Labeling Requirements for Alternative Fuels and Alternative Fueled Vehicles

FEDERAL TRADE COMMISSION

Labeling Requirements for Alternative Fuels and Alternative

Fueled Vehicles

AGENCY: Federal Trade Commission.

ACTION: Grant of Partial Exemption from the Commission's Alternative

Fuels and Alternative Fueled Vehicles Rule.

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SUMMARY: The Commission has granted the petition of the Ford Motor

Company (``Ford'') requesting permission to use an alternative fueled

vehicle (``AFV'') label in California that differs from the AFV label

specified in the Commission's rule concerning Labeling Requirements for

Alternative Fuels and Alternative Fueled Vehicles (``Rule''). Pursuant

to Rule 1.26 of the Commission's Rules of Practice, and Commission

grants, for good cause, the requested relief without a notice and

comment period because the Commission finds that such a procedure is

unnecessary to protect the public interest in this case.

EFFECTIVE DATE: August 7, 1997.

FOR FURTHER INFORMATION CONTACT:

Neil Blickman, Attorney, Federal Trade Commission, Bureau of Consumer

Protection, Division of Enforcement, Sixth Street and Pennsylvania

Ave., N.W., Washington, DC 20580, (202) 326-3038.

SUPPLEMENTARY INFORMATION:

Part A--Background Information

On May 19, 1995, the Commission published the Alternative Fuels and

Alternative Fueled Vehicles Rule in the Federal Register (60 FR 26926).

The Rule, in pertinent part, established labeling requirements for new

covered AFVs. The labels disclose specific cost and benefit information

to enable consumers to make reasonable purchasing choices and

comparisons. The labeling requirements for new covered AFVs became

effective November 20, 1995.

Section 309.20 of the Rule provides that before offering a new

covered AFV for acquisition to consumers, manufacturers must affix on a

visible surface of each such vehicle a new vehicle label consisting of

three parts. Part one must disclose objective information about the

estimated cruising range and environmental impact of the particular

AFV. Part two must disclose and explain specific factors consumers

should consider before buying an AFV. Part three must list specific

toll-free telephone numbers for consumers who want to call the Federal

government for more information about AFVs. Section 309.20 of the Rule

further states that no marks or information other than that specified

by the Rule may appear on the label.

With respect to environmental impact, the labels must tell

consumers whether or not the vehicle has met an Environmental

Protection Agency (``EPA'') emission certification standard and, if so,

what standard. If a vehicle has been certified, that fact must be noted

with a mark in a box on the label, and a caret must be inserted above

the standard the vehicle has been certified to meet. The graphic on the

label depicts seven EPA emissions standards in increasing order of

stringency.

For several years, EPA has promulgated emissions classification

standards as part of its Federal Motor Vehicle Control Program, which

establishes pollution limits for ``criteria air pollutants'' (i.e.,

hydrocarbons, carbon monoxide, nitrogen oxides, and particulate

matter). Each of these pollutants is released into the air from an

automobile's tailpipe as exhaust. In addition, hydrocarbons in vapor

form also are released due to the evaporation of fuel and during

refueling. The standards apply to new motor vehicles manufactured in

specified model years.

[[Page 42557]]

After manufacturers submit appropriate test reports and data, the EPA

Administrator issues a ``certificate of conformity'' to those vehicle

manufacturers demonstrating compliance with the applicable emissions

standards.

Pursuant to its authority under the 1990 Clean Air Act

Amendments,\1\ EPA began issuing stricter emission standards for each

model year as a way of reducing levels of the criteria air pollutants.

One set of standards, the Tier 1 standards, was phased in beginning

with the 1994 model year. The second set of standards establishes five

stricter standards as part of a new ``clean-fuel vehicles'' program.\2\

To qualify as a clean-fuel vehicle, a vehicle must meet one of five

sets of increasingly stringent standards. The standards are

denominated, in increasing order of stringency, TLEV (``Transitional

Low Emission Vehicle''), LEV (``Low Emission Vehicle''), ULEV (``Ultra

Low Emission Vehicle''), ILEV (``Inherently Low Emission Vehicle''),

and ZEV (``Zero Emission Vehicle''). Disclosures regarding both sets of

EPA emission standards are required on the Rule's labels for new

covered AFVs because the Commission determined that information

concerning EPA emission certification levels provides a simple way of

comparing different AFVs and, therefore, is useful to consumers

considering AFV acquisitions.\3\

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\1\ Pub. L. 101-549, 104 Stat. 2399 (1990).

\2\ See 40 CFR 88 (1996).

\3\ 60 FR 26926, 26946 (May 19, 1995).

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Part B--Ford's Proposal

In 1996, after the Commission promulgated its Rule, the State of

California Air Resources Board (``CARB'') established a stringent

emission standard denominated SULEV (``Super Ultra Low Emission

Vehicle''). Although EPA has not amended its regulations to adopt this

standard, according to staff at EPA and CARB, an AFV in California

certified as meeting the requirements of the CARB SULEV standard is

certified to a stricter emissions standard than a ULEV plus ILEV

certified vehicle.\4\ Furthermore, a vehicle certified to a SULEV plus

ILEV standard is certified to a stricter emissions standard than a

SULEV certified vehicle.

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\4\ According to EPA, a vehicle certified as meeting the

requirements to both the ULEV and ILEV standards has lower combined

exhaust and evaporative emission than an ILEV certified vehicle.

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The California LEV program requires Ford to sell a specified

percentage of vehicles that are certified to the LEV and ULEV

standards. By certifying vehicles to the SULEV standard, however, Ford

receives additional vehicle credits to comply with this program. Ford

is in the process of certifying AFVs in California to the CARB SULEV

emission standard and the EPA ILEV emission standard. Ford wishes to

disclose to consumers in California information indicating that an AFV

has been certified to the CARB SULEV emission standard. The problem

Ford has encountered is that the Commission's AFV label provides no

means of conveying such information because the SULEV emission standard

did not exist at the time the Rule was promulgated, and, therefore, is

not included as a disclosure on the Commission's AFV label.

Ford, therefore, petitioned the Commission to permit it to use an

AFV label, in California only, that differs in two respects from the

AFV label described in section 309.20 of the Rule: \5\

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\5\ Ford is a manufacturer of AFVs covered by the Rule. See 16

CFR 309.1(f) and 309.1(r).

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(1) To convey accurate information to consumers in California, Ford

requested permission to add a check-box to the label with accompanying

text that reads, ``This vehicle meets the California Air Resources

Board emission standard noted below.''

(2) For applicable new covered vehicles, Ford also requested

permission to add ``SULEV'' and ``SULEV + ILEV'' disclosures to the

list of emissions standards on the AFV label, between the ``ULEV +

ILEV'' and ``ZEV'' standards.

Ford asserted that granting its petition will provide additional

useful information to consumers considering AFV acquisitions in

California, and will permit it to demonstrate to consumers in that

state the technological advances it has made in producing cleaner,

lower-emitting vehicles.\6\

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\6\ The Commission previously has granted similar requests

without notice and comment procedures. See Fuel Rating Rule

(formerly Octane Rule) exemptions granted to Sunoco in 1979 (44 FR

33740) and in 1990 (55 FR 1871); to Gilbarco, Inc. in 1988 (53 FR

29277); to Gilbarco on behalf of Exxon in 1989 (54 FR 14072); to

Dresser Industries, Inc. on behalf of several gasoline refiners in

1991 (56 FR 26821); to the Bennett Pump Co. on behalf of Wesco Oil

Co. in 1993 (58 FR 64406); and to Gilbarco on behalf of several

gasoline refiners in 1995 (60 FR 57584).

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The Commission has determined that including the CARB SULEV

emission standard on labels in California for new covered AFVs, in the

format proposed by Ford, is appropriate, feasible, and consistent with

the Rule's intent. In issuing the Rule, the Commission concluded that

requiring disclosure of emission certification standards is appropriate

and would be useful to consumers. The Commission noted further that

incorporating environmental considerations into national energy policy

was a key goal of the Energy Policy Act of 1992 (``EPA 92''),\7\

pursuant to which the Rule was promulgated, and improving the

environment was a principal purpose of that statute. EPA 92 gives

special attention to the fact that the environmental performance of

alternative fuels differs, and that those differences need to be

explained to consumers.\8\

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\7\ Pub. L. 102-486, 106 Stat. 2776 (1992).

\8\ 60 FR 26926, 26946.

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In the Commission's view, granting Ford's petition to permit it to

include the SULEV emission standard on AFV labels will provide

additional comparative information regarding alternative fuels that

will be helpful to consumers in California considering AFV acquisitions

(e.g., fleet operators as well as environmentally concerned consumers).

Specifically, because AFVs are certified to a specific emission

standard, disclosure of the SULEV certification level will provide a

simple and even more useful way of comparing different AFVs in

California. Disclosure of additional objective data such as the SULEV

certification level also will benefit consumers in California

attempting to evaluate competitive advertising and marketing claims

regarding any AFV's environmental performance.

In addition, the Commission has determined that the AFV labeling

approach proposed by Ford offers a clear, conspicuous, and easily

readable disclosure to consumers of all Rule-required information and

complies with the intent of the regulation. Furthermore, granting the

AFV label variances requested will not adversely affect the public

interest or result in any consumer injury, but rather will provide

additional useful information to consumers while accommodating a

technological development in the industry. Therefore, the Commission is

granting Ford permission to use its proposed AFV label on new covered

AFVs, provided that Ford uses its modified AFV label only in the State

of California, and complies with the Rule's AFV label specifications in

all other respects.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 97-20797 Filed 8-6-97; 8:45 am]

BILLING CODE 6750-01-M