The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021-2026 Passenger Cars and Light Trucks

Federal RegisterApr 30, 2020

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 86 and 600

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Parts 523, 531, 533, 536, and 537

[NHTSA-2018-0067; EPA-HQ-OAR-2018-0283; FRL 10000-45-OAR]

RIN 2127-AL76; RIN 2060-AU09

The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021-2026 Passenger Cars and Light Trucks

AGENCY:

Environmental Protection Agency and National Highway Traffic Safety Administration.

ACTION:

Final rule.

SUMMARY:

EPA and NHTSA, on behalf of the Department of Transportation, are issuing final rules to amend and establish carbon dioxide and fuel economy standards. Specifically, EPA is amending carbon dioxide standards for model years 2021 and later, and NHTSA is amending fuel economy standards for model year 2021 and setting new fuel economy standards for model years 2022-2026. The standards set by this action apply to passenger cars and light trucks, and will continue our nation's progress toward energy independence and carbon dioxide reduction, while recognizing the realities of the marketplace and consumers' interest in purchasing vehicles that meet all of their diverse needs. These final rules represent the second part of the Administration's action related to the August 24, 2018 proposed Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule. These final rules follow the agencies' actions, taken September 19, 2019, to ensure One National Program for automobile fuel economy and carbon dioxide emissions standards, by finalizing regulatory text related to preemption under the Energy Policy and Conservation Act and withdrawing a waiver previously provided to California under the Clean Air Act.

DATES:

This final rule is effective on June 29, 2020.

Judicial Review:

NHTSA and EPA undertake this joint action under their respective authorities pursuant to the Energy Policy and Conservation Act and the Clean Air Act. Pursuant to CAA section 307(b), 42 U.S.C. 7607(b), any petitions for judicial review of this action must be filed in the United States Court of Appeals for the D.C. Circuit. Given the inherent relationship between the agencies' action, any challenges to NHTSA's regulation under 49 U.S.C. 32909 should also be filed in the United States Court of Appeals for the D.C. Circuit.

ADDRESSES:

EPA and NHTSA have established dockets for this action under Docket ID Nos. EPA-HQ-OAR-2018-0283 and NHTSA-2018-0067, respectively. All documents in the docket are listed in the

http://www.regulations.gov

index. Although listed in the index, some information is not publicly available,

e.g.,

confidential business information (CBI) or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available in hard copy in EPA's docket, and electronically in NHTSA's online docket. Publicly available docket materials can be found either electronically in

www.regulations.gov

by searching for the dockets using the Docket ID numbers above, or in hard copy at the following locations:

EPA:

EPA Docket Center, EPA/DC, EPA West, Room 3334, 1301 Constitution Ave. NW, Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744.

NHTSA:

Docket Management Facility, M-30, U.S. Department of Transportation (DOT), West Building, Ground Floor, Rm. W12-140, 1200 New Jersey Ave. SE, Washington, DC 20590. The DOT Docket Management Facility is open between 9 a.m. and 5 p.m. Eastern Time, Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT:

EPA:

Christopher Lieske, Office of Transportation and Air Quality, Assessment and Standards Division, Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; telephone number: (734) 214-4584; fax number: (734) 214-4816; email address:

lieske.christopher@epa.gov,

or contact the Assessment and Standards Division, email address:

otaq@epa.gov

NHTSA:

James Tamm, Office of Rulemaking, Fuel Economy Division, National Highway Traffic Safety Administration, 1200 New Jersey Avenue SE, Washington, DC 20590; telephone number: (202) 493-0515.

SUPPLEMENTARY INFORMATION:

Does this action apply to me?

This action affects companies that manufacture or sell new light-duty vehicles, light-duty trucks, and medium-duty passenger vehicles, as defined under EPA's CAA regulations,

and passenger automobiles (passenger cars) and non-passenger automobiles (light trucks) as defined under NHTSA's CAFE regulations.

Regulated categories and entities include:

“Light-duty vehicle,” “light-duty truck,” and “medium-duty passenger vehicle” are defined in 40 CFR 86.1803-01. Generally speaking, a “light-duty vehicle” is a passenger car, a “light-duty truck” is a pick-up truck, sport-utility vehicle, or minivan up to 8,500 lbs. gross vehicle weight rating, and a “medium-duty passenger vehicle” is a sport-utility vehicle or passenger van from 8,500 to 10,000 lbs. gross vehicle weight rating.

“Passenger car” and “light truck” are defined in 49 CFR part 523.

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

FOR FURTHER INFORMATION CONTACT

I. Executive Summary

II. Overview of Final Rule

III. Purpose of the Rule

IV. Purpose of Analytical Approach Considered as Part of Decision-Making

V. Regulatory Alternatives Considered

VI. Analytical Approach as Applied to Regulatory Alternatives

VII. What does the analysis show, and what does it mean?

VIII. How do the final standards fulfill the agencies' statutory obligations?

IX. Compliance and Enforcement

X. Regulatory Notices and Analyses

I. Executive Summary

NHTSA (on behalf of the Department of Transportation) and EPA are issuing final rules to adopt and modify standards regulating corporate average fuel economy and tailpipe carbon dioxide (CO

) emissions and use/leakage of other air conditioning refrigerants for passenger cars and light trucks for MYs 2021-2026.

These final rules follow the proposal issued in August 2018 and respond to each agency's legal obligation to set standards based on the factors Congress directed them to consider, as well as the direction of the United States Supreme Court in

Massachusetts

EPA,

which stated that “there is no reason to think the two agencies cannot both administer their obligations and yet avoid inconsistency.”

These standards are the product of significant and ongoing work by both agencies to craft regulatory requirements for the same group of vehicles and vehicle manufacturers. This work aims to facilitate, to the extent possible within the statutory directives issued to each agency, the ability of automobile manufacturers to meet all requirements under both programs with a single national fleet under one national program of fuel economy and tailpipe CO

emission regulation.

Throughout this document and the accompanying FRIA, the agencies will often use the term “CO

” or “tailpipe CO

” to refer broadly to EPA's suite of light duty vehicle GHG standards.

549 U.S. 497, 532 (2007).

The CAFE and CO

emissions standards established by these final rules will increase in stringency at 1.5 percent per year from MY 2020 levels over MYs 2021-2026. The “1.5 percent” regulatory alternative is new for the final rule and was not expressly analyzed in the NPRM, but it is a logical outgrowth of the NPRM analysis, being well within the range of alternatives then considered and consistent with discussions by both the agencies and commenters that there are benefits to having standards that increase at the same rate for all fleets. These standards apply to light-duty vehicles, which NHTSA divides for purposes of regulation into passenger cars and light trucks, and EPA divides into passenger cars, light-duty trucks, and medium-duty passenger vehicles (

i.e.,

sport utility vehicles, cross-over utility vehicles, and light trucks). Both the CAFE and CO

standards are vehicle-footprint-based, as are the standards currently in effect. These standards will become more stringent for each model year from 2021 to 2026, relative to the MY 2020 standards. Generally, the larger the vehicle footprint, the less numerically stringent the corresponding vehicle CO

and miles-per-gallon (mpg) targets. As a result of the footprint-based standards, the burden of compliance is distributed across all vehicle footprints and across all manufacturers. Each manufacturer is subject to individualized standards for passenger cars and light trucks, in each model year, based on the vehicles it produces. When standards are carefully crafted, both in terms of the footprint curves and the rate of increase in stringency of those curves, manufacturers are not

compelled to build vehicles of any particular size or type.

Knowing that many readers are accustomed to considering CAFE and CO

emissions standards in terms of the mpg and grams-per-mile (g/mi) values that the standards are projected to eventually require, the agencies include those projections here. EPA's standards are projected to require, on an average industry fleet-wide basis, 201 grams per mile (g/mi) of CO

in model year 2030, while NHTSA's standards are projected to require, on an average industry fleet-wide basis, 40.5 miles per gallon (mpg) in model year 2030. The agencies note that real-world CO

is typically 25 percent higher and real-world fuel economy is typically 20 percent lower than the CO

and CAFE compliance values discussed here, and also note that a portion of EPA's expected “CO

” improvements will in fact be made through improvements in minimizing air conditioning leakage and through use of alternative refrigerants, which will not contribute to fuel economy but will contribute toward reductions of climate-related emissions.

In these final rules, NHTSA and EPA are reaching similar conclusions on similar grounds: even though each agency has its own distinct statutory authority and factors, the relevant considerations overlap in many ways. Both agencies recognize that they are balancing the relevant considerations in somewhat different ways from how they may have been balanced previously, as in the 2012 final rule and in EPA's Initial Determination, but the current balancing is called for in light of the facts before the agencies. The balancing in these final rules is also somewhat different from how the agencies balanced their respective considerations in the proposal, in part because of updates to analytical inputs and methodologies, previewed in the NPRM and made in response to public comments, that collectively resulted in changes to the analytical outputs. For example, between the notice and final rule, the agencies updated fuel price projections to somewhat greater values, updated the analysis fleet to MY 2017, updated estimates of the efficacy and cost of fuel-saving technologies, revised procedures for calculating impacts on vehicle sales and scrappage, updated models for estimating highway safety impacts, updated estimates of highway congestion costs, and updated estimates of annual mileage accumulation, holding VMT (before applying the rebound effect) constant between regulatory alternative. Moreover, the cost-benefit analysis conducted for these final rules has even been overtaken by events in many ways over recent weeks. Based upon current events, and for additional reasons discussed in Section VI.D.1 the benefits of saving additional fuel through more stringent standards are potentially even smaller than estimated in this rulemaking analysis.

The standards finalized today fit the pattern of gradual, tough, but feasible stringency increases that take into account real world performance, shifts in fuel prices, and changes in consumer behavior toward crossovers and SUVs and away from more efficient sedans. This approach ensures that manufacturers are provided with sufficient lead time to achieve standards, considering the cost of compliance. The costs to both industry and automotive consumers would have been too high under the standards set forth in 2012, and by lowering the auto industry's costs to comply with the program, with a commensurate reduction in per-vehicle costs to consumers, the standards enhance the ability of the fleet to turn over to newer, cleaner and safer vehicles.

More stringent standards also have the potential for overly aggressive penetration rates for advanced technologies relative to the penetration rates seen in the final standards, especially in the face of an unknown degree of consumer acceptance of both the increased costs and of the technologies themselves—particularly given current projections of relatively low fuel prices during that timeframe. As a kind of insurance policy against future fuel price volatility, standards that increase at 1.5 percent per year for cars and trucks will help to keep fleet fuel economy higher than they would be otherwise when fuel prices are low, which is not improbable over the next several years.

At the same time, the standards help to address these issues by maintaining incentives to promote broader deployment of advanced technologies, and so provides a means of encouraging their further penetration while leaving manufacturers alternative technology choices. Steady, gradual increases in stringency ensure that the benefits of reduced GHG emissions and fuel consumption are achieved without the potential for disruption to automakers or consumers.

For example, EIA currently expects U.S. retail gasoline prices to average $2.14/gallon in 2020, compared to $2.69/gallon in 2019 (

see https://www.eia.gov/outlooks/steo/archives/mar20.pdf

), and $3.68/gallon in 2012 (

see https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=EMM_EPM0_PTE_NUS_DPG&f=A

). While gasoline prices may foreseeably rise over the rulemaking time frame, it is also very foreseeable that they will not rise to the $4-5/gallon that many Americans saw over the 2008-2009 time frame, that caused the largest shift seen toward smaller and higher-fuel-economy vehicles.

See, e.g.,

Figure VIII-2 below.

Standards that increase at 1.5 percent per year represent a reasonable balance of additional technology and required per-vehicle costs, consumer demand for fuel economy, fuel savings and emissions avoided given the foreseeable state of the global oil market and the minimal effect on climate between finalizing 1.5 percent standards versus more stringent standards. The final standards will also result in year-over-year improvements in fleetwide fuel economy, resulting in energy conservation that helps address environmental concerns, including criteria pollutant, air toxic pollutant, and carbon emissions.

The agencies project that under these final standards, required technology costs would be reduced by $86 to $126 billion over the lifetimes of vehicles through MY 2029. Equally important, purchase prices costs to U.S. consumers for new vehicles would be $977 to $1,083 lower, on average, than they would have been if the agencies had retained the standards set forth in the 2012 final rule and originally upheld by EPA in January 2017. While these final standards are estimated to result in 1.9 to 2.0 additional billion barrels of fuel consumed and from 867 to 923 additional million metric tons of CO

as compared to current estimates of what the standards set forth in 2012 would require, the agencies explain at length below why the overall benefits of the final standards outweigh these additional costs.

1.9 to 2.0 barrels of fuel is approximately 78 to 84 gallons of fuel.

For the CAFE program, overall (fleetwide) net benefits vary from $16.1 billion at a 7 percent discount rate to −$13.1 billion at a 3 percent discount rate. For the CO

program, overall (fleetwide) societal net benefits vary from $6.4 billion at a 7 percent discount rate to −$22.0 billion at a 3 percent discount rate. The net benefits straddle zero, and are very small relative to the scale of reduced required technology costs, which range from $86.3 billion to $126.0 billion for the CAFE and CO

programs across 7 percent and 3 percent discount rates. Likewise, net benefits are very small relative to the scale of reduced retail fuel savings over the full life of all vehicles manufactured during the 2021 through 2029 model years, which range from $108.6 billion to $185.1 billion for the CAFE and CO

programs across 7 percent and 3 percent discount rates. Similarly, all of the alternatives have small net benefits, ranging from $18.4 billion to −$31.1

billion for the CAFE and CO

programs across 7 percent and 3 percent discount rates.

See

Table II-12 to Table II-15 for costs, benefits and net benefits.

NHTSA and EPA believe their analysis of the final rule represents the best available science, evidence, and methodologies for assessing the impacts of changes in CAFE and CO

emission standards. In fact, the agencies note that today's analysis represents a marked improvement over prior rulemakings. Previously, the agencies were unable to model the impact of the standards on new vehicle sales or the retirement of older vehicles in the fleet, and, instead, were forced to assume, contrary to economic theory and empirical evidence, that the number of new vehicles sold and older vehicles scrapped remained static across regulatory alternatives. Today's analysis—as commenters to previous rulemakings and EPA's Science Advisory Board have argued is necessary

—quantifies the sales and scrappage impacts of the standards, including the associated safety benefits, and represents a significant step forward in agencies' ability to comprehensively analyze the impacts of CAFE and CO

emission standards.

Science Advisory Board, U.S. EPA. Review of EPA's Proposed SAFE rule at 4 (Feb. 27, 2020), available at

https://yosemite.epa.gov/sab/sabproduct.nsf/LookupWebProjectsCurrentBOARD/1FACEE5C03725F268525851F006319BB/$File/EPA-SAB-20-003+.pdf

[hereinafter “SAB Report”].

However, the agencies also believe it is important to be transparent about analytical limitations. For example, EPA's Science Advisory Board stressed that the agencies account for “evolving consumer preferences for performance and other vehicle attributes,”

yet due to limitations on the agencies' current ability to model buyers' choices among combinations of various attributes and their costs, the primary analysis does not account for the consumer benefits of other vehicle features that may be sacrificed for costly technologies that improve fuel economy. The agencies' analysis assumes that under these final standards, attributes of new cars and light trucks other than fuel economy would remain identical to those under the baseline standards, so that changes in sales prices and fuel economy would be the only sources of benefits or costs to new car and light truck buyers. In other words, the agencies' primary analysis does not consider that producers will likely respond to buyers' demands by reallocating some their savings in production costs due to lower technology costs to add or improve other attributes that consumers value more highly than the increases in fuel economy the augural standards would have required. The agencies have long debated whether and how best to model the consumer benefits of other vehicle attributes, and note that they have made considerable progress.

However, despite these potential analytical shortcomings, the agencies reaffirm that today's analysis represents the most complete and rigorous examination of CAFE and CO

emission standards to date, and provide decision-makers a powerful analytical tool—especially since the limitations are known, do not bias the central analysis' results, and are afforded due consideration.

SAB at 10.

In their evaluations of previous CAFE and CO

rules, the agencies attempted to account for this possibility by conducting sensitivity analyses that reduced the fuel savings and other benefits to vehicle buyers by a significant fraction. For example, NHTSA's analysis supporting the Final Rule establishing CAFE standards for model year 2012-16 cars and light trucks tested the sensitivity of their central estimates of social costs and benefits to the assumptions that 25 percent and 50 percent of benefits to buyers were offset by opportunity costs of foregone improvements in attributes other than fuel economy;

see

NHTSA,

Final Regulatory Impact Analysis: Corporate Average Fuel Economy for Model year 2012-16 Passenger Cars and Light Trucks,

March 2010, at 563-565 and Table X-9, at 566-56;

see also

74 FR 66495 (Dec. 15, 2009) (“Endangerment and Cause or Contribute Findings for Greenhouse Gases under Section 202(a) of the Clean Air Act”).

See, e.g.,

75 FR 25324, at 25327 (May 7, 2010) (“The National Program is both needed and possible because the relationship between improving fuel economy and reducing tailpipe CO

emissions is a very direct and close one. The amount of those CO

emissions is essentially constant per gallon combusted of a given type of fuel. Thus, the more fuel efficient a vehicle is, the less fuel it burns to travel a given distance. The less fuel it burns, the less CO

it emits in traveling that distance. [citation omitted] While there are emission control technologies that reduce the pollutants (

e.g.,

carbon monoxide) produced by imperfect combustion of fuel by capturing or converting them to other compounds, there is no such technology for CO

. Further, while some of those pollutants can also be reduced by achieving a more complete combustion of fuel, doing so only increases the tailpipe emissions of CO

. Thus, there is a single pool of technologies for addressing these twin problems,

i.e.,

those that reduce fuel consumption and thereby reduce CO

emissions as well.”).

The agencies discussed some of the history leading to the proposal, including the 2012 final rule, the expectations regarding a mid-term evaluation as required by EPA regulation, and the rapid process over 2016 and early 2017 by which EPA issued its first Final Determination that the CO

standards set in 2012 for MYs 2022-2025 remained appropriate based on the information then before the EPA Administrator.

The agencies also discussed President Trump's direction in March 2017 to restore the original mid-term evaluation timeline, and EPA's subsequent information-gathering process and announcement that it would reconsider the January 2017 Determination.

EPA ultimately concluded that the standards set in 2012 for MYs 2022-2025 were no longer appropriate.

For NHTSA, in turn, the “augural” CAFE standards for MYs 2022-2025 were never final, and as explained in the 2012 final rule, NHTSA was obligated from the beginning to undertake a new rulemaking to set CAFE standards for MYs 2022-2025.

See

83 FR at 42987 (Aug.24, 2018).

Id.

83 FR 16077 (Apr. 2, 2018).

The NPRM thus began the rulemaking process for both agencies to establish new standards for MYs 2022-2025 passenger cars and light trucks. Standards were concurrently proposed for MY 2026 in order to provide regulatory stability for as many years as is legally permissible for both agencies together. The NPRM also included revised standards for MY 2021 passenger cars and light trucks, because the agencies tentatively concluded, based on the information and analysis then before them, that the CAFE standards previously set for MY 2021 were no longer maximum feasible, and the CO

standards previously set for MY 2021 were no longer appropriate. Agencies always have authority under the Administrative Procedure Act to revisit previous decisions in light of new facts, as long as they provide notice and an opportunity for comment, and the agencies stated that it is plainly the best practice to do so when changed circumstances so warrant.

See FCC

Fox Television,

556 U.S. 502 (2009).

The NPRM proposed to maintain the CAFE and CO

standards applicable in MY 2020 for MYs 2021-2026, and took comment on a wide range of alternatives, including different stringencies and retaining existing CO

standards and the augural CAFE standards.

Table II-1, Table II-2, and Table II-3 show the estimates, under the NPRM analysis, of what the MY 2020 CAFE and CO

curves would translate to, in terms of miles per gallon (mpg) and grams per mile (g/mi), in MYs 2021-2026, as well as the regulatory alternatives considered in the NPRM. In addition to retaining the MY 2020 CO

standards through MY 2026, EPA proposed and sought comment on excluding air conditioning refrigerants and leakage, and nitrous oxide and methane emissions for compliance with CO

standards after model year 2020, in order to improve harmonization with the CAFE program. EPA also sought comment on whether to change existing methane and nitrous oxide standards that were finalized in the 2012 rule. The proposal was accompanied by a 1,600 page Preliminary Regulatory Impact Analysis (PRIA) and, for NHTSA, a 500 page Draft Environmental Impact Statement (DEIS), with more than 800 pages of appendices and the entire CAFE model, including the software source code and documentation, all of which were also subject to comment in their entirety and all of which received significant comments.

The agencies noted that this did not mean that the miles per gallon and grams per mile levels that were estimated for the MY 2020 fleet in 2012 would be the “standards” going forward into MYs 2021-2026. Both NHTSA and EPA set CAFE and CO

standards, respectively, as mathematical functions based on vehicle footprint. These mathematical functions that are the actual standards are defined as “curves” that are separate for passenger cars and light trucks, under which each vehicle manufacturer's compliance obligation varies depending on the footprints of the cars and trucks that it ultimately produces for sale in a given model year. It was the MY 2020 CAFE and CO

curves that the agencies proposed would continue to apply to the passenger car and light truck fleets for MYs 2021-2026. The mpg and g/mi values which those curves would eventually require of the fleets in those model years would be known for certain only at the ends of each of those model years. While it is convenient to discuss CAFE and CO

standards as a set “mpg,” “g/mi,” or “mpg-e” number, attempting to define those values based on the information then before the agency would necessarily end up being inaccurate.

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The carbon dioxide equivalents of air conditioning refrigerant leakage, nitrous oxide emissions, and methane emissions were included for compliance with the EPA standards for all MYs under the baseline/no action alternative in the NPRM. Carbon dioxide equivalent is calculated using the Global Warming Potential (GWP) of each of the emissions.

Beginning in MY 2021, the proposal provided that the GWP equivalents of air conditioning refrigerant leakage, nitrous oxide emissions, and methane emissions would no longer be able to be included with the tailpipe CO

for compliance with tailpipe CO

standards.

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BILLING CODE 4910-59-C

The agencies explained in the NPRM that new information had been gathered and new analysis performed since publication of the 2012 final rule establishing CAFE and CO

standards for MYs 2017 and beyond and since issuance of the 2016 Draft TAR and EPA's 2016 and early 2017 “mid-term evaluation” process. This new information and analysis helped lead the agencies to the tentative conclusion that holding standards constant at MY 2020 levels through MY 2026 was maximum feasible, for CAFE purposes, and appropriate, for CO

purposes.

The agencies further explained that technologies had played out differently in the fleet from what the agencies previously assumed: That while there remain a wide variety of technologies available to improve fuel economy and reduce CO

emissions, it had become clear that there were reasons to temper previous optimism about the costs, effectiveness, and consumer acceptance of a number of technologies. In addition, over the years between the previous analyses and the NPRM, automakers had added considerable amounts of technologies to their new vehicle fleets, meaning that the agencies were no longer free to make certain assumptions about how some of those technologies

could

be used going forward. For example, some technologies that could be used to improve fuel economy and reduce emissions had not been used entirely for that purpose, and some of the benefit of these technologies had gone instead toward improving other vehicle attributes. Other technologies had been tried, and had been met with significant customer acceptance issues. The agencies underscored the importance of reflecting the fleet as it stands today, with the technology it has and as that technology has been used, and considering what technology remains on the table at this point, whether and when it can realistically be available for widespread use in production, and how much it would cost to implement.

The agencies also acknowledged the math of diminishing returns: As CAFE and CO

emissions standards increase in stringency, the benefit of continuing to increase in stringency decreases. In mpg terms, a vehicle owner who drives a light vehicle 15,000 miles per year (a typical assumption for analytical purposes)

and trades in a vehicle with fuel economy of 15 mpg for one with fuel economy of 20 mpg, will reduce their annual fuel consumption from 1,000 gallons to 750 gallons—saving 250 gallons annually. If, however, that owner were to trade in a vehicle with fuel economy of 30 mpg for one with fuel economy of 40 mpg, the owner's annual gasoline consumption would drop from 500 gallons/year to 375 gallons/year—only 125 gallons even though the mpg improvement is twice as large. Going from 40 to 50 mpg would save only 75 gallons/year. Yet each additional fuel economy improvement becomes much more expensive as the easiest to achieve low-cost technological improvement options are chosen. In CO

terms, if a vehicle emits 300 g/mi CO

a 20 percent improvement is 60 g/mi, so the vehicle would emit 240 g/mi; but if the vehicle emits 180 g/mi, a 20 percent improvement is only 36 g/mi, so the vehicle would get 144 g/mi. In order to continue achieving similarly large (on an absolute basis) emissions reductions, the percentage reduction must also continue to increase.

A different vehicle-miles-traveled (VMT) assumption would change the absolute numbers in the example, but would not change the mathematical principles.

Related, average real-world fuel economy is lower than average fuel economy required under CAFE and CO

standards. The 2012

Federal Register

notice announcing augural CAFE and CO

standards extending through MY 2025 indicated that, if met entirely through the application of fuel-saving technology, the MY 2025 CO

standards would result in an average requirement equivalent to 54.5 mpg. However, because the CO

standards provide credit for reducing leakage of AC refrigerants and/or switching to lower-GWP refrigerants, and these actions do not affect fuel economy, the notice explained that the corresponding fuel economy requirement (under the CAFE program) would be 49.7 mpg. These estimates were based on a market forecast grounded in the MY 2008 fleet. The notice also presented analysis using a market forecast grounded in the MY 2010 fleet, showing a 48.7 mpg average CAFE requirement.

In the real world, fuel economy is, on average, about 20% lower than as measured under regulatory test procedures. In the real world, then, these new standards were estimated to require 39.0-39.8 mpg.

Today's analysis indicates that the requirements under the baseline/augural CAFE standards would average 46.6 mpg in MY 2029. The lower value results from changes in the fleet forecast which reflects consumer preference for larger vehicles than was forecast for the 2012 rulemaking. In the real world, the requirements average about 37.1 mpg. Under the final standards issued today, the regulatory test procedure requirements average 40.5 mpg, corresponding to 33.2 mpg in the real world. Buyers of new vehicles experience real-world fuel economy, with levels varying among drivers (due to a wide range of factors). Vehicle fuel economy labels provide average real-world fuel economy information to buyers.

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Vehicle owners also face fuel prices at the pump. The agencies noted in the NPRM that when fuel prices are high, the value of fuel saved may be enough to offset the cost of further fuel economy/emissions reduction improvements, but the agencies recognized that then-current projections of fuel prices by the Energy Information Administration did not indicate particularly high fuel prices in the foreseeable future. The agencies explained that fundamental structural shifts had occurred in global oil markets since the 2012 final rule, largely due to the rise of U.S. production and export of shale oil. The consequence over time of diminishing returns from more stringent fuel economy/emissions reduction standards, especially when combined with relatively low fuel prices, is greater difficulty for automakers to find a market of consumers willing to buy vehicles that meet the increasingly stringent standards. American consumers have long demonstrated that in times of relatively low fuel prices, fuel economy is not a top priority for the majority of them, even when highly fuel efficient vehicle models are available.

The NPRM analysis sought to improve how the agencies captured the effects of higher new vehicle prices on fleet composition as a whole by including an improved model for vehicle scrappage rates. As new vehicle prices increase, consumers tend to continue using older vehicles for longer, slowing fleet turnover and thus slowing improvements in fleet-wide fuel economy, reductions in CO

emissions, reductions in criteria pollutant emissions, and advances in safety. That aspect of the analysis was also driven by the agencies' updated estimates of average per-vehicle cost increases due to

higher standards, which were several hundred dollars higher than previously estimated. The agencies cited growing concerns about affordability and negative equity for many consumers under these circumstances, as loan amounts grow and loan terms extend.

For all of the above reasons, the agencies proposed to maintain the MY 2020 fuel economy and CO

emissions standards for MYs 2021-2026. The agencies explained that they estimated, relative to the standards for MYs 2021-2026 put forth in 2012, that an additional 0.5 million barrels of oil would be consumed per day (about 2 to 3 percent of projected U.S. consumption) if that proposal were finalized, but that they also expected the additional fuel costs to be outweighed by the cost savings from new vehicle purchases; that more than 12,700 on-road fatalities and significantly more injuries would be prevented over the lifetimes of vehicles through MY 2029 as compared to the standards set forth in the 2012 final rule over the lifetimes of vehicles as more new and safer vehicles are purchased than the current (and augural) standards; and that environmental impacts, on net, would be relatively minor, with criteria and toxic air pollutants not changing noticeably, and with estimated atmospheric CO

concentrations increasing by 0.65 ppm (a 0.08 percent increase), which the agencies estimated would translate to 0.003 degrees Celsius of additional temperature increase relative to the standards finalized in 2012.

Under the NPRM analysis, the agencies tentatively concluded that maintaining the MY 2020 curves for MYs 2021-2026 would save American auto consumers, the auto industry, and the public a considerable amount of money as compared to EPA retaining the previously-set CO

standards and NHTSA finalizing the augural standards. The agencies explained that this had been identified as the preferred alternative, in part, because it appeared to maximize net benefits compared to the other alternatives analyzed, and recognizing the statutory considerations for both agencies. Relative to the standards issued in 2012, under CAFE standards, the NPRM analysis estimated that costs would decrease by $502 billion overall at a three-percent discount rate ($335 billion at a seven-percent discount rate) and benefits were estimated to decrease by $326 billion at a three-percent discount rate ($204 billion at a seven-percent discount rate). Thus, net benefits were estimated to increase by $176 billion at a three-percent discount rate and $132 billion at a seven-percent discount rate. The estimated impacts under CO

standards were estimated to be similar, with net benefits estimated to increase by $201 billion at a three-percent discount rate and $141 billion at a seven-percent discount rate.

The NPRM also sought comment on a variety of potential changes to NHTSA's and EPA's compliance programs for CAFE and CO

as well as related programs, including questions about automaker requests for additional flexibilities and agency interest in reducing market-distorting incentives and improving transparency; and on a proposal to withdraw California's CAA preemption waiver for its “Advanced Clean Car” regulations, with an accompanying discussion of preemption of State standards under EPCA.

The agencies sought comment broadly on all aspects of the proposal.

Agency actions relating to California's CAA waiver and EPCA preemption have since been finalized,

see

84 FR 51310 (Sept. 27, 2019), and will not be discussed in great detail as part of this final rule.

B. Public Participation Opportunities and Summary of Comments

The NPRM was published on NHTSA's and EPA's websites on August 2, 2018, and published in the

Federal Register

on August 24, 2018, beginning a 60-day comment period. The agencies subsequently extended the official comment period for an additional three days, and left the dockets open for more than a year after the start of the comment period, considering late comments to the extent practicable. A separate

Federal Register

notice also published on August 24, 2018, which announced the locations, dates, and times of three public hearings to be held on the proposal: One in Fresno, California, on September 24, 2018; one in Dearborn, Michigan, on September 25, 2018; and one in Pittsburgh, Pennsylvania, on September 26, 2018. Each hearing started at 10 a.m. local time; the Fresno hearing ended at 5:10 p.m. and resulted in a 235 page transcript; the Dearborn hearing ran until 5:26 p.m. and resulted in a 330 page transcript; and the Pittsburgh hearing ran until 5:06 p.m. and also resulted in a 330 page transcript. Each hearing also collected several hundred pages of comments from participants, in addition to the hearing transcripts.

Besides the comments submitted as part of the public hearings, NHTSA's docket received a total of 173,359 public comments in response to the proposal as of September 18, 2019, and EPA's docket a total of 618,647 public comments, for an overall total of 792,006. NHTSA also received several hundred comments on its DEIS to the separate DEIS docket. While the majority of individual comments were form letters, the agencies received over 6,000 pages of substantive comments on the proposal.

Many commenters generally supported the proposal and many commenters opposed it. Commenters supporting the proposal tended to cite concerns about the cost of new vehicles, while commenters opposing the proposal tended to cite concerns about additional fuel expenditures and the impact on climate change. Many comments addressed the modeling used for the analysis, and specifically the inclusion, operation, and results of the sales and scrappage modules that were part of the NPRM's analysis, while many addressed the NPRM's safety findings and the role that those findings played in the proposal's justification. Many other comments addressed California's standards and role in Federal decision-making; as discussed above, those comments are further summarized and responded to in the separate

Federal Register

notice published in September 2019. Nearly every aspect of the NPRM's analysis and discussion received some level of comment by at least one commenter. The comments received, as a whole, were both broad and deep, and the agencies appreciate the level of engagement of commenters in the public comment process and the information and opinions provided.

C. Changes in Light of Public Comments and New Information

The agencies made a number of changes to the analysis between the NPRM and the final rule in response to public comments and new information that was received in those comments or otherwise became available to the agencies. While these changes, their rationales, and their effects are discussed in detail in the sections below, the following represents a high-level list of some of the most significant changes:

• Some regulatory alternatives were dropped from consideration, and one was added;

• updated analysis fleet, and changes to technologies on “baseline” vehicles within the fleet to reflect better their current properties and improve modeling precision;

• no civil penalties assumed to be paid after MY 2020 under CAFE program;

• updates and expansions in accounting for certain over-compliance

credits, including early credits earned in EPA's program;

• updates and expansions to CAFE Model's technology paths;

• updates to inputs defining the range of manufacturer-, technology-, and product-specific constraints;

• updates to allow the model to adopt a more advanced technology if it is more cost-effective than an earlier technology on the path;

• precision improvements to the modeling of A/C efficiency and off-cycle credits;

• updates to model's “effective cost” metric;

• extended explicit simulation of technology application through MY 2050;

• expanded presentation of the results to include “calendar year” analysis;

• quantifying different types of health impacts from changes in air pollution, rather than only accounting for such impacts in aggregate estimates of the social costs of air pollution;

• updated costs to 2018 dollars;

• updated fuel costs based on the AEO 2019 version of NEMS;

• a variety of technology updates in response to comments and new information;

• updated accounting of rebound VMT between regulatory alternatives;

• updated estimates of the macroeconomic cost of petroleum dependence;

• updated response of total new vehicle sales to increases in fuel efficiency and price; and

• updated response of vehicle retirement rates to changes in new vehicle fuel efficiency and transaction price.

Sections IV and VI below discuss these updates in significant detail.

D. Final Standards—Stringency

As explained above, the agencies have chosen to set CAFE and CO

standards that increase in stringency by 1.5 percent year over year for MYs 2021-2026. Separately, EPA has decided to retain the A/C refrigerant and leakage and CH

and N

O standards set forth in 2012 for MYs 2021 and beyond, and the stringency of the CO

standards in this final rule reflect the “offset” also established in 2012 based on assumptions made at that time about anticipated HFC emissions reductions.

When the agencies state that stringency will increase at 1.5 percent per year, that means that the footprint curves which actually define the standards for CAFE and CO

emissions will become more stringent at 1.5 percent per year. Consistent with Congress's direction in EISA to set CAFE standards based on a mathematical formula, which EPA harmonized with for the CO

emissions standards, the standard curves are equations, which are slightly different for CAFE and CO

, and within each program, slightly different for passenger cars and light trucks. Each program has a basic equation for a fleet standard, and then values that change to cause the stringency changes are the coefficients within the equations. For passenger cars, consistent with prior rulemakings, NHTSA is defining fuel economy targets as follows:

ER30AP20.011

where:

TARGET

is the fuel economy target (in mpg) applicable to a specific vehicle model type with a unique footprint combination,

is a minimum fuel economy target (in mpg),

is a maximum fuel economy target (in mpg),

is the slope (in gallons per mile per square foot, or gpm, per square foot) of a line relating fuel consumption (the inverse of fuel economy) to footprint, and

is an intercept (in gpm) of the same line.

Here,

MIN

and

MAX

are functions that take the minimum and maximum values, respectively, of the set of included values. For example,

MIN

[40,35] = 35 and

MAX

(40, 25) = 40, such that

MIN

[

MAX

(40, 25), 35] = 35.

For light trucks, also consistent with prior rulemakings, NHTSA is defining fuel economy targets as follows:

ER30AP20.012

where:

TARGET

is the fuel economy target (in mpg) applicable to a specific vehicle model type with a unique footprint combination,

a, b, c,

and

are as for passenger cars, but taking values specific to light trucks,

is a second minimum fuel economy target (in mpg),

is a second maximum fuel economy target (in mpg),

is the slope (in gpm per square foot) of a second line relating fuel consumption (the inverse of fuel economy) to footprint, and

is an intercept (in gpm) of the same second line.

The final CAFE standards (described in terms of their footprint-based curves) are as follows, with the values for the coefficients changing over time:

ER30AP20.013

These equations are presented graphically below, where the x-axis represents vehicle footprint and the y-axis represents fuel economy, showing that in the CAFE context, targets are higher (fuel economy) for smaller footprint vehicles and lower for larger footprint vehicles:

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EPCA, as amended by EISA, requires that any manufacturer's domestically-manufactured passenger car fleet must meet the greater of either 27.5 mpg on average, or 92 percent of the average fuel economy projected by the Secretary for the combined domestic and non-domestic passenger automobile fleets manufactured for sale in the U.S. by all manufacturers in the model year, which projection shall be published in the

Federal Register

when the standard for that model year is promulgated in accordance with 49 U.S.C. 32902(b).

Any time NHTSA establishes or changes a passenger car standard for a model year, the MDPCS for that model year must also be evaluated or re-evaluated and established accordingly. Thus, this final rule establishes the applicable MDPCS for MYs 2021-2026. Table II-8 lists the minimum domestic passenger car standards.

49 U.S.C. 32902(b)(4).

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EPA CO

standards are as follows. Rather than expressing these standards as linear functions with accompanying minima and maxima, similar to the approach NHTSA has followed since 2005 in specifying attribute-based standards, the following tables specify flat standards that apply below and above specified footprints, and a linear function that applies between those footprints. The two approaches are mathematically identical. For passenger cars with a footprint of less than or equal to 41 square feet, the gram/mile CO

target value is selected for the appropriate model year from Table II-9:

ER30AP20.017

For passenger cars with a footprint of greater than 56 square feet, the gram/mile CO

target value is selected for the appropriate model year from Table II-10:

ER30AP20.018

For passenger cars with a footprint that is greater than 41 square feet and less than or equal to 56 square feet, the gram/mile CO

target value is calculated using the following equation and rounded to the nearest 0.1 grams/mile.

Target CO

= [a ×

] +

Where

is the vehicle footprint and

a and b

are selected from Table II-11 for the appropriate model year:

ER30AP20.019

For light trucks with a footprint of less than or equal to 41 square feet, the gram/mile CO

target value is selected for the appropriate model year from Table II-12:

ER30AP20.020

For light trucks with a footprint greater than the minimum value specified in the table below for each model year, the gram/mile CO

target value is selected for the appropriate model year from Table II-13:

ER30AP20.021

For light trucks with a footprint that is greater than 41 square feet and less than or equal to the maximum footprint value specified in Table II-14 below for each model year, the gram/mile CO

target value is calculated using the following equation and rounded to the nearest 0.1 grams/mile.

Target CO

= (a ×

) +

Where

is the footprint and

a and b

are selected from Table II-14 below for the appropriate model year:

ER30AP20.022

These equations are presented graphically below, where the x-axis represents vehicle footprint and the y-axis represents the CO

target. The targets are lower for smaller footprint vehicles and higher for larger footprint vehicles:

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Except that EPA elected to apply a slightly different slope when defining passenger car targets, CO

targets may be expressed as direct conversion of fuel economy targets, as follows:

ER30AP20.025

where 8887 g/gal relates grams of CO

emitted to gallons of fuel consumed, and

OFFSET

reflects the fact that that HFC emissions from lower-GWP A/C refrigerants and less leak-prone A/C systems are counted toward average CO

emissions, but EPCA provides no basis to count reduced HFC emissions toward CAFE levels.

For the reader's benefit, Table II-15, Table II-16, and Table II-17 show the estimates, under the final rule analysis, of what the MYs 2021-2026 CAFE and CO

curves would translate to, in terms of miles per gallon (mpg) and grams per mile (g/mi).

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As the following tables demonstrate, averages of manufacturers' estimated requirements are more stringent (

i.e.,

for CAFE, higher, and for CO

, lower) under the final standards than under the proposed standards:

ER30AP20.028

ER30AP20.029

E. Final Standards—Impacts

This section summarizes the estimated costs and benefits of the MYs 2021-2026 CAFE and CO

emissions standards for passenger cars and light trucks, as compared to the regulatory alternatives considered. These estimates helped inform the agencies' choices among the regulatory alternatives considered and provide further confirmation that the final standards are maximum feasible, for NHTSA, and appropriate, for EPA. The costs and benefits estimated to result from the CAFE standards are presented first, followed by those estimated to result from the CO

standards. For several reasons, the estimates for costs and benefits presented for the different programs, while consistent, are not identical. NHTSA's and EPA's standards are projected to result in slightly different fuel efficiency improvements. EPA's CO

standard is nominally more stringent in part due to its assumptions about manufacturers' use of air conditioning leakage/refrigerant replacement credits, which are expected to result in reduced emissions of HFCs. NHTSA's final standards are based solely on assumptions about fuel economy improvements, and do not account for emissions reductions that do not relate to fuel economy. In addition, the CAFE and CO

programs offer somewhat different program flexibilities and provisions, primarily because NHTSA is statutorily prohibited from considering some flexibilities when establishing CAFE standards, while EPA is not.

The analysis underlying this final rule reflects many of those additional EPA flexibilities, which contributes to differences in how the agencies estimate manufacturers could comply with the respective sets of standards, which in turn contributes to differences in estimated impacts of the standards. These differences in compliance flexibilities are discussed in more detail in Section IX below.

See

49 U.S.C. 32902(h); CAA Sec. 202(a).

Table II-20 to Table II-23 present all subcategories of costs and benefits of this final rule for all seven alternatives proposed. Costs include application of fuel economy technology to new vehicles, consumer surplus, crash costs due to changes in VMT, as well as, noise and congestion. Benefits include fuel savings, consumer surplus, refueling time, and clean air.

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F. Other Programmatic Elements

1. Compliance and Flexibilities

Automakers seeking to comply with the CAFE and CO

standards are generally expected to add fuel economy-improving technologies to their new vehicles to boost their overall fleet fuel economy levels. Readers will remember that improving fuel economy directly reduces CO

emissions, because CO

is a natural and inevitable byproduct of fossil fuel combustion to power vehicles. The CAFE and CO

programs contain a variety of compliance provisions and flexibilities to accommodate better automakers' production cycles, to reward real-world fuel economy improvements that cannot be reflected in the 1975-developed test procedures, and to incentivize the production of certain types of vehicles. While the agencies sought comment on a broad variety of changes and potential expansions of the programs' compliance flexibilities in the NPRM, the agencies determined, after considering the comments, to make a few changes to the flexibilities proposed in the NPRM in this final rule. The most noteworthy change is the retention, in the CO

program, of the flexibilities that allow automakers to continue to use HFC reductions toward their CO

compliance, and that extend the “0 grams/mile” assumption for electric vehicles through MY 2026 (

i.e.,

recognizing only the tailpipe emissions of full battery-electric vehicles and not recognizing the upstream emissions caused by the electricity usage of those vehicles). In the NPRM, EPA had proposed to remove and sought comment on removing those flexibilities from the CO

program, but determined not to remove them in this final rule. EPA and NHTSA are also removing from the programs, starting in MY 2022, the credit/FCIV for full-size pickup trucks that are either hybrids or over-performing by a certain amount relative to their targets, and allowing technology suppliers to begin the petition process for off-cycle credits/adjustments.

Table II-24, Table II-25, Table II-26, and Table II-27 provide a summary of the various compliance provisions in the two programs; their authorities; and any changes included as part of this final rule:

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ER30AP20.040

The CAFE program uses an energy efficiency metric and standards that are expressed in miles per gallon. For PHEVs and BEVs, to determine gasoline the equivalent fuel economy for operation on electricity, a Petroleum Equivalency Factor (PEF) is applied to the measured electrical consumption. The PEF for electricity was established by the Department of Energy, as required by statute, and includes an accounting for upstream energy associated with the production and distribution for electricity relative to gasoline. Therefore, the CAFE program includes upstream accounting based on the metric that is consistent with the fuel economy metric. The PEF for electricity also includes an incentive that effectively counts only 15 percent of the electrical energy consumed.

Providing a technology neutral basis by which manufacturers meet fuel economy and CO

emissions standards encourages an efficient and level playing field. The agencies continue to have a desire to minimize incentives that disproportionately favor one technology over another. Some of this may involve regulations established by other Federal agencies. In the near future, NHTSA and EPA intend to work with other relevant Federal agencies to pursue regulatory means by which we can further ensure technology neutrality in this field.

2. Preemption/Waiver

As discussed above, the issues of Clean Air Act waivers of preemption under Section 209 and EPCA/EISA preemption under 49 U.S.C. 32919 are not addressed in today's final rule, as

they were the subject of a separate final rulemaking action by the agencies in September 2019. While many comments were received in response to the NPRM discussion of those issues, those comments have been addressed and responded to as part of that separate rulemaking action.

III. Purpose of the Rule

The Administrative Procedure Act (APA) requires agencies to incorporate in their final rules a “concise general statement of their basis and purpose.”

While the entire preamble document represents the agencies' overall explanation of the basis and purpose for this regulatory action, this section within the preamble is intended as a direct response to that APA (and related CAA) requirements. Executive Order 12866 further states that “Federal agencies should promulgate only such regulations as are required by law, are necessary to interpret the law, or are made necessary by compelling public need, such as material failures of private markets to protect or improve the health and safety of the public, the environment, or the well-being of the American people.”

Section III.C of the FRIA accompanying this rulemaking discusses at greater length the question of whether a market failure exists that these final rules may address.

5 U.S.C. 553(c);

See also

42 FR 33534, 33537 (Jun. 30, 1977).

See

Section VI, below.

The NPRM also discussed how EPA's CO

standards for light-duty vehicles and California's Advanced Clean Cars program fit into NHTSA's consideration of “the effect of other motor vehicle standards of the Government on fuel economy.” The agencies note that on September 19, 2019, to ensure One National Program for automobile fuel economy and carbon dioxide emissions standards, the agencies finalized regulatory text related to preemption of State tailpipe CO

standards and Zero Emission Vehicle (ZEV) mandates under EPCA and partial withdrawal of a waiver previously provided to California under the Clean Air Act.

This final rule's impact on State programs—including California's—will therefore be somewhat different from the NPRM's consideration. In the interest of brevity, this preamble will hold further discussion of that point, along with responses to comments received, until Section VIII.

84 FR 51310 (Sept. 27, 2019).

(d) The Need of the United States To Conserve Energy

“The need of the United States to conserve energy” means “the consumer cost, national balance of payments, environmental, and foreign policy implications of our need for large quantities of petroleum, especially imported petroleum.”

Environmental implications principally include changes in emissions of carbon dioxide and criteria pollutants and air toxics. Prime examples of foreign policy implications are energy independence and security concerns.

42 FR 63184, 63188 (1977).

(1) Consumer Costs and Fuel Prices

Fuel for vehicles costs money for vehicle owners and operators. All else equal (and this is an important qualification), consumers benefit from vehicles that need less fuel to perform the same amount of work. Future fuel prices are a critical input into the economic analysis of potential CAFE standards because they determine the value of fuel savings both to new vehicle buyers and to society, the amount of fuel economy that the new vehicle market is likely to demand in the absence of new standards, and they inform NHTSA about the consumer cost of the nation's need for large quantities of petroleum. In this final rule, NHTSA's analysis relies on fuel price projections estimated using the version of NEMS used for the U.S. Energy Information Administration's (EIA) Annual Energy Outlook for 2019.

Federal government agencies generally use EIA's price projections in their assessment of future energy-related policies.

The analysis for the proposal relied on fuel price projections from AEO 2017; the difference in the projections is discussed in Section VI.

(2) National Balance of Payments

Historically, the need of the United States to conserve energy has included consideration of the “national balance of payments” because of concerns that importing large amounts of oil created a

significant wealth transfer to oil-exporting countries and left the U.S. economically vulnerable.

As recently as 2009, nearly half of the U.S. trade deficit was driven by petroleum,

yet this concern has largely lain fallow in more recent CAFE actions, in part because other factors besides petroleum consumption have since played a bigger role in the U.S. trade deficit.

Given significant recent increases in U.S. oil production and corresponding decreases in oil imports, this concern seems likely to remain fallow for the foreseeable future.

Increasingly, changes in the price of fuel have come to represent transfers between domestic consumers of fuel and domestic producers of petroleum rather than gains or losses to foreign entities.

See, e.g.,

42 FR 63184, 63192 (Dec. 15, 1977) (“A major reason for this need [to reduce petroleum consumption] is that the importation of large quantities of petroleum creates serious balance of payments and foreign policy problems. The United States currently spends approximately $45 billion annually for imported petroleum. But for this large expenditure, the current large U.S. trade deficit would be a surplus.”)

See

“Today in Energy: Recent improvements in petroleum trade balance mitigate U.S. trade deficit,” U.S. Energy Information Administration (Jul. 21, 2014), available at

https://www.eia.gov/todayinenergy/detail.php?id=17191

See, e.g.,

Nida Çakir Melek and Jun Nie, “What Could Resurging U.S. Energy Production Mean for the U.S. Trade Deficit,” Mar. 7, 2018, Federal Reserve Bank of Kansas City. Available at

https://www.kansascityfed.org/publications/research/mb/articles/2018/what-could-resurging-energy-production-mean

. The authors state that “The decline in U.S. net energy imports has prevented the total U.S. trade deficit from widening further. . . . In 2006, petroleum accounted for about 16 percent of U.S. goods imports and about 3 percent of U.S. goods exports. By the end of 2017, the share of petroleum in total goods imports declined to 8 percent, while the share in total goods exports almost tripled, shrinking the U.S. petroleum trade deficit. Had the petroleum trade deficit not improved, all else unchanged, the total U.S. trade deficit would likely have been more than 35 percent wider by the end of 2017.”

For an illustration of recent increases in U.S. production,

see, e.g.,

`U.S. crude oil and liquid fuels production,” Short-Term Energy Outlook, U.S. Energy Information Administration (Aug. 2019), available at

http://www.eia.gov/outlooks/steo/images/Fig16.png

. EIA noted in April 2019 that “Annual U.S. crude oil production reached a record level of 10.96 million barrels per day (b/d) in 2018, 1.6 million b/d (17%) higher than 2017 levels. In December 2018, monthly U.S. crude oil production reached 11.96 million b/d, the highest monthly level of crude oil production in U.S. history. U.S crude oil production has increased significantly over the past 10 years, driven mainly by production from tight rock formations using horizontal drilling and hydraulic fracturing. EIA projects that U.S. crude oil production will continue to grow in 2019 and 2020, averaging 12.3 million b/d and 13.0 million b/d, respectively.” “Today in Energy: U.S. crude oil production grew 17% in 2018, surpassing the previous record in 1970,” EIA, Apr. 9, 2019. Available at

http://www.eia.gov/todayinenergy/detail.php?id=38992

As flagged in the NPRM, some commenters raised concerns about potential economic consequences for automaker and supplier operations in the U.S. due to disparities between CAFE standards at home and their counterpart fuel economy/efficiency and CO

standards abroad. NHTSA finds these concerns more relevant to technological feasibility and economic practicability considerations than to the national balance of payments. The discussion in Section VIII below addresses this topic in more detail.

(3) Environmental Implications

Higher fleet fuel economy can reduce U.S. emissions of various pollutants by reducing the amount of oil that is produced and refined for the U.S. vehicle fleet, but can also increase emissions by reducing the cost of driving, which can result in more vehicle miles traveled (

i.e.,

the rebound effect). Thus, the net effect of more stringent CAFE standards on emissions of each pollutant depends on the relative magnitude of both its reduced emissions in fuel refining and distribution and increases in its emissions from vehicle use. Fuel savings from CAFE standards also necessarily results in lower emissions of CO

, the main greenhouse gas emitted as a result of refining, distributing, and using transportation fuels. Reducing fuel consumption directly reduces CO

emissions because the primary source of transportation-related CO

emissions is fuel combustion in internal combustion engines.

NHTSA has considered environmental issues, both within the context of EPCA and the context of the National Environmental Policy Act (NEPA), in making decisions about the setting of standards since the earliest days of the CAFE program. As courts of appeal have noted in three decisions stretching over the last 20 years,

NHTSA defined “the need of the United States to conserve energy” in the late 1970s as including, among other things, environmental implications. In 1988, NHTSA included climate change concepts in its CAFE notices and prepared its first environmental assessment addressing that subject.

It cited concerns about climate change as one of its reasons for limiting the extent of its reduction of the CAFE standard for MY 1989 passenger cars.

Since then, NHTSA has considered the effects of reducing tailpipe emissions of CO

in its fuel economy rulemakings pursuant to the need of the United States to conserve energy by reducing petroleum consumption.

CAS, 793 F.2d 1322, 1325 n. 12 (D.C. Cir. 1986); Public Citizen, 848 F.2d 256, 262-63 n. 27 (D.C. Cir 1988) (noting that “NHTSA itself has interpreted the factors it must consider in setting CAFE standards as including environmental effects”); CBD, 538 F.3d 1172 (9th Cir. 2007).

53 FR 33080, 33096 (Aug. 29, 1988).

53 FR 39275, 39302 (Oct. 6, 1988).

(4) Foreign Policy Implications

U.S. consumption and imports of petroleum products can impose additional costs (

i.e.,

externalities) on the domestic economy that are not reflected in the market price for crude petroleum or in the prices paid by consumers for petroleum products such as gasoline. NHTSA has said previously that these costs can include (1) higher prices for petroleum products resulting from the effect of U.S. oil demand on world oil prices, (2) the risk of disruptions to the U.S. economy caused by sudden increases in the global price of oil and its resulting impact on fuel prices faced by U.S. consumers, and (3) expenses for maintaining the strategic petroleum reserve (SPR) to provide a response option should a disruption in commercial oil supplies threaten the U.S. economy, to allow the U.S. to meet part of its International Energy Agency obligation to maintain emergency oil stocks, and to provide a national defense fuel reserve.

Higher U.S. consumption of crude oil or refined petroleum products increases the magnitude of these external economic costs, thus increasing the true economic cost of supplying transportation fuels above the resource costs of producing them. Conversely, reducing U.S. consumption of crude oil or refined petroleum products (by reducing motor fuel use) can reduce these external costs.

While the U.S. maintains a military presence in certain parts of the world to help secure global access to petroleum supplies, that is neither the primary nor the sole mission of U.S. forces overseas. Additionally, the scale of oil consumption reductions associated with CAFE standards would be insufficient to alter any existing military missions focused on ensuring the safe and expedient production and transportation of oil around the globe. See the FRIA's discussion on energy security for more information on this topic.

While these costs are considerations, the United States has significantly increased oil production capabilities in recent years, to the extent that the U.S. is currently producing enough oil to satisfy nearly all of its energy needs and is projected to continue to do so (or even become a net energy exporter in the near future).

This has added stable new supply to the global oil market, which ameliorates the U.S.' need to

conserve energy from a security perspective even given that oil is a global commodity. The agencies discuss this issue in more detail in Section VIII below.

See

AEO 2019, at 14 (“In the Reference case, the United States becomes a net exporter of petroleum liquids after 2020 as U.S. crude oil production increases and domestic consumption of petroleum products decreases.”).

Available at https://www.eia.gov/outlooks/aeo/pdf/aeo2019.pdf

(2) Factors That NHTSA Is Prohibited From Considering

EPCA states that in determining the level at which it should set CAFE standards for a particular model year, NHTSA may not consider the ability of manufacturers to take advantage of several EPCA provisions that facilitate compliance with CAFE standards and thereby can reduce their costs of compliance.

As discussed further below, NHTSA cannot consider compliance credits that manufacturers earn by exceeding the CAFE standards and then use to achieve compliance in years in which their measured average fuel economy falls below the standards. NHTSA also cannot consider the use of alternative fuels by dual-fueled vehicles (such as plug-in hybrid electric vehicles) nor the availability of dedicated alternative fuel vehicles (such as battery electric or hydrogen fuel cell vehicles) in any model year. EPCA encourages the production of alternative fuel vehicles by specifying that their fuel economy is to be determined using a special calculation procedure that results in those vehicles being assigned a higher fuel economy level than they actually achieve. For non-statutory incentives that NHTSA developed by regulation, NHTSA does not consider these incentives subject to the EPCA prohibition on considering flexibilities. These topics will be addressed further in Section VIII below.

49 U.S.C. 32902(h).

(3) Other Considerations in Determining Maximum Feasible CAFE Standards

NHTSA historically has interpreted EPCA's statutory factors as including consideration for potential adverse safety consequences in setting CAFE standards. Courts have consistently recognized that this interpretation is reasonable. As courts have recognized, “NHTSA has always examined the safety consequences of the CAFE standards in its overall consideration of relevant factors since its earliest rulemaking under the CAFE program.”

The courts have consistently upheld NHTSA's implementation of EPCA in this manner.

Thus, in evaluating what levels of stringency would result in maximum feasible standards, NHTSA assesses the potential safety impacts and considers them in balancing the statutory considerations and to determine the maximum feasible level of the standards.

Many commenters addressed the NPRM's analysis of safety impacts; those comments will be summarized and responded to in Section VI.D.2 and also in each agency's discussion in Section VIII.

Competitive Enterprise Institute

NHTSA,

901 F.2d 107, 120 n. 11 (D.C. Cir. 1990) (“

CEI-I”

) (citing 42 FR 33534, 33551 (Jun. 30, 1977).

See, e.g., Competitive Enterprise Institute

NHTSA,

956 F.2d 321, 322 (D.C. Cir. 1992) (“

CEI-II”

) (in determining the maximum feasible fuel economy standard, “NHTSA has always taken passenger safety into account,” citing

CEI-I,

901 F.2d at 120 n. 11);

Competitive Enterprise Institute

NHTSA,

49 F.3d 481, 483-83 (D.C. Cir. 1995) (same);

Center for Biological Diversity

NHTSA,

538 F.3d 1172, 1203-04 (9th Cir. 2008) (upholding NHTSA's analysis of vehicle safety issues with weight in connection with the MYs 2008-2011 light truck CAFE rulemaking).

NHTSA stated in the NPRM that “While we discuss safety as a separate consideration, NHTSA also considers safety as closely related to, and in some circumstances a subcomponent of, economic practicability. On a broad level, manufacturers have finite resources to invest in research and development. Investment into the development and implementation of fuel saving technology necessarily comes at the expense of investing in other areas such as safety technology. On a more direct level, when making decisions on how to equip vehicles, manufacturers must balance cost considerations to avoid pricing further consumers out of the market. As manufacturers add technology to increase fuel efficiency, they may decide against installing new safety equipment to reduce cost increases. And as the price of vehicles increase beyond the reach of more consumers, such consumers continue to drive or purchase older, less safe vehicles. In assessing practicability, NHTSA also considers the harm to the nation's economy caused by highway fatalities and injuries.” 83 FR at 43209 (Aug. 24, 2018). Many comments were received on this issue, which will be discussed further in Section VIII below.

The above sections explain what Congress thought was important enough to codify when it directed each agency to regulate, and begin to explain how the agencies have interpreted those directions over time and in this final rule. The next section looks more closely at the interplay between Congress's direction to the agencies and the aspects of the market that these regulations affect, as follows.

IV. Purpose of Analytical Approach Considered as Part of Decision-Making

A. Relationship of Analytical Approach to Governing Law

Like the NPRM, today's final rule is supported by extensive analysis of potential impacts of the regulatory alternatives under consideration. Below, Section VI reviews the analytical approach, Section VII summarizes the results of the analysis, and Section VIII explains how the final standards—informed by this analysis—fulfill the agencies' statutory obligations. Accompanying today's notice, a final Regulatory Impact Analysis (FRIA) and, for NHTSA's consideration, a final Environmental Impact Analysis (FEIS), together provide a more extensive and detailed enumeration of related methods, estimates, assumptions, and results. The agencies' analysis has been constructed specifically to reflect various aspects of governing law applicable to CAFE and CO

standards, and has been expanded and improved in response to comments received to the NPRM and based on additional work by the agencies. The analysis aided the agencies in implementing their statutory obligations, including the weighing of competing considerations, by reasonably informing the agencies about the estimated effects of choosing different regulatory alternatives.

The agencies' analysis makes use of a range of data (

i.e.,

observations of things that have occurred), estimates (

i.e.,

things that may occur in the future), and models (

i.e.,

methods for making estimates). Two examples of

data

include (1) records of actual odometer readings used to estimate annual mileage accumulation at different vehicle ages and (2) CAFE compliance data used as the foundation for the “analysis fleet” containing, among other things, production volumes and fuel economy levels of specific configurations of specific vehicle models produced for sale in the U.S. Two examples of

estimates

include (1) forecasts of future GDP growth used, with other estimates, to forecast future vehicle sales volumes and (2) the “retail price equivalent” (RPE) factor used to estimate the ultimate cost to consumers of a given fuel-saving technology, given accompanying estimates of the technology's “direct cost,” as adjusted to account for estimated “cost learning effects” (

i.e.,

the tendency that it will cost a manufacturer less to apply a technology as the manufacturer gains more experience doing so).

The agencies' analysis makes use of several models, some of which are actually integrated systems of multiple models. As discussed in the NPRM, the agencies' analysis of CAFE and CO

standards involves two basic elements: First, estimating ways each manufacturer could potentially respond to a given set of standards in a manner that considers potential consumer response; and second, estimating various impacts of those responses. Estimating manufacturers' potential responses involves simulating manufacturers' decision-making processes regarding the year-by-year application of fuel-saving technologies to specific vehicles. Estimating impacts involves calculating resultant changes in new vehicle costs, estimating a

variety of costs (

e.g.,

for fuel) and effects (

e.g.,

emissions from fuel combustion) occurring as vehicles are driven over their lifetimes before eventually being scrapped, and estimating the monetary value of these effects. Estimating impacts also involves consideration of the response of consumers—

e.g.,

whether consumers will purchase the vehicles and in what quantities. Both of these basic analytical elements involve the application of many analytical inputs.

The agencies' analysis uses the CAFE Model to estimate manufacturers' potential responses to new CAFE and CO

standards and to estimate various impacts of those responses. The model may be characterized as an integrated system of models. For example, one model estimates manufacturers' responses, another estimates resultant changes in total vehicle sales, and still another estimates resultant changes in fleet turnover (

i.e.,

scrappage). The CAFE model makes use of many inputs, values of which are developed

outside

of the model and not

the model. For example, the model applies fuel prices; it does not estimate fuel prices. The model does not determine the form or stringency of the standards; instead, the model applies inputs specifying the form and stringency of standards to be analyzed and produces outputs showing effects of manufacturers working to meet those standards, which become the basis for comparing between different potential stringencies.

The agencies also use EPA's MOVES model to estimate “tailpipe” (a.k.a. “vehicle” or “downstream”) emission factors for criteria pollutants,

and use four DOE and DOE-sponsored models to develop inputs to the CAFE model, including three developed and maintained by DOE's Argonne National Laboratory. The agencies use the DOE Energy Information Administration's (EIA's) National Energy Modeling System (NEMS) to estimate fuel prices,

and use Argonne's Greenhouse gases, Regulated Emissions, and Energy use in Transportation (GREET) model to estimate emissions rates from fuel production and distribution processes.

DOT also sponsored DOE/Argonne to use Argonne's Autonomie full-vehicle modeling and simulation system to estimate the fuel economy impacts for roughly a million combinations of technologies and vehicle types.

84 85

Section VI.B.3, below, and the accompanying final RIA document details of the agencies' use of these models. In addition, as discussed in the final EIS accompanying today's notice, DOT relied on a range of climate and photochemical models to estimate impacts on climate, air quality, and public health. The EIS discusses and documents the use of these models.

See https://www.epa.gov/moves

. Today's final rule used version MOVES2014b, available at

https://www.epa.gov/moves/latest-version-motor-vehicle-emission-simulator-moves

See https://www.eia.gov/outlooks/aeo/info_nems_archive.php

. Today's final rule uses fuel prices estimated using the Annual Energy Outlook (AEO) 2019 version of NEMS (

see https://www.eia.gov/outlooks/aeo/data/browser/#/?id=3-AEO2019&cases=ref2019&sourcekey=0

Information regarding GREET is available at

https://greet.es.anl.gov/index.php

. Today's notice uses the 2018 version of GREET.

As part of the Argonne simulation effort, individual technology combinations simulated in Autonomie were paired with Argonne's BatPAC model to estimate the battery cost associated with each technology combination based on characteristics of the simulated vehicle and its level of electrification. Information regarding Argonne's BatPAC model is available at

http://www.cse.anl.gov/batpac/

In addition, the impact of engine technologies on fuel consumption, torque, and other metrics was characterized using GT POWER simulation modeling in combination with other engine modeling that was conducted by IAV Automotive Engineering, Inc. (IAV). The engine characterization “maps” resulting from this analysis were used as inputs for the Autonomie full-vehicle simulation modeling. Information regarding GT Power is available at

https://www.gtisoft.com/gt-suite-applications/propulsion-systems/gt-power-engine-simulation-software

As further explained in the NPRM,

to prepare for analysis supporting the proposal, DOT expanded the CAFE model to address EPA statutory and regulatory requirements through a year-by-year simulation of how manufacturers could comply with EPA's CO

standards, including:

83 FR 42986, 43003 (Aug. 24, 2018).

• Calculation of vehicle models' CO

emission rates before and after application of fuel-saving (and, therefore, CO

-reducing) technologies;

• Calculation of manufacturers' fleet average CO

emission rates;

• Calculation of manufacturers' fleet average CO

emission rates under attribute-based CO

standards;

• Accounting for adjustments to average CO

emission rates reflecting reduction of air conditioner refrigerant leakage;

• Accounting for the treatment of alternative fuel vehicles for CO

compliance;

• Accounting for production “multipliers” for PHEVs, BEVs, compressed natural gas (CNG) vehicles, and fuel cell vehicles (FCVs);

• Accounting for transfer of CO

credits between regulated fleets; and

• Accounting for carried-forward (a.k.a. “banked”) CO

credits, including credits from model years earlier than modeled explicitly.

As further discussed in the NPRM, although EPA had previously developed a vehicle simulation tool (“ALPHA”) and a fleet compliance model (“OMEGA”), and had applied these in prior actions, having considered the facts before the Agency in 2018, EPA determined that, “it is reasonable and appropriate to use DOE/Argonne's model for full-vehicle simulation, and to use DOT's CAFE model for analysis of regulatory alternatives.”

83 FR 42986, 43000 (Aug. 24, 2018).

As discussed below and in Section VI.B.3, some commenters—some citing deliberative EPA staff communications during NPRM development, and one submitting comments by a former EPA staff member closely involved in the origination of the above-mentioned OMEGA model—took strong exception to EPA's decision to rely on DOE/Argonne and DOT-originated models as the basis for analysis informing EPA's decisions regarding CO

standards. Some commenters argued that the EPA Administrator must consider exclusively models and analysis originating with EPA staff, and that to do otherwise would be arbitrary and capricious. As explained below (and as explained in the NPRM), it is reasonable for the Administrator to consider analysis and information produced from many sources, including, in this instance, the DOE/Argonne and DOT models. The Administrator has the discretion to determine what information reasonably and appropriately informs decisions regarding emissions standards. Some commenters conflated models with decisions, suggesting that the former mechanically

determine

the latter. The CAA authorizes the EPA Administrator, not a model, to make decisions about emissions standards, just as EPCA provides similar authority to the Secretary. Models produce analysis, the results of which help to inform decisions. However, in making such decisions, the Administrator may and should consider other relevant information beyond the outputs of any models—including public comment—and, in all cases, must exercise judgment in establishing appropriate standards.

Some commenters conflated models with inputs and/or with results of the modeling. All of the models mentioned above rely on inputs, including not only data (

i.e.,

facts), but also estimates (inputs about the future are estimates, not data). Given these inputs, the models produce estimates—ultimately, the agencies' reported estimates of the potential impacts of standards under

consideration. In other words, inputs do not define models; models use inputs. Therefore, disagreements about inputs do not logically extend to disagreements about models. Similarly, while models determine resulting outputs, they do so based on inputs. Therefore, disagreements about results do not necessarily imply disagreements about models; they may merely reflect disagreements about inputs. With respect to the Administrator's decisions regarding models underlying today's analysis, comments regarding inputs, therefore, are more appropriately addressed separately, which is done so below in Section VI.

The EPA Administrator's decision to continue relying on the DOE/Argonne Autonomie tool and DOT CAFE model rather than on the corresponding tools developed by EPA staff is informed by consideration of comments on results and on technical aspects of the models themselves. As discussed below, some commenters questioned specific aspects of the CAFE model's simulation of manufacturer's potential responses to CO

standards. Considering these comments, the CAFE model applied in the final rule's analysis includes some revisions and updates. For example, the “effective cost” metric used to select among available opportunities to apply fuel-saving technologies now uses a “cost per credit” metric rather than the metric used for the NPRM. Also, the model's representation of sales “multipliers” EPA has included for CNG vehicles, PHEVs, BEVs, and FCVs reflects current EPA regulations or, as an input-selectable option, an alternative approach under consideration. On the other hand, some commenters questioning the CAFE model's approach to some CO

program features appear to ignore the fact that prior analysis by EPA (using EPA's OMEGA) model likewise did not account for the same program features. For example, some stakeholders took issue with the CAFE model's approach to accounting for banked CO

credits and, in particular, credits banked prior to the model years accounted for explicitly in the analysis. In the course of updating the basis for analysis fleet from model year 2016 to model year 2017, the agencies have since updated corresponding inputs. However, even though the ability to carry forward credits impacts outcomes, EPA's OMEGA model used in previous rulemakings never attempted to account for credit banking and, indeed, lacking a year-by-year structure,

cannot

account for credit banking. Therefore, at least with respect to this important CO

program flexibility, the CAFE model provides a more complete and realistic basis for estimating actual impacts of new CO

standards.

For its part, NHTSA remains confident that the combination of the Autonomie and CAFE models remains the best available for CAFE rulemaking analysis, and notes, as discussed below, that even the environmental group coalition stated that the CAFE model is aligned with EPCA requirements.

In late 2001, after Congress discontinued an extended series of budget “riders” prohibiting work on CAFE standards, NHTSA and the DOT Volpe Center began development of a modeling system appropriate for CAFE rulemaking analysis, because other available models were not designed with this purpose in mind, and lacked capabilities important for CAFE rulemakings. For example, although NEMS had procedures to account for CAFE standards, those procedures did not provide the ability to account for specific manufacturers, as is especially relevant to the statutory requirement that NHTSA consider the economic practicability of any new CAFE standards. Also, as early as the first rulemaking making use of this early CAFE model, commenters stressed the importance of product redesign schedules, leading developers to introduce procedures to account for product cadence. In the 2003 notice regarding light truck standards for MYs 2005-2007, NHTSA stated that “we also changed the methodology to recognize that capital costs require employment of technologies for several years, rather than a single year. . . . In our view, this makes the Volpe analysis more consistent with the [manually implemented] Stage analysis and better reflects actual conditions in the automotive industry.”

Since that time, NHTSA and the Volpe Center have significantly refined the CAFE model with each of rulemaking. For example, for the 2006 rulemaking regarding standards for MYs 2008-2011 light trucks, NHTSA introduced the ability to account for attribute-based standards, account for the social cost of CO

emissions, estimate stringencies at which net benefits would be maximized, and perform probabilistic uncertainty analysis (

i.e.,

Monte Carlo simulation).

For the 2009 rulemaking regarding standards for MY 2011 passenger cars and light trucks, we introduced the ability to account for attribute-based passenger car standards, and the ability to apply “synergy factors” to estimate how some technology pairings impact fuel consumption,

For the 2010 rulemaking regarding standards for MYs 2012-2016, we introduced procedures to account for FFV credits, and to account for product planning as a multiyear consideration.

For the 2012 rulemaking regarding standards for MYs 2017-2025, we introduced several new procedures, such as (1) accounting for electricity used to charge electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs), (2) accounting for use of ethanol blends in flexible-fuel vehicles (FFVs), (3) accounting for costs (

i.e.,

“stranded capital”) related to early replacement of technologies, (4) accounting for previously-applied technology when determining the extent to which a manufacturer could expand use of the technology, (5) applying technology-specific estimates of changes in consumer value, (6) simulating the extent to which manufacturers might utilize EPCA's provisions regarding generation and use of CAFE credits, (7) applying estimates of fuel economy adjustments (and accompanying costs) reflecting increases in air conditioner efficiency, (8) reporting privately-valued benefits, (9) simulating the extent to which manufacturers might voluntarily apply technology beyond levels needed for compliance with CAFE standards, and (10) estimating changes in highway fatalities attributable to any applied reductions in vehicle mass.

Also for the 2012 rulemaking, we began making use of Autonomie to estimate fuel consumption impacts of different combinations of technologies, using these estimates to specify inputs to the CAFE model.

In 2016, providing analyses for both the draft TAR regarding light-duty CAFE standards and the final rule regarding fuel consumption standards for heavy-duty pickup trucks and vans, we greatly expanded the agency's use of Autonomie-based full vehicle simulations and introduced the ability to simulate compliance with attribute-based standards for heavy-duty pickups and vans.

And, as discussed at length in the NPRM and below, for this rulemaking, we have, among other things, refined procedures to account for impacts on highway travel and safety,

added procedures to simulate compliance with CO

standards, refined procedures to account for compliance credits, and added procedures to account for impacts on sales, scrappage, and employment. We have also significantly revised the model's graphical user interface (GUI) in order to make the model easier to operate and understand. Like any model, both Autonomie and the CAFE model benefit from ongoing refinement. However, NHTSA is confident that this combination of models produces a more realistic characterization of the potential impacts of new standards than would another combination of available models. Some stakeholders, while commenting on specific aspects of the inputs, models, and/or results, commended the agencies' exclusive reliance on the DOE/Argonne Autonomie tool and DOT CAFE model. With respect to CO

standards, these stakeholders noted not only technical reasons to use these models rather than the EPA models, but also other reasons such as efficiency, transparency, and ease with which outside parties can exercise models and replicate the agencies' analysis. These comments are discussed below and in Section VI.

Environmental group coalition, NHTSA-2018-0067-12000, Appendix A, at 24-25.

68 FR at 16885 (Apr. 7, 2003).

71 FR at 17566

et seq.

(Apr. 6, 2006).

74 FR at 14196

et seq.

(Mar. 30, 3009).

75 FR at 25599

et seq.

(May 7, 2010).

77 FR 63009

et seq.

(Oct. 15, 2012).

77 FR at 62712

et seq.

(Oct. 15, 2012).

81 FR at 73743

et seq.

(Oct. 25, 2016); Draft TAR, available at Docket No. NHTSA-2016-0068-0001, Chapter 13.

Nevertheless, some comments regarding the model's handling of CAFE and/or CO

standards, and some comments regarding the model's estimation of resultant impacts, led the agencies to make changes to specific aspects of the model. Comments on and changes to the inputs and model are discussed below and in Section VI; results are discussed in Section VII and in the accompanying RIA; and the meaning of results in the context of the applicable statutory requirements is discussed in Section VIII.

As explained, the analysis is designed to reflect a number of statutory and regulatory requirements applicable to CAFE and tailpipe CO

standard setting. EPCA contains a number of requirements governing the scope and nature of CAFE standard setting. Among these, some have been in place since EPCA was first signed into law in 1975, and some were added in 2007, when Congress passed EISA and amended EPCA. The CAA, as discussed elsewhere, provides EPA with very broad authority under Section 202(a), and does not contain EPCA/EISA's prescriptions. In the interest of harmonization, however, EPA has adopted some of the EPCA/EISA requirements into its tailpipe CO

regulations, and NHTSA, in turn, has created some additional flexibilities by regulation not expressly envisioned by EPCA/EISA in order to harmonize better with some of EPA's programmatic decisions. EPCA/EISA requirements regarding the technical characteristics of CAFE standards and the analysis thereof include, but are not limited to, the following, and the analysis reflects these requirements as summarized:

Corporate Average Standards:

49 U.S.C. 32902 requires standards that apply to the average fuel economy levels achieved by each corporation's fleets of vehicles produced for sale in the U.S.

CAA Section 202(a) does not preclude the EPA Administrator from expressing CO

standards as

de facto

fleet average requirements, and EPA has adopted a similar approach in the interest of harmonization. The CAFE Model, used by the agencies to conduct the bulk of today's analysis, calculates the CAFE and CO

levels of each manufacturer's fleets based on estimated production volumes and characteristics, including fuel economy levels, of distinct vehicle models that could be produced for sale in the U.S.

This differs from safety standards and traditional emissions standards, which apply separately to each vehicle. For example, every vehicle produced for sale in the U.S. must, on its own, meet all applicable federal motor vehicle safety standards (FMVSS), but no vehicle produced for sale must, on its own, federal fuel economy standards. Rather, each manufacturer is required to produce a mix of vehicles that, taken together, achieve an average fuel economy level no less than the applicable minimum level.

Separate Standards for Passenger Cars and Light Trucks:

49 U.S.C. 32902 requires the Secretary of Transportation to set CAFE standards separately for passenger cars and light trucks. CAA Section 202(a) does not preclude the EPA Administrator from specifying CO

standards separately for passenger cars and light trucks, and EPA has adopted a similar approach. The CAFE Model accounts separately for passenger cars and light trucks, including differentiated standards and compliance.

Attribute-Based Standards:

49 U.S.C. 32902 requires the Secretary of Transportation to define CAFE standards as mathematical functions expressed in terms of one or more vehicle attributes related to fuel economy. This means that for a given manufacturer's fleet of vehicles produced for sale in the U.S. in a given regulatory class and model year, the applicable minimum CAFE requirement (

i.e.,

the numerical value of the requirement) is computed based on the applicable mathematical function, and the mix and attributes of vehicles in the manufacturer's fleet. In the 2012 final rule that first established CO

standards, EPA also adopted an attribute-based standard under its broad CAA Section 202(a) authority. The CAFE Model accounts for such functions and vehicle attributes explicitly.

Separately Defined Standards for Each Model Year:

49 U.S.C. 32902 requires the Secretary to set CAFE standards (separately for passenger cars and light trucks) at the maximum feasible levels in each model year. CAA Section 202(a) allows EPA to establish CO

standards separately for each model year, and EPA has chosen to do so for this final rule, similar to the approach taken in the previous light-duty vehicle CO

standard-setting rules. The CAFE Model represents each model year explicitly, and accounts for the production relationships between model years.

For example, a new engine first applied to given vehicle model/configuration in model year 2020 will most likely be “carried forward” to model year 2021 of that same vehicle model/configuration, in order to reflect the fact that manufacturers do not apply brand-new engines to a given vehicle model every single year.

Separate Compliance for Domestic and Imported Passenger Car Fleets:

49 U.S.C. 32904 requires the EPA Administrator to determine CAFE compliance separately for each manufacturers' fleets of domestic passenger cars and imported passenger cars, which manufacturers must consider as they decide how to improve the fuel economy of their passenger car fleets. CAA 202(a) does not preclude the EPA Administrator from determining compliance with CO

standards separately for a manufacturer's domestic and imported car fleets, but EPA did not include such a distinction in either the 2010 or 2012 final rules, and EPA did not propose or ask for comment on taking such an approach in the proposal. The CAFE Model is able to account explicitly for this requirement when simulating manufacturers' potential responses to CAFE standards, but combines any given manufacturer's domestic and imported cars into a single fleet when simulating that manufacturer's potential response to CO

standards.

Minimum CAFE Standards for Domestic Passenger Car Fleets:

49 U.S.C. 32902 requires that domestic passenger car fleets achieve CAFE levels no less than 92 percent of the industry-wide average level required under the applicable attribute-based CAFE standard, as projected by the Secretary at the time the standard is promulgated. CAA 202(a) does not preclude the EPA Administrator from correspondingly requiring that domestic passenger car fleets achieve CO

levels no greater than 108.7 percent (1/0.92 = 1.087) of the projected industry-wide average CO

requirement under the attribute-based standard, but the GHG program that EPA designed in the 2010 and 2012 final rules did not include such a distinction, and EPA did not propose or seek comment on such an approach in the proposal. The CAFE Model is able to account explicitly for this requirement for CAFE standards, and sets this requirement aside for CO

standards.

Civil Penalties for Noncompliance:

49 U.S.C. 32912 prescribes a rate (in dollars per tenth of a mpg) at which the Secretary is to levy civil penalties if a manufacturer fails to comply with a CAFE standard for a given fleet in a given model year, after considering available credits. Some manufacturers have historically demonstrated a willingness to treat CAFE noncompliance as an “economic” choice, electing to pay civil penalties rather than achieving full numerical compliance across all fleets. The CAFE Model calculates civil penalties for CAFE shortfalls and provides means to estimate that a manufacturer might stop adding fuel-saving technologies once continuing to do so would be effectively more “expensive” (after accounting for fuel prices and buyers' willingness to pay for fuel economy) than paying civil penalties. In contrast, the CAA does not authorize the EPA Administrator to allow manufacturers to sell noncompliant fleets and instead only pay civil penalties; manufacturers who choose to pay civil penalties for CAFE compliance tend to employ EPA's more-extensive programmatic flexibilities to meet tailpipe CO

emissions standards. Thus, the CAFE Model does not allow civil penalty payment as an option for CO

standards.

Dual-Fueled and Dedicated Alternative Fuel Vehicles:

For purposes of calculating CAFE levels used to determine compliance, 49 U.S.C. 32905 and 32906 specify methods for calculating the fuel economy levels of vehicles operating on alternative fuels to gasoline or diesel through MY 2020. After MY 2020, methods for calculating alternative fuel vehicle (AFV) fuel economy are governed by regulation. The CAFE Model is able to account for these requirements explicitly for each vehicle model. However, 49 U.S.C. 32902 requires that maximum feasible CAFE standards be set in a manner that does not presume manufacturers can respond by producing new dedicated alternative fuel vehicle (AFV) models. The CAFE model can be run in a manner that excludes the additional application of dedicated AFV technologies in model years for which maximum feasible standards are under consideration. As allowed under NEPA for analysis appearing in EISs informing decisions regarding CAFE standards, the CAFE Model can also be run without this analytical constraint. CAA 202(a) does not preclude the EPA Administrator adopting analogous provisions, but EPA has instead opted through regulation to “count” dual- and alternative fuel vehicles on a CO

basis (and through MY 2026, to set aside emissions from electricity generation). The CAFE model accounts for this treatment of dual- and alternative fuel vehicles when simulating manufacturers' potential responses to CO

standards. For natural gas vehicles, both dedicated and dual-fueled, EPA is establishing a multiplier of 2.0 for model years 2022-2026.

Creation and Use of Compliance Credits:

49 U.S.C. 32903 provides that manufacturers may earn CAFE “credits” by achieving a CAFE level beyond that required of a given fleet in a given model year, and specifies how these credits may be used to offset the amount by which a different fleet falls short of its corresponding requirement. These provisions allow credits to be “carried forward” and “carried back” between model years, transferred between regulated classes (domestic passenger cars, imported passenger cars, and light trucks), and traded between manufacturers. However, these provisions also impose some specific statutory limits. For example, CAFE compliance credits can be carried forward a maximum of five model years and carried back a maximum of three model years. Also, EPCA/EISA caps the amount of credit that can be transferred between passenger car and light truck fleets, and prohibits manufacturers from applying traded or transferred credits to offset a failure to achieve the applicable minimum standard for domestic passenger cars. The CAFE Model explicitly simulates manufacturers' potential use of credits carried forward from prior model years or transferred from other fleets.

49 U.S.C. 32902 prohibits consideration of manufacturers' potential application of CAFE compliance credits when setting maximum feasible CAFE standards. The CAFE Model can be operated in a manner that excludes the application of CAFE credits after a given model year. CAA 202(a) does not preclude the EPA Administrator adopting analogous provisions. EPA has opted to limit the “life” of compliance credits from most model years to 5 years, and to limit borrowing to 3 years, but has not adopted any limits on transfers (between fleets) or trades (between manufacturers) of compliance credits. The CAFE Model is able to account for the absence of limits on transfers of CO

standards. Insofar as the CAFE model can be exercised in a manner that simulates trading of CO

compliance credits, such simulations treat trading as unlimited.

EPA has considered manufacturers' ability to use credits as part of its decisions on these final standards, and the CAFE model is now able to account for that.

As explained in Section VI, the CAFE Model does not explicitly simulate the potential that manufacturers would carry CAFE or CO

credits back (

i.e.,

borrow) from future model years, or acquire and use CAFE compliance credits from other manufacturers. At the same time, because EPA has elected to not limit credit trading, the CAFE Model can be exercised in a manner that simulates unlimited (a.k.a. “perfect”) CO

compliance credit trading throughout the industry (or, potentially, within discrete trading “blocs”). The agencies believe there is significant uncertainty in how manufacturers may choose to employ these particular flexibilities in the future: for example, while it is reasonably foreseeable that a manufacturer who over-complies in one year may “coast” through several subsequent years relying on those credits rather than continuing to make technology improvements, it is harder to assume with confidence that manufacturers will rely on future technology investments (that may not pan out as expected, as if market demand for “target-beater” vehicles is lower than expected) to offset prior-year shortfalls, or whether/how manufacturers will trade credits with market competitors rather than making their own technology investments. Historically, carry-back and trading have been much less utilized than carry-forward, for a variety of reasons including higher risk and preference not to “pay competitors to make fuel economy improvements we should be making” (to paraphrase one manufacturer), although the agencies recognize that carry-back and trading are used more frequently when standards require more technology application than manufacturers believe their markets will bear. Given the uncertainty just discussed, and given also the fact that the agencies have yet to resolve some of analytical challenges associated with simulating use of these flexibilities, the agencies consider borrowing and trading to involve sufficient risk that it is prudent to support today's decisions with analysis that sets aside the potential that manufacturers could come to depend widely on borrowing and trading. While compliance costs in real life may be somewhat different from what is modeled today as a result of this analytical decision, that is broadly true no matter what, and the agencies do not believe that the difference would be so great that it would change the policy outcome.

To avoid making judgments (that would invariably turn out to be at least somewhat incorrect) about possible future trading activity, the model simulates trading by combining all manufacturers into a single entity, so that the most cost-effective choices are made for the fleet as a whole.

Statutory Basis for Stringency:

49 U.S.C. 32902 requires the Secretary to set CAFE standards at the maximum feasible levels, considering technological feasibility, economic practicability, the need of the Nation to conserve energy, and the impact of other government standards. EPCA/EISA authorizes the Secretary to interpret

these factors, and as the Department's interpretation has evolved, NHTSA has continued to expand and refine its qualitative and quantitative analysis. For example, as discussed below in Section VI.B.3, the Autonomie simulations reflect the agencies' judgment that it would not be economically practicable for a manufacturer to “split” an engine shared among many vehicle model/configurations into a myriad of versions each optimized to a single vehicle model/configuration. Also responding to evolving interpretation of these EPCA/EISA factors, the CAFE Model has been expanded to address additional impacts in an integrated manner. For example, the CAFE Model version used for the NPRM analysis included the ability to estimate impacts on labor utilization internally, rather than as an external “off model” or “post processing” analysis. In addition, NEPA requires the Secretary to issue an EIS that documents the estimated impacts of regulatory alternatives under consideration. The EIS accompanying today's notice documents changes in emission inventories as estimated using the CAFE model, but also documents corresponding estimates—based on the application of other models documented in the EIS, of impacts on the global climate, on tropospheric air quality, and on human health. Regarding CO

standards, CAA 202(a) provides general authority for the establishment of motor vehicle emissions standards, and the final rule's analysis, like that accompanying the agencies' proposal, addresses impacts relevant to the EPA Administrator's decision making, such as technological feasibility, air quality impacts, costs to industry and consumers, and lead time necessary for compliance.

Other Factors:

Beyond these statutory requirements applicable to DOT and/or EPA are a number of specific technical characteristics of CAFE and/or CO

regulations that are also relevant to the construction of today's analysis. These are discussed at greater length in Section II.F. For example, EPA has defined procedures for calculating average CO

levels, and has revised procedures for calculating CAFE levels, to reflect manufacturers' application of “off-cycle” technologies that increase fuel economy (and reduce CO

emissions) in ways not reflected by the long-standing test procedures used to measure fuel economy. Although too little information is available to account for these provisions explicitly in the same way that the agencies have accounted for other technologies, the CAFE Model does include and makes use of inputs reflecting the agencies' expectations regarding the extent to which manufacturers may earn such credits, along with estimates of corresponding costs. Similarly, the CAFE Model includes and makes use of inputs regarding credits EPA has elected to allow manufacturers to earn toward CO

levels (not CAFE) based on the use of air conditioner refrigerants with lower global warming potential (GWP), or on the application of technologies to reduce refrigerant leakage. In addition, EPA has elected to provide that through model year 2021, manufacturers may apply “multipliers” to plug-in hybrid electric vehicles, dedicated electric vehicles, fuel cell vehicles, and hydrogen vehicles, such that when calculating a fleet's average CO

levels (not CAFE), the manufacturer may, for example, “count” each electric vehicle twice. The CAFE Model accounts for these multipliers, based on either current regulatory provisions or on alternative approaches. Although these are examples of regulatory provisions that arise from the exercise of discretion rather than specific statutory mandate, they can materially impact outcomes. Section VI.B explains in greater detail how today's analysis addresses them.

Benefits of Analytical Approach

The agencies' analysis of CAFE and CO

e.g.,

for fuel) and effects (

e.g.,

whether consumers will purchase the vehicles and in what quantities. Both of these basic analytical elements involve the application of many analytical inputs.

As mentioned above, the agencies' analysis uses the CAFE model to estimate manufacturers' potential responses to new CAFE and CO

standards and to estimate various impacts of those responses. DOT's Volpe National Transportation Systems Center (often simply referred to as the “Volpe Center”) develops, maintains, and applies the model for NHTSA. NHTSA has used the CAFE model to perform analyses supporting every CAFE rulemaking since 2001, and the 2016 rulemaking regarding heavy-duty pickup and van fuel consumption and CO

emissions also used the CAFE model for analysis.

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While both agencies used the CAFE Model to simulate manufacturers' potential responses to standards, some model inputs differed EPA's and DOT's analyses, and EPA also used the EPA MOVES model to calculate resultant changes in emissions inventories.

See

81 FR 73478, 73743 (Oct. 25, 2016).

NHTSA recently arranged for a formal peer review of the model. In general, reviewers' comments strongly supported the model's conceptual basis and implementation, and commenters provided several specific recommendations. The agency agreed with many of these recommendations and has worked to implement them wherever practicable. Implementing some of the recommendations would require considerable further research, development, and testing, and will be considered going forward. For a handful of other recommendations, the agency disagreed, often finding the recommendations involved considerations (

e.g.,

other policies, such as those involving fuel taxation) beyond the model itself or were based on concerns with inputs rather than how the model itself functioned. A report available in the docket for this rulemaking presents peer reviewers' detailed comments and recommendations, and provides DOT's detailed responses.

101

Docket No. NHTSA-2018-0067-0055.

As also mentioned above, the agencies use EPA's MOVES model to estimate tailpipe emission factors, use DOE/EIA's NEMS to estimate fuel prices,

102

and use Argonne's GREET model to estimate downstream emissions rates.

103

DOT also sponsored DOE/Argonne to use the Autonomie full-vehicle modeling and simulation tool to estimate the fuel economy impacts for roughly a million

combinations of technologies and vehicle types.

104 105

102

See https://www.eia.gov/outlooks/aeo/info_nems_archive.php

. Today's notice uses fuel prices estimated using the Annual Energy Outlook (AEO) 2019 version of NEMS (see

https://www.eia.gov/outlooks/archive/aeo19/

and

https://www.eia.gov/outlooks/aeo/data/browser/#/?id=3-AEO2019&cases=ref2019&sourcekey=0

103

Information regarding GREET is available at

https://greet.es.anl.gov/index.php

. Availability of NEMS is discussed at

https://www.eia.gov/outlooks/aeo/info_nems_archive.php

. Today's notice uses fuel prices estimated using the AEO 2019 version of NEMS.

104

http://www.cse.anl.gov/batpac/

105

Furthermore, the impact of engine technologies on fuel consumption, torque, and other metrics was characterized using GT POWER simulation modeling in combination with other engine modeling that was conducted by IAV Automotive Engineering, Inc. (IAV). The engine characterization “maps” resulting from this analysis were used as inputs for the Autonomie full-vehicle simulation modeling. Information regarding GT Power is available at

https://www.gtisoft.com/gt-suite-applications/propulsion-systems/gt-power-engine-simulation-software

EPA developed two models after 2009, referred to as the “ALPHA” and “OMEGA” models, which provide some of the same capabilities as the Autonomie and CAFE models. EPA applied the OMEGA model to conduct analysis of tailpipe CO

emissions standards promulgated in 2010 and 2012, and the ALPHA and OMEGA models to conduct analysis discussed in the above-mentioned 2016 Draft TAR and Proposed and 2017 Initial Final Determinations regarding standards beyond 2021. In an August 2017 notice, the agencies requested comments on, among other things, whether EPA should use alternative methodologies and modeling, including DOE/Argonne's Autonomie full-vehicle modeling and simulation tool and DOT's CAFE model.

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82 FR 39551, 39553 (Aug. 21, 2017).

Having reviewed comments on the subject and having considered the matter fully, the agencies have determined it is reasonable and appropriate to use DOE/Argonne's model for full-vehicle simulation, and to use DOT's CAFE model for analysis of regulatory alternatives. EPA interprets Section 202(a) of the CAA as giving the agency broad discretion in how it develops and sets CO

emissions standards for light-duty vehicles. Nothing in Section 202(a) mandates that EPA use any specific model or set of models for analysis of potential CO

standards for light-duty vehicles. EPA weighs many factors when determining appropriate levels for CO

standards, including the cost of compliance (

see

Section 202(a)(2)), lead time necessary for compliance (

id.

), safety (

see NRDC

EPA,

655 F.2d 318, 336 n. 31 (D.C. Cir. 1981)) and other impacts on consumers,

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and energy impacts associated with use of the technology.

108

Using the CAFE model allows consideration of a number of factors. The CAFE model explicitly evaluates the cost of compliance for each manufacturer, each fleet, and each model year; it accounts for lead time necessary for compliance by directly incorporating estimated manufacturer production cycles for every vehicle in the fleet, ensuring that the analysis does not assume vehicles can be redesigned to incorporate more technology without regard to lead time considerations; it provides information on safety effects associated with different levels of standards and information about many other impacts on consumers, and it calculates energy impacts (

i.e.,

fuel saved or consumed) as a primary function, besides being capable of providing information about many other factors within EPA's broad CAA discretion to consider.

107

Since its earliest Title II regulations, EPA has considered the safety of pollution control technologies.

See

45 FR 14496, 14503 (1980).

108

See

George E. Warren Corp. v. EPA, 159 F.3d 616, 623-624 (D.C. Cir. 1998) (ordinarily permissible for EPA to consider factors not specifically enumerated in the Act).

Because the CAFE model simulates a wide range of actual constraints and practices related to automotive engineering, planning, and production, such as common vehicle platforms, sharing of engines among different vehicle models, and timing of major vehicle redesigns, the analysis produced by the CAFE model provides a transparent and realistic basis to show pathways manufacturers could follow over time in applying new technologies, which helps better assess impacts of potential future standards. Furthermore, because the CAFE model also accounts fully for regulatory compliance provisions (now including CO

compliance provisions), such as adjustments for reduced refrigerant leakage, production “multipliers” for some specific types of vehicles (

e.g.,

PHEVs), and carried-forward (

i.e.,

banked) credits, the CAFE model provides a transparent and realistic basis to estimate how such technologies might be applied over time in response to CAFE or CO

standards.

There are sound reasons for the agencies to use the CAFE model going forward in this rulemaking. First, the CAFE and CO

fact analyses are inextricably linked. Furthermore, the analysis produced by the CAFE model and DOE/Argonne's Autonomie addresses the agencies' analytical needs. The CAFE model provides an explicit year-by-year simulation of manufacturers' application of technology to their products in response to a year-by-year progression of CAFE standards and accounts for sharing of technologies and the implications for timing, scope, and limits on the potential to optimize powertrains for fuel economy. In the real world, standards actually are specified on a year-by-year basis, not simply some single year well into the future, and manufacturers' year-by-year plans involve some vehicles “carrying forward” technology from prior model years and some other vehicles possibly applying “extra” technology in anticipation of standards in ensuing model years, and manufacturers' planning also involves applying credits carried forward between model years. Furthermore, manufacturers cannot optimize the powertrain for fuel economy on every vehicle model configuration—for example, a given engine shared among multiple vehicle models cannot practicably be split into different versions for each configuration of each model, each with a slightly different displacement. The CAFE model is designed to account for these real-world factors.

Considering the technological heterogeneity of manufacturers' current product offerings, and the wide range of ways in which the many fuel economy-improving/CO

emissions-reducing technologies included in the analysis can be combined, the CAFE model has been designed to use inputs that provide an estimate of the fuel economy achieved for many tens of thousands of different potential combinations of fuel-saving technologies. Across the range of technology classes encompassed by the analysis fleet, today's analysis involves more than a million such estimates. While the CAFE model requires no specific approach to developing these inputs, the National Academy of Sciences (NAS) has recommended, and stakeholders have commented, that full-vehicle simulation provides the best balance between realism and practicality. DOE/Argonne has spent several years developing, applying, and expanding means to use distributed computing to exercise its Autonomie full-vehicle modeling and simulation tool over the scale necessary for realistic analysis of CAFE or average tailpipe CO

emissions standards. This scalability and related flexibility (in terms of expanding the set of technologies to be simulated) makes Autonomie well-suited for developing inputs to the CAFE model.

In addition, DOE/Argonne's Autonomie also has a long history of development and widespread application by a much wider range of users in government, academia, and industry. Many of these users apply

Autonomie to inform funding and design decisions. These real-world exercises have contributed significantly to aspects of Autonomie important to producing realistic estimates of fuel economy levels and CO

emission rates, such as estimation and consideration of performance, utility, and driveability metrics (

e.g.,

towing capability, shift business, frequency of engine on/off transitions). This steadily increasing realism has, in turn, steadily increased confidence in the appropriateness of using Autonomie to make significant investment decisions. Notably, DOE uses Autonomie for analysis supporting budget priorities and plans for programs managed by its Vehicle Technologies Office (VTO). Considering the advantages of DOE/Argonne's Autonomie model, it is reasonable and appropriate to use Autonomie to estimate fuel economy levels and CO

emission rates for different combinations of technologies as applied to different types of vehicles.

Commenters have also suggested that the CAFE model's graphical user interface (GUI) facilitates others' ability to use the model quickly—and without specialized knowledge or training—and to comment accordingly.

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For the NPRM, NHTSA significantly expanded and refined this GUI, providing the ability to observe the model's real-time

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