Greenhouse Gas Emissions Standards and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles

Federal RegisterSep 15, 2011

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 85, 86, 600, 1033, 1036, 1037, 1039, 1065, 1066, and 1068

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Parts 523, 534, and 535

[EPA-HQ-OAR-2010-0162; NHTSA-2010-0079; FRL-9455-1]

RIN 2060-AP61; 2127-AK74

Greenhouse Gas Emissions Standards and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles

AGENCY:

Environmental Protection Agency (EPA) and National Highway Traffic Safety Administration (NHTSA), DOT.

ACTION:

Final Rules.

SUMMARY:

EPA and NHTSA, on behalf of the Department of Transportation, are each finalizing rules to establish a comprehensive Heavy-Duty National Program that will reduce greenhouse gas emissions and fuel consumption for on-road heavy-duty vehicles, responding to the President's directive on May 21, 2010, to take coordinated steps to produce a new generation of clean vehicles. NHTSA's final fuel consumption standards and EPA's final carbon dioxide (CO

) emissions standards are tailored to each of three regulatory categories of heavy-duty vehicles: Combination Tractors; Heavy-duty Pickup Trucks and Vans; and Vocational Vehicles. The rules include separate standards for the engines that power combination tractors and vocational vehicles. Certain rules are exclusive to the EPA program. These include EPA's final hydrofluorocarbon standards to control leakage from air conditioning systems in combination tractors, and pickup trucks and vans. These also include EPA's final nitrous oxide (N

O) and methane (CH

) emissions standards that apply to all heavy-duty engines, pickup trucks and vans.

EPA's final greenhouse gas emission standards under the Clean Air Act will begin with model year 2014. NHTSA's final fuel consumption standards under the Energy Independence and Security Act of 2007 will be voluntary in model years 2014 and 2015, becoming mandatory with model year 2016 for most regulatory categories. Commercial trailers are not regulated in this phase of the Heavy-Duty National Program.

The agencies estimate that the combined standards will reduce CO

emissions by approximately 270 million metric tons and save 530 million barrels of oil over the life of vehicles sold during the 2014 through 2018 model years, providing over $7 billion in net societal benefits, and $49 billion in net societal benefits when private fuel savings are considered.

EPA is also finalizing provisions allowing light-duty vehicle manufacturers to use CO

credits to meet the light-duty vehicle N

O and CH

standards, technical amendments to the fuel economy provisions for light-duty vehicles, and a technical amendment to the criteria pollutant emissions requirements for certain switch locomotives.

DATES:

These final rules are effective on November 14, 2011. The incorporation by reference of certain publications listed in this regulation is approved by the Director of the Federal Register as of November 14, 2011.

ADDRESSES:

EPA and NHTSA have established dockets for this action under Docket ID No. EPA-HQ-OAR-2010-0162 and NHTSA-2010-0079, respectively. All documents in the docket are listed on the

http://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

http://www.regulations.gov

or in hard copy at the following locations: EPA: EPA Docket Center, EPA/DC, EPA West Building, 1301 Constitution Ave., NW., Room 3334, 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 Docket is (202) 566-1742. NHTSA: Docket Management Facility, M-30, U.S. Department of Transportation, West Building, Ground Floor, Rm. W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. The Docket Management Facility is open between 9 a.m. and 5 p.m. Eastern Time, Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT:

NHTSA: Lily Smith, Office of Chief Counsel, National Highway Traffic Safety Administration, 1200 New Jersey Avenue, SE., Washington, DC 20590. Telephone: (202) 366-2992. EPA: Lauren Steele, Office of Transportation and Air Quality, Assessment and Standards Division (ASD), Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; telephone number: (734) 214-4788; fax number: (734) 214-4816; e-mail address:

steele.lauren@epa.gov,

or contact the Office of Transportation and Air Quality at

OTAQPUBLICWEB@epa.gov.

SUPPLEMENTARY INFORMATION:

A. Does this action apply to me?

This action affects companies that manufacture, sell, or import into the United States new heavy-duty engines and new Class 2b through 8 trucks, including combination tractors, school and transit buses, vocational vehicles such as utility service trucks, as well as

3/4

-ton and 1-ton pickup trucks and vans. The heavy-duty category incorporates all motor vehicles with a gross vehicle weight rating of 8,500 pounds or greater, and the engines that power them, except for medium-duty passenger vehicles already covered by the greenhouse gas emissions standards and corporate average fuel economy standards issued for light-duty model year 2012-2016 vehicles. Regulated categories and entities include the following:

Category

NAICS Code

Examples of potentially affected entities

Industry

336111

336112

Motor Vehicle Manufacturers, Engine and Truck Manufacturers.

336120

Industry

541514

811112

Commercial Importers of Vehicles and Vehicle Components.

811198

Industry

336111

Alternative Fuel Vehicle Converters.

336112

422720

454312

541514

541690

811198

Industry

333618

336510

Manufacturers, remanufacturers and importers of locomotives and locomotive engines.

Note:

North American Industry Classification System (NAICS).

This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely covered by these rules. This table lists the types of entities that the agencies are aware may be regulated by this action. Other types of entities not listed in the table could also be regulated. To determine whether your activities are regulated by this action, you should carefully examine the applicability criteria in the referenced regulations. You may direct questions regarding the applicability of this action to the persons listed in the preceding

FOR FURTHER INFORMATION CONTACT

section.

Table of Contents

A. Does this action apply to me?

I. Overview

A. Introduction

B. Building Blocks of the Heavy-Duty National Program

C. Summary of the Final EPA and NHTSA HD National Program

D. Summary of Costs and Benefits of the HD National Program

E. Program Flexibilities

F. EPA and NHTSA Statutory Authorities

G. Future HD GHG and Fuel Consumption Rulemakings

II. Final GHG and Fuel Consumption Standards for Heavy-Duty Engines and Vehicles

A. What vehicles will be affected?

B. Class 7 and 8 Combination Tractors

C. Heavy-Duty Pickup Trucks and Vans

D. Class 2b-8 Vocational Vehicles

E. Other Standards

III. Feasibility Assessments and Conclusions

A. Class 7-8 Combination Tractor

B. Heavy-Duty Pickup Trucks and Vans

C. Class 2b-8 Vocational Vehicles

IV. Final Regulatory Flexibility Provisions

A. Averaging, Banking, and Trading Program

B. Additional Flexibility Provisions

V. NHTSA and EPA Compliance, Certification, and Enforcement Provisions

A. Overview

B. Heavy-Duty Pickup Trucks and Vans

C. Heavy-Duty Engines

D. Class 7 and 8 Combination Tractors

E. Class 2b-8 Vocational Vehicles

F. General Regulatory Provisions

G. Penalties

VI. How will this program impact fuel consumption, GHG emissions, and climate change?

A. What methodologies did the agencies use to project GHG emissions and fuel consumption impacts?

B. MOVES Analysis

C. What are the projected reductions in fuel consumption and GHG emissions?

D. Overview of Climate Change Impacts From GHG Emissions

E. Changes in Atmospheric CO

Concentrations, Global Mean Temperature, Sea Level Rise, and Ocean pH Associated With the Program's GHG Emissions Reductions

VII. How will this final action impact non-ghg emissions and their associated effects?

A. Emissions Inventory Impacts

B. Health Effects of Non-GHG Pollutants

C. Environmental Effects of Non-GHG Pollutants

D. Air Quality Impacts of Non-GHG Pollutants

VIII. What are the agencies' estimated cost, economic, and other impacts of the final program?

A. Conceptual Framework for Evaluating Impacts

B. Costs Associated With the Final Program

C. Indirect Cost Multipliers

D. Cost per Ton of Emissions Reductions

E. Impacts of Reduction in Fuel Consumption

F. Class Shifting and Fleet Turnover Impacts

G. Benefits of Reducing CO

Emissions

H. Non-GHG Health and Environmental Impacts

I. Energy Security Impacts

J. Other Impacts

K. The Effect of Safety Standards and Voluntary Safety Improvements on Vehicle Weight

L. Summary of Costs and Benefits

M. Employment Impacts

IX. Analysis of the Alternatives

A. What are the alternatives that the agencies considered?

B. How do these alternatives compare in overall GHG emissions reductions and fuel efficiency and cost?

C. What is the agencies' decision regarding trailer standards?

X. Public Participation

XI. NHTSA's Record of Decision

A. The Agency's Decision

B. Alternatives Considered by NHTSA in Reaching Its Decision, Including the Environmentally Preferable Alternative

C. Factors Balanced by NHTSA in Making Its Decision

D. How the Factors and Considerations Balanced by NHTSA Entered Into Its Decision

E. The Agency's Preferences Among Alternatives Based on Relevant Factors, Including Economic and Technical Considerations and Agency Statutory Missions

F. Mitigation

XII. Statutory and Executive Order Reviews

XIII. Statutory Provisions and Legal Authority

A. EPA

B. NHTSA

I. Overview

A. Introduction

EPA and NHTSA (“the agencies”) are announcing a first-ever program to reduce greenhouse gas (GHG) emissions and fuel consumption in the heavy-duty highway vehicle sector. This broad sector—ranging from large pickups to sleeper-cab tractors—together represent the second largest contributor to oil consumption and GHG emissions from the mobile source sector, after light-duty passenger cars and trucks. These are the second joint rules issued by the agencies, following on the April 1, 2010 standards to sharply reduce GHG emissions and fuel consumption from MY 2012-2016 passenger cars and light trucks (published on May 7, 2010 at 75 FR 25324).

In a May 21, 2010 memorandum to the Administrators of EPA and NHTSA (and the Secretaries of Transportation and Energy), the President stated that “America has the opportunity to lead the world in the development of a new generation of clean cars and trucks through innovative technologies and manufacturing that will spur economic growth and create high-quality domestic jobs, enhance our energy security, and improve our environment.”

1 2

In the

May 2010 memorandum, the President specifically requested the Administrators of EPA and NHTSA to “immediately begin work on a joint rulemaking under the Clean Air Act (CAA) and the Energy Independence and Security Act of 2007 (EISA) to establish fuel efficiency and greenhouse gas emissions standards for commercial medium-and heavy-duty on-highway vehicles and work trucks beginning with the 2014 model year (MY).” In this final rulemaking, each agency is addressing this Memorandum by adopting rules under its respective authority that together comprise a coordinated and comprehensive HD National Program designed to address the urgent and closely intertwined challenges of reduction of dependence on oil, achievement of energy security, and amelioration of global climate change.

Improving Energy Security, American Competitiveness and Job Creation, and Environmental Protection Through a Transformation of Our Nation's Fleet of Cars And Trucks,” Issued May 21, 2010, published at 75 FR 29399, May 26, 2010.

The May 2010 Presidential Memorandum also directed EPA and NHTSA, in close coordination with the California Air Resources Board, to build on the National Program for 2012-2016 MY light-duty vehicles by developing and proposing coordinated light-duty vehicle standards for MY 2017-2025. The agencies have taken an initial step in this process, releasing a Joint Notice of Intent and

Initial Joint Technical Assessment Report in September 2010 (75 FR 62739), and a Supplemental Notice of Intent (75 FR 76337). The agencies plan to issue a full light-duty vehicle proposal to extend the National Program to MY 2017-2025 in September 2011.

At the same time, the final program will enhance American competitiveness and job creation, benefit consumers and businesses by reducing costs for transporting goods, and spur growth in the clean energy sector.

The HD National Program the agencies are finalizing today reflects a collaborative effort between the agencies, a range of public interest nongovernmental organizations (NGOs), the state of California and the regulated industry. At the time of the President's announcement, a number of major HD truck and engine manufacturers representing the vast majority of this industry, and the California Air Resources Board (California ARB), sent letters to EPA and NHTSA supporting the creation of a HD National Program based on a common set of principles. In the letters, the stakeholders committed to working with the agencies and with other stakeholders toward a program consistent with common principles, including:

Increased use of existing technologies to achieve significant GHG emissions and fuel consumption reductions;

A program that starts in 2014 and is fully phased in by 2018;

A program that works towards harmonization of methods for determining a vehicle's GHG and fuel efficiency, recognizing the global nature of the issues and the industry;

Standards that recognize the commercial needs of the trucking industry; and

Incentives leading to the early introduction of advanced technologies.

The final rules adopted today reflect these principles. The final HD National Program also builds on many years of heavy-duty engine and vehicle technology development to achieve what the agencies believe is the greatest degree of fuel consumption and GHG emission reduction appropriate, technologically and economically feasible, and cost-effective for model years 2014-2018. In addition to taking aggressive steps that are reasonably possible now, based on the technological opportunities and pathways that present themselves during these model years, the agencies and industry will also continue learning about emerging opportunities for this complex sector to further reduce fuel consumption and GHG emission through future regulatory steps.

Similarly, the agencies will participate in efforts to improve our ability to accurately characterize the actual in-use fuel consumption and emissions of this complex sector. As technologies progress in the coming years and as the agencies improve the regulatory tools to evaluate real world vehicle performance, we expect that we will develop a second phase of regulations to reinforce these initial rules and achieve further reductions in GHG emissions and fuel consumption reduction for the mid- and longer-term time frame (beyond 2018). The agencies are committed to working with all interested stakeholders in this effort and to the extent possible working towards alignment with similar programs being developed in Canada, Mexico, Europe, China, and Japan. In doing so, we will continue to evaluate many of the structural and technical decisions we are making in today's final action in the context of new technologies and the new regulatory tools that we expect to realize in the future.

The regulatory program we are finalizing today is largely unchanged from the proposal the agencies made on November 30, 2010 (

See

75 FR 741512). The structure of the program and the stringency of the standards are essentially the same as proposed. We have made a number of changes to the testing requirements and reporting requirements to provide greater regulatory certainty and better align the NHTSA and EPA portions of the program. In response to comments, we have also made some changes to the averaging, banking and trading (ABT) provisions of the program that will make implementation of this final program more flexible for manufacturers. We have added provisions to further encourage the development of advanced technologies and to provide a more straightforward mechanism to certify engines and vehicles using innovative technologies. Finally in response to comments, we have made some technical changes to our emissions compliance model that results in different numeric standards for both combination tractors and vocational vehicles to more accurately characterize emissions while maintaining the same overall stringency and therefore expected costs and benefits of the program.

Heavy-duty vehicles move much of the nation's freight and carry out numerous other tasks, including utility work, concrete delivery, fire response, refuse collection, and many more. Heavy-duty vehicles are primarily powered by diesel engines, although about 37 percent of these vehicles are powered by gasoline engines.

Heavy-duty trucks

have long been an important part of the goods movement infrastructure in this country and have experienced significant growth over the last decade related to increased imports and exports of finished goods and increased shipping of finished goods to homes through Internet purchases.

References in this preamble to “gasoline” engines (and the vehicles powered by them) generally include other Otto-cycle engines as well, such as those fueled by ethanol and natural gas, except in contexts that are clearly gasoline-specific.

In this rulemaking, EPA and NHTSA use the term “truck” in a general way, referring to all categories of regulated heavy-duty highway vehicles (including buses). As such, the term is generally interchangeable with “heavy-duty vehicle.”

The heavy-duty sector is extremely diverse in several respects, including types of manufacturing companies involved, the range of sizes of trucks and engines they produce, the types of work the trucks are designed to perform, and the regulatory history of different subcategories of vehicles and engines. The current heavy-duty fleet encompasses vehicles from the “18-wheeler” combination tractors one sees on the highway to school and transit buses, to vocational vehicles such as utility service trucks, as well as the largest pickup trucks and vans.

For purposes of this preamble, the term “heavy-duty” or “HD” is used to apply to all highway vehicles and engines that are not within the range of light-duty vehicles, light-duty trucks, and medium-duty passenger vehicles (MDPV) covered by the GHG and Corporate Average Fuel Economy (CAFE) standards issued for MY 2012-2016.

It also does not include

motorcycles. Thus, in this rulemaking, unless specified otherwise, the heavy-duty category incorporates all vehicles with a gross vehicle weight rating above 8,500 pounds, and the engines that power them, except for MDPVs.

Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards; Final Rule 75 FR 25323, May 7, 2010.

The CAA defines heavy-duty as a truck, bus or other motor vehicles with a gross vehicle weight rating exceeding 6,000 pounds (CAA section 202(b)(3)). The term HD as used in this action refers to a subset of these vehicles and engines.

The agencies proposed to cover all segments of the heavy-duty category above, except with respect to recreational vehicles (RVs or motor homes). We note that the Energy Independence and Security Act of 2007 requires NHTSA to set standards for “commercial medium- and heavy-duty on-highway vehicles and work trucks.”

The standards that EPA is finalizing today cover recreational on-highway vehicles, while NHTSA proposed not to include recreational vehicles based on an interpretation of the term “commercial medium- and heavy-duty on-highway commercial” vehicles. NHTSA stated in the NPRM that recreational vehicles are non-commercial, and therefore outside of the term and the scope of its rule.

49 U.S.C. 32902(k)(2). “Commercial medium- and heavy-duty on-highway vehicles” are defined as on-highway vehicles with a gross vehicle weight rating of 10,000 pounds or more, while “work trucks” are defined as vehicles rated between 8,500 and 10,000 pounds gross vehicle weight that are not MDPVs.

See

49 U.S.C. 32901(a)(7) and (a)(19).

Oshkosh Corporation commented that this interpretation did not match the statutory definition of the term in EISA, which defines “commercial medium- and heavy-duty on-highway vehicle” by weight only,

and that therefore the agency's interpretation of the term should be explicitly broadened to include all vehicles, and more than only vehicles that are not engaged in interstate commerce as defined by the Federal Motor Carrier Safety Administration in 49 CFR part 202. Alternatively, Oshkosh suggested that if NHTSA followed the definition provided in EISA, which makes no direct reference to the concept of “commercial,” there would be no logical reason to exclude RVs based on that definition.

See

49 U.S.C. 32902(k)(2), Note 7 above.

NHTSA has considered Oshkosh's comment and reconsidered its interpretation that effectively read words into the statutory definition. Given the very wide variety of vehicles contained in the HD fleet, reading those words into the definition and thereby excluding certain types of vehicles could create illogical results,

i.e.,

treating similar vehicles differently. Therefore, NHTSA will adhere to the statutory definition contained in EISA for this rulemaking. However, as RVs were not included by NHTSA in the proposed regulation in the NPRM, they are not within the scope and must be excluded in NHTSA's portion of the final program. Accordingly, NHTSA will address this issue in the next rulemaking. However, as noted, RVs are subject to the CO

standards for vocational vehicles.

Setting fuel consumption standards for the heavy-duty sector, pursuant to NHTSA's EISA authority, will also improve our energy and national security by reducing our dependence on foreign oil, which has been a national objective since the first oil price shocks in the 1970s. Net petroleum imports now account for approximately 49-51 percent of U.S. petroleum consumption. World crude oil production is highly concentrated, exacerbating the risks of supply disruptions and price shocks as the recent unrest in North Africa and the Persian Gulf highlights. Recently, oil prices have been over $100 per barrel, gasoline and diesel fuel prices in excess of $4 per gallon, causing financial hardship for many families and businesses. The export of U.S. assets in exchange for oil imports continues to be an important component of the historically unprecedented U.S. trade deficits. Transportation accounts for about 72 percent of U.S. petroleum consumption. Heavy-duty vehicles account for about 17 percent of transportation oil use, which means that they alone account for about 12 percent of all U.S. oil consumption.

In 2009 Source: EIA Annual Energy Outlook 2010 released May 11, 2010.

Setting GHG emissions standards for the heavy-duty sector will help to ameliorate climate change. The EPA Administrator found after a thorough examination of the scientific evidence on the causes and impact of current and future climate change, and careful review of public comments, that the science compellingly supports a positive finding that atmospheric concentrations of six greenhouse gases taken in combination result in air pollution which may reasonably be anticipated to endanger both public health and welfare and that the combined emissions of these greenhouse gases from new motor vehicles and engines contributes to the greenhouse gas air pollution that endangers public health and welfare. In her finding, the Administrator carefully studied and relied heavily upon the major findings and conclusions from the recent assessments of the U.S. Climate Change Science Program and the U.N. Intergovernmental Panel on Climate Change. 74 FR 66496, December 15, 2009. As summarized in the Technical Support Document for EPA's Endangerment and Cause or Contribute Findings under section 202(a) of the Clean Air Act, anthropogenic emissions of GHGs are very likely (a 90 to 99 percent probability) the cause of most of the observed global warming over the last 50 years.

Primary GHGs of concern are carbon dioxide (CO

), methane (CH

), nitrous oxide (N

O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF

). Mobile sources emitted 31 percent of all U.S. GHGs in 2007 (transportation sources, which do not include certain off-highway sources, account for 28 percent) and have been the fastest-growing source of U.S. GHGs since 1990.

Mobile sources addressed in EPA's endangerment and contribution findings under CAA section 202(a)—light-duty vehicles, heavy-duty trucks, buses, and motorcycles—accounted for 23 percent of all U.S. GHG emissions in 2007.

Heavy-duty vehicles emit CO

, CH

, N

O, and HFCs and are responsible for nearly 19 percent of all mobile source GHGs (nearly 6 percent of all U.S. GHGs) and about 25 percent of section 202(a) mobile source GHGs. For heavy-duty vehicles in 2007, CO

emissions represented more than 99 percent of all GHG emissions (including HFCs).

U.S. EPA. (2009). “Technical Support Document for Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act” Washington, DC, available at Docket: EPA-HQ-OAR-2009-0171-11645, and at

http://epa.gov/climatechange/endangerment.html.

U.S. Environmental Protection Agency. 2009. Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2007. EPA 430-R-09-004. Available at

http://epa.gov/climatechange/emissions/downloads09/GHG2007entire_report-508.pdf.

See

Endangerment TSD, Note 10, above, at pp. 180-194.

U.S. Environmental Protection Agency. 2009. Inventory of U.S. Greenhouse Gas Emissions and Sinks:

See

Note 11, above.

In developing this HD National program, the agencies have worked with a large and diverse group of stakeholders representing truck and engine manufacturers, trucking fleets, environmental organizations, and states including the State of California.

Further, it is our expectation based on our ongoing work with the State of California that the California ARB will

be able to adopt regulations equivalent in practice to those of this HD National Program, just as it has done for past EPA regulation of heavy-duty trucks and engines. NHTSA and EPA have been working with California ARB to enable that outcome.

Pursuant to DOT Order 2100.2, NHTSA has docketed a memorandum recording those meetings that it attended and documents submitted by stakeholders which formed a basis for this action and which can be made publicly available in its docket for this rulemaking. DOT Order 2100.2 is available at

http://www.reg-group.com/library/DOT2100-2.PDF.

In light of the industry's diversity, and consistent with the recommendations of the National Academy of Sciences (NAS) as discussed further below, the agencies are adopting a HD National Program that recognizes the different sizes and work requirements of this wide range of heavy-duty vehicles and their engines. NHTSA's final fuel consumption standards and EPA's final GHG standards apply to manufacturers of the following types of heavy-duty vehicles and their engines; the final provisions for each of these are described in more detail below in this section:

• Heavy-duty Pickup Trucks and Vans.

• Combination Tractors.

• Vocational Vehicles.

As in the light-duty 2012-2016 MY vehicle rule, EPA's and NHTSA's final standards for the heavy-duty sector are largely harmonized with one another due to the close and direct relationship between improving the fuel efficiency of these vehicles and reducing their CO

tailpipe emissions. For all vehicles that consume carbon-based fuels, the amount of CO

exhaust emissions is essentially constant per gallon for a given type of fuel that is consumed. The more efficient a heavy-duty truck is in completing its work, the lower its environmental impact will be, because the less fuel consumed to move cargo a given distance, the less CO

that truck emits directly into the air. The technologies available for improving fuel efficiency, and therefore for reducing both CO

emissions and fuel consumption, are one and the same.

Because of this close technical relationship, NHTSA and EPA have been able to rely on jointly-developed assumptions, analyses, and analytical conclusions to support the standards and other provisions that NHTSA and EPA are adopting under our separate legal authorities.

However, as discussed below, in addition to addressing CO

, the EPA's final standards also include provisions to address other GHGs (nitrous oxide, methane, and air conditioning refrigerant emissions).

See

Section II.

This program is based on standards for direct exhaust emissions from engines and vehicles. In characterizing the overall emissions impacts, benefits and costs of the program, analyses of air pollutant emissions from upstream sources have been conducted. In this action, the agencies use the term upstream to include emissions from the production and distribution of fuel. A summary of the analysis of upstream emissions can be found in Section VI.C of this preamble, and further details are available in Chapter 5 of the RIA.

The timelines for the implementation of the final NHTSA and EPA standards are also closely coordinated. EPA's final GHG emission standards will begin in model year 2014. In order to provide for the four full model years of regulatory lead time required by EISA, as discussed in Section 0 below, NHTSA's final fuel consumption standards will be voluntary in model years 2014 and 2015, becoming mandatory in model year 2016, except for diesel engine standards which will be voluntary in model years 2014, 2015 and 2016, becoming mandatory in model year 2017. Both agencies are also allowing for early compliance in model year 2013. A detailed discussion of how the final standards are consistent with each agency's respective statutory requirements and authorities is found later in this preamble.

Allison Transmission stated that sufficient time must be taken before issuing the final rules in order to ensure that the standards are supportable. As explained in Sections II and III below, as well as in the RIA, the agencies believe there is sufficient lead time to meet all of the standards adopted in today's rules. For those areas for which the agencies have determined that insufficient time is available to develop appropriate standards, such as for trailers, the agencies are not including regulations as part of this initial program.

NHTSA received several comments related to the timing of the implementation of its fuel consumption standards. The Engine Manufacturers Association (EMA), the National Automobile Dealers Association (NADA), The Volvo Group (Volvo), and Navistar argued that the timing of NHTSA's standards violated the lead time requirement of 49 U.S.C. 32902(k)(3)(A), which states that standards under the new medium- and heavy-duty program shall have “not less than 4 full model years of regulatory lead-time.” The commenters seemed to interpret the voluntary program as the imposition of regulation upon industry. NADA described NHTSA's standards during the voluntary period as “mandates.”

NHTSA has reviewed this issue and believes that the regulatory schedule is consistent with the lead time requirement of Section 32902(k)(3). To clarify, NHTSA will not be imposing a mandatory regulatory program until 2016, and none of the voluntary standards will be “mandates.” As described in later sections, the voluntary standards would only apply to a manufacturer if it makes the voluntary and affirmative choice to opt-in to the program.

Mandatory NHTSA standards will first come into effect in 2016, giving industry four full years of lead time with the NHTSA fuel consumption standards.

Prior to or at the same time that a manufacturer submits its first application for a certificate of conformity;

See

Section V below.

EMA, NADA, and Navistar also argued that the proposed standards would violate the stability requirement of 49 U.S.C. 32902(k)(3)(B), which states that they shall have “not less than 3 full model years of regulatory stability.” EMA stated that since there are HD emission standards taking effect in 2013, the 2014 implementation date for this rule would violate the stability requirements. NADA argued that the MY 2014-2017/2018 phase-in period was inadequate to fulfill the stability requirement.

Congress has not spoken directly to the meaning of the words “regulatory stability.” NHTSA believes that the “regulatory stability” requirement exists to ensure that manufacturers will not be subject to new standards in repeated rulemakings too rapidly, given that Congress did not include a minimum duration period for the MD/HD standards.

NHTSA further believes that standards, which as set provide for increasing stringency during the period that the standards are applicable under this rule to be the maximum feasible during the regulatory period, are within the meaning of the statute. In this statutory context, NHTSA interprets the phrase “regulatory stability” in Section 32902(k)(3)(B) as requiring that the standards remain in effect for three years before they may be increased by amendment. It does not prohibit standards which contain pre-determined stringency increases.

In contrast, light-duty standards must remain in place for “at least 1, but not more than 5, model years.” 23902(b)(3)(B).

As laid out in Section II below, NHTSA's final standards follow different phase-in schedules based on differences between the regulatory categories. Consistent with NHTSA's statutory obligation to implement a program designed to achieve the maximum feasible fuel efficiency improvement, the standards increase in stringency based upon increasing fleet penetration rates for the available technologies. The NPRM proposed phase-in schedules aligned with EPA's,

some of which followed pre-determined stringency increases. The NPRM also noted that NHTSA was considering alternate standards that would not change in stringency during the time frame when the regulations are effective for those standards that increased throughout the mandatory program. As described in Section II below, the final rule includes the proposed alternate standards for those standards that follow such a stringency phase-in path. Therefore, NHTSA believes that the final rule provides ample stability for each standard.

Each standard, associated phase-in schedule, and alternative standard implemented by this final rule was noticed in the NPRM. Those fuel consumption standards that become mandatory in 2017 will remain in effect through at least 2019. This further ensures that the fuel consumption standards in this rule will remain in effect for at least three years, providing the statutorily-mandated three full years of regulatory stability, and ensuring that manufacturers will not be subject to new or amended standards too rapidly. (The greenhouse gas emission standards remain in effect unless and until amended in all later model years in any case.) Therefore, NHTSA believes the commenters' concern about regulatory stability is addressed in the structure of the rule.

Neither EPA nor NHTSA is adopting standards at this time for GHG emissions or fuel consumption, respectively, for heavy-duty commercial trailers or for vehicles or engines manufactured by small businesses. The agencies recognize that aerodynamic and tire rolling resistance improvements to trailers represent a significant opportunity to reduce fuel consumption and GHGs as evidenced, among other things, by the work of the EPA SmartWay program. While we are deferring action today on setting trailer standards, the agencies are committed to moving forward to create a regulatory program for trailers that would complement the current vehicle program. See Section IX for more details on the agencies' decisions regarding trailers, and Sections II and XII for more details on the agencies' decisions regarding small businesses.

The agencies have analyzed in detail the projected costs, fuel savings, and benefits of the final GHG and fuel consumption standards. Table I-1 shows estimated lifetime discounted program costs (including technological outlays), fuel savings, and benefits for all heavy-duty vehicles projected to be sold in model years 2014-2018 over these vehicles' lives. Section I.D includes additional information about this analysis.

Table I-1—Estimated Lifetime Discounted Costs, Fuel Savings, Benefits, and Net Benefits for 2014-2018 Model Year Heavy-Duty Vehicles

a b

[Billions, 2009$]

Lifetime Present Value

—3% Discount Rate

Program Costs

$8.1

Fuel Savings

Benefits

7.3

Net Benefits

Annualized Value

—3% Discount Rate

Annualized Costs

0.4

Fuel Savings

2.2

Annualized Benefits

0.4

Net Benefits

2.2

Lifetime Present Value

—7% Discount Rate

Program Costs

8.1

Fuel Savings

Benefits

6.7

Net Benefits

Annualized Value

—7% Discount Rate

Annualized Costs

0.6

Fuel Savings

2.6

Annualized Benefits

0.5

Net Benefits

2.5

Notes:

The agencies estimated the benefits associated with four different values of a one ton CO

reduction (model average at 2.5% discount rate, 3%, and 5%; 95th percentile at 3%), which each increase over time. For the purposes of this overview presentation of estimated costs and benefits, however, we are showing the benefits associated with the marginal value deemed to be central by the interagency working group on this topic: the model average at 3% discount rate, in 2009 dollars. Section VIII.F provides a complete list of values for the 4 estimates.

Note that net present value of reduced GHG emissions is calculated differently than other benefits. The same discount rate used to discount the value of damages from future emissions (SCC at 5, 3, and 2.5 percent) is used to calculate net present value of SCC for internal consistency. Refer to Section VIII.F for more detail.

Present value is the total, aggregated amount that a series of monetized costs or benefits that occur over time is worth now (in year 2009 dollar terms), discounting future values to the present.

Net benefits reflect the fuel savings plus benefits minus costs.

The annualized value is the constant annual value through a given time period (2012 through 2050 in this analysis) whose summed present value equals the present value from which it was derived.

B. Building Blocks of the Heavy-Duty National Program

The standards that are being adopted in this notice represent the first time that NHTSA and EPA are regulating the heavy-duty sector for fuel consumption and GHG emissions, respectively. The HD National Program is rooted in EPA's prior regulatory history, the SmartWay® Transport Partnership program, and extensive technical and engineering analyses done at the federal level. This section summarizes some of the most important of these precursors and foundations for this HD National Program.

(1) EPA's Traditional Heavy-Duty Regulatory Program

Since the 1980s, EPA has acted several times to address tailpipe emissions of criteria pollutants and air toxics from heavy-duty vehicles and engines. During the last 18 years, these programs have primarily addressed emissions of particulate matter (PM) and the primary ozone precursors, hydrocarbons (HC) and oxides of nitrogen (NO

). These programs have successfully achieved significant and cost-effective reductions in emissions and associated health and welfare benefits to the nation. They have been structured in ways that account for the varying circumstances of the engine and truck industries. As required by the CAA, the emission standards implemented by these programs include standards that apply at the time that the vehicle or engine is sold as well as standards that apply in actual use. As a result of these programs, new vehicles meeting current emission standards will emit 98 percent less NO

and 99 percent less PM than new trucks 20 years ago. The resulting emission reductions provide significant public health and welfare benefits. The most recent EPA regulations which were fully phased-in in 2010, the monetized health and welfare benefits alone are projected to be greater than $70 billion in 2030—benefits far exceeding compliance costs and not including the unmonetized benefits resulting from reductions in air toxics and ozone precursors (66 FR 5002, January 18, 2001).

EPA's overall program goal has always been to achieve emissions reductions from the complete vehicles that operate on our roads. The agency has often accomplished this goal for many heavy-duty truck categories through the regulation of heavy-duty engine emissions. A key part of this success has been the development over many years of a well-established, representative, and robust set of engine

test procedures that industry and EPA now routinely use to measure emissions and determine compliance with emission standards. These test procedures in turn serve the overall compliance program that EPA implements to help ensure that emissions reductions are being achieved. By isolating the engine from the many variables involved when the engine is installed and operated in a HD vehicle, EPA has been able to accurately address the contribution of the engine alone to overall emissions. The agencies discuss below how the final program incorporates the existing engine-based approach used for criteria pollutant regulations, as well as new vehicle-based approaches.

(2) NHTSA's Responsibilities To Regulate Heavy-Duty Fuel Efficiency under EISA

With the passage of the EISA in December 2007, Congress laid out a framework developing the first fuel efficiency regulations for HD vehicles. As codified at 49 U.S.C. 32902(k), EISA requires NHTSA to develop a regulatory system for the fuel efficiency of commercial medium-duty and heavy-duty on-highway vehicles and work trucks in three steps: a study by NAS, a study by NHTSA,

and a rulemaking to develop the regulations themselves.

Factors and Considerations for Establishing a Fuel Efficiency Regulatory Program for Commercial Medium- and Heavy-Duty Vehicles, October 2010, available at

http://www.nhtsa.gov/staticfiles/rulemaking/pdf/cafe/NHTSA_Study_Trucks.pdf.

Specifically, section 102 of EISA, codified at 49 U.S.C. 32902(k)(2), states that not later than two years after completion of the NHTSA study, DOT (by delegation, NHTSA), in consultation with the Department of Energy (DOE) and EPA, shall develop a regulation to implement a “commercial medium-duty and heavy-duty on-highway vehicle and work truck fuel efficiency improvement program designed to achieve the maximum feasible improvement.” NHTSA interprets the timing requirements as permitting a regulation to be developed earlier, rather than as requiring the agency to wait a specified period of time.

Congress specified that as part of the “HD fuel efficiency improvement program designed to achieve the maximum feasible improvement,” NHTSA must adopt and implement:

Appropriate test methods;

Measurement metrics;

Fuel economy standards;

and

In the context of 49 U.S.C. 32902(k), NHTSA interprets “fuel economy standards” as referring not specifically to miles per gallon, as in the light-duty vehicle context, but instead more broadly to account as accurately as possible for MD/HD fuel efficiency. While it is a metric that NHTSA considered for setting MD/HD fuel efficiency standards, the agency recognizes that miles per gallon may not be an appropriate metric given the work that MD/HD vehicles are manufactured to do. NHTSA is thus finalizing alternative metrics as discussed further below.

Compliance and enforcement protocols.

Congress emphasized that the test methods, measurement metrics, standards, and compliance and enforcement protocols must all be appropriate, cost-effective, and technologically feasible for commercial medium-duty and heavy-duty on-highway vehicles and work trucks. NHTSA notes that these criteria are different from the “four factors” of 49 U.S.C. 32902(f)

that have long governed NHTSA's setting of fuel economy standards for passenger cars and light trucks, although many of the same issues are considered under each of these provisions.

49 U.S.C. 32902(f) states that “When deciding maximum feasible average fuel economy under this section, [NHTSA] shall consider technological feasibility, economic practicability, the effect of other motor vehicle standards of the Government on fuel economy, and the need of the United States to conserve energy.”

Congress also stated that NHTSA may set separate standards for different classes of HD vehicles, which the agency interprets broadly to allow regulation of HD engines in addition to HD vehicles, and provided requirements new to 49 U.S.C. 32902 in terms of timing of regulations, stating that the standards adopted as a result of the agency's rulemaking shall provide not less than four full model years of regulatory lead time, and three full model years of regulatory stability.

(3) National Academy of Sciences Report on Heavy-Duty Technology

In April 2010 as mandated by Congress in EISA, the National Research Council (NRC) under NAS issued a report to NHTSA and to Congress evaluating medium-duty and heavy-duty truck fuel efficiency improvement opportunities, titled “Technologies and Approaches to Reducing the Fuel Consumption of Medium- and Heavy-duty Vehicles.”

This study covers the same universe of heavy-duty vehicles that is the focus of this final rulemaking—all highway vehicles that are not light-duty, MDPVs, or motorcycles. The agencies have carefully evaluated the research supporting this report and its recommendations and have incorporated them to the extent practicable in the development of this rulemaking.

Committee to Assess Fuel Economy Technologies for Medium- and Heavy-Duty Vehicles; National Research Council; Transportation Research Board (2010). “Technologies and Approaches to Reducing the Fuel Consumption of Medium- and Heavy-Duty Vehicles,” (hereafter, “NAS Report”). Washington, DC, The National Academies Press. Available electronically from the National Academies Press Website at

http://www.nap.edu/catalog.php?record_id=12845

(last accessed September 10, 2010).

The NAS report is far reaching in its review of the technologies that are available and which may become available in the future to reduce fuel consumption from medium and heavy-duty vehicles. In presenting the full range of technical opportunities the report includes technologies which may not be available until 2020 or even further into the future. As such, the report provides not only a valuable list of off the shelf technologies from which the agencies have drawn in developing this near-term 2014-2018 program consistent with statutory authorities and with the set of principles set forth by the President, but the report also provides a road map the agencies can use as we look to develop future regulations for this sector. A review of the technologies in the NAS report makes clear that there are not only many technologies readily available today to achieve important reductions in fuel consumption, like the ones we used in developing the 2014-2018 program, but there are also great opportunities for even larger reductions in the future through the development of advanced hybrid drive systems and sophisticated engine technologies such as Rankine waste heat recovery. The agencies will again make extensive use of this report when we move forward to develop the next phase of regulations for medium and heavy-duty vehicles.

Allison Transmission commented that NHTSA (implicitly, both agencies) had improperly relied on the NAS report and failed to do sufficient independent analysis, which Allison claimed did not meet the statutory obligation to provide an adequate basis for the rule. First, an agency does not improperly delegate its authority or judgment merely by using work performed by outside parties as the factual basis for its decision making.

See

.S. Telecom Ass'n

FCC,

359 F.3d 554, 568 (DC Cir. 2004);

United Steelworkers of Am.

Marshall,

647 F.2d 1189, 1216-17 (DC Cir. 1980). Here, although EPA and NHTSA carefully considered the NAS report, the agencies' consideration and use of the report was not uncritical and the agencies exercised reasonable independent judgment in developing the proposed and final rules. Consistent with EISA's direction, NAS submitted a report evaluating MD/HD fuel economy standards to NHTSA in March of 2010.

Indeed, many commenters argued that the agencies should have adopted more of the NAS report recommendations. The agencies reviewed the findings and recommendations of the NAS report when developing the proposed rules, as was clearly intended by Congress, but also conducted an independent study, as described throughout the record to the proposal and summarized in Section X of the NPRM, 75 FR at 74351-56. In conducting its analysis of the NAS report, the agencies found that several key recommendations, such as the use of fuel efficiency metrics, were the best approach to implementing the new program. However, the agencies rejected other recommendations of the NAS report, for example, by proposing separate regulation of engines and vehicles and the regulation of large manufacturers.

(4) The NHTSA and EPA Light-Duty National GHG and Fuel Economy Program

On May 7, 2010, EPA and NHTSA finalized the first-ever National Program for light-duty cars and trucks, which set GHG emissions and fuel economy standards for model years 2012-2016 (

See

75 FR 25324). The agencies have used the light-duty National Program as a model for this final HD National Program in many respects. This is most apparent in the case of heavy-duty pickups and vans, which are very similar to the light-duty trucks addressed in the light-duty National Program both technologically as well as in terms of how they are manufactured (

i.e.,

the same company often makes both the vehicle and the engine). For these vehicles, there are close parallels to the light-duty program in how the agencies have developed our respective final standards and compliance structures, although, as discussed below, the technologies applied to light-duty trucks are not invariably applicable to heavy-duty pickups and vans at the same penetration rates in the lead time afforded in this heavy-duty action. Another difference is that each agency adopts standards based on attributes other than vehicle footprint, as discussed below.

Due to the diversity of the remaining HD vehicles, there are fewer parallels with the structure of the light-duty program. However, the agencies have maintained the same collaboration and coordination that characterized the development of the light-duty program. Most notably, as with the light-duty program, manufacturers will be able to design and build vehicles to meet a closely coordinated, harmonized national program, and avoid unnecessarily duplicative testing and compliance burdens.

(5) EPA's SmartWay Program

EPA's voluntary SmartWay Transport Partnership program encourages shipping and trucking companies to take actions that reduce fuel consumption and CO

by working with the shipping community and the freight sector to identify low carbon strategies and technologies, and by providing technical information, financial incentives, and partner recognition to accelerate the adoption of these strategies. Through the SmartWay program, EPA has worked closely with truck manufacturers and truck fleets to develop test procedures to evaluate vehicle and component performance in reducing fuel consumption and has conducted testing and has established test programs to verify technologies that can achieve these reductions. Over the last six years, EPA has developed hands-on experience testing the largest heavy-duty trucks and evaluating improvements in tire and vehicle aerodynamic performance. In 2010, according to vehicle manufacturers, approximately five percent of new combination heavy-duty trucks will meet the SmartWay performance criteria demonstrating that they represent the pinnacle of current heavy-duty truck reductions in fuel consumption.

In developing this HD National Program, the agencies have drawn from the SmartWay experience, as discussed in detail both in Sections II and III below (

e.g.,

developing test procedures to evaluate trucks and truck components) but also in the RIA (estimating performance levels from the application of the best available technologies identified in the SmartWay program). These technologies provide part of the basis for the GHG emission and fuel consumption standards in this rulemaking for certain types of new heavy-duty Class 7 and 8 combination tractors.

In addition to identifying technologies, the SmartWay program includes operational approaches that truck fleet owners as well as individual drivers and their freight customers can incorporate, that the NHTSA and EPA believe will complement the final standards. These include such approaches as improved logistics and driver training, as discussed in the RIA. This approach is consistent with the one of the three alternative approaches that the NAS recommended be considered. The three approaches were raising fuel taxes, relaxing truck size and weight restrictions, and encouraging incentives to disseminate information to inform truck drivers about the relationship between driving behavior and fuel savings. Taxes and truck size and weight limits are mandated by public law; as such, these options are outside EPA's and NHTSA's authority to implement. However, complementary operational measures like driver training, which SmartWay does promote, can complement the final standards and also provide benefits for the existing truck fleet, furthering the public policy objectives of addressing energy security and climate change.

(6) Environment Canada

The Government of Canada's Department of the Environment (Environment Canada) assisted EPA's development of this rulemaking by conducting emissions testing of heavy-duty vehicles at their test facilities to gather data on a range of possible test cycles, and to evaluate the impact of certain emissions reduction technologies. Environment Canada also facilitated the evaluation of heavy-duty vehicle aerodynamic properties at Canada's National Research Council wind tunnel, and during coastdown testing.

We expect the technical collaboration with Environment Canada to continue as we implement testing and compliance verification procedures for this rulemaking. We may also begin to develop a knowledge base enabling improvement upon this regulatory framework for model years beyond 2018 (for example, improvements to the means of demonstrating compliance). We also expect to continue our collaboration with Environment Canada on compliance issues.

Collaboration with Environment Canada is taking place under the Canada-U.S. Air Quality Committee.

C. Summary of the Final EPA and NHTSA HD National Program

When EPA first addressed emissions from heavy-duty trucks in the 1980s, it established standards for engines, based on the amount of work performed (grams of pollutant per unit of work, expressed as grams per brake horsepower-hour or g/bhp-hr).

This

approach recognized the fact that engine characteristics are the dominant determinant of the types of emissions generated, and engine-based technologies (including exhaust aftertreatment systems) need to be the focus for addressing those emissions. Vehicle-based technologies, in contrast, have less influence on overall truck emissions of the pollutants that EPA has regulated in the past. The engine testing approach also recognized the relatively small number of distinct heavy-duty engine designs, as compared to the extremely wide range of truck designs. EPA concluded at that time that any incremental gain in conventional emission control that could be achieved through regulation of the complete vehicle would be small in comparison to the cost of addressing the many variants of complete trucks that make up the heavy-duty sector—smaller and larger vocational vehicles for dozens of purposes, various designs of combination tractors, and many others.

The term “brake power” refers to engine torque and power as measured at the interface between the engine's output shaft and the dynamometer. This contrasts with “indicated power”, which is a calculated value based on the pressure dynamics in the combustion chamber, not including internal losses that occur due to friction and pumping work. Since the measurement procedure inherently measures brake torque and power, the final regulations refer simply to g/hp-hr. This is consistent with EPA's other emission control programs, which generally include standards in g/kW-hr.

Addressing GHG emissions and fuel consumption from heavy-duty trucks, however, requires a different approach. Reducing GHG emissions and fuel consumption requires increasing the inherent efficiency of the engine as well as making changes to the vehicles to reduce the amount of work demanded from the engine in order to move the truck down the road. A focus on the entire vehicle is thus required. For example, in addition to the basic emissions and fuel consumption levels of the engine, the aerodynamics of the vehicle can have a major impact on the amount of work that must be performed to transport freight at common highway speeds. For this first rulemaking, the agencies proposed a complementary engine and vehicle approach in order to achieve the maximum feasible near-term reductions.

NHTSA received comments on the proposal to create complementary engine and vehicle standards. Volvo and Daimler argued that EISA limited NHTSA's authority to the regulation of completed vehicles and did not give NHTSA authority to regulate engines. 49 U.S.C. 32902(k)(2) grants NHTSA broad authority to regulate this sector, stating simply that the Secretary “shall determine in a rulemaking proceeding how to implement a commercial medium- and heavy-duty on-highway vehicle and work truck fuel efficiency improvement program designed to achieve the maximum feasible improvement,” considering appropriateness, cost-effectiveness, and technological feasibility. NHTSA does not believe that this language precludes the regulation of engines, but rather explicitly leaves the regulatory approach to the agency's expertise and discretion.

See

75 FR at 74173 n. 36. Considering the factors described in the NPRM and in Sections III and IV below, NHTSA continues to believe that the separate regulation of engines and vehicles is both consistent with the agency's statutory mandate to determine how to implement a regulatory program designed to achieve the maximum feasible improvement and facilitates coordination with EPA's efforts to reduce greenhouse gas emissions. The Clean Air act, of course, mandates standards for both “new motor vehicles” and “new motor vehicle engines”, so there is no issue of authority for separate engine standards under the EPA GHG program. CAA section 202(a)(1).

As described elsewhere in this preamble, the final standards under the HD National Program address the complete vehicle, to the extent practicable and appropriate under the agencies' respective statutory authorities, through complementary engine and vehicle standards. The agencies continue to believe that this complementary engine and vehicle approach is the best way to achieve near term reductions from the heavy-duty sector. However, we also recognize as did the NAS committee and a wide range of industry and environmental commenters, that in order to fully capture the multi-faceted synergistic aspects of engine and vehicle design a more comprehensive complete vehicle standard may be appropriate in the future. The agencies are committed to fully exploring such a possibility and to developing the testing and modeling tools necessary to enable such a regulatory approach. We intend to work with all interested stakeholders as we move forward.

(1) Brief Overview of the Heavy-Duty Truck Industry

The heavy-duty truck sector spans a wide range of vehicles with often unique form and function. A primary indicator of the extreme diversity among heavy-duty trucks is the range of load-carrying capability across the industry. The heavy-duty truck sector is often subdivided by vehicle weight classifications, as defined by the vehicle's gross vehicle weight rating (GVWR), which is a measure of the combined curb (empty) weight and cargo carrying capacity of the truck.

Table I-2 below outlines the vehicle weight classifications commonly used for many years for a variety of purposes by businesses and by several federal agencies, including the Department of Transportation, the Environmental Protection Agency, the Department of Commerce, and the Internal Revenue Service.

GVWR describes the maximum load that can be carried by a vehicle, including the weight of the vehicle itself. Heavy-duty vehicles also have a gross combined weight rating (GCWR), which describes the maximum load that the vehicle can haul, including the weight of a loaded trailer and the vehicle itself.

Table I-2—Vehicle Weight Classification

Class

GVWR (lb)

8,501-10,000

10,001-14,000

14,001-16,000

16,001-19,500

19,501-26,000

26,001-33,000

> 33,001

In the framework of these vehicle weight classifications, the heavy-duty truck sector refers to Class 2b through Class 8 vehicles and the engines that power those vehicles.

Unlike light-duty vehicles, which are primarily used for transporting passengers for personal travel, heavy-duty vehicles fill much more diverse operator needs. Heavy-duty pickup trucks and vans (Classes 2b and 3) are used chiefly as work truck and vans, and as shuttle vans, as well as for personal transportation, with an average annual mileage in the range of 15,000 miles. The rest of the heavy-duty sector is used for carrying cargo and/or performing specialized tasks. “Vocational” vehicles, which may span Classes 2b through 8, vary widely in size, including smaller and larger van trucks, utility “bucket” trucks, tank

trucks, refuse trucks, urban and over-the-road buses, fire trucks, flat-bed trucks, and dump trucks, among others. The annual mileage of these trucks is as varied as their uses, but for the most part tends to fall in between heavy-duty pickups/vans and the large combination tractors, typically from 15,000 to 150,000 miles per year, although some travel more and some less. Class 7 and 8 combination tractor-trailers—some equipped with sleeper cabs and some not—are primarily used for freight transportation. They are sold as tractors and sometimes run without a trailer in between loads, but most of the time they run with one or more trailers that can carry up to 50,000 pounds or more of payload, consuming significant quantities of fuel and producing significant amounts of GHG emissions. The combination tractor-trailers used in combination applications can travel more than 150,000 miles per year.

Class 2b vehicles designed as passenger vehicles (Medium Duty Passenger Vehicles, MDPVs) are covered by the light-duty GHG and fuel economy standards and not addressed in this rulemaking.

EPA and NHTSA have designed our respective standards in careful consideration of the diversity and complexity of the heavy-duty truck industry, as discussed next.

(2) Summary of Final EPA GHG Emission Standards and NHTSA Fuel Consumption Standards

As described above, NHTSA and EPA recognize the importance of addressing the entire vehicle in reducing fuel consumption and GHG emissions. At the same time, the agencies understand that the complexity of the industry means that we will need to use different approaches to achieve this goal, depending on the characteristics of each general type of truck. We are therefore dividing the industry into three discrete regulatory categories for purposes of setting our respective standards—combination tractors, heavy-duty pickups and vans, and vocational vehicles—based on the relative degree of homogeneity among trucks within each category. For each regulatory category, the agencies are adopting related but distinct program approaches reflecting the specific challenges that we see in these segments. In the following paragraphs, we discuss EPA's final GHG emission standards and NHTSA's final fuel consumption standards for the three regulatory categories of heavy-duty vehicles and their engines.

The agencies are adopting test metrics that express fuel consumption and GHG emissions relative to the most important measures of heavy-duty truck utility for each segment, consistent with the recommendation of the 2010 NAS Report that metrics should reflect and account for the work performed by various types of HD vehicles. This approach differs from NHTSA's light-duty program that uses fuel economy as the basis. The NAS committee discussed the difference between fuel economy (a measure of how far a vehicle will go on a gallon of fuel) and fuel consumption (the inverse measure, of how much fuel is consumed in driving a given distance) as potential metrics for MD/HD regulations. The committee concluded that fuel economy would not be a good metric for judging the fuel efficiency of a heavy-duty vehicle, and stated that NHTSA should instead consider fuel consumption as the metric for its standards. As a result, for heavy-duty pickup trucks and vans, EPA and NHTSA are finalizing standards on a per-mile basis (g/mile for the EPA standards, gallons/100 miles for the NHTSA standards), as explained in Section 0 below. For heavy-duty trucks, both combination and vocational, the agencies are adopting standards expressed in terms of the key measure of freight movement, tons of payload miles or, more simply, ton-miles. Hence, for EPA the final standards are in the form of the mass of emissions from carrying a ton of cargo over a distance of one mile (g/ton-mi). Similarly, the final NHTSA standards are in terms of gallons of fuel consumed over a set distance (one thousand miles), or gal/1,000 ton-mile. Finally, for engines, EPA is adopting standards in the form of grams of emissions per unit of work (g/bhp-hr), the same metric used for the heavy-duty highway engine standards for criteria pollutants today. Similarly, NHTSA is finalizing standards for heavy-duty engines in the form of gallons of fuel consumption per 100 units of work (gal/100 bhp-hr).

Section II below discusses the final EPA and NHTSA standards in greater detail.

(a) Class 7 and 8 Combination Tractors

Class 7 and 8 combination tractors and their engines contribute the largest portion of the total GHG emissions and fuel consumption of the heavy-duty sector, approximately 65 percent, due to their large payloads, their high annual miles traveled, and their major role in national freight transport.

These vehicles consist of a cab and engine (tractor or combination tractor) and a detachable trailer. In general, reducing GHG emissions and fuel consumption for these vehicles will involve improvements in aerodynamics and tires and reduction in idle operation, as well as engine-based efficiency improvements.

The on-highway Class 7 and 8 combination tractors constitute the vast majority of this regulatory category, and form the backbone of this HD National Program. A small fraction of combination tractors are used in off-road applications and are regulated differently, as described in Section II.

In general, the heavy-duty combination tractor industry consists of tractor manufacturers (which manufacture the tractor and purchase and install the engine) and trailer manufacturers. These manufacturers are usually not the same entity. We are not aware of any manufacturer that typically assembles both the finished truck and the trailer and introduces the combination into commerce for sale to a buyer. The owners of trucks and trailers are often distinct as well. A typical truck buyer will purchase only the tractor. The trailers are usually purchased and owned by fleets and shippers. This occurs in part because trucking fleets on average maintain 3 trailers per tractor and in some cases as many as 6 or more trailers per tractor. There are also large differences in the kinds of manufacturers involved with producing tractors and trailers. For HD highway tractors and their engines, a relatively limited number of manufacturers produce the vast majority of these products. The trailer manufacturing industry is quite different, and includes a large number of companies, many of which are relatively small in size and production volume. Setting standards for the products involved—tractors and trailers—requires recognition of the large differences between these manufacturing industries, which can then warrant consideration of different regulatory approaches.

Based on these industry characteristics, EPA and NHTSA believe that the most straightforward regulatory approach for combination tractors and trailers is to establish standards for tractors separately from trailers. As discussed below in Section IX, the agencies are adopting standards for the tractors and their engines in this rulemaking, but did not propose and are not adopting standards for trailers.

As with the other regulatory categories of heavy-duty vehicles, EPA and NHTSA have concluded that achieving reductions in GHG emissions and fuel consumption from combination tractors requires addressing both the cab and the engine, and EPA and NHTSA each are adopting standards that reflect this conclusion. The importance of the cab is that its design determines the amount of power that the engine must produce in moving the truck down the road. As illustrated in Figure I-1, the loads that require additional power from the engine include air resistance (aerodynamics), tire rolling resistance,

and parasitic losses (including accessory loads and friction in the drivetrain). The importance of the engine design is that it determines the basic GHG emissions and fuel consumption performance of the engine for the variety of demands placed on the engine, regardless of the characteristics of the cab in which it is installed. The agencies intend for the final standards to result in the application of improved technologies for lower GHG emissions and fuel consumption for both the cab and the engine.

Adapted from Figure 4.1. Class 8 Truck Energy Audit, Technology Roadmap for the 21st Century Truck Program: A Government-Industry Research Partnership, 21CT-001, December 2000.

ER15SE11.000

Accordingly, for Class 7 and 8 combination tractors, the agencies are each finalizing two sets of standards. For vehicle-related emissions and fuel consumption, tractor manufacturers are required to meet vehicle-based standards. Compliance with the vehicle standard will typically be determined based on a customized vehicle simulation model, called the Greenhouse gas Emissions Model (GEM), which is consistent with the NAS Report recommendations to require compliance testing for combination tractors using vehicle simulation rather than chassis dynamometer testing. This compliance model was developed by EPA specifically for this final action. It is an accurate and cost-effective alternative to measuring emissions and fuel consumption while operating the vehicle on a chassis dynamometer. Instead of using a chassis dynamometer as an indirect way to evaluate real-world operation and performance, various characteristics of the vehicle are measured and these measurements are used as inputs to the model. These characteristics relate to key technologies appropriate for this subcategory of truck—including aerodynamic features, weight reductions, tire rolling resistance, the presence of idle-reducing technology, and vehicle speed limiters. The model also assumes the use of a representative typical engine, rather than a vehicle-specific engine, because engines are regulated separately. Using these inputs, the model will be used to quantify the overall performance of the vehicle in terms of CO

emissions and fuel consumption. The model's development and design, as well as the sources for inputs, are discussed in detail in Section II below and in Chapter 4 of the RIA.

(i) Final Standards for Class 7 and 8 Combination Tractors and Their Engines

The vehicle standards that EPA and NHTSA are adopting for Class 7 and 8 combination tractor manufacturers are based on several key attributes related to GHG emissions and fuel consumption that we believe reasonably represent the many differences in utility and performance among these vehicles. The final standards differ depending on GVWR (

i.e.,

whether the truck is Class 7 or Class 8), the height of the roof of the cab, and whether it is a “day cab” or a “sleeper cab.” These later two attributes are important because the height of the roof, designed to correspond to the height of the trailer, significantly affects air resistance, and a sleeper cab generally corresponds to the opportunity for extended duration idle emission and fuel consumption improvements. We received a number of comments supporting this approach and no comments that provided a compelling reason to change our approach in this final action.

Thus, the agencies have created nine subcategories within the Class 7 and 8 combination tractor category based on the differences in expected emissions and fuel consumption associated with the key attributes of GVWR, cab type, and roof height. The agencies are setting standards beginning in 2014 model year with more stringent standards following in 2017 model year. Table I-3 presents the agencies' respective standards for combination tractor manufacturers for the 2017 model year. The standards represent an overall fuel consumption and CO

emissions reduction up to 23 percent from the tractors and the engines installed in them when compared to a baseline 2010 model year tractor and engine without idle shutdown technology. The standard values shown below differ somewhat from the proposal, reflecting refinements made to the GEM in response to comments. These changes did not impact our estimates of the relative effectiveness of the various control technologies modeled in this final action nor the overall cost or benefits or cost effectiveness estimated for these final vehicle standards.

As proposed, the agencies are exempting certain types of tractors which operate off-road to be exempt

from the combination tractor vehicle standards (although standards would still apply to the engines installed in these vehicles). The criteria for tractors to be considered off-road have been amended slightly from those proposed, in response to public comment. The agencies have also recognized, again in response to public comment, that some combination tractors operate in a manner essentially the same as vocational vehicles and have created a subcategory of “vocational tractors” as a result. Vocational tractors will be subject to the standards for vocational vehicles rather than the combination tractor standards.

See

Section II.B of this preamble.

Table I-3—Heavy-Duty Combination Tractor EPA Emissions Standards (G CO

/Ton-Mile) and NHTSA Fuel Consumption Standards (GAL/1,000 Ton-Mile)

Day cab

Class 7

Class 8

Sleeper cab

Class 8

2017 Model Year CO

Grams per Ton-Mile

Low Roof

104

Mid Roof

115

High Roof

120

2017 Model Year Gallons of Fuel per 1,000 Ton-Mile

Low Roof

10.2

7.8

6.5

Mid Roof

11.3

8.4

7.2

High Roof

11.8

8.7

7.1

In addition, the agencies are finalizing separate performance standards for the engines manufactured for use in these trucks. EPA's engine-based CO

standards and NHTSA's engine-based fuel consumption standards are implemented using EPA's existing test procedures and regulatory structure for criteria pollutant emissions from medium- and heavy-duty engines. As at proposal, the final engine standards vary depending on engine size linked to intended vehicle service class. Consistent with our proposal, the agencies are finalizing an interim alternative compression ignition engine standard for model years 2014-2016. This alternative standard is designed to provide a glide path for legacy diesel engine products that may not be able to comply with the final engine standards for model years 2014-16 given the short (approximately 2-year) lead time of this program. We believe this alternative standard is appropriate for a first-ever program when the overall baseline performance of the industry is quite varied and where the short lead time means that not every product can be brought into compliance by 2014. The alternative standard only applies through and including model year 2016.

Separately, EPA is adopting standards for combination tractors that apply in use. EPA is also finalizing engine-based N

O and CH

standards for manufacturers of the engines used in these combination tractors. EPA is finalizing separate engine-based standards for N

O and CH

because the agency believes that emissions of these GHGs are technologically related solely to the engine, fuel, and emissions aftertreatment systems, and the agency is not aware of any influence of vehicle-based technologies on these emissions. NHTSA is not incorporating standards for N

O and CH

because these emissions do not impact fuel consumption in a significant way. The standards that EPA is finalizing for N

O and CH

are less stringent than those we proposed, reflecting new data provided to EPA in comments on the proposal showing that the current baseline level of N

O and CH

emissions varies more than EPA had expected. EPA expects that manufacturers of current engine technologies will be able to comply with the final N

O and CH

“cap” standards with little or no technological improvements; the value of the standards will be to prevent significant increases in these emissions as alternative technologies are developed and introduced in the future. Compliance with the final EPA engine-based CO

standards and the final NHTSA engine-based fuel consumption standards, as well as the final EPA N

O and CH

standards, will be determined using the appropriate EPA engine test procedure, as discussed in Sections II.B, II.D, and II.E below.

As with the other categories of heavy-duty vehicles, EPA and NHTSA are finalizing respective standards that will apply to Class 7 and 8 tractors at the time of production (as in Table I-3, above). In addition, EPA is finalizing separate standards that will apply for a specified period of time in use. All of the standards for these vehicles, as well as details about the provisions for certification and implementation of these standards, are discussed in more detail in Sections II, III, IV, and V below and in the RIA.

(ii) EPA's Final Air Conditioning Leakage Standard for Class 7 and 8 Combination Tractors

In addition to the final EPA tractor- and engine-based standards for CO

and engine-based standards for N

O, and CH

emissions, EPA is finalizing a separate standard to reduce leakage of HFC refrigerant from cabin air conditioning (A/C) systems from combination tractors, to apply to the tractor manufacturer. This standard is independent of the CO

tractor standard, as discussed below in Section II.E.5. Because the current refrigerant used widely in all these systems has a very high global warming potential, EPA is concerned about leakage of refrigerant.

The global warming potential for HFC-134a refrigerant of 1430 used in this program is consistent with the Intergovernmental Panel on Climate Change Fourth Assessment Report.

Because the interior volume to be cooled for most tractor cabins is similar to that of light-duty vehicles, the size and design of current tractor A/C systems is also very similar. The compliance approach for Class 7 and 8 tractors is therefore similar to that in the light-duty rule in that these standards are design-based. Manufacturers will choose technologies from a menu of leak-reducing technologies sufficient to comply with the standard, as opposed to using a test to measure performance.

However, the final heavy-duty A/C provisions differ in two important ways from those established in the light-duty rule. First, the light-duty provisions were established as voluntary ways to

generate credits towards the CO

g/mi standard, and EPA took into account the expected use of such credits in determining the stringency of the CO

emissions standards. In the HD National Program, EPA is requiring that manufacturers actually meet a standard—as opposed to having the opportunity to earn a credit—for A/C refrigerant leakage. Thus, refrigerant leakage control is not separately accounted for in the final heavy-duty CO

standards. We are taking this approach here recognizing that while the benefits of leakage control are almost identical between light-duty and heavy-duty vehicles on a per vehicle basis, these benefits on a per mile basis expressed as a percentage of overall GHG emissions are much smaller for heavy-duty vehicles due to their much higher CO

emissions rates and higher annual mileage when compared to light-duty vehicles. Hence a credit-based approach as done for light-duty vehicles would provide less motivation for manufacturers to install low leakage systems even though such systems represent a highly cost effective means to control GHG emissions. The second difference relates to the expression of the leakage rate. The light-duty A/C leakage standard is expressed in terms of grams per year. For EPA's heavy-duty program, however, because of the wide variety of system designs and arrangements, a one-size-fits-all gram per year standard would not be appropriate, so EPA is adopting a standard in terms of annual mass leakage rate for A/C systems with refrigerant capacities less than or equal to 733 grams and percent of total refrigerant leakage per year for A/C systems with refrigerant capacities greater than 733 grams. The percent of total refrigerant leakage per year requires the total refrigerant capacity of the A/C system to be taken into account in determining compliance. EPA believes that this approach—a standard instead of a credit, and basing the standard on percent or mass of leakage over time—is more appropriate for heavy-duty tractors than the light-duty vehicle approach and that it will achieve the desired reductions in refrigerant leakage. Compliance with the standard will be determined through a showing by the tractor manufacturer that its A/C system incorporates a combination of low-leak technologies sufficient to meet the leakage rate of the applicable standard. The “menu” of technologies is very similar to that established in the light-duty 2012-2016 MY vehicle rule.

EPA has approved an alternative refrigerant, HFO-1234yf, which has a very low GWP, for use in light-duty vehicle mobile A/C systems. The final heavy-duty vehicle A/C leakage standard is designed to account for use of an alternative, low-GWP refrigerant. If in the future this refrigerant is approved for heavy-duty applications and if it becomes widespread as a substitute for HFC-134a in heavy-duty vehicle mobile A/C systems, EPA may propose to revise or eliminate the leakage standard.

Finally, the agencies did not propose and are not adopting an A/C system efficiency standard in this heavy-duty rulemaking, although an efficiency credit was a part of the light-duty rule. The much larger emissions of CO

from a heavy-duty tractor as compared to those from a light-duty vehicle mean that the relative amount of CO

that could be reduced through A/C efficiency improvements is very small.

A more detailed discussion of A/C related issues is found in Section II.E.5 of this preamble.

(b) Heavy-Duty Pickup Trucks and Vans (Class 2b and 3)

Heavy-duty vehicles with GVWR between 8,501 and 10,000 lb are classified in the industry as Class 2b motor vehicles per the Federal Motor Carrier Safety Administration definition. As discussed above, Class 2b includes MDPVs that are regulated by the agencies under the light-duty vehicle rule, and the agencies are not adopting additional requirements for MDPVs in this rulemaking. Heavy-duty vehicles with GVWR between 10,001 and 14,000 lb are classified as Class 3 motor vehicles. Class 2b and Class 3 heavy-duty vehicles (referred to in these rules as “HD pickups and vans”) together emit about 15 percent of today's GHG emissions from the heavy-duty vehicle sector.

About 90 percent of HD pickups and vans are

3/4

-ton and 1-ton pickup trucks, 12- and 15-passenger vans, and large work vans that are sold by vehicle manufacturers as complete vehicles, with no secondary manufacturer making substantial modifications prior to registration and use. These vehicle manufacturers are companies with major light-duty markets in the United States, primarily Ford, General Motors, and Chrysler. Furthermore, the technologies available to reduce fuel consumption and GHG emissions from this segment are similar to the technologies used on light-duty pickup trucks, including both engine efficiency improvements (for gasoline and diesel engines) and vehicle efficiency improvements.

For these reasons, EPA believes it is appropriate to adopt GHG standards for HD pickups and vans based on the whole vehicle (including the engine), expressed as grams per mile, consistent with the way these vehicles are regulated by EPA today for criteria pollutants. NHTSA believes it is appropriate to adopt corresponding gallons per 100 mile fuel consumption standards that are likewise based on the whole vehicle. This complete vehicle approach being adopted by both agencies for HD pickups and vans is consistent with the recommendations of the NAS Committee in their 2010 Report. EPA and NHTSA also believe that the structure and many of the detailed provisions of the recently finalized light-duty GHG and fuel economy program, which also involves vehicle-based standards, are appropriate for the HD pickup and van GHG and fuel consumption standards as well, and this is reflected in the standards each agency is finalizing, as detailed in Section II.C. These commonalities include a new vehicle fleet average standard for each manufacturer in each model year and the determination of these fleet average standards based on production volume-weighted targets for each model, with the targets varying based on a defined vehicle attribute. Vehicle testing will be conducted on chassis dynamometers using the drive cycles from the EPA Federal Test Procedure (Light-duty FTP or “city” test) and Highway Fuel Economy Test (HFET or “highway” test).

The Light-duty FTP is a vehicle driving cycle that was originally developed for certifying light-duty vehicles and subsequently applied to HD chassis testing for criteria pollutants. This contrasts with the Heavy-duty FTP, which refers to the transient engine test cycles used for certifying heavy-duty engines (with separate cycles specified for diesel and spark-ignition engines).

For the light-duty GHG and fuel economy standards, the agencies factored in vehicle size by basing the emissions and fuel economy targets on vehicle footprint (the wheelbase times the average track width).

For those standards, passenger cars and light trucks with larger footprints are assigned higher GHG and lower fuel economy target levels in acknowledgement of their inherent tendency to consume more fuel and emit more GHGs per mile. For HD pickups and vans, the agencies believe that setting standards based on vehicle attributes is appropriate, but feel that a work-based metric serves as a better attribute than the footprint attribute utilized in the light-duty vehicle

rulemaking. Work-based measures such as payload and towing capability are key among the parameters that characterize differences in the design of these vehicles, as well as differences in how the vehicles will be utilized. Buyers consider these utility-based attributes when purchasing a heavy-duty pickup or van. EPA and NHTSA are therefore finalizing standards for HD pickups and vans based on a “work factor” attribute that combines their payload and towing capabilities, with an added adjustment for 4-wheel drive vehicles. The agencies received a number of comments supporting this approach arguing, as the agencies had, that this approach was an effective way to encourage technology development and to appropriately reflect the utility of work vehicles while setting a consistent metric measure of vehicle performance.

EISA requires CAFE standards for passenger cars and light trucks to be attribute-based;

See

49 U.S.C. 32902(b)(3)(A).

As proposed, the agencies are adopting provisions such that each manufacturer's fleet average standard will be based on production volume-weighting of target standards for all vehicles that in turn are based on each vehicle's work factor. These target standards are taken from a set of curves (mathematical functions), presented in Section II.C below and in § 1037.104. EPA is also phasing in the CO

standards gradually starting in the 2014 model year, at 15-20-40-60-100 percent of the model year 2018 standards stringency level in model years 2014-2015-2016-2017-2018, respectively. The phase-in takes the form of a set of target standard curves, with increasing stringency in each model year, as detailed in Section II.C. The final EPA standards for 2018 (including a separate standard to control air conditioning system leakage) represent an average per-vehicle reduction in GHGs of 17 percent for diesel vehicles and 12 percent for gasoline vehicles, compared to a common baseline, as described in Sections II.C and III.B of this preamble. The rule contains separate standards for diesel and gasoline heavy duty pickups and vans for reasons described in Section II.C below. EPA is also finalizing a compliance alternative whereby manufacturers can phase in different percentages: 15-20-67-67-67-100 percent of the model year 2019 standards stringency level in model years 2014-2015-2016-2017-2018-2019, respectively. This compliance alternative parallels and is equivalent to NHTSA's first alternative described below.

NHTSA is allowing manufacturers to select one of two fuel consumption standard alternatives for model years 2016 and later. The first alternative defines individual gasoline vehicle and diesel vehicle fuel consumption target curves that will not change for model years 2016-2018, and are equivalent to EPA's 67-67-67-100 percent target curves in model years 2016-2017-2018-2019, respectively. The target curves for this alternative are presented in Section II.C. The second alternative uses target curves that are equivalent to the EPA's 40-60-100 percent target curves in model years 2016-2017-2018, respectively. Stringency for the alternatives has been selected to allow a manufacturer, through the use of the credit and deficit carry-forward provisions that the agencies are also finalizing, to rely on the same product plans to satisfy either of these two alternatives, and also EPA requirements. If a manufacturer cannot meet an applicable standard in a given model year, it may make up its shortfall by overcomplying in a subsequent year, called reconciling a credit deficit. NHTSA is also allowing manufacturers to voluntarily opt into the NHTSA HD pickup and van program in model years 2014 or 2015. For these model years, NHTSA's fuel consumption target curves are equivalent to EPA's target curves.

The agencies received a number of comments including from the Senate authors and supporters of the Ten-in-Ten Fuel Economy Act suggesting that the standards for heavy-duty pickups and vans should be made more stringent for gasoline vehicles and that the phase-in timing of the standards should be accelerated to the 2016 model year (from 2018). We also received comments arguing that the proposed standards were aggressive and could only be met given the phase-in schedules proposed by the agencies. In response to these comments, we reviewed again the technology assessments from the 2010 NAS report, our own joint light-duty 2012-2016 rulemaking, and information provided by the commenters relevant to the stringency of these standards. After reviewing all of the information, we continue to conclude that the proposed standards and associated phase-in schedules represent technically stringent but reasonable standards considering the available lead time and costs to bring the necessary technologies to market and our own assessments of the efficacy of the technologies when applied to heavy-duty pickup trucks and vans. Further detail on the feasibility of the standards and the agencies' choices among alternative standards is found in Section III.C below.

The Senate authors and supporters of the Ten-in-Ten Fuel Economy Act sent a letter to the agencies encouraging the agencies to finalize a fuel economy labeling requirement for heavy-duty pickups and vans.

The agencies recognize that consumer information in the form of a fuel efficiency label can be a valuable tool to help achieve our goals, and we note that the agencies have just recently finalized a new fuel economy label for passenger cars and light trucks.

See

76 FR at 39478. That rulemaking effort focused solely on modifying an existing label and was a multi-year process with significant public input. As we did not propose a consumer label for heavy-duty pickups and vans in this action and have not appropriately engaged the public in developing such a label, we are not prepared to finalize a consumer-based label in this action. However, we do intend to consider this issue as we begin work on the next phase of regulations, as we recognize that a consumer label can play an important role in reducing fuel consumption and GHG emissions.

See

Docket EPA-HQ-OAR-2010-0162.

The form and stringency of the EPA and NHTSA standards curves are based on a set of vehicle, engine, and transmission technologies expected to be used to meet the recently established GHG emissions and fuel economy standards for model year 2012-2016 light-duty vehicles, with full consideration of how these technologies are likely to perform in heavy-duty vehicle testing and use. All of these technologies are already in use or have been announced for upcoming model years in some light-duty vehicle models, and some are in use in a portion of HD pickups and vans as well. The technologies include:

• Advanced 8-speed automatic transmissions.

• Aerodynamic improvements.

• Electro-hydraulic power steering.

• Engine friction reductions.

• Improved accessories.

• Low friction lubricants in powertrain components.

• Lower rolling resistance tires.

• Lightweighting.

• Gasoline direct injection.

• Diesel aftertreatment optimization.

• Air conditioning system leakage reduction (for EPA program only).

See Section III.B for a detailed analysis of these and other potential technologies, including their feasibility, costs, and effectiveness when employed for reducing fuel consumption and CO

emissions in HD pickups and vans.

A relatively small number of HD pickups and vans are sold by vehicle manufacturers as incomplete vehicles, without the primary load-carrying

device or container attached. We are generally regulating these vehicles as Class 2b through 8 vocational vehicles but are also allowing manufacturers the option to choose to comply with heavy-duty pickup or van standards, as described in Section I.C.(2)(c). Although, as with vocational vehicles generally, we have little information on baseline aerodynamic performance and opportunities for improvement, a sizeable subset of these incomplete vehicles, often called cab-chassis vehicles, are sold by the vehicle manufacturers in configurations with many of the components that affect GHG emissions and fuel consumption identical to those on complete pickup truck or van counterparts—including engines, cabs, frames, transmissions, axles, and wheels. We are including provisions that will allow manufacturers to include these vehicles, as well as some Class 4 and 5 vehicles, to be regulated under the chassis-based HD pickup and van program (

i.e.

subject to the standards for HD pickups and vans), rather than the vocational vehicle program. These provisions are described in Section V.B(1)(e).

In addition to the EPA CO

emission standards and the NHTSA fuel consumption standards for HD pickups and vans, EPA is also finalizing standards for two additional GHGs, N

O and CH

, as well as standards for air conditioning-related HFC emissions. These standards are discussed in more detail in Section II.E. Finally, EPA is finalizing standards that will apply to HD pickups and vans in use. All of the standards for these HD pickups and vans, as well as details about the provisions for certification and implementation of these standards, are discussed in Section II.C.

Class 2b-8 vocational vehicles consist of a wide variety of vehicle types. Some of the primary applications for vehicles in this segment include delivery, refuse, utility, dump, and cement trucks; transit, shuttle, and school buses; emergency vehicles, motor homes,

tow trucks, among others. These vehicles and their engines contribute approximately 20 percent of today's heavy-duty truck sector GHG emissions.

NHTSA's final fuel consumption standards will not apply to recreational vehicles, as discussed in earlier in this preamble section.

Manufacturing of vehicles in this segment of the industry is organized in a more complex way than that of the other heavy-duty categories. Class 2b-8 vocational vehicles are often built as a chassis with an installed engine and an installed transmission. Both the engine and transmissions are typically manufactured by other manufacturers and the chassis manufacturer purchases and installs them. Many of the same companies that build Class 7 and 8 tractors are also in the Class 2b-8 chassis manufacturing market. The chassis is typically then sent to a body manufacturer, which completes the vehicle by installing the appropriate feature—such as dump bed, delivery box, or utility bucket—onto the chassis. Vehicle body manufacturers tend to be small businesses that specialize in specific types of bodies or specialized features.

EPA and NHTSA proposed that in this vocational vehicle category the proposed GHG and fuel consumption standards apply to chassis manufacturers. Chassis manufacturers play a central role in the manufacturing process. The product they produce—the chassis with engine and transmission—includes the primary technologies that affect GHG emissions and fuel consumption. They also constitute a much more limited group of manufacturers for purposes of developing and implementing a regulatory program. The agencies believe that a focus on the body manufacturers would be much less practical, since they represent a much more diverse set of manufacturers, many of whom are small businesses. Further, the part of the vehicle that they add affords very few opportunities to reduce GHG emissions and fuel consumption (given the limited role that aerodynamics plays in many types of lower speed and stop-and-go operation typically found with vocational vehicles.) Therefore, the agencies proposed that the standards in this vocational vehicle category would apply to the chassis manufacturers of all heavy-duty vehicles not otherwise covered by the HD pickup and van standards or Class 7 and 8 combination tractor standards discussed above. The agencies requested comment on the proposed focus on chassis manufacturers.

Volvo and Daimler commented that the EISA does not speak to the regulation of subsystems, such as engines or incomplete vehicles, and argued that on the other hand, Section 32902(k)(2) prescribes the regulation of vehicles. Volvo further stated that precedent for the regulation of complete vehicles exists in the light-duty fuel economy rule. As noted above, NHTSA does not believe that EISA mandates a particular regulatory approach, but rather gives the agency wide latitude and explicitly leaves that determination to the agency. NHTSA also notes that its heavy-duty rule creates a new fuel efficiency program for which the light-duty program does not necessarily serve as a useful precedent for considerations of its structure. Unlike the light-duty fuel economy program, MD/HD vehicles are produced in widely diverse stages. Further, given the MD/HD market structure, where the complete vehicle manufacturers are numerous, diverse, and often small businesses, the regulation of complete vehicles would create unique difficulties for the application of appropriate and feasible technologies. These same considerations justify EPA's determination, pursuant to CAA section 202 (a), to regulate only chassis manufacturers in this first stage of GHG rules for the heavy-duty sector. NHTSA also notes that this rule does not represent the first time that the agency has regulated incomplete vehicles. Rather, incomplete vehicles have a history of regulation under the Federal Motor Vehicle Safety Standards.

For this first phase of the HD National Program, NHTSA and EPA believe that given the complexity of the manufacturing process for vocational vehicles, and given the wide range of entities that participate in that process, vehicle fuel consumption standards would be most appropriately applied to chassis manufacturers and not to body builders.

See

49 U.S.C. 567.5 and 568.4.

The agencies continue to believe that regulation of the chassis manufacturers for this vocational vehicle category will achieve the maximum feasible improvement in fuel efficiency for purposes of EISA and appropriate emissions reductions for purposes of the CAA. Therefore, consistent with our proposal the final standards in this vocational vehicle category apply to the chassis manufacturers of all heavy-duty vehicles not otherwise covered by the HD pickup and van standards or Class 7 and 8 combination tractor standards discussed above. As discussed above, EPA and NHTSA have concluded that reductions in GHG emissions and fuel consumption require addressing both the vehicle and the engine. As discussed above for Class 7 and 8 combination tractors, the agencies are each finalizing two sets of standards for Class 2b-8 vocational vehicles. For vehicle-related emissions and fuel consumption, the agencies are adopting standards for chassis manufacturers: EPA CO

(g/ton-mile) standards and NHTSA fuel consumption (gal/1,000 ton-mile) standards). While the agencies believe that a freight-based metric is broadly appropriate for vocational vehicles

because the vocational vehicle population is dominated by freight trucks and maintain that it is appropriate for the first phase of the program, the agencies may consider other metrics for future phases of a HD program. Manufacturers will use GEM, the same customized vehicle simulation model used for Class 7 and 8 tractors, to determine compliance with the vocational vehicle standards finalized in this action. The primary manufacturer-generated input into the GEM for this category of trucks will be a measure of tire rolling resistance, as discussed further below, because tire improvements are the primary means of vehicle improvement available at this time for vocational vehicles. The model also assumes the use of a typical representative, compliant engine in the simulation, resulting in an overall value for CO

emissions and one for fuel consumption. This is done for the same reason as for combination tractors. As is the case for combination tractors, the manufacturers of the engines intended for vocational vehicles will be subject to separate engine-based standards.

(i) Final Standards for Class 2b-8 Vocational Vehicles and Their Engines

Based on our analysis and research, the agencies believe that the primary opportunity for reductions in vocational vehicle GHG emissions and fuel consumption will be through improved engine technologies and improved tire rolling resistance. For engines, EPA and NHTSA are adopting separate standards for the manufacturers of engines used in Class 2b-8 vocational vehicles (the same approach as for combination tractors and engines intended for use in those tractors). EPA's final engine-based CO

standards and NHTSA's final engine-based fuel consumption standards vary based on the expected weight class and usage of the truck into which the engine will be installed. Tire rolling resistance is closely related to the weight of the vehicle. Therefore, we are adopting vehicle-based standards for these trucks which vary according to one key attribute, GVWR. For this initial HD rulemaking, we are adopting standards based on the same groupings of truck weight classes used for the engine standards—light heavy-duty, medium heavy-duty, and heavy heavy-duty. These groupings are appropriate for the final vehicle-based standards because they parallel the general divisions among key engine characteristics, as discussed in Section II.

The agencies are also finalizing an interim alternative compression ignition (diesel) engine standard for model years 2014-2016, again analogous to the alternative standards for compression ignition engines use in combination tractors. The need for this provision and our considerations in adopting it are the same for the engines used in vocational vehicles as for the engines used in combination tractors. As we proposed, these alternative standards will only be available through model year 2016. In addition, manufacturers that use the interim alternative diesel engine standards for model years 2014-2016 under the EPA program must use equivalent fuel consumption standards under the NHTSA program.

For the 2014 to 2016 model years, manufacturers may also choose to meet alternative engine standards that are phased-in over the model years to coincide with new EPA On-Board Diagnostic (OBD) requirements applicable for these same model years. See Sections II.B and II.D below.

The agencies received a significant number of comments including from the Senate authors and supporters of the Ten-in-Ten Fuel Economy Act arguing that our proposed standards for vocational vehicles did not reflect all of the technologies identified in the 2010 NAS report. The commenters encouraged the agencies to expand the program to bring in additional reductions through the use of new transmission technologies, vehicle weight reductions and hybrid drivetrains. In general, the agencies agree with the commenters' central contention that there are additional technologies to improve the fuel efficiency of vocational vehicles. As discussed later, we are finalizing provisions to allow new technologies to be brought into the program through the innovative technology credit program. More specifically, we are including provisions to account for and credit the use of hybrid technology as a technology that can reduce emissions and fuel consumption. Hybrid technology can currently be a cost-effective technology in certain specific vocational applications, and the agencies want to recognize and promote the use of this technology. (

See

Sections I.E and IV below.) However, we are not finalizing standards that are premised on the use of these additional technologies because we have not been able to develop the test procedures, regulatory mechanisms and baseline performance data necessary to adopt a more comprehensive approach to controlling fuel efficiency and GHG emissions from vocational vehicles. In concept, the agencies would need to know the baseline weight, aerodynamic performance, and transmission configuration for the wide range of vocational vehicles produced today. We do not have this information even for relatively small portions of this market (

e.g.

concrete mixers) nor are we well informed regarding the potential tradeoffs to changes to vehicle utility that might exist for changes to concrete mixer designs in response to a regulation. Nor did the commenters provide any such information. Absent this information and the necessary regulatory tools, we believe the standards we are finalizing for vocational vehicles represent the most appropriate standards for this segment during the model years of the first phase of the program. We intend to address fuel consumption and GHG emissions from these vehicles in a more comprehensive manner through future regulation and look forward to working with all stakeholders on this important segment in the future.

The agencies are setting standards beginning in the 2014 model year and establishing more stringent standards in the 2017 model year. Table I-4 presents EPA's final CO

standards and NHTSA's final fuel consumption standards for chassis manufacturers of Class 2b through Class 8 vocational vehicles for the 2017 model year. The 2017 model year standards represent a 6 to 9 percent reduction in CO

emissions and fuel consumption over a 2010 model year vehicle.

Table I-4—Final 2017 Class 2

-8 Vocational Vehicle EPA CO

Standards and NHTSA Fuel Consumption Standards

Light heavy-duty Class 2b-5

Medium heavy-duty Class 6-7

Heavy heavy-duty Class 8

EPA CO

(gram/ton-mile) Standard Effective 2017 Model Year

Emissions

373

225

222

NHTSA Fuel Consumption (gallon per 1,000 ton-mile) Standard Effective 2017 Model Year

Fuel Consumption

36.7

22.1

21.8

As mentioned above for Class 7 and 8 combination tractors, EPA believes that N

O and CH

emissions are technologically related solely to the engine, fuel, and emissions aftertreatment systems, and the agency is not aware of any influence of vehicle-based technologies on these emissions. Therefore, for Class 2b-8 vocational vehicles, EPA's final N

O and CH

standards cover manufacturers of the engines to be used in vocational vehicles. EPA did not propose, nor are we adopting separate vehicle-based standards for these GHGs. As for the engines used in Class 7 and 8 tractors, we are finalizing a somewhat higher N

O and CH

emission standards reflecting new data submitted to the agencies during the public comment period. EPA expects that manufacturers of current engine technologies will be able to comply with the final “cap” standards with little or no technological improvements; the value of the standards is that they will prevent significant increases in these emissions as alternative technologies are developed and introduced in the future. Compliance with the final EPA engine-based CO

standards and the final NHTSA fuel consumption standards, as well as the final EPA N

O and CH

standards, will be determined using the appropriate EPA engine test procedure, as discussed in Section II below.

As with the other regulatory categories of heavy-duty vehicles, EPA and NHTSA are adopting standards that apply to Class 2b-8 vocational vehicles at the time of production, and EPA is adopting standards for a specified period of time in use. All of the standards for these trucks, as well as details about the final provisions for certification and implementation of these standards, are discussed in more detail later in this notice and in the RIA.

EPA did not propose, nor is it adopting A/C refrigerant leakage standards for Class 2b-8 vocational vehicles, primarily because of the number of entities involved in their manufacture and thus the potential for different entities besides the chassis manufacturer to be involved in the A/C system production and installation.

(d) What manufacturers are not covered by the final standards?

The NPRM proposed to defer temporarily greenhouse gas emissions and fuel consumption standards for any manufacturers of heavy-duty engines, manufacturers of combination tractors, and chassis manufacturers for vocational vehicles that meet the “small business” size criteria set by the Small Business Administration (SBA). 13 CFR 121.201 defines a small business by the maximum number of employees; for example, this is currently 1,000 for heavy-duty vehicle manufacturing and 750 for engine manufacturing.

The agencies stated that they would instead consider appropriate GHG and fuel consumption standards for these entities as part of a future regulatory action. This includes both U.S.-based and foreign small-volume heavy-duty manufacturers. To ensure that the agencies are aware of which companies would be exempt, the agencies proposed to require that such entities submit a declaration describing how it qualifies as a small entity under the provisions of 13 CFR 121.201 to EPA and NHTSA as prescribed in Section V below.

See

§ 1036.150 and § 1037.150

EPA and NHTSA were not aware of any manufacturers of HD pickups and vans that meet these criteria. For each of the other categories and for engines, the agencies identified a small number of manufacturers that would appear to qualify as small businesses under the SBA size criterion, which were estimated to comprise a negligible percentage of the U.S. market.

Therefore, the agencies believed that deferring the standards for these companies at this time would have a negligible impact on the GHG emission reductions and fuel consumption reductions that the program would otherwise achieve. The agencies proposed to consider appropriate GHG emissions and fuel consumption standards for these entities as part of a future regulatory action.

Two heavy-duty combination tractor and ten chassis manufacturers each comprising less than 0.5 percent of the total tractor and vocational market based on Polk Registration Data from 2003 through 2007, and three engine manufacturing entities based on company information included in Hoover's, comprising less than 0.1 percent of the total heavy-duty engine sales in the United States based on 2009 and 2010 EPA certification information.

The Institute for Policy Integrity (IPI) commented that the small business exemption proposed in the NPRM was based on the improper framework of whether the exemption would have a negligible impact, and did not adequately explain why the regulation of small businesses would face special compliance and administrative burdens. IPI argued that the only proper basis for this exemption would be if the agencies could explain how these burdens create costs that exceeded the benefits of regulation.

NHTSA believes that developing standards that are “appropriate, cost-effective, and technologically feasible” under 49 U.S.C. 32902(k)(2) includes the authority to exclude certain manufacturers if their inclusion would work against these statutory factors. Similarly, under section 202(a) of the CAA, EPA may reasonably choose to defer regulation of industry segments based on considerations of cost, cost-effectiveness and available lead time for standards. As noted above, small businesses make up a very small percentage of the market and are estimated to have a negligible impact on the emissions and fuel consumption goals of this program. The short lead time before the CO

standards take effect, the extremely small fuel savings and emissions contribution of these entities, and the potential need to develop a program that would be structured differently for them (which would require more time to determine and adopt), all led to the decision that the inclusion of small businesses would not be appropriate at this time. Therefore, the final rule exempts small businesses as proposed.

Volvo and EMA stated that by exempting small businesses based on the definition from SBA, the rules would create a competitive advantage for small businesses over larger entities. EMA commented that the exemption should not apply to market segments where a small business has a significant share of a particular HD market. Volvo argued that the exempted businesses could expand their product offerings or

sell vehicles on behalf of larger entities, thereby inappropriately increasing the scope of the exclusion. The agencies anticipate that the gain a manufacturer might achieve by restructuring its practices and products to circumvent the standard (which for vocational vehicles simply means installing low rolling resistance tires) in the first few years of this program will be outweighed by the costs, particularly as small businesses anticipate their potential inclusion in the next rulemaking.

Volvo also commented that the agencies should elaborate on the requirements for the exemption in greater detail. The agencies agree that this may help to clarify the process. As suggested by Volvo, the agencies will consider affiliations to other companies and evidence of spin-offs for the purpose of circumventing the standards in determining whether a business qualifies as a small entity for this exclusion. Each declaration must be submitted in writing to EPA and NHTSA as prescribed in Section V below. As the agencies gain more experience with this exemption, these clarifications may be codified in the regulatory text of a future rulemaking.

Volvo further commented that the agencies were adopting an exemption of “small businesses” in order to avoid doing a Small Business Regulatory Enforcement Fairness Act (SBREFA) and Regulatory Flexibility Act (RFA) analysis. The agencies would like to reiterate that they have decided not to include small businesses at this time due to the factors described above. The discussion on an RFA analysis is laid out in Section XII(4).

The agencies continue to believe that deferring the standards for these companies at this time will have a negligible impact on the GHG emission reductions and fuel consumption reductions that the program would otherwise achieve. Therefore, the final rules include the small business exemption as proposed. The specific deferral provisions are discussed in more detail in Section II.

The agencies will consider appropriate GHG emissions and fuel consumption standards for these entities as part of a future regulatory action.

(e) Light-Duty Vehicle CH

and N

O Standards Flexibility

After finalization of the N

O and CH

standards for light-duty vehicles as part of the 2012-2016 MY program, some manufacturers raised concerns that they may have difficulty meeting those standards across their light-duty vehicle fleets. In response to these concerns, as part of the same

Federal Register

notice as the heavy-duty proposal, EPA requested comments on additional options for manufacturers to comply with light-duty vehicle N

O and CH

standards to provide additional near-term flexibility. Commenters providing comment on this issue supported additional flexibility for manufacturers. EPA is finalizing provisions allowing manufacturers to use CO

credits, on a CO

-equivalent basis, to meet the N

O and CH

standards, which is consistent with many commenters' preferred approach. Manufacturers will have the option of using CO

credits to meet N

O and CH

standards on a test group basis as needed for MYs 2012-2016.

(f) Alternative Fuel Engines and Vehicles

The agencies believe that it is also appropriate to take steps to recognize the benefits of flexible-fueled vehicles (FFVs) and dedicated alternative-fueled vehicles. In the NPRM, EPA proposed to determine the emissions performance of dedicated alternative fuel engines and pickup trucks and vans by measuring tailpipe CO

emissions. NHTSA proposed to determine fuel consumption performance of non-electric dedicated alternative fuel engines and pickup trucks and vans by measuring fuel consumption with the alternative fuel and then calculating a petroleum equivalent fuel consumption using a Petroleum Equivalency Factor (PEF) that is determined by the Department of Energy. NHTSA proposed to treat electric vehicles as having zero fuel consumption, comparable to the EPA proposal. Both agencies proposed to determine FFV performance in the same way as for GHG emissions for light-duty vehicles, with a 50-50 weighting of alternative and conventional fuel test results through MY 2015, and a weighting based on demonstrated fuel use in the real world after MY 2015 (defaulting to an assumption of 100 percent conventional fuel use). This approach was considered to be a reasonable and logical way to properly credit alternative fuel use in FFVs in the real world without imposing a difficult burden of proof on manufacturers. However, unlike in the light-duty rule, the agencies do not believe it is appropriate to create a provision for additional incentives similar to the 2012-2015 light-duty incentive program (

See

49 U.S.C. 32904) because the HD sector does not have the incentives mandated in EISA for light-duty FFVs, and so has not relied on the existence of such credits in devising compliance strategies for the early model years of this program.

See

74 FR at 49531. In fact, manufacturers have not in the past produced FFV heavy-duty vehicles. On the other hand, the agencies sought comment on how to properly recognize the impact of the use of alternative fuels, and E85 in particular, in HD pickups and vans, including the proper accounting for alternative fuel use in FFVs in the real world.

See

75 FR at 74198.

E85 is a blended fuel consisting of nominally 15 percent gasoline and 85 percent ethanol.

The agencies received several comments from natural gas vehicle (NGV) interests arguing for greater crediting of NGVs than the proposed approach would have provided. Clean Energy, Hayday Farms, Border Valley, AGA, Ryder, Encana, and a group of NGV interests commented that the NPRM ignored Congress' intent to incentivize the use of NGVs by not including the conversion factor that exists in the light-duty statutory language. The commenters argued that Congress' intent to incentivize NGVs is evident in the formula contained in 49 U.S.C. 32905, which deems a gallon equivalent of gaseous fuel to have a fuel content of 0.15 gallon of fuel. The commenters also argued that Congress implicitly intended NGVs to be incentivized in this rulemaking, as evidenced by the incentives in the light-duty statutory text. AGA and Hayday suggested that the agencies were not including the NGV incentive from light-duty because Congress did not explicitly include it in 49 U.S.C. 32902(k), and argued that this would contradict the agencies' inclusion of other incentives similar to the light-duty rule.

The American Trucking Association expressed support for estimating natural gas fuel efficiency by using carbon emissions from natural gas rather than energy content to estimate fuel consumption. ATA explained that two vehicles can achieve the same fuel efficiency, yet one operated on natural gas would have a lower carbon dioxide emissions rate. A natural gas conversion factor that uses carbon content versus energy content is a more appropriate method for calculating fuel consumption, in the commenter's view. A number of other groups commented on the appropriate method to use in establishing fuel consumption from alternative fueled vehicles. A group of NGV interests, Ryder, Border Valley Trading, Waste Management, Robert Bosch and the Blue Green Alliance encouraged the agencies to adopt the 0.15 conversion factor in estimating fuel consumption for FFVs and alternative fuel vehicles finalized in the light-duty

2012-2016 MY vehicle standards. The suggested incentive would effectively reduce the calculated fuel consumption for FFVs and alternative fuel vehicles by a factor of 85 percent. The commenters argued that the incentive is needed for heavy-duty vehicles to encourage the use of natural gas and to reduce the nation's dependence on petroleum.

The agencies reassessed the options for evaluating the CO

and fuel consumption performance of alternative fuel vehicles in response to comments and because the agencies recognized that the treatment of alternate fuel vehicles was one of the few provisions in the proposal where the EPA and NHTSA programs were not aligned. The agencies conducted an analysis comparing fuel consumption calculated based on CO

emissions

to fuel consumption calculated based on gasoline or diesel energy equivalency to evaluate impacts of a consistent consumption measurement for all vehicle classes covered by this program and to further understand how alternative fuels would be impacted by this measurement methodology. In particular the agencies evaluated how measuring consumption via CO

emissions would hinder or benefit the application of alternative fuels versus following similar alternative fuel incentivizing programs provided via statute for the Agency's light-duty programs. The analysis showed measuring a vehicle's CO

output converted to fuel consumption provided a fuel consumption measurement benefit to those vehicles operating on fuels other than gasoline or diesel. For CNG, LNG and LPG the benefit is approximately 19 percent to 24 percent, for biodiesel and ethanol blends the benefit is approximately 1 percent to 3 percent, and for electricity and hydrogen fuels the benefit is 100 percent benefit, as fuel consumption is zero. The agencies also considered that the EPA Renewable Fuel Standard,

a separate program, requires an increase in the volume of renewable fuels used in the U.S. transportation sector. For the fuels covered by the Renewable Fuels Standard additional incentives are not needed in this regulation given the large volume increases required under the Renewable Fuel Standard.

Fuel consumption calculated from measured CO

using conversion factors of 8,887 g CO

/gallon for gasoline (for alternative fuel engines that are derived from gasoline engines), and 10,180 g CO

/gallon for diesel fuel (for alternative fuel engines that are derived from diesel engines).

EPA is responsible for developing and implementing regulations to ensure that transportation fuel sold in the United States contains a minimum volume of renewable fuel. The RFS program was created under the Energy Policy Act (EPAct) of 2005, and expanded under the Energy Independence and Security Act (EISA) of 2007.

The agencies continue to believe that alternative-fueled vehicles, including NGVs, provide fuel consumption benefits that should be, and are, accounted for in this program. However, the agencies do not agree with the commenters' claim that the NGV incentive contained in EISA, and reflected in the light-duty program, is an explicit Congressional directive that must also be applied to the heavy-duty program, nor that the light-duty incentive for NGVs should be interpreted as an implicit Congressional directive for NGVs to be comparably incentivized in the heavy-duty program. Further, the agencies believe that the fuel consumption benefits that alternative fuel vehicles would obtain through measuring CO

emissions for the EPA program and converting CO

emissions to fuel consumption for the NHTSA program accurately reflects their energy benefits. This accurate accounting, in conjunction with the volumetric increases required by the Renewable Fuels Standard, provides sufficient incentives for these vehicles. The agencies continue to believe that the light-duty conversion factor is not appropriate for this program. Instead, the agencies are finalizing measuring the performance of alternative fueled vehicles by measuring CO

emissions for the EPA program and converting CO

emissions to fuel consumption for the NHTSA program. The agencies are also finalizing measuring FFV performance with a 50-50 weighting of alternative and conventional fuel test results through MY 2015, and an agency- or manufacturer-determined weighting based on demonstrated fuel use in the real world after MY 2015 (defaulting to an assumption of 100 percent conventional fuel use).

The agencies believe this structure accurately reflects the fuel consumption of the vehicles while at the same time providing an incentive for the alternative fuel use. (For example, natural gas heavy duty engines perform 20 to 30 percent better than their diesel and gasoline counterparts from a CO

perspective, and so meet the standards adopted in these rules without cost, and indeed will be credit generators without cost.) We believe this is a substantial enough advantage to spur the market for these vehicles. The calculation at the same time does not overestimate the benefit from these technologies, which could reduce the effectiveness of the regulation. Therefore, the final rules do not include the light-duty 0.15 conversion factor for NGVs. The agencies would like to clarify that the decision not to include an NGV incentive was based on this policy determination, not on a belief that incentives present in the light-duty rule could not be developed for the heavy-duty sector because they were not explicitly included in Section 32902(k).

NHTSA recognizes that EPCA/EISA promotes incentives for alternative fueled vehicles for different purposes than does the CAA, and that there may be additional energy and national security benefits that could be achieved through increasing fleet percentages of natural gas and other alternative-fueled vehicles. More alternative-fueled vehicles on road would arguably displace petroleum-fueled vehicles, and thereby increase both U.S. energy and national security by reducing the nation's dependence on foreign oil.

However, a rule that adopts identical incentive provisions reduces industry reporting burdens and NHTSA's monitoring burden. In addition, the agencies are concerned that providing greater incentives under EPCA/EISA might lead to little increased production of alternative fueled vehicles. If this were the case, then the benefits of harmonization could outweigh any potential gains from providing greater incentives. It is also consistent with Executive Order 13563.

EO 13563 states that an agency shall “tailor its regulations to impose the least burden on society, consistent with obtaining regulatory objectives, taking into account, among other things, and to the extent practicable, the costs of cumulative regulations,” and “promote such coordination, simplification, and harmonization” as will reduce redundancy, inconsistency, and costs of multiple regulatory requirements.

Adopting the same incentive provisions could also have benefits for the public, the regulated industries, and the agencies. This approach allows manufacturers to project clear benefits for the application of GHG-reduction and fuel efficiency technologies, thus spurring their adoption.

This combined rulemaking by EPA and NHTSA is designed to regulate two separate characteristics of heavy duty vehicles: Greenhouse gas emissions (GHG) and fuel consumption. In the case of diesel or gasoline powered vehicles, there is a one-to-one relationship between these two characteristics. Each gallon of gasoline combusted by a truck engine generates approximately 8,887 grams of CO

; and each gallon of diesel fuel burned generates about 10,180 grams of CO

. Because no available technologies reduce tailpipe CO

emissions per gallon of fuel combusted, any rule that limits tailpipe CO

emissions is

effectively identical to a rule that limits fuel consumption. Compliance by a truck manufacturer with the NHTSA fuel economy rule assures compliance with the EPA rule, and vice versa.

For alternatively fueled vehicles, which use no petroleum, the situation is different. For example, a natural gas vehicle that achieves approximately the same fuel economy as a diesel powered vehicle would emit 20 percent less CO

; and a natural gas vehicle with the same fuel economy as a gasoline vehicle would emit 30 percent less CO

. Yet natural gas vehicles consume no petroleum. To the extent that the goal of the NHTSA fuel economy portion of this rulemaking is to curb petroleum use, crediting natural gas vehicles with zero fuel consumption per mile could contribute to achieving that goal. Similar differences between oil consumption and greenhouse gas emissions would apply to electric vehicles, hybrid electric vehicles, and biofuel-powered vehicles.

NHTSA notes that the purpose of EPCA/EISA is not merely to curb petroleum use—it is more generally to secure energy independence, which can be achieved by reducing petroleum use. The value of incentivizing natural gas, electric vehicles, biofuels, hydrogen, or other alt fuel vehicles for energy independence is limited to the extent that the alternative fuels may be imported.

In the recent rulemaking for light-duty vehicles, EPA and NHTSA have followed the light duty specific statutory provision that treats one gallon of alternative fuel as equivalent to 0.15 gallons of gasoline until MY 2016, when performance on the EPA CO

standards is measured based on actual emissions. 75 FR at 25433. Following that MY 2012-2015 approach in this heavy duty program would mean that, for example, a natural gas powered truck would have attributed to it 20 percent less CO

emissions than a comparable diesel powered truck, but 85 percent less fuel consumption. Engine manufacturers with a relatively large share of alternative-fuel products would likely have an easier time complying with NHTSA's average fuel economy standard than with EPA's GHG standard. Similarly, engine manufacturers with a relatively small share of alternative-fuel products would have a relatively easier time complying with EPA's CO

standard than with NHTSA's fuel economy standard. In that way, the rule would not differ from the light duty vehicle rules.

Instead, in this program, EPA and NHTSA are establishing identical rules. Fuel consumption for alternatively-powered vehicles will be calculated according to their tailpipe CO

emissions. In that way, there will be a one-to-one relationship between fuel economy and tailpipe CO

emissions for all vehicles. However, this might not result in a one-to-one relationship between petroleum consumption and GHG emissions for all vehicles. On the other hand, it could have the disadvantage of not doing more to encourage some cost-effective means of reducing petroleum consumption by trucks, and the accompanying energy security costs. By attributing to natural gas engines only 20 percent less fuel consumption than comparable diesel engines, because they emit 20 percent less CO

, rather than attributing to them a much larger percentage reduction in fuel consumption, because they use no petroleum, this uniform approach to rulemaking provides less of an incentive for technologies that reduce consumption of petroleum-based fuels.

In the future, the Agencies will consider the possibility of proposing standards in a way that more fully reflects differences in fuel consumption and greenhouse gas emissions. Under such standards, any given vehicle might “over-comply” with the fuel economy standard, but might “under-comply” with the greenhouse gas standard. Therefore, in meeting the fleet-wide requirements, a manufacturer would need to meet both standards using all available options, such as credit trading and technology mix. Allowing for two distinct standards might enable manufacturers to achieve the twin goals of reducing greenhouse gas emissions and decreasing consumption of petroleum-based fuels in a more cost-effective manner.

D. Summary of Costs and Benefits of the HD National Program

This section summarizes the projected costs and benefits of the final NHTSA fuel consumption and EPA GHG emissions standards. These projections helped to inform the agencies' choices among the alternatives considered and provide further confirmation that the final standards are an appropriate choice within the spectrum of choices allowable under the agencies' respective statutory criteria. NHTSA and EPA have used common projected costs and benefits as the bases for our respective standards.

The agencies have analyzed in detail the projected costs, fuel savings, and benefits of the final GHG and fuel consumption standards. Table I-5 shows estimated lifetime discounted program costs (including technological outlays), fuel savings, and benefits for all heavy-duty vehicles projected to be sold in model years 2014-2018 over these vehicles' lives. The benefits include impacts such as climate-related economic benefits from reducing emissions of CO

(but not other GHGs) and reductions in energy security externalities caused by U.S. petroleum consumption and imports. The analysis also includes economic impacts stemming from additional heavy-duty vehicle use attributable to fuel savings, such as the economic damages caused by accidents, congestion and noise. Note that benefits reflect on estimated values for the social cost of carbon (SCC), as described in Section VIII.G.

The costs, fuel savings, and benefits summarized here are slightly higher than at proposal, reflecting the use of 2009 (versus 2008) dollars, some minor changes to our cost estimates in response to comments, and a change to the 2011 Annual Energy Outlook (AEO) estimate of economic growth and future fuel prices. In aggregate, these changes lead to an increased estimate of the net benefits of the final action compared to the proposal.

Table I-5—Estimated Lifetime Discounted Costs, Fuel Savings, Benefits, and Net Benefits for 2014-2018 Model Year Heavy-Duty Vehicles

a b

[Billions, 2009$]

Lifetime Present Value

—3% Discount Rate

Program Costs

$8.1

Fuel Savings

$50

Benefits

$7.3

Net Benefits

$49

Annualized Value

—3% Discount Rate

Annualized Costs

$0.4

Fuel Savings

$2.2

Annualized Benefits

$0.4

Net Benefits

$2.2

Lifetime Present Value

—7% Discount Rate

Program Costs

$8.1

Fuel Savings

$34

Benefits

$6.7

Net Benefits

$33

Annualized Value

—7% Discount Rate

Annualized Costs

$0.6

Fuel Savings

$2.6

Annualized Benefits

$0.5

Net Benefits

$2.5

Notes:

The agencies estimated the benefits associated with four different values of a one ton CO

Present value is the total, aggregated amount that a series of monetized costs or benefits that occur over time is worth now (in year 2009 dollar terms), discounting future values to the present.

Net benefits reflect the fuel savings plus benefits minus costs.

The annualized value is the constant annual value through a given time period (2012 through 2050 in this analysis) whose summed present value equals the present value from which it was derived.

Table I-6 shows the estimated lifetime reductions in CO

emissions (in million metric tons (MMT)) and fuel consumption for all heavy-duty vehicles sold in the model years 2014-2018. The values in Table I-6 are projected lifetime totals for each model year and are not discounted. The two agencies' standards together comprise the HD National Program, and the agencies' respective GHG emissions and fuel consumption standards, jointly, are the source of the benefits and costs of the HD National Program.

Table I-6—Estimated Lifetime Reductions in Fuel Consumption and CO

Emissions for 2014-2018 Model Year HD Vehicles

All heavy-duty vehicles

2014 MY

2015 MY

2016 MY

2017 MY

2018 MY

Total

Fuel (billion gallons)

4.0

3.6

5.1

5.8

22.1

Fuel (billion barrels)

0.10

0.09

0.08

0.12

0.14

0.53

(MMT)

50.2

44.8

44.0

62.8

71.7

273

Note:

Includes upstream and downstream CO

reductions.

Table I-7 shows the estimated lifetime discounted benefits for all heavy-duty vehicles sold in model years 2014-2018. Although the agencies estimated the benefits associated with four different values of a one ton CO

reduction ($5, $22, $36, $66), for the purposes of this overview presentation of estimated benefits the agencies are showing the benefits associated with one of these marginal values, $22 per ton of CO

, in 2009 dollars and 2010 emissions. Table I-7 presents benefits based on the $22 per ton of CO

value. Section VIII.F presents the four marginal values used to estimate monetized benefits of CO

reductions and Section VIII presents the program benefits using each of the four marginal values, which represent only a partial accounting of total benefits due to omitted climate change impacts and other factors that are not readily monetized. The values in the table are discounted values for each model year of vehicles throughout their projected lifetimes. The analysis includes other economic impacts such as energy security, and other externalities such as impacts on accidents, congestion and noise. However, the model year lifetime analysis supporting the program omits other impacts such as benefits related to non-GHG emission reductions.

The lifetime discounted benefits are shown for one of four different SCC values considered by EPA and NHTSA. The values in Table I-7 do not include costs associated with new technology required to meet the GHG and fuel consumption standards.

Non-GHG emissions and health-related impacts were estimated for the calendar year analysis.

See

Section VII for more information about non-GHG emission impacts and Section VIII for more information about non-GHG-related health impacts.

Table I-7—Estimated Lifetime Discounted Benefits for 2014-2018 Model Year HD Vehicles Assuming the Model Average, 3% Discount Rate SCC Value

a b c

[billions of 2009 dollars]

Discount rate

(percent)

Model year

2014

2015

2016

2017

2018

Total

$10.7

$9.4

$9.2

$13.2

$14.9

$57

8.3

6.9

6.6

9.2

10.1

Notes:

The analysis includes impacts such as the economic value of reduced fuel consumption and accompanying climate-related economic benefits from reducing emissions of CO

(but not other GHGs), and reductions in energy security externalities caused by U.S. petroleum consumption and imports. The analysis also includes economic impacts stemming from additional heavy-duty vehicle use, such as the economic damages caused by accidents, congestion and noise.

Note that net present value of reduced CO

emissions is calculated differently than other benefits. The same discount rate used to discount the value of damages from future emissions (SCC at 5, 3, and 2.5 percent) is used to calculate net present value of SCC for internal consistency. Refer to Section VIII.F for more detail, including a list of all four SCC values, which increase over time.

Benefits in this table include fuel savings.

Table I-8 shows the agencies' estimated lifetime fuel savings, lifetime CO

emission reductions, and the monetized net present values of those fuel savings and CO

emission reductions. The gallons of fuel and CO

emission reductions are projected lifetime values for all vehicles sold in the model years 2014-2018. The

estimated fuel savings in billions of barrels and the GHG reductions in million metric tons of CO

shown in Table I-8 are totals for the five model years throughout their projected lifetime and are not discounted. The monetized values shown in Table I-8 are the summed values of the discounted monetized-fuel consumption and monetized-CO

reductions for the five model years 2014-2018 throughout their lifetimes. The monetized values in Table I-8 reflect both a 3 percent and a 7 percent discount rate as noted.

Table I-8—Estimated Lifetime Reductions and Associated Discounted Monetized Benefits for 2014-2018 Model Year HD Vehicles

[Monetized values in 2009 dollars]

Amount

$ Value (billions)

Fuel Consumption Reductions

0.53 billion barrels

$50.1, 3% discount rate $34.4, 7% discount rate.

Emission Reductions

Valued assuming $22/ton CO

in 2010

273 MMT CO

$5.8

Notes:

Includes both upstream and downstream CO

emission reductions.

Note that net present value of reduced CO

Table I-9 shows the estimated incremental and total technology outlays for all heavy-duty vehicles for each of the model years 2014-2018. The technology outlays shown in Table I-9 are for the industry as a whole and do not account for fuel savings associated with the program.

Table I-9—Estimated Incremental Technology Outlays for 2014-2018 Model Year HD Vehicles

[Billions of 2009 dollars]

2014 MY

2015 MY

2016 MY

2017 MY

2018 MY

Total

All Heavy-Duty Vehicles

$1.6

$1.4

$1.5

$1.6

$2.0

$8.1

Table I-10 shows the agencies' estimated incremental cost increase of the average new heavy-duty vehicle for each model year 2014-2018. The values shown are incremental to a baseline vehicle and are not cumulative.

Table I-10—Estimated Incremental Increase in Average Cost for 2014-2018 Model Year HD Vehicles

[2009 Dollars per unit]

2014

2015

2016

2017

2018

Combination Tractors

$6,019

$5,871

$5,677

$6,413

$6,215

HD Pickups & Vans

165

215

422

631

1,048

Vocational Vehicles

329

320

397

387

378

Both costs and benefits presented in this section are in comparison to a reference case with no improvements in fuel consumption or greenhouse gas emissions in model years 2014 to 2018.

E. Program Flexibilities

For each of the heavy-duty vehicle and heavy-duty engine categories for which we are adopting respective standards, EPA and NHTSA are also finalizing provisions designed to give manufacturers a degree of flexibility in complying with the standards. These final provisions have enabled the agencies to consider overall standards that are more stringent and that will become effective sooner than we could consider with a more rigid program, one in which all of a manufacturer's similar vehicles or engines would be required to achieve the same emissions or fuel consumption levels, and at the same time.

We believe that incorporating carefully structured regulatory flexibility provisions into the overall program is an important way to achieve each agency's goals for the program.

NHTSA notes that it has greater flexibility in the HD program to include consideration of credits and other flexibilities in determining appropriate and feasible levels of stringency than it does in the light-duty CAFE program.

Cf.

49 U.S.C. 32902(h), which applies to light-duty CAFE but not heavy-duty fuel efficiency under 49 U.S.C. 32902(k).

NHTSA's and EPA's flexibility provisions are essentially identical in structure and function. Within combination tractor and vocational vehicle categories and within heavy-duty engines, we are finalizing four primary types of flexibility: Averaging, banking, and trading (ABT) provisions; early credits; advanced technology credits (including hybrid powertrains); and innovative technology credit provisions. The final ABT provisions are patterned on existing EPA and NHTSA ABT programs and will allow a vehicle manufacturer to reduce CO

emission and fuel consumption levels further than the level of the standard for one or more vehicles to generate ABT credits. The manufacturer can use those credits to offset higher emission or fuel consumption levels in the same averaging set, “bank” the credits for later use, or “trade” the credits to another manufacturer. For HD pickups and vans, we are finalizing a fleet

averaging system very similar to the light-duty GHG and CAFE fleet averaging system.

At proposal, we restricted the use of the ABT provisions of the program to vehicles or engines within the same regulatory subcategory. This meant that credit exchanges could only happen between similar vehicles meeting the same standards. We proposed this approach for two reasons. First, we were concerned about a level playing field between different manufacturers who may not participate equally in the various truck and engine markets covered in the regulation. Second, we were concerned about the uncertainties inherent in credit calculations that are based on projections of lifetime emissions for different vehicles in wholly different vehicle markets. In response to comments, we have revised our ABT provisions to provide greater flexibility while continuing to provide assurance that the projected reductions in fuel consumption and GHG emissions will be achieved. We are relaxing the restriction on averaging, banking, and trading of credits between the various regulatory subcategories, by defining three HD vehicle averaging sets: Light Heavy-Duty (Classes 2b-5); Medium Heavy-Duty (Class 6-7); and Heavy Heavy-Duty (Class 8). This allows the use of credits between vehicles within the same weight class. This means that a Class 8 day cab tractor can exchange credits with a Class 8 high roof sleeper tractor but not with a smaller Class 7 tractor. Also, a Class 8 vocational vehicle can exchange credits with a Class 8 tractor. We are adopting these revisions based on comments from the regulated industry that convinced us these changes would allow the broadest trading possible while maintaining a level playing field among the various market segments. However, we are restricting trading between engines and chassis, even within the same vehicle class.

The agencies believe that restricting trading to within the same eight classes as EPA's existing criteria pollutant program (

i.e.

Heavy-Heavy Duty, Light Heavy-Duty, Medium Heavy-Duty), but not restricting trading between vehicle or engine type (such as combination tractors), and restricting between engines and chassis for the same vehicle type, is appropriate and reasonable. We do not expect emissions from engines and vehicles—when restricted by weight class—to be dissimilar. We therefore expect that the lifetime vehicle performance and emissions levels will be very similar across these defined categories, and the estimated credit calculations will fairly ensure the expected fuel consumption and GHG reductions.

The agencies considered even broader averaging, banking, and trading provisions but decided that in this first phase of regulation, it would be prudent to start with the program described here, which will regulate greenhouse gas emissions and fuel consumption from this sector for the first time and provide considerable early reductions as well as opportunities to learn about technical and other issues that can inform future rulemakings. In the future we intend to consider whether additional cost savings could be realized through broader trading provisions and whether such provisions could be designed so as to address any other relevant concerns.

Reducing the cost of regulation through broader use of market tools is a high priority for the Administration. See Executive Order 13563 and in particular section 1(b)(5) and section 4. Consistent with this principle, we intend to seek public comment through a Notice of Data Availability after credit trading begins in 2013, the first year we expect manufacturers to begin certifying 2014 model year vehicles, on whether broader credit trading is more appropriate in developing the next phase of heavy-duty regulations. We believe that input will be better informed by the work the agencies and the regulated industry will have put into implementing this first phase of heavy-duty regulations.

Through this public process, emphasizing the Administration's strong preference for flexible approaches and maximizing the use of market tools, the agencies intend to fully consider whether broader credit trading is more appropriate in developing the next phase of heavy-duty regulations.

This program thus does not allow credits to be exchanged between heavy-duty vehicles and light-duty vehicles, nor can credits be traded from heavy-duty vehicle fleets to light-duty vehicle fleets and vice versa.

The engine ABT provisions are also changed from the proposal and now are the same as in EPA's existing criteria pollutant emission rules. The agencies have broadened the averaging sets to include both FTP-certified and SET-certified engines in the same averaging set. For example, a SET-certified engine intended for a Class 8 tractor can exchange credits with a FTP-certified engine intended for a Class 8 vocational vehicle.

The agencies are finalizing three year deficit carry-forward provisions for heavy-duty engines and vehicles within a limited time frame. This flexibility is expected to provide an opportunity for manufacturers to make necessary technological improvements and reduce the overall cost of the program without compromising overall environmental and fuel economy objectives. This flexibility, similar to the flexibility the agencies have offered under the light-duty vehicle program, is intended to assist the broad goal of harmonizing the two agencies' standards while preserving the flexibility of manufacturers of vehicles and engines in meeting the standards, to the extent appropriate and required by law. During the MYs 2014-2018 manufacturers are expected to go through the normal business cycle of redesigning and upgrading their heavy-duty engine and vehicle products, and in some cases introducing entirely new vehicles and engines not on the market today. As explained in the following paragraph, the carry-forward provision will allow manufacturers the time needed to incorporate technology to achieve GHG reductions and improve fuel economy during the vehicle redesign process.

We received comments from Center for Biological Diversity against the need to offer the deficit carry-forward flexibility. CBD has stated that allowing manufacturers to carry-forward deficits for up to three years would incentivize delays in investment and technological innovation and allow for the generation of additional tons of GHG emissions that may be prevented today. However, the deficit carry-forward flexibility (as well as ABT generally) has enabled the agencies to consider overall standards that are more stringent and that will become effective at an earlier period than we could consider with a more rigid program. The agencies also believe this flexibility is an important aspect of the program, as it avoids the much higher costs that would occur if manufacturers needed to add or change technology at times other than their scheduled redesigns,

i.e.

the cost of adopting a new engine or vehicle platform mid-production or mid-design. This time period would also provide manufacturers the opportunity to plan for compliance using a multi-year time frame, again consistent with normal business practice. Over these four model years, there would be an opportunity for manufacturers to evaluate practically all of their vehicle and engine model platforms and add technology in a cost effective way to control GHG emissions and improve fuel economy.

As noted above, in addition to ABT, the other primary flexibility provisions in this program involve opportunities to generate early credits, advanced technology credits (including for use of

hybrid powertrains), and innovative technology credits. For the early credits and advanced technology credits, the agencies sought comment on the appropriateness of providing a 1.5x multiplier as an incentive for their use. We received a number of comments supporting the idea of a credit multiplier, arguing it was an appropriate means to incentivize the early compliance and advanced technologies the agencies sought. We received other comments suggesting a multiplier was unnecessary. After considering the comments, the agencies have decided to finalize a 1.5x multi

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