle fuel economy for hybrids fall in the range of onroad fuel economy estimates developed by various organizations (see Section II of the Technical Support Document). It is true that the 5-cycle formulae decrease the fuel economy of some hybrid vehicles more than conventional vehicles, compared to the current label approach. However, this is easily explained by the way that current hybrid technology works under various operational and ambient conditions. For example, many current hybrid engine shut-off strategies cease to operate when the heater is turned on at cold temperatures. The current label approach assumes that any engine shut-off strategies operating over the FTP and HFET tests always operate in in-use. This is clearly not correct. Thus, some additional adjustment to current hybrid vehicle fuel economy is to be expected. Available data on hybrid fuel economy outside of the conditions addressed by the FTP and HFET confirm the impact of the 5-cycle formulae. We expect that future hybrid technology will significantly improve fuel economy over real-world conditions outside the FTP and HFET tests. Such improvements in real-world fuel economy will be reflected under the new 5-cycle estimates.

2. Changes to the 5-Cycle Methodology From Proposal

We received very few comments that provided new data with which to modify the proposed methodology. However, based on a few comments and new data we obtained, the methodology we are finalizing differs from the proposed methodology in three ways. First, we reevaluated an assumption with respect to the effect of ambient temperature on running fuel use. This reduced the weighting factor for cold temperature running fuel use. Second, we obtained new vehicle trip length data from extensive vehicle monitoring ongoing in Atlanta. This increased our estimate of trip length during city driving, which then reduced the contribution of start fuel use to average fuel consumption during city driving. Third, we updated our analyses based on the Federal Highway Administration's release of 2004 fuel economy estimates and revised 2003 fuel economy estimates. This analysis, along with addressing public comments, decreased the non-dynamometer adjustment factor slightly. Readers are referred to the Technical Support Document for detailed discussions of the analyses noted briefly below.

In response to Honda's comments regarding the assumptions involved in developing the 5-cycle formulae, we reevaluated our assumption regarding the effect of ambient temperature on running fuel use. This was the one area where the relationship in the proposed 5-cycle formula was based on a simple assumption of linearity and not on the results of actual vehicle testing. We performed an analysis of running fuel use of several vehicles tested at 20 °F, 50 °F, and 75 °F and determined that the effect was non-linear. Using the new relationship reduced the city and highway formulae's weighting of running fuel use at 20 °F from 0.30 to 0.18.

Since the time of the proposal, we also obtained vehicle trip data from extensive vehicle monitoring which is ongoing in Atlanta. Across a total of 668,000 vehicle trips, the average trip length was found to be 7.25 miles. This is 20 percent longer than found in Atlanta in the early 1990's. When we extrapolate this increase to the results of other studies performed in the early 1990's, we determined that a more reasonable estimate of trip length during city driving would be 4.1 miles, as opposed to the 3.5 mile estimate proposed in the 5-cycle city fuel economy formulae. This effectively reduces the contribution of start fuel use in the estimation of city fuel economy.

Also, since the proposal, the Federal Highway Administration published onroad fuel economy estimates for 2004, as well as a revised onroad fuel economy estimate for 2003. These estimates are roughly 3% lower than those contained in their 2003 report, which was the basis of our proposal. At the same time, Honda correctly pointed out that we had inappropriately assumed that the changes in FTP and HFET test procedures implemented with the Supplemental FTP rule increased measured fuel economy by 3%. These changes, plus other minor adjustments, led us to revise the factor for non-dynamometer effects from 0.89 to 0.905 (meaning that this factor further reduces both city and highway estimates by 9.5 percent). Detailed discussion and analyses of the non-dynamometer factor can be found in Section 5.0 of the Response to Comments document and Chapter III of the Technical Support Document.

With these revisions, under the vehicle-specific 5-cycle approach, the city fuel economy value will be calculated as follows:

ER27DE06.000

Where:

ER27DE06.001

Where:

ER27DE06.002

Where:

Bag y FE

= the fuel economy in miles per gallon of fuel during the specified bag of the FTP test conducted at an ambient temperature of 75 ° or 20 °F.

For hybrid gasoline-electric vehicles tested over a 4-bag FTP the calculation for start fuel consumption is somewhat different:

ER27DE06.003

Where:

ER27DE06.004

and

ER27DE06.005

Likewise,

ER27DE06.006

Where:

US06 FE = fuel economy in mile per gallon over the US06 test,

HFET FE = fuel economy in mile per gallon over the HFET test,

SC03 FE = fuel economy in mile per gallon over the SC03 test.

Hybrid gasoline-electric vehicles tested over a 4-bag 75 °F FTP will substitute the fuel economy over Bag 4 for Bag 2 in the appropriate places in the above equation (except in the case of the cold FTP, where hybrids, like conventional vehicles, will run a 3-bag test). The resulting equation for hybrid vehicles thus becomes:

ER27DE06.007

Under the vehicle-specific 5-cycle formula, the highway fuel economy value would be calculated as follows:

ER27DE06.008

Where:

ER27DE06.009

and,

ER27DE06.010

where the various symbols have the same definitions as described under the formula for the vehicle-specific 5-cycle city fuel economy value.

For hybrid gasoline-electric vehicles tested over a 4-bag 75 °F FTP the highway fuel economy is calculated using the following equations:

ER27DE06.011

Where:

ER27DE06.012

Where:

ER27DE06.013

and,

ER27DE06.014

and,

ER27DE06.015

Where:

US06 Highway FE = fuel economy in miles per gallon over the Highway portion of the US06 test,

HFET FE = fuel economy in miles per gallon over the HFET test,

SC03 FE = fuel economy in miles per gallon over the SC03 test.

Additional equations are necessary in the unusual cases where a manufacturer test a hybrid gasoline-electric vehicle using a 2-bag FTP; these equations are detailed in the Technical Support Document.

B. Derivation of the MPG-Based Methodology

Although the 5-cycle vehicle-specific method will be optionally available to manufacturers starting with the 2008 model year, it is the mpg-based approach that will be more widely utilized for the 2008 through 2010 model years. Starting with the 2011 model year the mpg-based approach may continue to be used where test data demonstrates that the 5-cycle method is unlikely to produce significantly different results. The mpg-based method applies an adjustment to a vehicle's FTP or HFET test result based on that vehicle's measured fuel economy on the FTP or HFET.

The mpg-based adjustments were developed from applying the 5-cycle formulae to fuel economy data from 615 recent model year vehicles and determining the average relationship between the 5-cycle city and highway fuel economy values and FTP and HFET fuel economy values. Thus, because the data used to develop the average adjustments were derived from 5-cycle fuel economies, the mpg-based adjustments include the effect of high speeds, aggressive driving, air conditioning, and colder temperatures. However, they do so based on the impact of these factors on the average vehicle and do not reflect the fuel economy actually achieved during these types of driving by individual vehicles, which is the case with the 5-cycle formulae. As indicated by a comparison of the fuel economy label values developed using the mpg-based and 5-cycle approaches (see Figures II-1 and II-2), these “fleet-average” adjustments are reasonably accurate for most vehicles.

For example, for vehicles with FTP fuel economy ranging from 20 to 30 mpg, the mpg-based approach will adjust the FTP fuel economy result downward by 20-22 percent (

i.e.

, by 4 to 7 mpg), versus today's 10 percent downward adjustment. Thus, city fuel economy label values under the mpg-based approach will tend to be about 10-12 percent lower than today's label values. For vehicles with HFET fuel economy in the range of 25 to 35 mpg the mpg-based approach on average will adjust the HFET fuel economy downward by 28 percent (

i.e.

, by 7 to 10 mpg), versus today's 22 percent downward adjustment. Thus, highway fuel economy label values under the mpg-based approach will tend to be about 8 percent lower than today's label values.

The characteristics of the mpg-based equations can be seen in Figures II-1 and II-2 below. The 5-cycle fuel economies for 615 recent model year vehicles are represented by the individual data points on the charts. Hybrid vehicles are represented by large squares on the charts. The mpg-based fuel economy curve, represented by the regression line on the chart, was developed from these data. The horizontal axis is the measured FTP fuel economy.

Under the mpg-based approach, the city fuel economy value will be calculated as follows:

ER27DE06.016

Where:

FTP FE = the fuel economy in miles per gallon of fuel during the FTP test conducted at an ambient temperature of 75°F. This value is normally a sales-weighted average of the vehicle models included in the “model type” vehicle grouping as defined in 40 CFR 600.002-93.

ER27DE06.018

Likewise, the highway fuel economy value will be calculated as follows:

ER27DE06.019

Where:

HFET FE = fuel economy in mile per gallon over the HFET test. This value is normally a sales-weighted average of the vehicle models included in the “model type” vehicle grouping as defined in 40 CFR 600.002-93.

ER27DE06.020

These equations differ from those that we proposed in two ways. First, as described above, we have modified the 5-cycle fuel economy formulae slightly based on additional information received since the proposal. Second, we have added 192 additional vehicles to our 5-cycle fuel economy database. The mpg-based equations developed for the proposal were based on 5-cycle fuel economy estimates for 423 2003 to 2005 model year vehicles, whereas the mpg-based equations shown above were based on 5-cycle fuel economy estimates for 615 2003 to 2006 model year vehicles. The net effect of these two changes is that the city and highway fuel economy adjustments to the FTP and HFET fuel economy values are a few percent smaller than those based on the proposed mpg-based equations.

As mentioned above, the mpg-based equations were developed from the 5-cycle fuel economy estimates for 615 2003-2006 model year vehicles. In order to keep the mpg-based equations up-to-date and reflecting changes in vehicle technology, EPA will update these equations periodically using the same methodology, but no more frequently than on an annual basis. We will update the mpg-based equations periodically, especially if we determine that doing so would significantly change the label results, using all of the available 5-cycle fuel economy estimates for the previous three or more model years. These revised mpg-based equations will be issued through the publication of an EPA guidance document. The final regulations contain the equations that are applicable to 2008 model year vehicles, as well as the components of the equations to be utilized for future model year vehicles.

We plan to update the mpg-based curves periodically using all of the available 5-cycle fuel economy estimates for the previous three or more model years. We proposed that these revised mpg-based equations would be issued through the publication of an EPA guidance document which would be released by January 1 of the calendar year prior to the model year to which the equations first apply. We suggested in the proposal that this meant, for example, that mpg equations for the 2012 year would be published prior to January 1 of 2011. However, we now recognize that the model year for many manufacturers can begin almost a full year before the start of the identically-named calendar year (

i.e.

, the 2012 model year can begin on January 2, 2011). Manufacturers commented that issuing guidance applicable to a given model year potentially mere days or weeks from the start of that model year for some vehicle lines did not provide adequate lead time. We agree, and we are finalizing regulations that require EPA to issue guidance regarding revisions to the equations by no later than July 1 of the calendar year prior to the earliest start of the model year that starts in the following calendar year. In other words, for new equations to be applicable to the 2010 model year (which can begin as early as January 2, 2009), EPA must issue guidance prior to July 1, 2008.

C. Effect of the New Methods on Fuel Economy Label Values

The impact of the new methodology on city and highway fuel economy label values was assessed using the same database of 615 recent model year vehicles used to develop the mpg-based adjustments discussed above. It is important to realize that these are projections based on historical data, and that the actual impacts on fuel economy label values will be dependent upon how a given vehicle performs over the specific tests. Figures II-3 and II-4 show, for city and highway fuel economy, respectively, how the label values would change under the 5-cycle

method for each vehicle in the 615-vehicle database. Figures II-5 and II-6 show, for city and highway fuel economy, respectively, the distributions of the percent change in label values relative to the current labels. More than 90 percent of the vehicles would have new city label values that are from 8 to 15 percent lower than their current label values. Figure II-3 also shows that the new city label values for most hybrid vehicles will be between 20 and 30 percent lower than today's city label values. Figure II-4 shows that about 90 percent of the vehicles in the database, including most hybrids, would have new highway label estimates that are from 5 to 15 percent lower than today's current highway estimates. Under the current method all vehicles would receive the same adjustment to account for the variety of factors now accounted for by the new methodology. Under the 5-cycle method vehicles receive differing “adjustments” relative to the current label values based on each vehicle's response to the five tests. Table II-1 presents the average results of this comparison for all 615 vehicles, as well as various sub-sets of vehicles.

ER27DE06.021

ER27DE06.022

ER27DE06.023

ER27DE06.024

Table II-1.—Effect of 5-Cycle Formulae on City and Highway Fuel Economy Labels

City

Current

(mpg)

5-Cycle

(mpg)

Percent

change

(percent)

Highway

Current

(mpg)

5-Cycle

(mpg)

Percent

change

(percent)

Combined*

Current

(mpg)

5-Cycle

(mpg)

Percent

change

(percent)

Hybrids

42.7

33.0

−22.3

42.8

36.9

−12.9

42.6

35.0

−17.1

Diesel (1 vehicle)

26.2

23.4

−10.7

35.3

32.0

−9.3

29.6

27.6

−6.7

Conventional Vehicles

12 Highest FE

30.9

26.9

−12.9

36.6

34.0

−6.9

33.2

30.5

−8.0

12 Lowest FE

10.2

9.5

−6.9

14.8

−0.2

11.9

0.4

Average

18.6

16.5

−10.8

24.6

22.8

−7.4

20.9

19.6

−6.0

* Combined fuel economy for Current MPG is based on weighting of 55%/45% city/highway, respectively. Combined fuel economy for 5-cycle MPG is based on weighting of 43%/57% city/highway, respectively (discussed further in Chapter II.C of the Technical Support Document).

As can be seen from Table II-1, use of the 5-cycle formulae will reduce both current city and highway fuel economy label values. For conventional vehicles, city and highway fuel economy values will be reduced an average of 10.8 percent and 7.4 percent, respectively. The reduction in city fuel economy label values for conventional vehicles with higher than average fuel economy will be slightly higher than average (−12.9%), while the reduction for conventional vehicles with lower than average fuel economy will typically be slightly lower than average (−6.9%). The reduction in highway fuel economy for conventional vehicles varies less around the average in the same way that it does for city fuel economy. Vehicles with higher than average fuel economy will typically experience a reduction in the highway label value similar to all conventional vehicles, while vehicles with lower than average fuel economy at the other end of the spectrum will, on average, see little to no change in their highway label value (or possibly a modest increase in some cases). Again, this is explained by each vehicle's fuel economy response to the new test cycles, and some vehicles are more sensitive to the new test conditions than others.

The impact on hybrid vehicles will be greater, averaging a 22.3 percent reduction for city fuel economy and 12.9 percent for highway fuel economy.

This greater impact occurs primarily because a number of the fuel efficient aspects of hybrid vehicles produce their maximum benefit under conditions akin to the FTP and HFET tests, and are somewhat less beneficial during aggressive driving, colder ambient temperatures and when the air conditioner is turned on. However, these vehicles will still remain among the top fuel economy vehicles.

The database of 615 vehicles includes 14 hybrid vehicles. All the hybrid models available as of the 2006 model year are represented in the database: Honda Insight, Honda Civic, Honda Accord, Toyota Prius, Toyota Highlander/Lexus RX400h, Ford Escape/Mercury Mariner, and Chevrolet Silverado/GMC Sierra pickup truck.

There is one diesel vehicle in our 5-cycle fuel economy database. The

impact of the 5-cycle formulae on this one diesel is very similar to that for the average conventional, gasoline-fueled vehicle.

The impact of the mpg-based formulae will be very similar on average to those shown in Table II-1 above for conventional vehicles. This is not surprising, since the mpg-based formulae are based essentially on the average results of the 5-cycle formulae. However, the mpg-based formulae will increase the city fuel economy of hybrid vehicles slightly, as indicated in Table II-2. This occurs because there are only 14 hybrid vehicles in the database, compared to 601 gasoline-fueled, conventional vehicles. The mpg-based regression of city fuel economy, therefore, represents essentially the impact of the 5-cycle formulae on conventional vehicles, which is less than that for hybrids. The mpg-based regression of highway fuel economy is essentially the same for conventional and hybrid vehicles.

Table II-2.—Effect of MPG-Based Formulae on Conventional and Hybrid Fuel Economy

City

Current

(mpg)

MPG-based

(mpg)

Percent

change

(percent)

Highway

Current

(mpg)

MPG-based

(mpg)

Percent

change

(percent)

Conventional

18.6

16.5

−10.9

24.6

22.7

−7.8

Hybrids

42.7

35.1

−16.7

42.8

38.4

−9.8

Table II-3 summarizes the projected impact of the new methods (5-cycle and mpg-based) relative to the current label values of the 615 vehicle database.

Table II-3.—Effect of New Methods on Fuel Economy Estimates

City fuel economy estimate

Current

5-Cycle

MPG-

based

Highway fuel economy estimate

Current

5-Cycle

MPG-

based

Conventional Vehicles:

MPG

18.6

16.5

24.6

22.8

22.7

Percent Change

−10.8%

−10.9%

−7.4%

−7.8%

Hybrid Vehicles:

MPG

42.7

32.4

35.1

42.8

36.7

38.4

Percent Change

−23.6%

−16.7%

−13.2%

−9.8%

In addition to looking at the overall change in fuel economy estimates for all vehicles in the database, we also focused on those manufacturers responsible for the majority of sales in the U.S. This approach may better reflect the changes likely to be seen by the majority of consumers. In effect, Table II-3 above includes vehicles by Aston Martin and Rolls-Royce in the percent change, and these vehicles are weighted equally with cars made by GM, Ford, DaimlerChrysler, and other top-selling manufacturers. According to Autodata Corporation, the seven manufacturers with the greatest U.S. market share account for more than 90 percent of U.S. sales. Table II-4 shows these manufacturers, their 2005 U.S. market share, and the average percent change in city and highway fuel economy estimates for each of these manufacturers as represented in our database. As can be seen in the table, the city mpg estimates for these manufacturers will drop by about 12 percent on average relative to today's estimates, and highway estimates will drop by about 8 percent on average. It is important to note, however, that these estimates are not intended to represent or include the entirety of a manufacturer's product line, and should not be interpreted as such. These estimates are derived from our database of 615 test vehicles for which data on all five emission and fuel economy test procedures is available, and because of differing ways in which manufacturers test their vehicles and submit data to EPA, the database may not reflect the range of makes and models similarly across manufacturers.

The database spreadsheet is available in the public docket for review.

Table II.-4.—Effect of New Methods on Fuel Economy Estimates for Major Manufacturers

Manufacturer

2005 U.S. market share

(percent)*

Average change in city fuel economy estimate

(percent)

Average change in highway fuel economy estimate

(percent)

General Motors

25.9

−10

−11

Ford Motor Co.

17.9

−12

−10

DaimlerChrysler

14.9

−10

−11

Toyota

13.7

−11

−7

Honda

8.9

−13

−7

Nissan

6.1

−11

−7

Hyundai

2.9

−13

−8

Average

−12

−8

* Source: Autodata Corp., Woodcliff Lake, New Jersey.

D. Comparison to Other Onroad Fuel Economy Estimates

In the proposal, we compared fuel economy label values based on the current, mpg-based, and 5-cycle formulae to estimates of onroad fuel economy developed by a number of organizations. In the short time since the proposal, little new data has become available. Also, as described above, we are finalizing only minor changes to the proposed mpg-based and 5-cycle formulae. Thus, overall, the relative comparisons described in the proposal remain largely unchanged. We describe these generally below, and refer the reader to Chapter II of the Technical Support Document for a detailed description of these comparisons.

We begin with a comparison of 5-cycle fuel economy values with the fleetwide fuel economy estimates developed by the Federal Highway Administration (FHWA). There are several differences in these two estimates. First, we do not have fuel economy data for all vehicles sold over the past 20-30 years over all five test procedures. Therefore, we cannot develop a 5-cycle fuel economy estimate for the current onroad fleet directly. Instead, we compare 5-cycle fuel economy values to the current label values for the vehicles for which we have 5-cycle fuel economy data, and then extrapolate this relationship to the rest of the vehicle fleet. Also, the FHWA light truck class includes vehicles above 8,500 pound GVWR. The fuel economy estimated for this class therefore requires adjustment to be comparable to EPA's light-duty truck class. We also make this comparison for cars and light trucks combined, in order to avoid differences in the ways that FHWA categorizes vehicles.

Since the NPRM, FHWA has published onroad fuel economy estimates for the 2004 vehicle fleet and updated their estimates for 2003. FHWA's estimates of light truck fuel economy onroad are almost 20 percent lower than their previous estimate for the 2002-2003 fleets. After adjusting for the difference in light truck categories, FHWA data indicate that combined car and light truck fuel economy averaged 19.7-19.9 mpg during 2003 and 2004. Extrapolating the fuel economy label estimates from the 615 vehicles in our certification database to the entire fleet produces an average combined fuel economy of 19.9 mpg. This close match-up is not surprising, given that the value of the factor representing effects not simulated during the dynamometer tests (e.g., wind, road grade, etc.) was set using the FHWA estimates of onroad fuel economy.

Next, several governmental and non-governmental organizations perform their own fuel economy assessments. Of these, the American Automobile Association (AAA) and Consumer Report have tested the greatest number of vehicles. Oak Ridge National Laboratory (ORNL) has recently begun a program where drivers can submit their own fuel economy measurements via the Internet. Argonne National Laboratory (ANL) has also been operating an extensive hybrid demonstration project for a few years as part of DOE's Freedom Car project.

Each of these estimates of onroad fuel economy has their relative strengths and weaknesses. The strengths of the non-governmental organization testing include the fact that the vehicles are tested on actual roads, usually in traffic and under real environmental conditions. The primary weaknesses of this testing are:

(1) The driving patterns involved are not typically published, so they may or may not be representative of average U.S. driving,

(2) Vehicles are tested throughout the year, so some vehicles are tested in hot weather and others in cold weather, and some under moderate conditions, thus leading to results that are not comparable across vehicles and that may not reflect average U.S. driving, and

(3) In some cases, the actual test procedures used to measure the volume of fuel consumed during the test are not described, leaving some doubt as to their accuracy. Still, because of the public interest in these estimates, we have compared them to our mpg-based and 5-cycle label estimates.

We updated our comparison of mpg-based and 5-cycle fuel economy estimates to Consumer Report's fuel economy estimates for 2000-2005 model year vehicles which were also in our 5-cycle database. We were also able to match 70 of these vehicles with those in our 5-cycle fuel economy database.

As in the NPRM, we focused on Consumer Report's combined fuel economy, which is a harmonic average of its fuel economy measurements for city driving, highway driving, and a 150-mile trip. On average, the mpg-based combined fuel economy values are 3 percent higher than those of Consumer Report, while the 5-cycle fuel economy values are 2% higher than those of Consumer Report. Thus, there is an excellent match between the composite mpg-based fuel economy and the Consumer Report combined fuel economy.

In the NPRM, we identified 151 vehicles which were both tested by Consumer Reports and in our certification database. However, many of these matching vehicles were not from the same model year.

Table II-5.—Consumer Reports and Current EPA and MPG-Based Fuel Economy: 303 Vehicles

Consumer reports

MPG

Current EPA label

MPG

Difference*

(percent)

MPG-based

MPG

Difference

(percent)

City

14.2

20.4

−30

18.0

−21

Highway

29.3

26.9

24.7

Combined

20.7

22.9

−9

21.2

−3

Table II-6 presents the same comparisons, except that it includes the 5-cycle estimates and only includes the 70 matched vehicles.

Table II-6.—CR and Current EPA, 5-Cycle and MPG-Based Fuel Economy: 70 Vehicles

Consumer reports

MPG

Current EPA label

MPG

Difference*

(percent)

5-cycle

MPG

Difference

(percent)

MPG-based

MPG

Difference

(percent)

City

14.3

20.4

−30

18.0

−21

17.8

−20

Highway

29.3

26.4

24.3

24.1

Combined

20.6

22.7

−9

21.0

−2

20.9

−2

We also updated our comparison to onroad fuel economy as estimated by AAA.

We were able to match 61 out of the 163 vehicles from their 2004 report to vehicles in our 5-cycle certification database. This is lower than the 98 models which we matched in the analysis described in the NPRM due to the use of a more stringent criterion that the vehicles match in terms of model year. As AAA only develops a single fuel economy estimate for each vehicle (i.e., no separate city or highway estimates), we compared their estimates to combined fuel economy values using the mpg-based and 5-cycle formulae. On average, the mpg-based combined fuel economy values exceeded those of AAA by 6.7%, while the 5-cycle fuel economy values exceeded those of AAA by 6.1%.

AAA Auto Guide: 2004 New Cars and Trucks. AAA Publishing, 2004.

We obtained a recent compilation of consumer's onroad fuel economy estimates which have been submitted to the Oak Ridge National Laboratory's “Your MPG” database. Unlike Consumer Report and AAA, drivers submit their own estimates of onroad fuel economy and city/highway driving split to the YourMPG Web site. The strength of this type of data is the fact that the vehicle is being operated by the owner or regular driver in typical use. The weaknesses are the unknown representativeness of the sample, the unknown nature of the technique used by the owner/driver to measure fuel economy and the unknown time period over which fuel economy is generally assessed (e.g., a couple of tanks full or the past year). The database now contains 8180 estimates of fuel economy for 4192 vehicles, compared to 2544 estimates of fuel economy for 1794 vehicles at the time of the NPRM. The database does not provide sufficiently precise vehicle descriptions to match vehicles to those in our 5-cycle database. Thus, we limit our comparison to the mpg-based method. We combined the mpg-based city and highway label values using each driver's estimate of the percentage of their driving that was in city or highway conditions. If a driver did not provide an estimate of the breakdown of their driving pattern, we assumed that their driving was 43 percent city and 57 percent highway in terms of miles driven (not time driven).

Diesels appear to perform better onroad than gasoline vehicles compared to their current or mpg-based label values. Onroad fuel economy by diesels in the YourMPG database exceeded the current label combined label values by 4.3 percent. In contrast, conventional gasoline vehicles fell short of their current combined label values by 1.4 percent.

Table II-7. —YourMPG Versus Current and MPG-Based Label Fuel Economy

Vehicle type

Number of estimates

YourMPG

Current label

Difference

(percent)

MPG-based label

Difference

(percent)

Conventional gasoline

7330

23.8

24.1

−1.4

21.7

9.1

High MPG Conventional Gasoline*

680

35.1

35.8

−1.7

31.6

11.2

Hybrid Gasoline

520

43.2

47.1

−8.2

40.5

6.3

Diesel

221

41.8

40.1

4.3

35.3

18.3

* Combined EPA Label fuel economy value of 32 mpg or greater, representing about the top 10% fuel economy conventional vehicles.

We also performed similar comparisons of EPA label and various onroad fuel economy estimates focusing specifically on hybrids and high fuel economy conventional vehicles. In the NPRM, we did this analysis for hybrids. However, we received some comments that highlighting the impact on hybrid vehicles specifically was misleading. The reason given was that, if hybrids performed differently on the road compared to their label values, it was

due to their relatively high fuel economy and not because of their hybrid technology. However, we found that the relationship between mpg-based and 5-cycle label values and the onroad fuel economy estimates for conventional vehicles with relatively high fuel economy is consistently more similar to that of lower fuel economy conventional vehicles than to hybrids.

There is a significant degree of scatter in the various estimates of onroad hybrid fuel economy. Those from DOE's FreedomCar program, Consumer Report and Edmunds

tend to be much lower than those from YourMPG and AAA. EPA's Kansas City data, although not representative of the entire country, tends to fall in between these other two sets of onroad hybrid estimates. The 5-cycle combined label values tend to be in line with the lower set of estimates. The mpg-based label values tend to be somewhat higher than the lower set of estimates, but well below those of YourMPG and AAA. As described in the NPRM, the fuel economy of hybrids is more sensitive to driving patterns and ambient conditions than conventional vehicles. The scatter in the various onroad fuel economy estimates for hybrids likely reflects this fact, as each estimate is based on a unique set of driving activity and ambient conditions.

See

www.edmunds.com.

Overall, the mpg-based and 5-cycle fuel economy label values compare favorably with estimates of onroad fuel economy made by other organizations. However, lack of detailed knowledge of the driving conditions and test procedures behind many of the latter estimates prevents systematic comparisons, especially involving individual weighting factors in the 5-cycle formulae.

E. Implementation of the New Fuel Economy Methods

1. 5-Cycle Vehicle Selection Criteria for 2011 and Later Model Years

In addition to finalizing the mpg-based adjustments for the 2008-2010 model years, as mentioned above, we are finalizing as proposed selection criteria for the continued use of this method for 2011 and later model years. These criteria will indicate for a given vehicle test group whether the full 5-cycle testing would result in significantly different fuel economy label values than the mpg-based approach. If not, then those vehicles could use the mpg-based method rather than the 5-cycle method. This approach is designed to avoid additional test burden where the fuel economy label values would not be significantly different under the 5-cycle method.

Each year, manufacturers must demonstrate compliance with federal emission standards by performing tests over all five test procedures. The vehicles on which these tests are performed are known as “emission data vehicles”, which are selected to represent the “worst-case” emitting vehicle in a group of vehicles, known as a “test group”, which share common engine and emission control designs.

EPA issues certificates of emission conformity for each test group of vehicles in each model year. Thus, for each test group, there exists a set of official certification test data from all five test cycles—FTP, HFET, US06, SC03 and Cold FTP. The fuel economy measured from these official certification tests can be inserted into the 5-cycle city and highway formulae to determine city and highway fuel economy values. Since FTP and HFET testing is included in the official certification data, the mpg-based city and highway fuel economy values can also be determined. Thus, for each emission data vehicle, the 5-cycle city and highway fuel economy values then can be compared to the mpg-based city and highway fuel economy values. We believe that it is reasonable to allow continued use of the mpg-based line when the available 5-cycle fuel economy data (from emissions certification) indicates that the mpg-based fuel economy determined from the official FTP and HFET tests performed for the test group are similar enough to the 5-cycle fuel economy determined from the official FTP, HFET, US06, SC03 and Cold FTP tests for that same test group. In that case, the manufacturer can use the mpg-based method for all model types covered under the EPA certificate of conformity that is represented by the 5-cycle data submitted to represent those vehicles. The manufacturer will not need to conduct 5-cycle testing for fuel economy labeling for these model types.

The “emission data vehicle” is the test vehicle chosen to represent a “test group” for emission certification purposes. A “test group” is made up of vehicles that share common combustion cycle, engine type, fuel type, fuel metering system, catalyst construction and precious metal content, engine displacement, number and arrangement of cylinders, and emission standards. The emission data vehicle is required to be the vehicle within the test group that is expected to be worst-case for exhaust emissions. In general the criteria that cause the emission data vehicle to be worst-case for emissions will also cause it to be worst-case for fuel economy (e.g., it will be the heaviest vehicle in the test group, with an automatic transmission, four-wheel drive, etc.). In general, the FTP, HFET, US06 and SC03 are performed on the emission data vehicle to demonstrate that the test group complies with the federal emission standards. The Cold FTP is performed on the worst-case vehicle within a durability group, which represents a larger group of vehicles, including those covered in the test group.

To accomplish this, we defined the lower bound of a tolerance band around the mpg-based line as the criteria for whether the mpg-based line could be used or whether 5-cycle testing would be required for further vehicle models within a test group. As proposed, we are finalizing four and five percent as the tolerance bands for the city and highway mpg lines, respectively. Mathematically, the tolerance line is defined by Y x mpg-based fuel economy, where Y is 0.96 for city fuel economy and 0.95 for highway fuel economy. In other words, if the 5-cycle city fuel economy value is greater than or equal to 0.96 times the mpg-based city fuel economy, all the vehicle model types covered under the certificate of conformity for that test group are eligible to use the mpg-based method to determine both city and highway fuel economy label estimates. Similarly, when the 5-cycle highway fuel economy is greater than or equal to 0.95 times the mpg-based highway fuel economy, all vehicle model types covered under the certificate of conformity in that test group are required to use the vehicle-specific 5-cycle approach. This can be done using analytically derived fuel economy estimates, when appropriate. This approach is appropriate because those vehicles with a 5-cycle value above the mpg-based line that used the mpg-based line would simply be reducing their fuel economy down to the average level, even though the 5-cycle data indicated better than average performance was likely for that vehicle group. Because of the better-than-average performance, we expect that most manufacturers will want to do complete 5-cycle testing for vehicles likely to be significantly above the mpg-based line.

This approach is illustrated in the Figures II-7 and II-8, below. The black squares in these figures represent situations where the mpg line does not do a good job (based on the tolerance criteria as shown by the dashed line) of predicting the 5-cycle fuel economy. Those vehicles with black squares in the two charts below may not use the mpg-based approach, but instead must perform additional testing to achieve better fuel economy estimates. Note that these charts do not show the entire range of FTP and HFET fuel economy on the x-axis, and thus do not show all those vehicles “passing” or “failing” the city or highway criteria. For the purpose of illustrating this concept it helps to isolate the FTP range from 20 to 30 mpg and the HFET range from 30 to 40 mpg.

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If the 5-cycle city fuel economy falls below the mpg-based city fuel economy by more than four percent (i.e., below the tolerance line), but the 5-cycle highway fuel economy does not fall below the mpg-based highway fuel economy by more than five percent (i.e., above the tolerance line), all the vehicle configurations represented by the emission data vehicle are required to use the vehicle-specific 5-cycle approach for both city and highway fuel economy, since fuel economy values for all five cycles are important in estimating 5-cycle city fuel economy. However, if the 5-cycle highway fuel economy is less than the mpg-based highway fuel economy by more than five percent (i.e., below the tolerance line), but the 5-cycle city fuel economy is not more than four percent lower than the mpg-based city fuel economy (i.e., above the tolerance line), all the vehicle configurations represented by the emission data vehicle will use the mpg-based approach to estimate the city fuel economy label. For the highway label in

this case, all the vehicle configurations represented by the emission data vehicle may use an approximate 5-cycle formula. This formula includes vehicle-specific fuel economy measurements for the FTP, HFET and US06 tests, but the SC03 and cold FTP test values may be estimated based on relationships developed from other vehicles. This is appropriate because the impact of the cold FTP test on highway fuel economy in the 5-cycle formula is not vehicle-specific, but estimated (or modeled) based on known relationships. Also the impact of the SC03 test on highway fuel economy is very small, particularly compared to that for the US06 test.

The criteria for use of the mpg-based approach in model year 2011 and later (5-cycle city fuel economy above four percent and 5-cycle highway fuel economy above five percent) are based on the balance of three factors. First, we designed them to be sufficiently large so that typical test-to-test variability would not cause a test group to fail the criteria. This may be a greater concern for the highway fuel economy comparison, due to the dominance of the US06 fuel economy (which inherently has greater test-to-test variability than the other tests) in the 5-cycle formula. Second, we want to minimize the potential error in the fuel economy label. Label fuel economy values are rounded to the nearest whole mpg. Thus, we felt it important to keep the difference between the 5-cycle and mpg-based fuel economy values within roughly one mpg, if possible. In other words, if the difference between the two methods is less than 1 mpg, then the two methods would produce the same label value. If the difference is more than 1 mpg then we would expect the 5-cycle method to result in a different label value, and thus it is more important to trigger the requirement for additional testing. Third, we want to avoid requiring additional fuel economy testing that will have little to no impact on the label values.

The four percent tolerance band for city fuel economy is equivalent to roughly 0.6-0.7 mpg on average. Due to the contribution of a number of independent fuel economy measurements in the 5-cycle city formula, the effect of test to test variability should be much lower than four percent. Based on the 5-cycle test results of 615 recent model year vehicles, we estimate that about 96 percent of test groups would fall above the four percent tolerance line. Thus, we believe that this criterion adequately satisfies the three factors mentioned above.

The five percent tolerance band for highway fuel economy is equivalent to roughly 1.1 mpg on average. Thus, it is slightly higher than the typical error associated with rounding. However, due to the dominant contribution of the US06 fuel economy in the 5-cycle highway formula, and the fact that this test tends to have relatively high variability, we are concerned that test-to-test variability could be on the order of 3.0 percent in the 5-cycle highway formula. We estimate that about 87 percent of test groups would fall above the five percent tolerance line. Thus, again, we believe that this criterion adequately satisfies the three factors mentioned above.

Overall, allowing the continued use of the mpg-based approach in this way will reduce the number of additional SC03 and cold FTP tests by about 96 percent and reduce the number of additional US06 tests by about 87 percent. Moreover, this significant reduction in test burden is achieved with no significant impact on the fuel economy estimate.

2. Medium-Duty Passenger Vehicle Label Estimates

As noted in Section I, we are finalizing in this rule a fuel economy labeling program for Medium-Duty Passenger Vehicles (MDPVs), a subset of vehicles between 8,500 and 10,000 lbs GVWR. MDPVs were first defined in the regulation that put in place the “Tier 2” emission standards.

See 65 FR 6698 (Feb. 10, 2000).

This is the regulatory definition of Medium-Duty Passenger Vehicle, found in 40 CFR 86.1803-01: Medium-duty passenger vehicle (MDPV) means any heavy-duty vehicle (as defined in this subpart) with a gross vehicle weight rating (GVWR) of less than 10,000 pounds that is designed primarily for the transportation of persons. The MDPV definition does not include any vehicle which:

(1) Is an “incomplete truck” as defined in this subpart; or

(2) Has a seating capacity of more than 12 persons; or

(3) Is designed for more than 9 persons in seating rearward of the driver's seat; or

(4) Is equipped with an open cargo area (for example, a pick-up truck box or bed) of 72.0 inches in interior length or more. A covered box not readily accessible from the passenger compartment will be considered an open cargo area for purposes of this definition.

Under the Energy Policy and Conservation Act (EPCA), EPA is required to establish regulations that require a manufacturer to attach a label to each “automobile” manufactured in a model year.

“Automobile” is defined as a vehicle not more than 6,000 lbs GVWR, and those vehicles between 6,000 and 10,000 lbs GVWR that DOT determines are appropriate for inclusion in the CAFE program.

“Automobile” for the purposes of labeling also includes vehicles at no more than 8,500 lbs GVWR whether or not DOT has included those vehicles in the CAFE program.

See 49 U.S.C. 32908(b).

See 49 U.S.C. 32901(a)(3).

See 49 U.S.C. 32908(a).

Since the time of EPA's proposal, DOT has included some vehicles above 8,500 lbs GVWR and below 10,000 lbs in its CAFE program, beginning in model year 2011.

Since these vehicles now meet the definition of automobile, EPA is authorized to include these vehicles in the labeling program. EPA is now requiring fuel economy labels on MDPVs (as defined in the CAFE program), beginning with model year 2011.

See 71 FR 17565 (April 6, 2006).

MDPVs are currently subject to emission standards that apply on the existing Federal Test Procedure, and many also undergo emission testing on the current Highway Fuel Economy Test due to requirements in California. Beginning with the 2011 model year, manufacturers will be routinely testing MDPVs over the FTP and the HFET tests in order to comply with the CAFE program. However, MDPVs are not today subject to all of the additional emission tests we are utilizing for the 5-cycle method.

Specifically, MDPVs are not subject to the 1996 SFTP regulations.

The SFTP regulations include the US06 and SC03 test procedures, both of which are necessary elements of the 5-cycle fuel economy methodology. These two test cycles represent high speed and aggressive driving (US06), and impacts of air conditioner operation (SC03). We do not believe it is appropriate to require SFTP testing for MDPVs for fuel economy purposes alone, but we are not prepared at this time to establish SFTP standards

for MDPVs. In the Tier 2 regulations, we acknowledged that MDPVs were not covered by SFTP requirements, and we specifically noted that SFTP emission standards would be addressed in a future regulation.

We believe that the appropriate time to consider 5-cycle fuel economy testing for MDPVs is during or after development of appropriate SFTP emission standards for MDPVs. We plan to address SFTP emission standards for MDPVs in the near future. At that time, we will also assess the appropriateness of 5-cycle fuel economy testing for MDPVs. However, we are finalizing a program that requires MDPVs to use the mpg-based adjustments to calculate fuel economy estimates. The database of 615 vehicles used to generate the mpg-based adjustments includes vehicles similar in many respects to existing MDPVs, with similar FTP and HFET fuel economy as measured today. For example, the database includes models of the Chevrolet Suburban below 8,500 lbs GVWR, which are very similar to the versions of the same vehicle that is above 8,500 lbs GVWR and classified as an MDPV. Additionally, because the mpg-based adjustment is essentially the average relationship between FTP and HFET fuel economy and 5-cycle fuel economy results, we believe that the resulting label values for MDPVs will be an adequate representation. The mpg-based approach does not require testing beyond what will be required to meet the CAFE program in model year 2011. Manufacturers will simply take their FTP and HFET test results (conducted for the CAFE program) and apply them to the mpg-based equation to determine their fuel economy label values.

MDPVs are currently required under the Tier 2 program to meet a carbon monoxide standard on the cold FTP test; compliance with this standard is being phased in over the 2008 and 2009 model years.

See 61 FR 54852 (Oct. 22, 1996).

See 65 FR 6789 (Feb. 10, 2000).

3. Analytically Derived Fuel Economy

When a vehicle is required to generate data from all five test cycles, there are multiple ways for the manufacturer to accomplish this. One way would be to perform the three additional tests—the US06, SC03, and cold FTP tests (the FTP and HFET would be performed under current and future requirements). The other way is to estimate fuel economy values over the US06, SC03 and cold FTP tests analytically (i.e., analytically derived fuel economy, or ADFE) from testing of a similar vehicle over these three cycles. Under this method, manufacturers will be allowed to estimate the effect of differences in inertia test weight, road load horsepower, and N/V ratio (the ratio of engine revolutions to vehicle speed when the vehicle is in its highest gear) on fuel economy, and use these estimates to calculate predicted fuel economy over the three new fuel economy test cycles. A procedure to estimate the effect of these three vehicle parameters on FTP and HFET fuel economy has already been developed.

We plan to work with manufacturers to appropriately analytically derive fuel economy for the US06, SC03 and cold FTP tests, or otherwise utilize data for these tests already available from certification vehicles. We will implement these estimation procedures using agency guidance, as is currently done for FTP and HFET fuel economy.

U.S. EPA Memorandum “Updated Analytically Derived Fuel Economy (ADFE) Policy for 2005 MY and Later,” CCD-04-06 (LDVLDT), March 11, 2004. Available in the public docket for review.

III. Revisions to the Fuel Economy Label Format and Content

A. Background

We proposed to update the design of the fuel economy label to better convey its information to the public. We took comment on four alternative label designs. We received overwhelming public support for revamping the label and numerous constructive comments for enhancing the final label content. Based on these public comments, we developed additional alternatives for how information might be presented on the label. We gauged consumer reaction to these alternatives by conducting a series of focus groups in five cities across the country. These groups provided valuable feedback which we used to establish the final label. The docket to this rule includes the final report entitled “Fuel Economy Focus Groups—Phase Two Findings” that contains details about the focus groups.

The label format and content we are finalizing today reflects input from the public comments and focus group research. The modern design of this label more effectively communicates fuel economy estimates and related information to the customer. Section I of this preamble provides a graphic of the new fuel economy label and key considerations that went into developing its final design. This section presents the specific elements on the final label.

We plan to conduct public outreach and education to increase consumer awareness of the new label's design and content. We believe that we can increase consumer comprehension by jointly-sponsoring an outreach campaign with car dealers and other interested stakeholders that could include explanatory materials, such as a brochure that dealers could distribute to customers.

B. Label Size and Orientation

Although we proposed to maintain the label's size at 7 inches by 4.5 inches, we experimented with its orientation. Two of the four alternative labels proposed were positioned vertically (portrait), and two horizontally (landscape) as today's label. Public comments highly supported one of the vertically oriented versions (identified in the proposed rule as “Alternative 4.”

The commenters that provided reasons for this preference indicated that the new look, along with the graphically presented comparison information, helped convey the fuel economy information desired by the customer, discussed further in Section III.C below.

Note that the NPRM contained four label alternatives, printed in the Appendix to the proposed regulations on pages 5510-5513, labeled Alternative 1, 2, 3, and 4. These same labels were posted on EPA's Web site, but in a slightly different order and with different nomenclature (Label A, B, C, and D). In the following discussion we refer to the labels printed in the NPRM and use that nomenclature.

Some automakers expressed concerns with the vertical label orientation. Their primary apprehension was that the new Department of Transportation—National Highway Traffic Safety Administration safety rating label, required on price stickers (“Monroney” label) of all cars produced on or after September 1, 2007,

competes for space with the fuel economy label. Some manufacturers had already redesigned their price stickers to accommodate the safety rating label beside a horizontally positioned fuel economy label. These companies stated that because the price sticker contains a great deal of information, changing the fuel economy label orientation would be difficult from a graphic design standpoint. One manufacturer commented that it had already printed stock price stickers containing horizontally oriented fuel economy labels and would bear an added cost of redesigning and reprinting the stickers if EPA required the vertical label.

See 71 FR 53572 (Sept. 12, 2006).

To consider further the above comment, we tested both horizontal and vertical versions of the label (Figure III-1) with the focus groups. While the focus groups expressed a slight preference for the vertical orientation, this preference was not strongly held. Some participants remarked that the vertical label was easier to read “top to bottom”; however, a contrasting observation made in many of the focus groups was that on the vertical label the text within the gray area of the fuel pump was more difficult to read. [Insert photo Figure III-1: Preliminary vertical

and horizontal designs for focus group review.]

BILLING CODE 6560-50-P

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BILLING CODE 6560-50-C

Although public comments indicated a preference for the vertical orientation, the primary reasons given were more relevant to the design elements (particularly the gray “watermark” fuel pump design with information it its “window” and the bar graphic showing comparable fuel economy) rather than the label orientation itself. Therefore, in order to address both the consumers' needs and the automakers' concerns, our final label contains the new design elements supported by public comments and its appearance is oriented horizontally. The label size remains unchanged from the current label, at 7″ wide by 4.5″ high, and the final layout incorporates several important changes

to improve legibility and consumers' understanding of the label information.

C. Fuel Economy of Comparable Vehicles

We proposed two contrasting depictions comparing a particular vehicle's fuel economy to that of all other vehicles in its class: a text statement and a graphic depiction (Figure III-2). On three of the proposed labels, we specified separate city and highway comparable fuel economy information on the bottom half of the label in a text statement, similar to the current label. On one of the vertically oriented labels (Alternative 4) we proposed a graphical bar scale that indicated where the vehicle's combined fuel economy would fall compared to all other vehicles in its class.

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Public commenters strongly favored the graphical version, many noting that it was similar to the Federal Trade Commission's EnergyGuide ratings placed on new appliances.

One industry comment suggested that the graphical way of presenting comparable fuel economy highlighted a weakness in the comparable vehicle class designations. Automakers expressed concern that “the graphic representation may portray a significant volume of sales as having low fuel economy, even though many consumers would be shopping in only subgroups of EPA's classes.” They recommended that EPA retain its current text portrayal of comparable fuel economy, but if significant comments were to favor the graphic design, they asked to work with EPA and through additional focus groups to develop a design that addresses their competitive concerns. Although their concerns were directed at the graphic, the underlying issue is EPA's comparable class designations. A separate discussion of comparable classes is in Section VI.F.

We also tested these representations of comparable fuel economy with the focus groups and they responded positively to the graphic version of combined fuel economy. Participants indicated that they were more likely to use this information, since it was much more clearly displayed in the graphical version. Many participants commented further that the range of combined fuel economy was more useful than the city/highway ranges of the verbal text.

One commenter stated that the within-class graphic did not provide enough context for consumers because many people do not shop within a single class, but instead may be simultaneously considering a variety of types of vehicles (for example, SUVs or minivans). The commenter suggested an alternate version of this graphic containing a bar scale that represents the fuel economy range of all vehicles, with the range of the specific vehicle class embedded in the overall range. We tested this alternative with the focus groups, along with an enhanced graphic, similar to the one proposed in the Alternative 4 label. These alternatives are shown in Figure III-3.

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The focus groups slightly preferred Option 1 because of its simplicity, many participants noting that they already knew which class of vehicles they would be considering. Others preferring Option 2 mentioned that it could influence some people to reconsider vehicles with higher fuel economy. Although some participants thought the added fuel economy range in Option 2 was useful, many thought it was too much information or were confused by what it represents.

Because public comment and focus group reaction has been positive, we are finalizing a comparable fuel economy graphic similar to Option 1 (Figure III-3). This graphic shows the range of fuel economy for the comparable class of vehicles and indicates where the specific vehicle falls on that range. The focus groups comprehended it easily at a glance, an important consideration given how briefly most viewers look at the labels on dealer lots. We recognize that the added information provided by revealing the fuel economy range of all vehicles may be valuable to some, but because of clarity and ease of comprehension, we are finalizing the simpler within-class graphic. Those desiring more detailed information about comparable fuel economy can find it on the Fuel Economy Guide and at

http://www.fueleconomy.gov

, referenced at the bottom of the label.

D. Estimated Annual Fuel Cost

We proposed to elevate the visibility of the estimated annual fuel cost information by increasing its size and location on the label (Figure III-4, Option 1). Additionally, we proposed to include further information on which the estimated annual fuel costs are determined—specifically the number of miles driven per year and the price of fuel per gallon. (This information is currently optional on the label, but manufacturers typically do not include it). Public commenters and focus group participants responded favorably to these changes.

One commenter suggested that a single cost estimate would not match most drivers' experiences, and that a cost range would be more valuable for those who drove more exclusively under city or highway conditions. To explore this comment, we developed an option that showed three separate fuel cost estimates (Figure III-4, Option 2):

(1) Combined estimate based on a mix of city and highway driving;

(2) City estimate based on all city driving; and

(3) Highway estimate based on all highway driving.

Both options were tested with the focus groups.

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The focus groups had mixed reactions to these options, but slightly preferred Option 1 because it was simpler and provided all of the vital information. Others thought that the combined estimate would be more accurate, since they did not drive exclusively in either city or highway conditions. Alternatively, those that preferred seeing the added city/highway fuel costs did so because they did drive under one condition more often than another; others simply preferred having more information.

We are finalizing Option 1 based on positive response from both public commenters and focus groups. While the option to include separate city and highway annual fuel costs may provide additional useful information for some consumers, others may disregard it altogether because of its complexity. Furthermore, there is enough information provided on the simpler graphic that a person could determine their own customized fuel cost estimate by modifying one or more parameters (

e.g.

mpg, dollars-per-gallon, or miles-per-year).

As explained in further detail in Section III.I, the estimated annual fuel cost is determined using a weighted combination of estimated city and highway fuel economy values. Currently the combined fuel economy is based on a weighting of 55% city mpg and 45% highway mpg. We proposed changing the weighting to 43% city mpg and 57% highway mpg, but as discussed in Section III.I we are not finalizing this as proposed, choosing instead to retain the 55/45 weighting factors.

E. “Your mileage will vary” Statement

We proposed to include a statement on the label stating, “Your actual mileage can vary significantly depending on how you drive and maintain your vehicle and other factors.” This statement reinforces to customers that the mpg values are estimates only and that drivers will experience different fuel economy depending on many factors. Most commenters favored some sort of disclaimer statement and provided a number of suggestions. Some proposed that the statement both highlight the inexact nature of the estimate and educate consumers on which factors may lead to improved fuel economy. Others suggested that the statement distinguish between factors that drivers could and could not control. We tested three alternative versions with the focus groups: a slight modification to the proposed version, one having a list of fuel economy tips, and the other simply pointing to a Web site where one could find the tips. These are shown in Figure III-5.

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The focus group reaction was divided uniformly between the three options provided. Some liked seeing the more-detailed tips, while others preferred the Web link, since the list of tips was incomplete. Some thought that fewer details coupled with a Web link would be appropriate.

All factors that impact fuel economy cannot be listed on the fuel economy label because they are too numerous. Our proposed statement was designed to capture two of the biggest categories that drivers can control: Driving style and vehicle maintenance, with a blanket “and other factors” clause added. “How you drive” covers such factors such as speed, acceleration, use of air conditioning, braking, and driving predominantly in either city or highway conditions. “How you maintain your vehicle” covers factors like tire pressure, oil changes, tune-ups, and other maintenance. Both of these categories include factors that the driver can control in most cases.

The focus groups generally thought that the “other factors” clause was unnecessary. To increase the likelihood that consumers will read and understand the message that fuel economy will vary, we believe that a simpler statement is preferable. We considered adding the Web address to the statement in order to reflect the desire within the focus groups for access to more detailed information. However, in designing the final label format, we realized that it would be redundant because it is located directly above the identical Web site that is provided at the bottom right border of the label. Therefore, we are finalizing a statement that states, “Your actual mileage will vary depending on how you drive and maintain your vehicle,” to be located near the Web address at the bottom of the label.

F. Environmental Information Statement

Historically, EPA has rated fuel economy and emissions from 0-10 on the Green Vehicle Guide Web site (

www.epa.gov/greenvehicles/

). We sought comment on allowing companies to voluntarily include EPA air pollution and/or greenhouse gas ratings on the fuel economy label. While auto manufacturers supported alerting consumers to these issues, they did not favor adding emissions ratings to the label, because they may dilute the fuel economy information. Another comment from the auto industry was that the emissions factors and weights associated with the ratings presented in the Green Vehicle Guide are subjective and debatable. Thus, they recommended that we continue to present environmental ratings on the web, where there is ample space for elaboration.

One environmental group did not support rating a vehicle's greenhouse gas emissions from 0-10 because the scale was “too coarse,” but recommended that we instead educate consumers on how their vehicle choice impacts the environment. Two different environmental groups favored mandating both greenhouse gas and smog scores on the label. One of these groups disagreed with the auto manufacturers, stating that there was ample space on the label to present the scores without interfering with fuel economy information. The other group further suggested that we compare these scores numerically and graphically to all vehicles, as in the NPRM, and that we include an official EPA “Seal of Approval” to the most environmentally benign vehicles. Because some comments suggested further improvements to our method for calculating these scores, and because a clear preference for how to present this information did not emerge from the comments, we are not finalizing provisions for including this information on the label at this time. We remain open to suggestions for a voluntary environmental labeling program that could be implemented in the future.

To further consider those comments suggesting that we instead educate consumers on the relation of fuel economy and environmental and societal issues, we tested the following “environmental statement” with the focus groups: “Buying a vehicle with better fuel economy helps protect the environment and reduces dependence on oil.” Focus groups were strongly divided on this statement. Some asserted that it was “preachy” and “stating the obvious,” while others argued that it was consistent with EPA's mission and, even if obvious, addressed a concern felt by most of the population.

We are finalizing a label design that does not incorporate an environmental statement. While we agree that it is important to make a connection between a vehicle's fuel efficiency and the environment, we agree with focus group comments that most consumers already recognize this relationship. Additionally, since most of the new label space is utilized by statutorily-required information, a practical concern was that we would not be able to add this statement without creating a “fine print” look. However, both the Fuel Economy Guide and the

www.fueleconomy.gov

Web site (referenced on the label) include details

about the impact of fuel economy on the environment, for consumers wishing to explore these issues further.

G. Government Logos and Web Site Link

We proposed to include prominent EPA and DOE logos on the label and a prominent reference to “EPA” on the label title. These changes reflect earlier market research indicating that people were unaware of the fuel economy estimates' origin, and that knowing the government was the source of this information added to its credibility. Since public commenters and focus groups responded favorably to this proposal, the final label design includes the government logos at the bottom and “EPA Fuel Economy Estimates” in the title.

We also proposed to require placement of the jointly-sponsored EPA-DOE Web site

www.fueleconomy.gov

on the label. Since commenters and focus group members reacted positively to adding a web link, we are finalizing this requirement.

H. Temporary Transitional Statement

We asked commenters if the label should include transitional language indicating that the estimates are based on new methods. Such a statement could help customers understand why the fuel economy estimates are lower, especially when 2007 models having current fuel economy estimates are on dealer lots with 2008 models having new estimates. Commenters generally responded positively. Automakers suggested a brief statement, while another commenter suggested slightly longer wording. We tested the following transitional statement with the focus groups: “These estimates reflect new EPA methods beginning with 2008 models.” The meaning of this sentence was generally clear to the groups. A few participants wondered what the “new EPA methods” were, but determined after some discussion that the Web site provided on the label may give further explanation. We are finalizing this transitional statement for inclusion on the final fuel economy label.

We asked the groups how long this statement should be retained, and responses varied widely, from one year to the duration of an average consumer's vehicle purchase cycle. We believe that the transitional statement should be used while both the old and the new label formats appear simultaneously on vehicles on dealer lots. When all vehicles on the lot have labels with the new format (estimates based on new methods), there will be less potential for confusion. By the time 2010 models can be offered for sale (as early as January 2, 2009), all new vehicles on dealer lots will have the new label format and the transitional statement will no longer be necessary. Therefore, we are requiring the transition statement on the labels of all 2008 and 2009 model year vehicles.

I. Combined Fuel Economy Basis

For calculating the combined fuel economy displayed on the label (and also factored into the estimated annual fuel cost calculation), we proposed a weighting of 43% city and 57% highway. Currently this value is based on a 55% city/45% highway weighting. The 43/57 weighting was based on the new 5-cycle method and reflects average miles driven (not time spent) at speeds below and above 45 mph respectively, based on existing data for on-road driving patterns. This analysis is detailed in the Technical Support Document. We received comments that the 43/57 split was not intuitive to most drivers and that consumers may think more in terms of the percent of time they spend driving in city or highway conditions, rather than in percent of

distance

traveled. Some commenters suggested a simple 50/50 split, which is more intuitive to car buyers; others suggested retaining the 55/45 split since it is closer to the intuitive 50/50 split.

The basis for the 43/57 city-highway weighting as used to assess 5-cycle fuel economy fleetwide is discussed in the Technical Support Document. The issue for the label is how best to convey the fuel economy information most relevant to consumers and which city/highway weighting supports that purpose.

We agree with the comments that a 43/57 split based on distance is not intuitive to consumers. We considered the suggested 50/50 split, since likely most consumers think of “combined” fuel economy as an equal mix of city and highway driving. The 55/45 split was used historically to determine combined fuel economy since it is consistent with the statutory requirements for determining fuel economy for CAFE standards and the Gas Guzzler tax.

Thus, since it will remain the required weighting for the Gas Guzzler tax that appears on the label for applicable vehicles, it is most consistent to continue using the 55/45 split for combined fuel economy as well. We do not want to cause consumer confusion by using different city/highway weightings to calculate different numbers appearing on the label. Therefore, we are finalizing that a 55/45 weighting be used to calculate the combined fuel economy displayed on the label and used to calculate the estimated annual fuel costs. This decision does not impact the underlying city/highway split used analytically to determine fleetwide composite 5-cycle fuel economy, as discussed in the Technical Support Document.

See 49 U.S.C. 32904(c) and 26 U.S.C. 4064(c)(1).

J. Labeling Requirements for Dual Fueled Vehicles

Flexible-fueled vehicles (FFVs) (also called dual-fueled or bi-fueled vehicles) are vehicles that can operate either on gasoline or diesel fuel, or on an alternative fuel such as ethanol or methanol. Currently, for FFVs, manufacturers may voluntarily include the fuel economy estimates (and estimated annual fuel costs) for the alternative fuel on the label. This is part of the EPCA statute which requires that for dual fueled vehicles, the label must:

“(A) indicate the fuel economy of the automobile when operated on gasoline or diesel fuel;

(B) clearly identify the automobile as a dual fueled automobile;

(D) contain a statement informing the consumer that the additional information required by subsection (c)(2) of this section is published and distributed by the Secretary of Energy.”

See, 49 U.S.C. 32908(c)(3).

The current labeling requirements for dual-fueled vehicles are consistent with these EPCA requirements. We did not propose changes to these requirements, and we did not seek comment on the topic. However, EPA received a late public comment from several environmental and consumer groups urging EPA to require manufacturers to include for FFVs the fuel economy and estimated annual fuel costs of both gasoline and E85 (mixture of 85% ethanol and 15% gasoline).

Historically, the EPA did not require fuel economy on the label for ethanol FFVs, because a vast majority of these vehicles operated on gasoline only, since ethanol was not widely available, and many owners were unaware they were driving an FFV. However, in recent months there has been a sharp increase in national interest in alternatives to fossil-based fuels, flexible-fueled vehicles, and ethanol in particular. With increased awareness and availability of these vehicles, the late comment suggested that the label be required to not only display separate gasoline and E85 fuel economy and annual cost estimates, but also to provide EPA smog and greenhouse gas

scores and the ratio of ethanol to gasoline (which is not always 85:15) on the label. These additions would help alert customers that although the fuel economy of dual fuel models may be lower than gasoline-only models, they are still reducing environmental impact by using alcohol fuel.

Since we did not request comments on this topic, we are not finalizing requirements today that differ from the current regulations. However, we agree that it is important to provide consumers with complete fuel economy information on alternatively fueled vehicles, particularly in light of the rising sale of flex-fueled vehicles and a developing E85 fuel infrastructure. We agree that it is important for consumers to understand that fuel economy on E85 is typically about 20% to 30% lower than on gasoline, due to the lower energy density of E85.

Consumers can view the gasoline and E85 estimates of all FFVs in the Fuel Economy Guide and on the

www.fueleconomy.gov

Web site. We reiterate that manufacturers may voluntarily include the E85 (or other alternative fuel) mpg and estimated annual fuel costs on the label today, and we strongly encourage them to do so. The final label design includes a placeholder for such information.

Based on fuel economies of gasoline and E85 reported in the Model Year 2006 Fuel Economy Guide, p. 18.

We are not finalizing a requirement today, because we believe the issue (for manufacturers to display E85 fuel economy information on the label in addition to gasoline) deserves a more carefully considered approach. The label design we are finalizing was developed based on extensive public comments and focus group input. None of the options considered included E85 fuel economy information. Before requiring the inclusion of E85 fuel economy for FFVs, there are many questions we would consider for the design and placement of this information, such as: (1) How to clearly present E85 mpg relative to gasoline; (2) how to educate consumers that E85 helps reduce greenhouse gases and reduce oil consumption; (3) how to best convey estimated annual fuel costs of E85 (particularly given the volatility of E85 prices across the country), and (4) how to graphically depict comparable class fuel economy for E85 in addition to gasoline. In the next year, EPA will evaluate its legal authority to require manufacturers to include E85 fuel economy on the label. If we determine that we have statutory authority, we would then plan to work with interested stakeholders to assess how best to present E85 fuel economy information on the label. We welcome the input of stakeholders in this process, and we look forward to suggestions on how to best convey both the fuel economy and environmental benefit information on E85 relative to gasoline.

K. Addition of Final Regulatory Specifications for Label Content and Design

We proposed “placeholder” regulatory text that specifies the label content and design, knowing that the final label design would depend on the outcome of both the public comments and the focus group research. The final regulations contain the details for the format and content of the label.

IV. Testing Provisions

A. Testing Requirements for Vehicles Currently Exempt From Certain Emission Tests

Certain vehicles are currently exempt from some of the emission tests that we are including in the 5-cycle method.

These vehicles include diesel vehicles and alternative-fueled vehicles. In order to update the fuel economy methods for these vehicles, we proposed additional provisions and are finalizing them in this rulemaking.

See the applicable regulations at 40 CFR 86.1810(i)(4) and 40 CFR 86.1811-04(g).

1. Diesel Vehicles

Diesel fuel vehicles are not currently subject to Cold FTP emission standards and thus do not have a 20 °Fahrenheit (F) FTP (i.e., Cold FTP) fuel economy result to use in the 5-cycle formulae. Therefore, we proposed that beginning with the 2008 model year for certification diesel vehicles, a Cold FTP be performed for the purpose of collecting fuel economy data.

Accordingly, we also proposed and requested comments on winter-grade diesel fuel specifications for use during the Cold FTP test. Specifically, we proposed the use of a #1-D (winter-grade) diesel fuel as specified in ASTM D975-04c “Standard Specification for Diesel Fuel Oils,”

and that complies with 40 CFR Part 80,

where the level of kerosene added shall not exceed 20 percent. We further proposed the use of a manufacturer-specified diesel fuel, with EPA approval, in lieu of a conventional diesel fuel under the alternate test procedure provisions in 40 CFR 86.113-94, where the level of kerosene added shall not exceed 20 percent. Since we did not receive any comments regarding the winter-grade diesel fuel specification, we are finalizing these provisions as proposed.

ASTM International Specification D975-04C “Standard Specification for Diesel Oil Fuels” (November 1, 2005) describes the seven grades of diesel fuel oils suitable for various types of diesel engines. This specification is under the jurisdiction of ASTM Committee D02 on Petroleum Products and Lubricants and is the direct responsibility of subcommittee D02.E0 on Burner, Diesel, Non-Aviation Gas Turbine, and Marine Fuels.

40 CFR Part 80—Control of Air Pollution from New Motor Vehicles: Heavy-Duty Engines and Vehicle Standards and Highway Diesel Fuel Sulfur Control Requirements: Final Rule and Regulation of Fuels and Fuel Additives: Fuel Quality Regulations for Highway Diesel Fuel Sold in 1993 and Later Calendar Years.

However, we did receive comments regarding requiring the Cold FTP for diesel vehicles. The auto industry cited the potential for major laboratory retrofitting, which required additional lead time, and suggested that EPA not require diesels to perform the Cold FTP until the 2011 model year. They further suggested that Cold FTP testing for diesels be optional in the 2008-2010 model years.

We have evaluated the comments regarding additional lead time for laboratory retrofitting to perform the Cold FTP test for diesel vehicles and believe they have merit. To accommodate Cold FTP testing of diesel vehicles, manufacturers may need to add a heated flame ionization detection (FID) system, including heated probes, lines and filters. Some manufacturers may need to further modify their facilities for site specific designs and configurations, such as additional insulation to prevent water condensation in the sampling system or modifying the length of the exhaust collection hoses.

As a result, we are changing the provisions for requiring Cold FTP diesel testing from the proposal, as follows. First, we are providing additional lead time by extending the requirement for Cold FTP diesel testing from the 2008 model year to the 2011 model year. This will allow manufacturers additional lead time to address any facility modifications. Second, we will not require the measurement of particulate matter (PM) during the Cold FTP diesel test, since PM is not part of the fuel economy carbon balance calculation, and thus has no impact on fuel economy. Third, for manufacturers voluntarily using the 5-cycle method during the 2008-2010 model years, fuel economy over the Cold FTP may be reported based on carbon monoxide (CO) and carbon dioxide (CO

) measurements only, excluding the hydrocarbon (HC). Based on limited existing data showing that HC makes up a negligible fraction of the total cold fuel economy results (less than 0.1%), the

measure of HC will not be required during the 2008-2010 model years. This interim provision is another way to address manufacturers' concern about lead time for diesel cold testing facility upgrades, as measuring HC at cold temperatures requires the use of a heated FID, which many manufacturers do not have in existing cold facilities. In the 2011 model year and beyond, manufacturers will be required to conduct and report the results from the Cold FTP diesel testing, including the CO, CO

, and HC measurements.

2. Alternative-Fueled Vehicles

There are two types of alternative-fueled vehicles: (1) Flexible-fuel vehicles (FFVs; also known as dual-fueled, bi-fueled, or multi-fueled vehicles) that can operate on gasoline or diesel and/or some alternative fuel (

e.g.

, ethanol or methanol), and (2) dedicated alternative fueled vehicles that operate only on the altern

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